ASSIGNMENT: 1
GLOBAL INTERNATIONAL BUSINESS
WORLD TRADE ORGANIZATION
DEFINITION:
The World Trade Organization (WTO) is an intergovernmental
organization that is concerned with the regulation of international
trade between nations. The WTO officially commenced on 1 January 1995
under the Marrakesh Agreement, signed by 124 nations on 15 April 1994,
replacing the General Agreement on Tariffs and Trade (GATT), which
commenced in 1948. It is the largest international economic organization
in the world.
PURPOSE:
Reduction of tariffs and other barriers to trade
The purpose of the WTO is to ensure global trade commences
smoothly, freely and predictably.
The WTO creates and embodies the ground rules for global trade
among member nations, offering a system for international
commerce.
The WTO aims to create economic peace and stability in the world
through a multilateral system based on consenting member states
(in 2017 there were 164 members) that have ratified the rules of the
WTO in their individual countries as well.
This means WTO rules become part of a country's domestic legal
system.
The rules, therefore, apply to local companies conducting business
in the international arena.
MEMBERS:
The WTO has 164 members and 23 observer governments. Liberia became
the 163rd member on 14 July 2016, and Afghanistan became the 164th
member on 29 July 2016. In addition to states, the European Union, and
each EU country in its own right, is a member. WTO members do not have
to be fully independent states; they need only be a customs territory with
full autonomy in the conduct of their external commercial relations. Thus
Hong Kong has been a member since 1995 (as "Hong Kong, China" since
1997) predating the People's Republic of China, which joined in 2001 after
15 years of negotiations. The Republic of China (Taiwan) acceded to the
WTO in 2002 as "Separate Customs Territory of
China: Taiwan, Penghu, Kinsmen and Matsu" (Chinese Taipei) despite
its disputed status.
As of 2007, WTO member states represented 96.4% of global trade and
96.7% of global GDP. Iran, followed by Algeria, are the economies with the
largest GDP and trade outside the WTO, using 2005 data. With the
exception of the Holy See, observers must start accession negotiations
within five years of becoming observers. A number of international
intergovernmental organizations have also been granted observer status
to WTO bodies. 12 UN member states have no official affiliation with the
WTO.
MEMBER STATES OF THE WORLD TRADE
ORGANIZATION
The original member states of the World Trade Organization are the parties to
the GATT after ratifying the Uruguay Round Agreements, and the European
Communities. They obtained this status at the entry into force on 1 January 1995
or upon their date of ratification. All other members have joined the
organization as a result of negotiation, and membership consists of a balance of
rights and obligations. The process of becoming a World Trade
Organization (WTO) member is unique to each applicant country, and the terms
of accession are dependent upon the country's stage of economic development
and the current trade regime.
An offer of accession is given once consensus is reached among members. The
process takes about five years, on average, but it can take some countries almost
a decade if the country is less than fully committed to the process, or if political
issues interfere. The shortest accession negotiation was that of Kyrgyzstan,
lasting 2 years and 10 months. The longest were that of Russia, lasting 19 years
and 2 months, Vanuatu, lasting 17 years and 1 month, and China, lasting 15 years
and 5 months.
Applications:
Trade negotiations:
The WTO agreements cover goods, services and intellectual property. They
include individual countries’ commitments to lower customs tariffs and other
trade barriers, and to open and keep open services markets. They set procedures
for settling disputes. These agreements are not static; they are renegotiated from
time to time and new agreements can be added to the package. Many are now
being negotiated under the Doha Development Agenda, launched by WTO trade
ministers in Doha, Qatar, in November 2001.
Implementation and Monitoring:
WTO agreements require governments to make their trade policies transparent
by notifying the WTO about laws in force and measures adopted. Various WTO
councils and committees seek to ensure that these requirements are being
followed and that WTO agreements are being properly implemented.
Dispute Settlement:
The WTO’s procedure for resolving trade quarrels under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that
trade flows smoothly. Countries bring disputes to the WTO if they think their
rights under the agreements are being infringed
Building Trade Capacity:
WTO agreements contain special provision for developing countries, including
longer time periods to implement agreements and commitments, measures to
increase their trading opportunities, and support to help them build their trade
capacity, to handle disputes and to implement technical standards. The WTO
organizes hundreds of technical cooperation missions to developing countries
annually.
Outreach:
The WTO maintains regular dialogue with non-governmental organizations,
parliamentarians, other international organizations, the media and the general
public on various aspects of the WTO and the ongoing Doha negotiations, with
the aim of enhancing cooperation and increasing awareness of WTO activities.
