Instant Access To 100,000+ Essays!

Imagine you’re living in a world where there are no regulations for trade. Everyone would set their own trues and run after them. This could result in disastrous trade wars. However, we do not have these wars. Why? Because we have organisations like GATT (General Agreements On Tariffs and Trade) and WTO (World Trade Organization) which shape the world trade for us. Under what circumstances were these organizations founded? GATT was founded after some disastrous economic crises in 1930s. The great depression of the 1930s affected a majority of the world population. The average unemployment rate around the world was about 30%. This depression started with the Stock Market Crash of 1929. The world was in need of a stimulus, but governments were cutting their spending as much as possible. Nations formed barriers to trade, such as the Smoot- Hawley Tariff. It became a law in US in June of 1930, and led to a significant decline in on world trade. US were aiming to protect its domestic industry from foreign competition by this tariff. The great hegemon was not leading the world out of the depression. (DFAIT, “History…”, p. 1) Other countries also followed US’s path and the result was a decline in the world