Bretton Wood system played an essential role in the development of a new monetary system in the world. This process helped to bring order in the global trade. The use of a new global monetary system replaced the initially deployed gold standard approach with the global United States Dollar. Under the Bretton Woods system, countries established central banks that helped to regulate and fix the exchange rate between the respective countries currencies and the dollar. The dollar emerged as the global currency helping to create order and harmony in the global trade. The development of a single standard currency helped to reduce conflicts and trade wars. Bretton Woods system played an essential role in minimizing trade wars, for instance in situations where countries were required to lower their currencies to boost trade but had the capacity to regulate their respective currencies given certain conditions.
Before the Bretton Woods system, countries utilized the gold standard approach. The use of this method allows countries to redeem their currency for their specific gold value. After the implementation of the Bretton Woods system, countries arrived at an agreement to redeem their currency not for gold but for the United States dollar. Similarly, as expressed in Haley Edwards TedTalk, the confusion and conflict in international trade and the global economy affected many countries (Haley, 2017) . There has been an increase in trade conflicts in many trade deals in the world. As pointed out by Haley Edwards, policies such as quotas and GDP growth are not central in global trade. The contemporary era of free trade dates back in 1944 when economies were sticking together at Bretton Woods in the New Hampshire. During that time, the event that dominated the world was World War 1. Global trade was essential to increase world peace and foster international cooperation.
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The global trade has its origin at Bretton Woods, setting the ground for a reduction in global conflicts and wars while increasing international interdependencies. Global trade has facilitated success and prosperity among many countries in the world.
Reference
Haley, E (n.d.). (2017, May 17). What global trade deals are really about. Retrieved at October 28, 2020 from https://www.youtube.com/watch?v=-v3uqD1hWGE .