INTERNATIONAL MONETARY FUND (IMF)
DEFINITION:
The International Monetary Fund (IMF) is an international organization that
aims to promote global economic growth and financial stability, encourage
international trade, and reduce poverty.
The International Monetary Fund (IMF) is an international organization
headquartered in Washington, D.C., consisting of "189 countries working
to foster global monetary cooperation, secure financial stability, facilitate
international trade, promote high employment and sustainable economic
growth, and reduce poverty around the world."
PURPOSE:
Promote international monetary co-operation, facilitate international
trade, foster sustainable economic growth, to make resources available to
members experiencing balance of payments difficulties.
The IMF's primary purpose is to ensure the stability of the
international monetary system—the system of exchange rates and
international payments that enables countries (and their citizens)
to transact with each other.
The Fund's mandate was updated in 2012 to include all
macroeconomic and financial sector issues that bear on global
stability.
MEMBER COUNTRIES:
Not all member countries of the IMF are sovereign states, and therefore
not all "member countries" of the IMF are members of the United
Nations. Amidst "member countries" of the IMF that are not member
states of the UN are non-sovereign areas with special jurisdictions that
are officially under the sovereignty of full UN member states, such as
Aruba, Curacao, Hong Kong, and Macau, as well as Kosovo. The
corporate members appoint ex-officio voting members, who are listed
below. All members of the IMF are also International Bank for
Reconstruction and Development (IBRD) members and vice versa.
Former members are Cuba (which left in 1964),and the Republic of China
(Taiwan), which was ejected from the UN in 1980 after losing the support
of than United States President Jimmy Carter and was replaced by the
People's Republic of China. However, "Taiwan Province of China" is still
listed in the official IMF indices.
APPLICATIONS:
The IMF’s fundamental mission is to ensure the stability of the
international monetary system. It does so in three ways: keeping track of
the global economy and the economies of member countries; lending to
countries with balance of payments difficulties; and giving practical
help to members.
Economic Surveillance:
The IMF oversees the international monetary system and monitors the
economic and financial policies of its 189 member countries. As part of
this process, which takes place both at the global level and in individual
countries, the IMF highlights possible risks to stability and advises on
needed policy adjustments.
Lending:
The IMF provides loans to member countries experiencing actual or
potential balance of payments problems to help them rebuild their
international reserves, stabilize their currencies, continue paying for
imports, and restore conditions for strong economic growth, while
correcting underlying problems.
Capacity Development:
The IMF works with governments around the world to modernize their
economic policies and institutions, and train their people. This helps
countries strengthen their economy, improve growth and create jobs.
THE WORLD BANK
DEFINITION:
The World Bank is an international organization dedicated to providing
financing, advice and research to developing nations to aid their economic
advancement.
PURPOSE:
The Bank's stated purpose is to "bridge the economic divide between poor
and rich countries." It does this by turning "rich country resources into
poor country growth." It has a long-term vision to "achieve sustainable
poverty reduction."
To achieve this goal, the Bank focuses on six areas:
Overcome poverty by spurring growth, especially in Africa.
Help reconstruct countries emerging from war, the biggest cause of
extreme poverty.
Provide a customized solution to help middle-income countries
remain out of poverty.
Spur governments to prevent climate change. It helps them control
communicable diseases, especially HIV/AIDS, and malaria. It
also manages international financial crises and promotes free
trade.
Work with the Arab League on three goals. They are to
improve education, build infrastructure, and provide micro-loans
to small businesses.
Share its expertise with developing countries. Publicize its
knowledge via reports and its interactive online database.
APPLICATIONS:
The World Bank Group works in every major area of development. We
provide a wide array of financial products and technical assistance, and
we help countries share and apply innovative knowledge and solutions to
the challenges they face.
Three priorities guide our work with countries to end poverty and boost
prosperity for the poorest people. Helping create sustainable economic
growth, investing in people and building resilience to shocks and threats
that can roll back decades of progress.
We can end extreme poverty and create more inclusive societies by
developing human capital. This requires investing in people through
nutrition, health care, quality education, jobs and skills.
We offer support to developing countries through policy advice, research
and analysis, and technical assistance. Our analytical work often
underpins World Bank financing and helps inform developing countries'
own investments.
MEMBER COUNTRIES:
189 members
All of the 193 UN members and Kosovo that are WBG members
participate at a minimum in the IBRD. As of May 2016, all of them
also participate in some of the other four organizations: IDA, IFC,
MIGA, and ICSID.
