Welcome to our Presentation on

Roles of International Economic Institutions

Course Title: Globalization, Trade and Development
Course Code: DS 2201

Ayatullah Khan
Development Studies Discipline
Khulna University
 Outlines
• Introduction
• Major International Economic Institutions
General Agreement on Tariffs and Trade (GATT)
World Trade Organization (WTO)
International Monetary Fund (IMF)
World Bank (WB)
South Asian Free Trade Area (SAFTA)
Trade-Related Aspects of Intellectual Property
Rights (TRIPS)
South -South Cooperation
• Conclusion
 Introduction
• International Trade is usually referred to the
exchange of goods or services along
international borders.
• It allows us to expand our markets for both
goods and services.
• The growth of international trade can be
increased, if the countries follow a common
set of rules, regulations, and standards
related to import and export.
• These common rules and regulations are
set by various international economic
institutions.
• These institutions aim to provide a level
playing field for all the countries and
develop economic cooperation.
 Major International Economic
Institutions
• The Major International Economic Institutions
are as followed-
General Agreement on Tariffs and Trade (GATT)
World Trade Organization (WTO)
International Monetary Fund (IMF)
World Bank (WB)
South Asian Free Trade Area (SAFTA)
Trade-Related Aspects of Intellectual Property
Rights (TRIPS)
South -South Cooperation
 General Agreement on Tariffs and
Trade (GATT)
• The GATT was a trade agreement that was
implemented to boost the economic
recovery.
• The primary purpose of GATT was to increase
international trade by eliminating or reducing
various tariffs, quotas and subsidies while
maintaining meaningful regulations.
• The General Agreement on Tariffs and Trade
(GATT) was formed early after the World War
II ended.
• GATT was signed in Geneva on October 30,
1947 by 23 nations.
• It was officially established on January 1,
1948.
• It was lasted after the signature of 123 nations
in Marrakesh on April 14, 1994 of the Uruguay
Round Agreements.
• That was established the World Trade
Organization (WTO) on January 1, 1995.
• Major GATT Negotiating Rounds:

First Round, Geneva, 1947, 21% Average Cut in

Tariffs.
Kennedy (6th) Round, Geneva, 1964-67, 36%
Average Cut in Tariffs.
Tokyo (7th) Round, Geneva, 1974-79, 30% Average
Cut in Tariffs.
Uruguay (8th) Round, Geneva, 1986-93, 33%
Average Cut in Tariffs. Lastly it created WTO as
successor to GATT which is beginning in 1995.
World Trade Organization (WTO)

• The World Trade Organization (WTO) is a

global international organization dealing
with the rules of trade between nations.
• The goal of WTO is to provide a fair platform
for its member countries to help in services
like exports, imports and conduct their
business in a peaceful way.
• Officially established at 1 January 1995
under the Marrakesh Agreement by
replacing the General Agreement on Tariffs
and Trade (GATT), which established at
1947.
• The WTO has 164 members and 22
observer governments.
• Role of WTO in International Trade
WTO facilitates implementation, administration
and smooth operations of trade agreements
between the countries.
It provides a forum for the trade negotiations
between its member countries.
It settles arguments between the member
countries through the established rules and
regulations.
It cooperates with the IMF (International
Monitory Fund) and World Bank in terms of
making cohesiveness in making global economic
policies.
 The International Monetary Fund
(IMF)
• The International Monetary Fund (IMF) is an
international organization.
• It is an international financial institution organized
in 1945 to promote international trade by
increasing the exchange stability of the major
currencies.
• The IMF promotes international monetary
cooperation and provides policy advice and
technical assistance to help countries build and
maintain strong economies.
• Objectives of IMF
To promote international monetary cooperation
through a permanent institution.
To facilitate the expansion and balanced growth
of international trade, and to contribute thereby
to the promotion and maintenance of high
levels of employment and real income and to
the development of the productive resources of
all members as primary objective of economic
policy.
To promote exchange stability, to maintain
orderly exchange arrangements among
members, and to avoid competitive exchange
depreciation.
 To establishment of a multilateral system of
payments.
Make resource of the fund available to the
members.
• Role of international monetary fund
Facilitate the cooperation of countries on
monetary policy, including providing the
necessary resources for both consultation and
the establishment of monetary policy in order to
minimize the effects of international financial
crises.
Assist the liberalization of international trade
by helping countries increase their real incomes
while lowering unemployment.
Help stabilize exchange rates between countries
especially after the global depression of the 1930s.
Maintain a multilateral system of payments that
eliminates foreign exchange restrictions. Countries
are thus free to trade with each other without
worrying about the effects of interest rates.
Provide a safeguard to members of the IMF against
balance of payments crises. i.e., when governments
cannot balance the money they have with the
money they owe to other countries.
Try to reduce the effects of volatility in countries'
balance of payments accounts, the IMF helps assure
that global trade and financial relationships can
continue at a steady rate without the risks of global
depressions like that of the 1930s.
 World Bank

