GATT and the WTO

The hallmarks of the global trading system are robust institutional evolution and increasing complexity. Built from the misery of the Great Depression and the ashes of World War Two, post-war planners designed the multilateral trading system to re-engage the world's economies and yet still allow nations to preserve a significant measure of economic autonomy. The global trading system was enshrined in a compromise of 'embedded liberalism' (Ruggie, 2007). The 'embedded' aspect refers to the social bargain that reflected a Depression-era penchant for Keynesianinspired government stimulus spending and a commitment to full employment and social safety nets. The idea was to permit some measure of autonomy to cushion national economies from global market fluctuations. The 'liberalism' component reflects the rejection of the economic nationalism and imperialism that led to global war in favour of multilateralism, economic liberalism and integration. The foundational underpinnings of the post-war global trade regime were transparency, multilateral diplomacy, and re-integration of the global economy. The Soviet Union and its satellite nations were invited to join the Bretton Woods institutions (which also included the International Monetary Fund and the International Bank for Reconstruction and Development), but declined. They established Eastern counterparts under COMECON instead. In that sense, the Bretton Woods institutions were less global than intended…