World Trade Organization and

World Bank
Submitted by
Ahmad Husnain
BBA-20-111
Submitted to
Rafia Kazmi
Course
International Business
Department of Business Administration
University of Sahiwal, Sahiwal
World Trade Organization
History
The World Trade Organization (WTO) is an intergovernmental organization that regulates
and facilitates international trade. It was officially established in 1995 as successor to the
General Agreement on Tariffs and Trade (GATT), which had been established in 1948.
Today, the WTO is the world's largest international economic organization, with 164 member
states representing over 98% of global trade and global GDP.

The origins of the WTO can be traced back to the end of World War II, when the world was
in ruins and the global economy was in tatters. In an effort to rebuild and promote peace and
prosperity, nations came together to create a system of rules that would govern international
trade. This system, known as the General Agreement on Tariffs and Trade (GATT), was
signed by 23 countries in 1947.

GATT's primary goal was to reduce tariffs, or taxes on imports, in order to make it easier for
countries to trade with each other. Over the years, GATT was successful in negotiating a
number of tariff reductions, which helped to boost global trade.

Establishment of the WTO In the 1980s, it became clear that GATT was no longer adequate
to address the challenges of the modern global economy. In particular, the rise of new
industries, such as services and intellectual property, was not adequately covered by GATT's
rules.

As a result, in 1986, a new round of trade negotiations was launched, known as the Uruguay
Round. The Uruguay Round was the largest and most ambitious trade negotiation ever
undertaken, and it took eight years to complete.

The Uruguay Round resulted in the creation of the World Trade Organization (WTO), which
replaced GATT on January 1, 1995. The WTO's mandate is much broader than GATT's, and
it covers trade in goods, services, and intellectual property. The WTO also has a new dispute
settlement system, which is designed to be more effective and transparent than the old GATT
system.

Since 1995 Since its creation, the WTO has played a key role in promoting global trade and
economic growth. The WTO's rules have helped to reduce tariffs and other barriers to trade,
which has made it easier for businesses to operate in multiple countries. This, in turn, has led
to increased investment, job creation, and economic growth.

The WTO has also been a forum for resolving disputes between its members. The WTO's
dispute settlement system has been used to resolve a number of high-profile trade disputes,
including the US-EU banana dispute and the US-Japan beef dispute.
In recent years, the WTO has faced a number of challenges, including the rise of
protectionism, the increasing complexity of global trade, and the emergence of new issues
such as climate change and e-commerce. However, the WTO remains an important institution
for promoting global trade and economic growth.

Future of the WTO The future of the WTO is uncertain. The organization is facing a number
of challenges, and it is unclear whether it will be able to meet the needs of the 21st century
global economy. However, the WTO remains an important institution for promoting global
trade and economic growth, and it is likely to continue to play a role in the world economy
for many years to come.

Purposes of the WTO:

The World Trade Organization (WTO) is an intergovernmental organization that aims to

reduce obstacles to international trade and to ensure that trade flows as smoothly, predictably,
and freely as possible. The WTO's primary purpose is to open trade for the benefit of all.

Here are some of the key purposes of the WTO:

1. Administering trade agreements:

The WTO oversees the implementation of a set of trade agreements that its members have
negotiated. These agreements cover a wide range of issues, including tariffs, subsidies, and
intellectual property rights.
2. Acting as a forum for trade negotiations:
The WTO provides a forum for its members to negotiate new trade agreements. These
negotiations can be multilateral (involving all WTO members) or plurilateral (involving a
smaller group of WTO members).
3. Settling trade disputes:
The WTO's dispute settlement system provides a way for its members to resolve trade
disputes peacefully. This system is based on the principle of non-discrimination, which
means that all WTO members are treated equally.
4. Reviewing national trade policies:
The WTO regularly reviews the trade policies of its members. This helps to ensure that these
policies are consistent with the WTO's rules and principles.
5. Building the trade capacity of developing economies:
The WTO provides technical assistance and other support to help developing economies
build their trade capacity. This includes helping them to implement WTO agreements and to
participate in trade negotiations.

6. Cooperating with other international organizations:

The WTO cooperates with other international organizations, such as the World Bank and the
International Monetary Fund, to promote trade and economic development.

