The Rise of the American System - Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order - page 133

commitments and obligations—evolved into a more managed and American-run system. The
negotiations over Lend-Lease assistance to Britain, the Bretton Woods agreements, the Mar-
shall Plan, and the rising role of the American dollar and domestic market all helped shape
the terms of postwar order.
At the outset, American wartime assistance to Britain in the summer of 1941 provided
the trigger for wider discussions between Washington and London over rules and arrange-
ments of the world economy. The Ottawa Agreements of 1932, which established Britain's
network of imperial preferences, were seen by American officials as one of the causes of
economic breakdown in the 1930s and a major obstacle to a postwar nondiscriminatory com-
mercial system. If the United States was to lend resources to Britain to win the war, it expec-
ted the British not to discriminate against American trade after hostilities ended. At the At-
lantic Charter meeting between Roosevelt and Churchill, the British leader resisted language
that would signal a specific and absolute commitment to dissembling its preferential system.
But the United States insisted on a British commitment to “[t]he elimination of all forms of
discriminatory treatment in international commerce” as part of the Mutual Aid Agreement
signed by the two governments in February 1942, establishing Lend-Lease. 64
The negotiations that ensued over the following years involved a struggle between two
objectives. On the American side, the goal was to bring the rest of the world into an open
trading system in which barriers to trade and international payments would be lowered and
made nondiscriminatory. The war had turned the United States into a global juggernaut—its
power and wealth overshadowed all others, and it held the bargaining advantages at every
turn. On the other side, Britain and continental Europe were diminished by the war, and polit-
ical leaders worried about a postwar recession and rising unemployment. Open trade was less
critical than the establishment of social protections to guard against social and economic in-
stability. In Britain, the political left wanted to ensure that postwar economic arrangements
were consistent with government commitments to full employment, and the political right
maintained its defiant embrace of imperial preferences. 65 Thus, Britain sought a variety of
assurances and policy commitments from Washington. It wanted a postwar economic settle-
ment that would facilitate full employment, open up the American market for imports, and
provide assistance to overcome balance-of-payments difficulties.
The movement away from America's initial open trade position came in several steps.
One occurred in the famous Anglo-American negotiations between Keynes and Harry Dexter
that culminated in the Bretton Woods agreements. These negotiations—which established
the International Monetary Fund and World Bank—moved the debate over the principles and
rules of the postwar world economy from trade to monetary and financial arrangements. The
agreements that were reached were consistent with Washington's goal of market openness in
the sense that monetary rules would ensure the convertibility of currencies. Currency blocs
would not be permitted. But Britain and the other European states also got protections. Al-