Final answer:
The World Trade Organization succeeded the General Agreement on Tariffs and Trade (GATT) in 1995, which had been established following the Bretton Woods Conference in 1944. It serves as the successor to GATT, providing a structured forum for trade negotiations and the management of international trade issues.
Step-by-step explanation:
In 1995, the World Trade Organization succeeded the General Agreement on Tariffs and Trade (GATT) that had been created at the Bretton Woods Conference in 1944. The WTO was established to provide a forum for nations to negotiate reductions in tariffs and other barriers to trade, continuing the efforts initially begun by GATT. This transformation marked a significant evolution in global trade relations and the management of international trade.
The Bretton Woods Conference was an important moment in creating post-World War II economic structures, leading to the formation of the International Monetary Fund (IMF) and the World Bank. While an International Trade Organization (ITO) was planned, it was never realized. Instead, GATT was signed on October 30, 1947. After decades of functioning as an interim mechanism for trade negotiations, the need for a more structured and comprehensive organization led to the creation of the WTO.
As an international agency headquartered in Geneva, the World Trade Organization encourages free trade and aims to reduce government restrictions on international commerce. Through its activities, the WTO is charged with balancing trade liberalization with protecting the economies of its member nations.