Changes

Events after World War II have shaped recent economic approaches to tariffs. The The General Agreement on Tariffs and Trade (GATT) in 1947 was created with 23 countries in order to help foster multilateral trade that would help the global economy recover after World War II. The GATT became the foundation in which the World Trade Organization (WTO) was built, as it became its successor. The intent of this new economic order was also to fight Communist and trade was seen as vital for US policy in order to counter what they saw as threats from the Soviet Union in attracting countries to their sphere. The GATT became the framework in which other trade agreements, including the European Community (EC), which developed into the European Union, into in creating regional and bilateral trade agreements. With the fall of Communism in the early 1990s, and the increasing influence of the International Monetary Fund , WTO, and World Bank, countries have increasing lowered tariffs and signed trade agreements. Regional trade agreements were seen as an important goal, with North America, Europe, Asia, Africa, and South America forming varying agreements. The North American Free Trade Agreement is a recent iteration of this in the early 1990s. Today, free trade agreements have generated controversy as many industries see benefit in moving manufacturing overseas to lower costs and many countries abandon some forms of manufacturing all together as countries are better able to produce goods at lower costs. Free trade agreements have helped to reorient global trade, with increasingly low margin manufacturing moving to developing countries, while high technology manufacturing is still dominated by mostly developed countries. Rising countries such as Brazil, Russia, India, China, and South Africa (the so-called BRICS) have increasingly benefited from free trade agreements. Nevertheless, in more developed countries, there has been backlash against free trade agreements because it has had the effect of reducing manufacturing production in some economic sectors.<ref>For more on the evolution of the modern globalized economy and its relation to tariffs, see: Irwin, Douglas A, Petros C Mavroidis, and A. O Sykes. 2009. <i>The Genesis of the GATT</i>. Cambridge; New York: Cambridge University Press. </ref>