Olaes, Chelsea Shane B.
Case Study 1, Creating the International Trade Organization Page 1 of 1
The US State Department presented a charter for the creation of International Trade Organization (ITO) together with the World Bank & International Monetary Fund which were created at the Bretton Woods Conference. Those institutions would compromise a comprehensive system for the management of international economic affairs. The proposed ITO was also designed to address a wide variety of international economic issues. Before the ...view middle of the document...
They were especially concerned that the United States would be held to a higher standard than the rest of the world.
IMF & WB are two international institutions which are necessary to address future economic issues and so forth. The purpose of IMF was to monitor the new exchange rate mechanism, to provide liquidity when necessary and to encourage countries to move toward free currency convertibility for current account transactions. While the World Bank’s role was to finance post war reconstruction in devastated economies and thereby to promote long term economic stability. There are powers that should be granted to these international institutions. First is the voting power at both IMF & the World Bank. Another is dollar as a centerpiece of the new international exchange rate mechanism. And lastly, these are the one who will give basis on what domestic policies must be set for the countries.
Many negotiations and debates had been through before the creation of ITO Charter. It took years to come up on one decision yet many opponents insisted that ITO Charter is the United States’ key to become a leader among other countries. If International Trade Organization was approved, there would be an unfair treatment among traders, exporters or producers.