The world`s major countries launched GATT in response to the waves of protectionism that crippled world trade during the Great Depression of the 1930s and helped expand it. In successive rounds of negotiations, GATT has significantly reduced tariff barriers for manufactured goods in industrialized countries. Since the beginning of GATT in 1947, average tariffs in industrialized countries have risen from about 40% to about 5% today. These reductions helped to foster the considerable expansion of world trade after the Second World War and the consequent increase in real per capita income in both developed and developing countries. The annual benefit from the elimination of tariff and non-tariff barriers resulting from the Uruguay Round Agreement (negotiated under GATT between 1986 and 1993) was estimated at about $96 billion, or 0.4% of world GDP. The United States has free trade agreements (SAAs) with 20 countries. These free trade agreements are based on the WTO agreement, with broader and stronger disciplines than the WTO agreement. Many of our free trade agreements are bilateral agreements between two governments. But some, such as the North American Free Trade Agreement and the Dominican Republic-Central America-United States Free Trade Agreement, are multilateral agreements between several parties.
Critics of bilateral and regional approaches to trade liberalization have many additional arguments. They indicate that these approaches could undermine and replace the WTO`s multilateral approach, which should be favoured for a comprehensive approach based on a non-discriminatory approach, instead of supporting and complementing it. Therefore, the long-term outcome of bilateralism could be a deterioration of the global trading system into competing and discriminatory regional trading blocs, which complicates the fluidity of goods flows between countries. Moreover, the reform of issues such as agricultural export subsidies cannot be effectively addressed at the bilateral or regional level. The International Monetary Fund (IMF) is an international organization based in Washington, D.C., composed of 189 member countries. The IMF works to promote global growth and economic stability by providing policy, advice, and financing to its members. It also works with developing countries to help them reduce poverty and achieve macroeconomic stability. Created in 1944 at the Bretton Woods Conference in New Hampshire, it was created in 1945 with twenty-nine member countries and the objective of rebuilding the international payment system. It now plays a central role in managing balance-of-payments difficulties and international financial crises. Despite the possible tensions between the two approaches, it appears that multilateral and bilateral/regional trade agreements will remain hallmarks of the global economy. . .