Bretton Woods is a city located in the United States, which became popular in 1944, as it was the seat of the United Nations monetary and financial congress. Two of the most important financial organizations were established at this conference: the World Bank and the International Monetary Fund (IMF).
In addition to this, agreements of great significance for the world economy were signed. It was there that the statutes or regulations were created that guided the financial and commercial relations agreed between the most prominent industrial countries in the world.
After the Second World War, the existence of two groups of countries could be clearly observed: those that had a strong economic level (industrial countries) and those that were in a less favorable state (underdeveloped countries). To counteract this situation, it was agreed that economically stable countries would help those with less economic capacity through the allocation of resources.
This was the purpose of this convention: the creation of a system whose objectives were to promote world economic development, to promote trade relations between countries, in order to create stability both within the nations that participated in the agreement, as well as in the other states.
This treaty had the participation of 44 countries where the United States (considered the country with the strongest economy in the world), France, England and China, and some representatives of the Latin American countries that at that time, remained under the influence of the United States. The Soviet Union was present at this convention but was unable to join any of the agreements.
The agreements that were signed at said meeting were: the establishment of a fixed exchange rate of the value of the currency with respect to gold, in order to facilitate the exchange of currencies between the nations that signed the agreement. The International Monetary Fund (IMF) was founded in order for it to grant loans to member countries with difficulties in their balance of payments in exchange for alliances that reoriented their economic policy. Similarly, the World Bank was created whose mission was to financially support countries devastated by war. And finally it was agreed to create the so-called "General Agreement on Tariffs and Trade" (GATT), which was displaced by theWorld Trade Organization (WTO).
The benefits generated by this agreement could be evidenced in the great economic stability that prevailed between the 50s and 60s, stability that allowed countries like Germany and Japan to strengthen their economies, something that was truly unimaginable after the disastrous destruction that these nations experienced later. from the war. Without these agreements, states like France, England and Italy (destroyed by war) would not have emerged either.
The Bretton Woods agreements began to be broken during the Vietnam War, finally ending in 1971 when the United States, because it was financing this conflict, neglected its economy and it for the first time in the 20th century had its first trade deficit.
