General Agreement on Tariffs and Trade.

From December 1993 it became the World Trade Organization (originally proposed at the 1943 Bretton Woods Conference that set up the IMF and World Bank.

During the 1930s World Depression trade was restrained by competitive tariffs when each industrial country tried to protect its own industries by preventing trade from outside. The result was that world trade declined during the period.

Following the second world war it was agreed to attempt to reduce tariffs in order to gain the advantages of free trade. At the present time tariffs have generally reduced although the older industrialized countries continue to try to exclude products from former colonial countries (such as textiles). Food trade is generally still outside the free trade regime.

Such products as sugar and bananas still reflect the colonial pattern of tied producers.

Disadvantages?
The WTO is accused of ignoring environmental and social considerations. Thus there are attempts by large corporations to argue that the conditions of production (wages, health and safety) should not be considered when importing their products. If allowed, this practice would tend to reduce all wage rates to the lowest. This might be desirable if it brought consumption in the western world closer to the level of the rest of the world, but it is hard to foresee the privileged peoples voluntarily reducing their living standards, or at least their rate of consumption, to a level which allows the wealth of the world to be fairly distributed. Nevertheless the trade ministers signed such an agreement in December 1993. It remains to be seen whether the advantages promised will outweigh the disadvantages and what western voters will do if their living standards decline.

Moreover there have been riots and demonstrations in India against multi-national companies which many believe threaten Indian economy and culture. For example, should companies be allowed to patent seeds which people have been using for millennia? Or use water that farmers need for irrigation for Soft Drinks?