Since World War II, rising global prosperity has been encouraged by an international economic system committed to increasing free exchange of goods and services across national boundaries. Following the disastrous tariff wars which aggravated the Great Depression, the commitment to reduce trade barriers has been implemented largely through a series of multilateral agreements negotiated under the General Agreement on Tariffs and Trade (GATT).
In the 1970s the international economy has become increasingly unstable. The international monetary system, established at Bretton Woods in 1944 and built on fixed exchange rates, collapsed in 1971 and a new system, built on floating rates, has emerged. The system was severely shaken in 1973-1974 when the OPEC cartel quadrupled oil prices. In recent years the value of the dollar has fallen precipitously against other major currencies, notably the Japanese yen, the German mark, and the Swiss franc. The dollar's decline in the fall of 1978 reached panic proportions, forcing what may be the beginning of a major change in U.S. policy toward its rising inflation.
The 1970s have also seen a marked rise in protectionist sentiment in the United States and abroad. The success of the OPEC cartel has encouraged other Third World nations to create similar cartels, and although these have not been notably successful, negotiations are underway to create commodity agreements which some observers fear will serve the same purpose. Increasing concern about foreign imports has