The GATT* (General Agreement on Tariffs and Trade) came into being after the Second World War, at a time when new international organizations were being established to build an integrated world economic system. Three major issues had to be addressed for the global economy to emerge from the war and its previous disarray successfully: exchange rates, reconstruction and the organization of international trade in goods. In 1944, responding to each of these questions, the allied nations envisaged the establishment of three new international organizations.
The IMF (International Monetary Fund) and the World Bank were established by the Bretton Woods Agreements of July 1944, which were signed by 44 allied nations. The IMF was set up to manage the international monetary system. The management of exchange rates would henceforth be based on a new general principle: the fixed parity of currencies and cooperation between nations. It was implicit that States would no longer be able to freely manipulate the international exchange rate of their currency and all Member States were specifically prohibited from making competitive devaluations unjustified by their economic situation.
The World Bank, or as it was named at the time, the International Bank for Reconstruction and Development (IBRD), was initially intended to help the war-devastated European economies to finance production projects. Very soon, however, European reconstruction moved out of its sphere of competence and development financing became its main function.
In parallel with the Bretton Woods Conference, the idea of returning to an international trading system based on free trade appeared. This desire was manifested, on the one hand, in the United Nations, by a project for an International Trade Organization, and on the other hand, by the proposal for an international conference for the multilateral reduction of barriers to international trade. The two things led respectively to the “Charter Instituting an International Trade Organization”, adopted in March 1948 at the Havana Conference, and a General Agreement on Tariffs and Trade (GATT), which resulted from negotiations between 23 nations that took place from April to December 1947 in Geneva.
In practice, the International Trade Organization did not come into being in 1948 as the country that initiated the process did not ratify it. However, the agreement concluded in Geneva - resulting from the first “Round” of multilateral trade negotiations - gradually became institutionalized so that it became more than just a treaty; the GATT (also referred to as the General Agreement) went on to become, de facto, the main institutional framework for matters of international trade.