The Organisation for European Economic Co-operation (OEEC), the predecessor organization of the OECD, found that once it had achieved its goals for a European Payments Union and the establishment of a Liberalisation code, it lacked any clear mandate. Other changes were happening at the time; in 1956 six countries decided to constitute the European Economic Community which came into being on the 1 January 1959 and with the establishment in 1960 of the European Free Trade Association (EFTA), the purpose for which the OEEC came into being, European cooperation, now seemed likely to endanger the Organisation by virtue of the existence of two other European organisations.
Europe at this time was doing well economically but developing countries were paying the price, in that they were severely affected by the drop in prices of raw materials which constituted their main source of income. In December 1957, Dwight D Eisenhower, Charles de Gaulle, Harold Macmillan and Konrad Adenauer met in Paris where they discussed methods of increasing co-operation for the benefit of developing countries. A Preparatory Committee working on the advice of 4 experts was formed to draw practical conclusions from the principles laid down by the four leaders. This work led to the Convention setting up this new Atlantic Organisation, the OECD, in September 1961 to replace the OEEC. Its outlook was worldwide, and among its aims, the achievement of the highest sustainable growth was to work to their own advantage but also in the interests of developing countries. The OECD retained the unanimity rule of the OEEC along with the abstention procedure, therefore any Member Country not agreeing with a particular measure can put no obstacles in the way of its application by other Member Countries.
The Convention on the Organisation for Economic Co-operation and Development was signed on 14 December 1960 by 18 European countries and the US and Canada and came into effect on 30 September 1961. The three main objectives as laid down in the OECD Convention were: 1. to achieve the highest sustainable economic growth and employment and a rising standard of living in Member Countries, while maintaining financial stability, and thus to contribute to the development of the world economy; 2. to contribute to sound economic expansion in Member as well as non-Member Countries in the process of economic development; 3. to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international objectives. The OECD therefore, represented a transformation and an extension of the OEEC.