.
Smith's theories on trade were further developed in David Ricardo's theory of comparative advantage some years later. And these theories managed to remain almost intact until the great depression of 1929-1931, after which most countries abandoned them because they were seem to be losing their international competitiveness. Some economists for the economic crisis that followed have blamed this return to protectionist policies. The increase of protectionism in the 1930's is also linked with the rise of fascism in Germany and the start of the Second World War. .
After World War II, the general attempt was towards the reinstitution of freer trade policies that would manage economies more efficiently. In 1944 the allied leaders gathered at Bretton Woods and agreed to set up an international bank for reconstruction and development, the World Bank and an International Monetary Fund (IMF), designed to stabilise exchange rates and balance of payments internationally. Three years later, 23 countries signed the General Agreement on Tariffs and Trade (GATT) in Geneva. The GATT, which was a simple agreement attempting to reduce customs tariffs, became the spearhead for international trade liberalisation mainly through negotiated tariff reduction, for the next 40 years. Since then, there have been eight "rounds" of trade negotiations with the last one, the Uruguay Round, leading to the formation of the World Trade Organisation (WTO) in 1995. The latter is a recognised international body with "members", responsible for monitoring and enforcing the World Trade Agreement (WTA). Exactly one year ago (November 2001), the WTO started a new round of negotiations in Doha.
Table 1 .
The GATT Trade Rounds.
Year Place/name Subjects covered Countries.
1947 Geneva Tariffs 23.
1949 Annecy Tariffs 13.
1951 Torquay Tariffs 38.
1956 Geneva Tariffs 26.
1960-1961 Geneva (Dillon Round) Tariffs 26.
1964-1967 Geneva (Kennedy Round) Tariffs and anti-dumping measures 62.