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5.0 out of 5 stars
The Advent of GATT, April 8, 2000
This review is from: Free Trade, Free World: The Advent of GATT (The Luther Hartwell Hodges Series on Business, Society, and the State) (Hardcover)
The publication of Thomas W. Zeiler's book, Free Trade Free World: The Advent of GATT is indeed timely. As recent WTO meetings in Seattle showed, there is much confusion in the minds of many people about what has happened to world trade in recent years. Zeiler's book deals with the establishment of the GATT and provides an excellent background to the early years of the free trade debate. Covering the period from 1940 to 1953, it shows that controversy and disagreement were common at the birth of the GATT and globalization much as they are today.
Zeiler, associate professor of history at the University of Colorado at Boulder, provides a well-researched and detailed history of the very difficult discussions between the United States and its allies over free trade during and immediately after the Second World War. His book is well written and interesting. It shows that not only did the American supporters of free trade have to battle their foes at home, they had to constantly struggle to convince many other leaders of democratic nations that free trade was in their best interests, as well as America's. Economic arguments about the benefits of free trade to the world community often ran up against the realities of politics as well as the economic belief that protection was better for the public good. In the United States it was hard to argue with opponents of free trade that allowing in cheaper imports such as shoes helped to improve employment when workers in shoe factories lost their jobs.
Negotiations between the United States, Great Britain, and the British Commonwealth about the relaxation of protectionist measures began during World war 2. Britian and her former colonies devoted considerable time and energy to trade issues even when the British were involved in a life and death stuggle with Nazi Germany. Idealists were looking to the future when peace and an open world economy might prevail. Protection, of course, continued after the war. Much of the blame for the failure of the free trade negotiations at this time can be laid on the British and their Commonwealth. Facing considerable economic hardship as a result of the war, British politicians believed that protectionist policies would help their economy recover and allow them to regain some of their former world dominance.
In the United States, during the period covered by this book, presidents Franklin Roosevelt, Truman, and Eisenhower were all in favour of free trade but with different degrees of conviction. Their strongest opposition came from Republican members of Congress. Roosevelt supported free trade because he believed it helped his New Deal but was never a free trade idealist. He had, of course, seen protectionist policies cause world trade to decline by 60% in the early years of the Great Depression. Truman was much more convinced of free trade's merits, having believed in its value since his high school days, but also "backed protectionism when needed." Eisenhower, who became President near the end of this history, had a much broader world perspective than his predecessors. He supported free trade unequivocally, believing it would strengthen the non-communist world in the global struggle to win the hearts and minds of Third World leaders.
Considerable international opposition to free trade came from Britain and her Commonwealth. In 1932, as a result of the "Ottawa Agreement", Britain had established a trade system that discriminated against non-Commonwealth members. Naturally, Commonwealth leaders wanted this to continue and opposed any move towards free trade. In Britain, opposition to free trade crossed party lines as it did in the United States. Churchill, the Conservative Party leader, who had seen his country's power dissolve during the war, believed "that Britain's postwar salvation lay in regulated, not free trade". Clement Attlee, the socialist, Labour Party leader, who became Prime Minister immediately after the Second World War in 1945, believed in protection and regulated trade as a matter of principle.
Meetings to establish free trade took place between 1946 and 1948 in London, Geneva, and Havana. At Geneva, from April to October 1947, a draft charter for an International Trade Organization (ITO) was created. This was approved in Havana in November by fifty-three nations, most of the trading world with the exception of the Soviet Union. However, these nations were not truly committed to free trade and the ITO died. Replacing it was the less comprehensive General Agreement on Tariffs and Trade (GATT), which was signed by twenty-three nations on October 30th, 1947. The realities of Cold War politics destroyed the idealism that had surfaced during the war. American business interests and politicians who had strongly supported free trade throughout this period as a means of improving employment and prosperity had to be contented with a compromise that blended free trade with protectionism.
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