The WTO has been successful in reducing tariffs and other barriers to trade. As a result, trade
has grown faster than the global economy, and living standards have risen in many countries.
However, the WTO has also been criticized for its lack of transparency and for its failure to
address issues such as labour rights and environmental protection.

Structure of WTO:

Ministerial Conference

The Ministerial Conference is the highest decision-making body of the WTO. It is composed
of representatives from all WTO members and meets every two years. The Ministerial
Conference can make decisions on any matter under any of the WTO agreements.

General Council

The General Council is the WTO's day-to-day governing body. It is composed of

representatives from all WTO members and meets regularly in Geneva. The General Council
oversees the implementation of the WTO agreements and makes decisions on a wide range of
issues, such as trade disputes and the work of the WTO's subsidiary bodies.

Dispute Settlement Body (DSB)

The DSB is responsible for settling disputes between WTO members. It is composed of
representatives from all WTO members and operates on a continuous basis. The DSB can
establish panels to hear disputes and can make rulings that are binding on the parties to the
dispute.

Trade Policy Review Body (TPRB)

The TPRB conducts regular reviews of the trade policies of WTO members. These reviews
are designed to help members identify and address any problems with their trade policies.
The TPRB reports are an important source of information for WTO members and other
stakeholders.

Councils

The WTO has three councils that deal with specific issues:

 The Goods Council is responsible for overseeing the implementation of the WTO's
agreements on goods.
 The Services Council is responsible for overseeing the implementation of the WTO's
agreements on services.
 The Intellectual Property (TRIPS) Council is responsible for overseeing the
implementation of the WTO's agreements on intellectual property.
 Secretariat

The WTO Secretariat is responsible for providing administrative and technical support to the
organization. The Secretariat is headed by a Director-General and is located in Geneva,
Switzerland.

In addition to these formal bodies, the WTO also has a number of informal groups and
committees. These groups and committees provide a forum for members to discuss issues of
common interest and to develop new proposals.

The WTO's structure is designed to be flexible and adaptable. This allows the organization to
respond to the changing needs of its members. The WTO's structure also helps to ensure that
all members have a voice in the organization's decision-making process.

Member countries

Chaina, Malysia, Luxemburg, Australia, Mexico, Kuwait, Koria, Japan, Kenya, Italy, Ireland,
Indonesia, Iceland, India and many more.

World Bank
Introduction
The World Bank is an international organization dedicated to providing financing, advice, and
research to developing nations to aid their economic advancement. It is a vital player in the global
fight against poverty and inequality.

History
The World Bank was established in 1944 at the Bretton Woods Conference, alongside the
International Monetary Fund (IMF). The bank's initial mission was to help rebuild Europe and Japan
after the devastation of World War II. Over time, its focus has shifted to promoting economic
development in low- and middle-income countries around the world.

Objectives of the World Bank

The World Bank's overarching mission is to end extreme poverty and promote shared
prosperity in developing countries. To achieve this goal, the bank focuses on four key areas:

 Reducing poverty:
 The bank provides loans and grants to governments to support programs that help people lift
themselves out of poverty.

 Promoting economic growth:

The bank works to create a stable and enabling environment for economic growth in
developing countries.

 Investing in human capital:

The bank invests in education, health, and nutrition to improve the lives of people in
developing countries.

 Combating climate change:

The bank is working to help developing countries mitigate and adapt to the effects of climate
change.

Structure of World Bank

The World Bank Group is a multilateral financial institution composed of five closely related
institutions:

1. International Bank for Reconstruction and Development (IBRD):

The IBRD is the original lending arm of the World Bank Group, established in 1944. It
provides loans and grants to governments of middle-income and creditworthy low-income
countries.

2. International Development Association (IDA):

The IDA, created in 1960, is the World Bank Group's primary channel for concessional
financing to low-income countries. It provides loans and grants at zero or near-zero interest
rates to support economic development and poverty reduction programs.

3. International Finance Corporation (IFC):

The IFC, established in 1956, is the World Bank Group's private sector arm. It invests in
private businesses in developing countries to promote economic growth and job creation.

4. Multilateral Investment Guarantee Agency (MIGA):

 MIGA, created in 1988, provides insurance to investors against political risks associated with
foreign investments in developing countries.

