The General Agreement on Tariffs and Trade (GATT) is the second of three regimes governing international trade in the modern era. It has been succeeded by the World Trade Organization (WTO), and coexisted with the abortive International Trade Organization (ITO).

The International Trade Organization was intended to be a counterpart to the International Monetary Fund and the World Bank, institutions negotiated at the Bretton Woods Conference in 1944. Named for Bretton Woods, New Hampshire, site of the Mount Washington Hotel where negotiations took place, the conference—formally called the United Nations Monetary and Financial Conference, but rarely recognized by that name anymore—was attended by 730 delegates of the 44 Allied nations, already planning for the shape the world would take when World War II ended. The foundational idea of Bretton Woods was the encouraging of open markets and the lowering of barriers to trade, among member nations.

In 1946 the United Nations Economic and Social Committee called for a conference to charter the International Trade Organization. Though agreed upon fairly quickly, ITO never got off the ground; every attempt to have the United States Congress approve it failed, on the grounds that the ITO would be given too much jurisdiction over internal American matters. At the end of 1950, President Truman announced that he would stop seeking ratification of the ITO charter, and without American involvement, the organization withered on the vine.

GATT, in the meantime, had successfully been implemented but had been intended to supplement, rather than replace, the ITO. While the ITO, and the WTO that now reigns, was an organization, GATT was only a treaty, with no infrastructure, staff, or institutional existence. Negotiations over the GATT began in parallel and in cooperation with the ITO negotiations, and were originally intended to be a short-term treaty binding countries to some easily agreed-upon terms until the ITO began operations.

Twenty-three countries signed the original treaty, which in the United States was considered a congressional-executive agreement, an exercise of the president’s power to negotiate trade agreements when granted such authority by Congress. In essence, it granted “most favored nation” status upon all nations signing the treaty.

A staggering total of 45,000 tariff concessions were made by the first signing of GATT, affecting half of the world’s trade—an enormous initiative, despite the failure of the ITO three years later. More “rounds” of GATT followed, each addressing slightly different issues, participated in by slightly different assortments of countries:

The Annecy Round in Annecy, France, in 1949, further reduced tariffs among 13 countries.
The Torquay Round, 1951, England, another 8700 tariff concessions.
The Geneva Round, 1956, further tariff concessions as well as the first participation of postwar Japan.
The Dillon Round, 1962, Geneva, named for Secretary of the Treasury Douglas Dillon, tariff concessions and early talks about the European Economic Community.
The Kennedy Round, 1967, Geneva, named for the late President Kennedy, involving 66 countries, the most to date.
The Tokyo Round, 1979, 102 countries, and the first discussion of limiting non-tariff barriers and voluntary export restrictions.
The 1993 Uruguay Round, begun in 1986, was the most ambitious. It took seven years to negotiate, involved 123 countries, and was the first to involve agricultural goods. This was the final round of GATT, as one of the reasons for negotiations lasting so long was the decision to finally create an organizational body: the WTO, which replaced GATT in 1995.

Bibliography:

John H. Barton, Judith L. Goldstein, Timothy E. Josling, and Richard H. Steinberg, The Evolution of the Trade Regime: Politics, Law, and Economics of the GATT and the WTO (Princeton University Press, 2008);
John D. Emens, WTO Panel Dynamics: From Power-Based GATT Renderings to WTO Rule-Base Adjudication (VDM Verlag Dr. Müller, 2007);
Douglas A. Irwin, Petros C. Mavroidis, and Alan O. Sykes, The Genesis of the GATT (Cambridge University Press, 2008);
John H. Jackson, The Jurisprudence of GATT and the WTO: Insights on Treaty Law and Economic Relations (Cambridge University Press, 2007);
Orin Kirshner and Edward M. Bernstein, eds., The Bretton Woods-GATT System: Retrospect and Prospect After Fifty Years (M.E. Sharpe, 1995).