• The World Bank is an international financial

institution that provides loans to countries of
the world for capital programs.
• It comprises two institutions: the
International Bank for Reconstruction and
Development (IBRD), and the International
Development Association (IDA).
• The origins of the World Bank (WB) are
conventionally dated back to the Bretton
Woods conference in 1944.
• Role of World Bank in international trade
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.“
The World Bank Group helps its client countries
improve their access to developed country
markets and enhance their participation in the
world economy.
The World Bank works to make the global
trading system more rules-based, predictable,
and supportive of development.
 It also works with developing countries to
improve their access to international markets
and strengthen the competitiveness of their
firms.
The World Bank Group (WBG) is the main
multilateral provider of Aid for Trade,
development assistance designed to help
developing countries more effectively engage in
international trade.
• The WB group has specific trade programs
which include the following:
Promotion of multilateral trading system that is
supportive of economic development.
Making the trade competitiveness the
centerpiece of the development strategies of
countries.
Supporting trade and the facilitation of related
reforms by way of the Bank’s “Aid for Trade”
programs.
The World Bank is a vital source of financial and
technical assistance to developing countries around
the world. Today, the World Bank Group is one of the
world's largest sources of development assistance.
 South Asian Free Trade Area (SAFTA)
• SAFTA is a regional co-operation agreement
signed between the member countries of SAARC
Bangladesh, Bhutan, India, Maldives, Nepal,
Pakistan, Sri Lanka and Afghanistan.
• It is a trade agreement to promote trade and
economic growth in South Asia by reducing tariffs
for intra-regional exports.
• SAFTA ensure eventual duty-free access for a vast
range of manufactured goods and commodities
traded between the signatories.
• Roles of SAFTA
Promoting and enhancing mutual trade and
economic cooperation by eliminating barriers in
trade.
Promoting conditions of fair competition in the
free trade.
Ensuring equitable benefits to all.
Establishing a framework for further regional
cooperation to expand the mutual benefits of the
agreement.
Creating effective mechanism for the
implementation and application of this
agreement, for its joint administration and for the
resolution of disputes.
Trade-Related Aspects of Intellectual
Property Rights (TRIPS)
• The Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) is an
international legal agreement between all the
member nations of the World Trade
Organization (WTO).
• The Agreement on Trade related Aspects of
Intellectual Property Rights of the WTO is
commonly known as the TRIPS Agreement or
simply TRIPS.
• Features/Roles of TRIPS
Standard: the agreement sets out minimum
standards of protection to be provided by each
member.
Enforcement: The second main set of provisions
deals with domestic procedures and remedies for
the enforcement of intellectual property rights.
The Agreement lays down certain general
principles applicable to all IPR enforcement
procedures.
Dispute settlement: The Agreement makes
disputes between WTO Members about the
respect of the TRIPS obligations subject to the
WTO's dispute settlement procedures.
 South-South Cooperation
• South -South cooperation made a notable impact
on development assistance, trade and investment,
infrastructure development and remittances
during the reporting period.
• The major developments in South-South
cooperation and progress made in the
implementation of the Buenos Aires Plan of
Action, the new directions strategy and the
Nairobi outcome document.
• The contributions of South-South cooperation,
especially in the context of the new,
transformative sustainable development agenda,
can still be maximized.
• Global context and trends
South-South cooperation is largely financed from
developing country resources. Chinese, Indian and
United Arab Emirates firms continue to be notable
investors in Africa.
Chinese FDI to Africa in 2013-2014 was reportedly
4.4 per cent of the total. As foreign direct
investment (FDI) flows into the global South
reached a new high of $741 billion in 2015
• Developing countries Africa
 South-South and triangular partnerships are
enhancing trade, investment, Infrastructure
development, industrialization and agricultural
productivity in Africa.
 Manufactured and intermediate goods
constituted 35.5 percent of intra-African trade in
2014, up from 33.8 per cent in 2010. Negotiations
on a continental free trade area in Africa began in
June 2015 with the aim of concluding an
agreement by the end of 2017.
• Asia-Pacific

 South-South cooperation in the Asia and the

Pacific region promotion, the enhance regional
integration and infrastructure development.
 Asia largest intra-sub regional trade is within
ASEAN plus China, Japan and the Republic of
Korea (45 per cent). ASEAN trade with the rest of
Asia is 44 per cent of its total trade.
• Interregional cooperation
A third South-South-driven process will culminate
in the May 2016 Mid-Term Review of the Istanbul
Programme of Action for the Least Developed
Countries for the Decade 2011-2020.
The five BRICS countries (Brazil, Russia, India,
China and South Africa) established the New
Development Bank that became operational in
2015.
 Conclusion
However, the role of international economic
organizations are helping to set the international
agenda, mediating political bargaining, providing
place for political initiatives.
International organizations also define the
salient issues and decide which issues can be
grouped together, thus help governmental
priority determination or other governmental
arrangements.