The need to establish commercial regulations in the foreign arena became manifest at the turn of the twentieth century and the beginning of the twenty-first century, mainly as a result of the problems brought about by internal regulations of nation states devoted to international trade. The nation states played an active and marked role in establishing their own commercial regulations in order to maintain a good balance in this area and to boost an incipient domestic industry. Nonetheless, all of these national laws proved that there was no adequate regulation for commercial transactions at a world-wide level. The lack of such international regulations was a reflection of the commercial policies in use by the nation states which, far from boosting commercial activities, restricted global commercial turnover and prevented foreign economies from profiting from comparative costs. In other words, they denied the possibility to acquire imported goods in areas where such goods were produced at lower costs.
Consequently, the methods or policies employed by national governmentssuch as restrictions of certain fields in domestic industries, the benefit of exportsthe commercial privileges for dominant countries over colonies, the increase of customs barriers, and the direct control of imports and financial regulation-not only damaged and impoverished developing countries, but also became the main reason for initiating international trade regulations, with the fundamental purpose of developing alternative courses against governmental-driven measures.
The first attempts to establish the aforementioned commercial regulations were consolidated through the signing of bilateral and regional treaties, with the aim of reducing tariffs and other restrictions. However, in order for these agreements to come into effect and to avoid any kind of possible international discrimination-as they only included commercial benefits for the few signing countries-it was necessary for these treaties to be signed on multilateral grounds.
It was only after World War I, when the League of Nations was established in 1919, that a movement for the systematic regulation of international trade on a multilateral basis began. Although the League of Nations had limited duties in the economic field, it had no responsible body for commerce. Mercantile affairs were still conducted with traditional methods, that is, bilateral negotiations and international diplomatic conferences. The failure of the League of Nations-due to the United States' refusal to become a member, even though its president had been the driving force behind the foundation of this society-had a deep impact on the negotiations of all international treaties that did not receive support from the United States, at the time one of the leading world powers.
This was the reason why the world economy experienced a profound, dramatic, and memorable crisis in the 1920s, which gave rise to, among other things, the outbreak of World War II, a conflict that might have been prevented had the economy succeeded in becoming both a thriving commercial growth and an expansionist world system. From 1920 to 1930, however, the most significant attempts to reinstate world economy were the Brussels Financial Conference, held in 1920 to establish the financial and economic principles for the governments to follow, and the Conference for the Abolition of Prohibitions and Restrictions on Imports and Exports, held in 1927, where some decisions were made concerning a reduction of tariffs and other trade barriers, along with the approval of an Agreement for the abolition of prohibitions and restrictions on imports and exports. However, the Conference failed, and the Agreement never really came into effect.
The Great Depression-a result of, among other things, low foreign trade growth, in contrast with high production taxes-led to an industrial contraction, a deep financial crisis, and an increase in protectionist measures assumed by the nation states. …