Read the question and answer it based on what you read. Please DO NOT PLAGIARISM.

1. Describe the early stages ofGeneral Agreement on Tariffs and Trade and its effects on international trades.

During World War II, the establishment of three multilateral economic institutions was envisaged: the International Monetary Fund, the International Bank for Reconstruction and Development (the World Bank) and the International Trade Organization (ITO). However, while the U.S. Treasury drove the negotiations forward for the IMF and the World Bank, responsibility for planning the ITO fell to the State Department, which lagged behind. But U.S. negotiating authority to cut tariffs by 50 percent (with negotiated reciprocal tariff reductions by other countries) was due to expire before the ITO charter could be

ratified, so the General Agreement on Tariffs and Trade (GATT) was drawn up as an interim measure to underpin a first round of reciprocal tariff reductions. It turned out that the ITO charter was never ratified, and so the GATT articles became the basis for the international trading system (Krueger, 1999). The U.S. adherence to an open multilateral trading system became a key underpinning for the postwar international economic architecture.