Since the Bretton-Woods Monetary Conference held 1944, international economic policies have operated and evolved distinctly in multiple areas, which include trade, finance, money, and development. The conference saw 44 countries meet in Bretton Woods, New Hampshire, with the intention of creating a series of new rules on how to operate within the post-WWII international monetary system. An analysis of the accomplishments of the conference shows that it played a key role in shaping how global economic policies are formulated. In this report, the focus is analyzing some of the ways through which international economic policies have evolved, focusing on three key areas that define the successes or failures of the policies. The report will also examine how countries such as the United States have conducted their economic policies as a way of determining whether the countries have benefited from such policies.
Trade
Trade is one of the critical areas of consideration, touching on international economic policies, as it seeks to establish a framework through which countries are able to engage in trading activities with others. One of the successes of the Bretton-Woods Conference was the establishment of a rule that allowed for free trade among countries, which was established in 1945. Free trade policies seek to change the overall structure of trading between two countries in which they are each expected to gain value from their engagement in trade. However, the establishment of free trade policies gave a comparative advantage to some of the stronger economies, such as the United States. These economies tend to take advantage of their political influence in negotiating trade agreements with other countries, which are inclined to benefit their economic positioning.
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The establishment of free trade policies was aimed at ensuring that all countries would benefit from their engagement in trade based on the different products that they are able to offer as part of their engagement in trade. However, these policies have also affected the capacity for some of the countries to engage in trade for specific products, which include Portugal’s textile industry that was affected by such policies. Advancements in technology have also had a major influence on the trade policies that countries put in place, as some of these countries seem to gain significantly from their engagement in technological trade. That is evident from some of the more advanced countries such as the United States, which have established trade in areas of resources used for purposes of developing different technological devices. Growth of Silicon Valley, in the United States, has seen an increase in the importation of materials that include arsenic, natural graphite, and manganese, among others. This shows that international economic policies have been influenced by the political influence held by the countries engaging the trade activities.
Finance
The Bretton Woods Conference led to the formation of two key organizations involved in the finance industry, which are the International Monetary Fund (IMF) and the World Bank. The formation of the two organizations was seen as one of the notable milestones in finance that helped shape international policies on finance. Most of the international policies have evolved to match the infrastructure demands in different countries around the world. That can be seen from a project adopted by the Chinese Communist government, the Great Leap Forward, which was set up with the sole intention of investing in the country’s infrastructure development to advance its capacity as an economic hub in the region.
International policies on finance have also evolved towards the inclusion of tariffs, which are charged on products imported within a given country or region. An example can be seen from the tariffs that the United States government has put in place for products imported from China. The main intention of establishing these tariffs is to increase foreign earnings for the countries, which are then invested in other areas of the economy. The United States’ Marshall Plan of 1948-1951 has been structured on blended economic and political themes, which have created a well-structured front for financial development. Another key aspect to note when evaluating the evolution of international policies on the area of finance is that they have allowed the formation of allies among different countries. Some of the notable allies that have been defined by the international finance policies are the United Kingdom and Australia, whose policies are inclined towards advancing their economic positioning.
Money
Money is another key area of focus when focus on international economic policies, as it defines how countries can define the strength of their currencies. The 1944 Bretton Woods Conference played a key role in the introduction of fixed exchange rates as one of the features that echoed the gold standard. The introduction meant that countries were able to define their economic positioning compared to other countries based on the strength of their respective currencies. However, it must be noted that most of the international monetary policies have been centered on the dollar, which is viewed as the center of the world’s currency systems. Each country establishes its monetary policies to ensure that it increases its strength against the dollar to define its economic superiority.
Since the 1944 conference, it was clear that countries were able to adopt policies that would allow them to stabilize their currencies while giving them the authority to devalue or revalue depending on their economic expectations. An example can be seen from the British’s devaluing of its currency from $2.80 to $2.40 in 1967, which was considered as resulting from political influence. Another critical aspect to note when evaluating international monetary policies is that they were implemented with the focus being on creating an unfavorable balance of trade as a way of giving specific countries undue trade advantage. The idea of devaluing a currency was seen from the fact that it affected the pricing of its goods, making them much cheaper; thus, advancing their absorption into the international consumer market. However, the Bretton Woods monetary system fell apart in 1973, which was seen as a direct result of fiat currencies that would result in notable fluctuations in exchange rates.
Conclusion
The Bretton-Woods Monetary Conference held 1944 has helped in shaping the operation and evaluation of international economic policies distinctly on multiple areas, which include trade, finance, money, and development. One of the successes of the Bretton-Woods Conference was the establishment of a rule that allowed for free trade among countries. The establishment of free trade policies was aimed at ensuring that all countries would benefit from their engagement in trade. The Bretton Woods Conference led to the formation of two key organizations involved in the finance industry, which are the International Monetary Fund (IMF) and the World Bank. The 1944 Bretton Woods Conference played a key role in the introduction of fixed exchange rates as one of the features that echoed the gold standard.
