Final answer:
The statement that the GATT had no enforcement power is false. While not as strong as the WTO, GATT provided mechanisms for dispute resolution, and its rulings were generally respected by member countries as they valued the stability it brought to international trade.
Step-by-step explanation:
The statement 'GATT (General Agreement on Tariffs and Trade) agreement had no enforcement power since the losing party in a dispute was entitled to ignore the ruling' is false. While the GATT was not as powerful as the World Trade Organization (WTO) that succeeded it, it was more than merely a place for discussion. The GATT had mechanisms for resolving disputes which countries agreed to follow, and provided a framework for the gradual reduction of tariffs and other trade barriers, promoting free trade on a multilateral basis.
The GATT was put in place to stabilize trade policies and avoid protectionism following the destabilizing trade wars of the 1930s. It aimed to provide a system where trade negotiations could occur, and disputes could be settled amicably. One of the criticisms of the GATT was its slow negotiation process, leading to the description of GATT as 'Gentleman's Agreement to Talk and Talk'. Nevertheless, countries generally adhered to the agreement's provisions and its ruling because doing otherwise would mean undermining the very system that facilitated their international trade.
It is important to note that although the GATT lacked a strong enforcement mechanism compared to the WTO, its provisions were respected by member countries, and it provided the necessary groundwork for the establishment of WTO. The WTO then came into force with a stronger dispute resolution mechanism and the authority to enforce its rulings.