WBG members by the number of organizations which they participate
in: only in IBRD: None.
IBRD and one other organization: San Marino, Nauru, Tuvalu, Brunei
1. IBRD and two other
organizations: Antigua and Barbuda, Suriname, Venezuela, Nami
bia, Marshall Islands, Kiribati
2. IBRD and three other organizations: India, Mexico, Belize,
Jamaica, Dominican Republic, Brazil, Bolivia, Uruguay, Ecuador,
Dominica, Saint Vincent and the Grenadines, Guinea-Bissau,
Equatorial Guinea, Angola, South Africa, Seychelles, Libya,
Somalia, Ethiopia, Eritrea, Djibouti, Bahrain, Qatar, Iran, Malta,
Bulgaria, Poland, Russia, Belarus, Kyrgyzstan, Tajikistan,
Turkmenistan, Thailand, Laos, Vietnam, Palau, Tonga, Vanuatu,
Maldives, Bhutan, Myanmar
3. All five WBG organizations: the rest of the 138 WBG members
Non-Members Are: Andorra, Cuba, Liechtenstein, Monaco, State of
Palestine, Vatican City, Taiwan, and North Korea.
GENERAL AGREEMENT ON TARIFFS AND
TRADE
DEFINITION:
The General Agreement on Tariffs and Trade (GATT) is a legal
agreement between many countries, whose overall purpose was to
promote international trade by reducing or eliminating trade barriers
such as tariffs or quotas. According to its preamble, its purpose was the
"substantial reduction of tariffs and other trade barriers and the
elimination of preferences, on a reciprocal and mutually advantageous
basis."
PURPOSE:
Its purpose is the “substantial reduction of tariffs and other trade
barriers and the elimination of preferences, on a reciprocal and
mutually advantageous basis.
The purpose of GATT was to eliminate harmful trade protectionism.
That had sent global trade down 65 percent during the Great Depression.
GATT restored economic health to the world after the devastation of the
depression and World War II.
MEMBER COUNTRIES:
The original 23 GATT members were Australia; Belgium; Brazil; Burma,
now called Myanmar; Canada; Ceylon, now Sri Lanka; Chile; China; Cuba;
Czechoslovakia, now Czech Republic and Slovakia; France; India;
Lebanon; Luxembourg; Netherlands; New Zealand; Norway; Pakistan;
Southern Rhodesia, now Zimbabwe; Syria; South Africa; the United
Kingdom and the United States. The membership increased to more than
100 countries by 1993.
APPLICATIONS:
GATT was signed by 23 nations in Geneva on 30 October 1947, and took
effect on 1 January 1948. It remained in effect until the signature by 123
nations in Marrakesh on 14 April 1994, of the Uruguay Round
Agreements, which established the World Trade Organization (WTO) on 1
January 1995. The WTO is a successor to GATT, and the original GATT
text (GATT 1947) is still in effect under the WTO framework, subject to the
modifications of GATT 1994.
GATT, and its successor WTO, have successfully reduced tariffs. The
average tariff levels for the major GATT participants were about 22% in
1947, but were 5% after the Uruguay Round in 1999. Experts attribute part
of these tariff changes to GATT and the WTO.
MEMBER COUNTRIES
On 1 January 1948, GATT entered into force. The 23
founding members were: Australia, Belgium, Brazil, Burma, Canada,
Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon,
Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern
Rhodesia, Syria, South Africa, United Kingdom and the United States.
IMPORTANCE OF INTERNATIONAL TRADE
WITHIN THE FRAMEWORK OF COUNTRY
COMPETITIVENESS.
Make Utilization of Rich Crude Materials
A few nations are normally bounteous in crude materials-oil (Qatar),
metals, fish (Iceland). Without exchange, these nations would not profit by
the characteristic gifts of crude materials.
Comparative Advantage and Similar Favorable Position
The hypothesis of similar favorable position expresses that nations ought
to spend significant time in those merchandise where they have a
generally lower open door cost. Economy like UK may have a relative
preferred standpoint in instruction and computer game creation.
Exchange enables nations to practice.
Global Exchange Improves Welfare and Economy of the
Nation.
That was the point under dialog at the ongoing Global Farming Exchange
Exploration Consortium Yearly Gathering's Subject Day, sorted out by
Antoine Bouet , senior research individual at IFPRI. The Subject day
tended to four explicit parts of societal prosperity: sexual orientation
value, wellbeing, social equity and nourishment.
As indicated by laborde's introduction, there has been a persistent pattern
toward more globalized sustenance showcases in the course of recent
decades
