WTO(World Trade Organisation): How it all started?

World Trade Organization (WTO): How it all started?


World States faced Economical, Political and Social drastic changes and modifications after the World War Second(1945). European domination started fading away from most of the Asian and African countries after their disastrous defeat and consequences in WWII(1945). After 1945 European powers started vacating Asian and African countries and this continued up till 1991, because they themselves were facing huge loses of war which they started; for that matter they changed their scope from Asian and African countries to their own respective countries and to rebuild and re-establish themselves as powers again. During and After Second World War the worst hit was the trade and economy, with huge deficits and losses both in trade and economies of Europe and America the inflation just got insane. With the zero efficiency and immense and gigantic trade barriers among countries of Europe and in particular America, trade reached the point of no-where, thus this led to revise their policies.


Their Economies were totally fatigued with huge debts and losses because of the Second World War; and Allies(England, France, America) and other European countries realized that if they want to regain their power and prosperity they need to consolidate their economies. They were intelligent enough to know that "Protectionism" was the only virus they need to do away with, to bring in efficiency in trade, industry and economy. To rid of "Protectionism" they started GATT(General Agreement on Trade and Tariffs) in 1947, in this conference it was decided that they will do away with tariffs and make Trade 'Demand' dependent rather 'Supply' dependent. With their rounds of conferences they continued there policies of lowering tariffs and duties and making trade free of controls and barriers; these conferences continued within Europe and America with exception of Japan from Asia only unto 1973(Tokyo) conference. With diminishing trade barriers the trade flourished in full swing in Europe, America and Japan. Only efficient industry survived in this open trade, all the inefficient who never wanted to change just got wiped out like dust.

Meanwhile after 1947 the Asian and African countries brought the protectionism into their policy because their product didn't stand nowhere in comparison to the European, American and Japanese products. At that point of time these trade barriers were necessary because these countries just recently got the independence, so to protect their sovereignty and their economies to the foreign companies they applied protectionism. These countries were down-trodden and their industries and economy were much feeble. This industry was much reliant on the old technology which was out-dated and eroded; because of the old technology, ill organization and protectionism they were not able to fulfill the huge demands and their production was too low that they made the market 'Supply' dependent thus they dictated the prices.
 
With mechanisms of trade barriers they were able to protect their economies and this protection was the need of time by African and Asian countries. But the only mistake they made in this process of protection was that they stretched it for long time than it is to be continued; because of stretching it for long time this worked against their own economies and thus led to graver inefficiency in their economies and making their industry worthless.
 
For instance India got Independence in 1947 and Indians brought in Protectionism into their policies for the purpose of saving the industry from the developed world industry which can offer much less price than them with best technology and huge production. This protectionism was good to be pursued for maximum of 20 or 25 years but this protectionism continued in India for more than 40 years thus originating the "Lala" Class. This class was inefficient, dominated the prices and industry, who never believed in to invest in industry and the profits they cropped from the industry, they used these profits for themselves to buy lands and properties; this class is good for nothing for Indian economy because they are not willing to bring the new technology even if they can afford the investment easily and continue with the near to sabotaged equipments and technology.