DOHA, Qatar-In July 1944, just before the end of
World War II, the United States called an
international meeting at the small New Hampshire
town of Bretton Woods to help establish a
new world trading system. About 1, 000 delegates
representing 44 countries were present.
Today, more than half a century and half a world away, Doha
lies closer to the sand dunes and the silk road to
China, the world's first great trading route plied
for centuries by camel caravans.
And in an age when jet planes fly overhead in
the clear desert skies, the world's trading system
is no longer led by pipe and cigar-puffing statesmen
of yore, but by two marathon runners who welcomed
China to the fold at a meeting with hundreds more
delegates representing 144 nations.
The 1, 000 delegates at Bretton Woods included
the renowned Cambridge economist, John Maynard
Keynes who led Britain's contingent. The Free French
administration, then based in Algeria, sent the
young Pierre Mendes France. The United States was
represented by its treasury secretary, Harry D.
White. Europe was virtually in ruins as were large
tracts of Asia from China to the Philippines, and
north Africa. Fighting still raged in many parts
and a year later, the first atomic bomb would be
dropped on Japan.
At the time, the world's currencies were pegged
to the price of gold which then stood at US$35
an ounce. Washington wanted a new system whereby
the value of currencies would be fixed against
the value of the dollar, whatever their gold reserves.
A country in financial difficulty would be able
to devalue with the accord of the International
Monetary Fund.
It gave the IMF
tremendous political and economic clout. Keynes, instead recommended the establishment
of an international currency, the "bancor." Countries
in debt would receive loans in bancors if they
remained on their best behavior. The novel idea
was that countries deemed weak would be naturally
assisted by wealthier countries and thus create
a system of financial stability whereby wealthier
nations would be taxed to assist countries in difficulty.
Rogue nations would simply have to conform.
But his idea was not seriously discussed at Bretton
Woods because Washington, in preparation for the
post-war period wanted to push its advantage and
promote a stable monetary and open exchange system.
White wanted also an end to the rigid fixed exchange
system agreed in Genoa in 1922 because it had led
to competitive devaluations that brought on the
crisis of the 1930s when inflation in Germany fueled
Hitler's rise to power. Thus Washington decided
that gold should not be the only monetary reference
point, and the dollar was born as an international
currency. Four years later, in 1948, the first
multilateral trading system, the General Agreement
on Tariffs and Trade (GATT), was signed into being
by 23 nations. In 1995 GATT became the WTO, the
fully fledged international organization of today
.
It now has a membership of 144 nations, each at
its own level of economic development and with
its own set of priorities. Since the Seattle conference
in November 1999, nine countries have joined the
organization-Albania, Croatia, Georgia, Jordan, Lithuania, Modlova, Oman, and in Doha this weekend, China and Taiwan. The advent of these two giant
trading powers brings another 1.3 billion people
into the world's rules-based trading system.
The two marathon runners are the current US Trade
Secretary Robert Zoellick, and the man he sometimes
goes jogging with, Pascal Lamy, the Frenchman serving
as the trade commissioner of the world's biggest
trading bloc, the European Union.
If the five day conference in Doha is to be a
success, it may be because of the good relationship
between the French socialist and the American republican
who represent the world's economic giants, according
to officials who work with them.
Both firmly stated their commitment to winning
a new Doha Round of trade negotiations as the only
way to stop the current economic slowdown turning
into a global recession.
Their friendship started over a decade ago during
the long negotiations over German reunification, when Lamy was chief of staff to the European Commission
president and Zoellick was on the US Secretary
of State's staff. In 1991, the two received awards
from Germany which they celebrated by jogging together.
They ran together again in 1992 when the EU and
the US were arguing over the last big trade agreement, the Uruguay Round.
For both, on Sunday, it was truly an historic
moment when they shook hands with Shi Guangsheng, the Chinese foreign trade and economic cooperation
minister, and welcomed him to the Bretton Woods
club in the glare of television spotlights time
for a sip of Chinese tea and a jog along the silk
road in the sand dunes outside the Sheraton Hotel.
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