Global Institutions and Reserve Currencies

Trade was deliberately left outside the formal Bretton Woods institutional structure after an ambitious plan for an International Trade Organization failed to win ratification, particularly in the US Congress, in the late 1940s. In its place, the General Agreement on Tariffs and Trade, or GATT, signed in 1947 by 23 founding countries, functioned for nearly five decades as a provisional, treaty-based framework for negotiating reciprocal tariff reductions through successive negotiating "rounds." The most ambitious of these, the Uruguay Round, launched in 1986 and concluded in 1994, extended trade rules well beyond tariffs on goods to cover services, intellectual property, and agriculture, and culminated in the creation of a permanent institution, the World Trade Organization, which began operating on January 1, 1995, headquartered in Geneva. Unlike GATT, the WTO possesses a binding dispute-settlement mechanism and a standing institutional structure, making it, alongside the IMF and World Bank, one of the three pillars often described as the postwar "Bretton Woods system" in its broadest sense, even though the WTO itself was created half a century after the original 1944 conference.