General Electric

General Electric Company, often referred to as GE, is a publicly traded, United States–based multinational corporation that designs, produces, and markets an enormous range of products and services across six divisions. Despite having recently decided to shed its venerable home appliances unit, the company boasts an extensive list of business divisions, each with its own pervasive list of business units: GE Commercial Finance offers products and services, including loans and insurance, to manufacturers and distributors; GE Money offers credit cards, loans and mortgages, and deposit and savings products to consumers and retailers; GE Healthcare designs and manufactures medical imaging equipment and information technologies, medical diagnostics, and patient monitoring and life-support systems; GE Infrastructure manufactures aircraft engines of all sizes, turbines and generators, drilling equipment, oil and gas technology, electric diesel locomotives, and water process systems; NBC Universal develops, produces, and markets media and entertainment—such as film, television, news, sports, and special events—to a worldwide audience; GE Industrial offers lighting, factory automation systems, electrical power distribution and control systems, and security technologies. But this relatively short list of business units conceals the origins of a company that was founded in an era of transformative innovation.

GE traces part of its beginnings to the inventor Thomas Alva Edison, who established the Edison Electric Light Company in 1878. A few years before, Edison had established a laboratory in Menlo Park, New Jersey, at which he could explore work on electrical devices. From his laboratory, Edison promised to develop and sell one minor invention every 10 days and one major invention every six months. The first of many of the latter breakthroughs was the stock ticker. But it is his invention of the first commercially viable incandescent electric lamp, in 1879, that encouraged J. P. Morgan and the Vanderbilt family to partner with the inventor to take Edison Electric Light public. By 1890 Edison established the Edison General Electric Company by merging his three electric light manufacturing businesses.

But by 1892, with having to compete with other early electrical industry companies for patents and technologies, the Edison General Electric Company merged with Thomson-Houston Electric Company to create General Electric Company.

Going into the new century, Edison’s varied business offerings—which had grown to include at least lighting, transportation, communication, power systems, home appliances, and medical equipment—were now folded into the new company. At the same time, Charles A. Coffin had come from the Thomson-Houston side and was building the GE strategy as its first CEO.

Relatively early on, he accepted the pleas of chief consulting engineer Charles Proteus Steinmetz that the company should construct a research laboratory so as to maintain its lead in lighting and electricity and also to innovate and develop new products for its growing market. This laboratory, based in Schenectady, New York, was the first industrial laboratory in the United States.

In the following years, beyond improving its already successful product lines and developing new ones, the company also became one of the first to consider customer values and market appeal during the product design stage. And with the exception of some ethical and legal lapses in the mid-20th century, GE built on its strengths and continued to perform as one of the leading companies in business and industry. This held true during the Great Depression, as the company’s penchant for diversification tempered the difficult economic times. Later on, GE was also one of the first companies to utilize a decentralized organizational hierarchy that placed top management responsibility in an Executive Office and provided employees with considerable autonomy in their work.

Another feature of the organization is its dedication to employee development, the best evidence of which is the consistent promotion of people who have made long-standing and productive commitments to GE. This includes the list of people who have assumed the top position in the company, from the early days of Charles A. Coffin, E. W. Rice, Gerard Swope, and Owen D. Young to the eras of Charles E. Wilson, Philip D. Reed, Ralph J. Cordiner, Gerald L. Phillippe, and Fred J. Borch to the later 20th-century leadership of Reginald H. Jones and John F. (Jack) Welch.

Among this list of notable individuals, Jack Welch has achieved iconic status for having driven GE from a market value of approximately $14 billion, when he assumed leadership responsibilities in 1981, to something on the order of several hundred billion dollars when he left 20 years later. During that time, Welch also transformed GE from the United States’s 10th largest company by market capitalization to the world’s largest by market capitalization. Welch was succeeded by another long-term GE employee, Jeffrey R. Immelt. At present, GE is one of the world’s largest companies— and the only original Dow Jones Industrial Index company to remain on the list to this day. In 2008, GE’s revenue was $183 billion and earnings were $18.1 billion.

Bibliography:

B. Carlson, Innovation as a Social Process: Elihu Thomson and the Rise of General Electric, 1870–1900 (Cambridge University Press, 1992);
Eckes, General Electric’s Six Sigma Revolution: How General Electric and Others Turned Process Into Profits (Wiley, 2000);
Jonnes, Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World (Random House, 2004);
Bill Lane, Jacked Up: The Inside Story of How Jack Welch Talked GE Into Becoming the World’s Greatest Company (McGrawHill Professional, 2008);
William E. Rothschild, The Secret to GE’s Success (McGraw-Hill, 2007);
E. Stross, The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World (Crown, 2007);
Welch and J. A. Byrne, Jack: Straight from the Gut (Warner Books, 2001).

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