Ano Ang Bretton Woods Agreement

The Bretton Woods conference recommended that participating governments agree on reducing barriers to international trade. [11] The recommendation was then translated into the International Trade Organization(ITO) proposal for the establishment of rules and rules governing international trade. The ITO would have completed the IMF and IBRD. The ITO Charter was adopted at the UN Conference on Trade and Employment (March 1948 in Havana, Cuba), but the Charter was not ratified by the U.S. Senate. As a result, the ITO was never created. In its place, the less ambitious General Agreement on Tariffs and Trade (GATT) was adopted. However, in 1995, the Uruguay Round GATT negotiations established the World Trade Organization (WTO) as a replacement body for the GATT. The GATT principles and agreements were adopted by the WTO, which was responsible for management and enlargement. The need for a Post-War Western Economic Order was resolved by the Monetary Order and Trade System Agreements opened at the Bretton Woods Conference in 1944. These have synthesised the British desire for full employment and economic stability and the desire for free trade of the United States. The Bretton Woods system of exchange-bound exchange rates lasted until the early 1970s.

Post-war global capitalism suffered from a huge shortage of dollars. The U.S. had huge trade surpluses and U.S. reserves were huge and growing. It was necessary to reverse this river. Although all nations wanted to buy U.S. exports, the dollars had to leave the United States and be available for international use so that they could do so. In other words, the United States should reverse global prosperity imbalances by chartering a trade deficit financed by the U.S. outfed of reserves to other nations (a deficit in the U.S. fiscal balance). The United States could have a financial deficit, either by building plants, or by building plants, or by foreign nations.

Remember that speculative investments were discouraged by the Bretton Woods agreement. Imports from other nations were not attractive in the 1950s because American technology was up to date at that time. This is how multinationals and global aid from the United States originated. [29] The main objective of the conference was to reach an agreement on the IMF. There was sufficient consensus that the conference could also reach agreement on the IRD. To do so, the conference had to be extended from July 19, 1944 to July 22. The Bretton Woods countries have decided not to give the IMF the power of a global central bank. Instead, they agreed to contribute to a solid pool of national currencies and gold, which would be held by the IMF. Each member country of the Bretton Woods system then had the right to borrow as part of its dues, which it needed.

The IMF was also responsible for implementing the Bretton Woods agreement. In the final act, the most important part of the conference and the subsequent functioning of the world economy was the IMF agreement. Its main features were that, as part of the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar. If a country`s monetary value became too low against the dollar, the bank would buy its currency back on the foreign exchange markets. 730 delegates from the 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, USA, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference.

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