International Trade Organization(redirected from International Trade Organisation)
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International Trade Organization
Prior to World War II, many countries employed "beggar thy neighbor" trade policies, raising tariffs and instituting non-tariff barriers that impeded imports in an attempt to reduce unemployment and increase domestic output. However, other countries retaliated by raising their own barriers against imports. This resulted in reducing export markets, which then only worsened the already poor economic conditions. The problems created by such policies led United States to propose that a new international trade organization be established to regulate trade policies and settle disputes between trading partners. Under the U.S. proposal, the International Trade Organization (ITO) was to be a specialized agency of the United Nations and was to have several broad functions: promoting the growth of trade by eliminating or reducing tariffs or other barriers to trade; regulating restrictive business practices hampering trade; regulating international commodity agreements; assisting economic development and reconstruction; and settling disputes among member nations regarding harmful trade policies. Negotiations to establish the ITO began in Geneva, Switzerland, in 1947, with a more complete charter being drafted later in Havana, Cuba. Opposition to the charter of the ITO soon emerged, especially in the U.S. Congress. Subsequently, President harry truman's administration withdrew its support for the ITO, and interest in the ITO faded. The void left by the collapse of the ITO has been filled by other institutions, like the General Agreement on Tariffs and Trade (GATT), the World Bank, and the United Nations Conference on Trade and Development (UNCTAD).