week 1 Flashcards
(66 cards)
What was the Atlantic Charter, and what were its main economic goals?
The Atlantic Charter, issued on August 14, 1941, outlined American and British goals for the post-war world. Its economic goals included eliminating discriminatory trade practices, reducing trade restrictions, promoting global cooperation, ensuring freedom of the seas, and avoiding the use of force.
Why did the United States promote free trade after World War II?
The U.S. believed that free trade would not only boost global prosperity but also contribute to lasting peace by reducing economic tensions and fostering cooperation among nations.
Which countries were involved in shaping the post-war economic order?
The United States, the United Kingdom, and other Allied nations played key roles in negotiating international economic policies for the post-war world.
What was the significance of the Bretton Woods Conference in 1944?
The conference established the framework for the post-war global economy, leading to the creation of institutions like the International Monetary Fund (IMF) and the World Bank to ensure financial stability and economic recovery.
How did the Atlantic Charter influence post-war international economic institutions?
It laid the groundwork for multilateral agreements and institutions such as the IMF, World Bank, and later the General Agreement on Tariffs and Trade (GATT), which promoted global trade and economic cooperation.
Bretton Woods Agreement
The agreement was reached in a 1944 summit held in New Hampshire, USA.
The summit was attended by 730 delegates representing 44 Allied nations.
The main goals were to create an efficient foreign exchange system, prevent competitive currency devaluations, and promote international economic growth.
What institutions were created as a result of the Bretton Woods Agreement?
The Bretton Woods system established a fixed exchange rate system where global currencies were pegged to the value of the U.S. dollar, and the U.S. dollar itself was backed by gold.
The agreement led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now known as the World Bank.
What was the main role of the IMF when it was first established?
The IMF was created to manage the international monetary system, ensuring stability through a fixed exchange rate system, where currencies were pegged to the U.S. dollar, which was convertible to gold.
How did the IMF manage the international monetary system under the Bretton Woods Agreement?
Under the Bretton Woods system, the IMF managed the fixed exchange rate regime by ensuring that currencies were pegged to the U.S. dollar, which could be exchanged for gold at $35 per ounce, creating stability in global currency markets.
What were the key functions of the IMF as an international forum?
- The IMF served as a place where member countries could consult on monetary and economic issues, cooperate on international financial challenges, and develop standardized rules for global financial transactions.
- The IMF provided temporary financial assistance to countries struggling with balance of payments problems, helping prevent financial crises and maintaining global monetary stability.
How has the IMF evolved since the collapse of the Bretton Woods system in 1971?
- After the collapse of the Bretton Woods system, the IMF shifted focus to crisis prevention, promoting financial stability, and addressing new global challenges like climate change and digital currencies.
- After the collapse of the Bretton Woods system in 1971, the U.S. stopped converting the dollar into gold.
What were the main goals of the IMF and the IBRD when they were established?
Both institutions were created to prevent the economic chaos of the 1930s and promote international economic cooperation. The IMF focused on short-term stability and monetary cooperation, while the IBRD focused on long-term development and poverty reduction.
When was the IBRD established, and what were its primary missions?
The IBRD was established in 1944 and began operations in 1946. Its primary missions were to provide loans and technical assistance for the reconstruction of Europe after World War II and to promote economic development in less developed countries.
The IBRD’s initial focus was on providing loans and assistance for the reconstruction of European nations devastated by World War II.
How does the IBRD promote economic development in less developed countries?
The IBRD promotes development by offering long-term loans for infrastructure projects, providing technical expertise for development programs, supporting poverty reduction initiatives, and helping create conditions for private investment.
What institutions are part of the World Bank Group?
The World Bank Group includes the International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).
What was one of the recommendations made at the Bretton Woods Conference regarding international trade?
One recommendation was the establishment of an International Trade Organization (ITO) to promote trade and cooperation among nations.
What were the main goals of the Geneva Conference in 1947?
The Geneva Conference had two main goals: continuing negotiations on the ITO charter and conducting tariff reduction negotiations, which eventually led to the creation of the General Agreement on Tariffs and Trade (GATT).
What was the purpose of the London Conference in 1946?
The London Conference was the first meeting to start talking about making trade easier and setting up the basic rules for future talks.
What happened at the Havana Conference in 1947-1948?
The Havana Conference was the final preparatory meeting for the ITO. It focused on completing the ITO Charter, which resulted in the Havana Charter.
Why did the International Trade Organization (ITO) fail to be established?
The ITO failed because the United States Congress refused to ratify the Havana Charter in 1950, and this led other countries to abandon the organization as well.
What was the main purpose of the General Agreement on Tariffs and Trade (GATT)?
GATT was a legal agreement between many countries to help international trade by reducing or removing trade barriers like tariffs and quotas.
From 1948 to 1995 was the only instrument available for international trade rules until it was replaced by the World Trade Organization (WTO) in 1995.
When and where did the first GATT negotiations take place, and what was their outcome?
The first GATT negotiations happened in Geneva from April to October 1947. During this time, 23 nations agreed to lower tariffs and reduce trade restrictions.
what was the main result if GATT?
The 1947 trade negotiations were the largest ever, much bigger than any before. In just six months, nearly 1,000 formal meetings were held in Geneva, plus many informal talks. Around 760 people worked on both tariff negotiations and discussions about the trade Charter. This was a huge achievement in international trade.
What were the core principles of GATT?
GATT had four main principles:
1. Most Favored Nation (MFN) Treatment – If one country gave a trade benefit to another, it had to give the same benefit to all GATT members.
2. National Treatment – Imported goods had to be treated the same as local goods once they entered the market.
Elimination of 3. Quantitative Restrictions – GATT did not allow import limits (quotas) and preferred using tariffs instead.
4. Transparency – Countries had to publish their trade rules and follow them fairly.
