The Global Trade System ( Wto )

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The global trade system has seen many variations since the second quarter of the 19th century, when the Reform Act of 1932 was created to promote free trade. However, free trade really emerged with the Bretton Woods conference of 1944, which promoted liberal views and specifically free trade. Trade is one of the most ancient mode of communication in the world, with the triangular trading as an example. Trading has been set so that countries could benefit from comparative advantage, as Ricardo, a famous economist from the 19th century put forward, showing that international trading is much more beneficial to countries than isolation or simple national trade. However, with the rise of globalisation, the trade system has changed and needed…show more content…
Its aim was to establish a fixed exchange rates system and an international trade order. To do so, the idea of an International Trade Organization was presented, and discarded by President Truman. Subsequently, the GATT was created and became the dominant international trade agency. Through the process of this essay, the global trade system and its institutions will be analysed, and the question of its inequality will be assessed. The first part of this essay will highlight the benefits of free trade, and the fact that it does not necessarily perpetuate economic inequality, or at least doesn’t intend to. The second part of the essay will show the weaknesses of the global trade system, and how it does in fact maintain inequalities, through the hierarchy within the system, protectionism and unequal participation. Lastly, the need of reforming will be discussed to achieve a global system less unjust and inegalitarian than today’s system.

Firstly, global trade system does not perpetuate global economic inequality. Today’s global trade system is defined by the liberalist view of trade, illustrated by free trade associated to no barriers between states and low or non existent tariffs. To the liberalist view, open markets and free trade lead to economic growth, and economic growth associated to democracy leeds to peace. The Global Trade System today defends liberal principles : diversity, toleration, freedom, equality. The WTO is a perfect example of the new
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