Wishing for White Flags
On Thursday the world marks the 80th anniversary of the unconditional surrender of Nazi Germany and the end of World War II in Europe. Planning for the post-war world had started years before the fall of Berlin. This included arrangements for economic cooperation. It was understood that the Great Depression of the 1930s contributed to the rise of fascism, and that the sharp turn towards protectionism, notably the passing of the 1930 Smoot Hawley Tariff Act by the US Congress greatly worsened to the Depression. Mechanisms needed to be put in place to avoid a repeat. The post-war economic architecture (at least in the West) was agreed on at a conference in Bretton Woods, New Hampshire in 1944. This included the creation of the International Monetary Fund to help countries manage balance of payments difficulties, and the World Bank to fund reconstruction and economic development. A free trade agreement proved elusive, but by 1947 the General Agreement on Trade and Tariffs (GATT) came into existence and would oversee the gradual removal of trade barriers around the world. GATT was eventually replaced by the World Trade Organisation.