5. International Centre for Settlement of Investment Disputes (ICSID):

ICSID, established in 1965, is an international arbitration tribunal that provides a forum for
resolving investment disputes between private investors and host governments.

Governance Structure

The World Bank Group is governed by its Board of Governors, consisting of finance
ministers or their designated representatives from each member country. The Board of
Governors meets annually to set policies and approve major decisions.

The Board of Executive Directors, made up of 25 members representing different groups of

countries, oversees the day-to-day operations of the World Bank Group. The Executive
Directors are appointed by the Board of Governors and serve for five-year terms.

The President of the World Bank Group is the head of the organization and is responsible for
its overall management. The President is appointed by the Executive Directors and serves for
a five-year term.

Additional Components

In addition to the five core institutions, the World Bank Group also includes several other
entities that provide specialized services and expertise:

 World Bank Institute (WBI):

The WBI offers training and capacity-building programs for government officials, private
sector leaders, and civil society representatives in developing countries.

 Independent Evaluation Group (IEG):

The IEG conducts independent evaluations of the World Bank Group's operations to assess
their effectiveness and impact.

 Inspection Panel:

The Inspection Panel investigates allegations of harm caused by World Bank Group-financed
projects.

 Group Internal Audit (GIA):

 The GIA conducts independent audits of the World Bank Group's financial and operational
activities.

 Office of the Ombudsman:

The Office of the Ombudsman provides an independent mechanism for resolving complaints
about the World Bank Group's staff and operations.

This structure allows the World Bank Group to provide a comprehensive range of financial,
advisory, and research services to developing countries, supporting their efforts to achieve
sustainable economic growth and poverty reduction.

Types of Loans That World Bank Provide

The World Bank provides a variety of loans to developing countries to support their
economic development and poverty reduction efforts. These loans can be categorized based
on their purpose, terms, and eligibility criteria.

Types of Loans Based on Purpose

 Investment Project Financing (IPF):

These loans are provided to finance specific investment projects, such as infrastructure
development, education programs, and health initiatives.

 Development Policy Financing (DPF):

These loans are used to support a country's overall development policy agenda, such as
improving governance, promoting economic growth, or reducing poverty.

 Program-for-Results (PforR):

These loans are linked to the achievement of specific development results, such as increased
school enrollment, improved child health outcomes, or reduced poverty rates.

Types of Loans Based on Terms

 Fixed-rate loans:

These loans have a fixed interest rate that remains constant throughout the loan term.

 Variable-rate loans:

These loans have an interest rate that is adjusted periodically based on market conditions.
 Grace period:

The grace period is a period of time during which the borrower is not required to make
repayments on the principal amount of the loan.

 Maturity period:

The maturity period is the length of time over which the borrower must repay the loan.

Types of Loans Based on Eligibility Criteria

 IBRD loans:

These loans are provided to middle-income countries and creditworthy low-income countries.

 IDA loans:

These loans are provided to low-income countries on concessional terms, meaning that they
have lower interest rates and longer repayment periods than IBRD loans.

 Global concessional financing facility (GCFF):

The GCFF provides low-cost loans to IDA countries to address global challenges such as
climate change and fragility.

Additional Modalities

In addition to traditional loans, the World Bank also provides other forms of financing, such
as:

 Grants:

Grants are non-repayable transfers of funds that do not require repayment.

 Guarantees:

Guarantees provide credit protection to investors in developing countries.

 Financial risk management products:

These products help countries manage risks associated with financial markets, such as
interest rate fluctuations and currency exchange rate fluctuations.

 Disaster risk management products:

These products help countries prepare for and respond to natural disasters.

The World Bank's selection of the most appropriate type of financing for a particular project
or program is based on a careful assessment of the country's economic, financial, and risk
profile. The bank also takes into account the borrower's ability to repay the loan and the
project's potential development impact.

By providing a variety of financing options, the World Bank aims to support developing
countries in their efforts to achieve sustainable economic growth, reduce poverty, and
improve the lives of their citizens.

Banks Working Under World Bank

The International Bank for Reconstruction and Development (IBRD)

This is the World Bank's main operating arm. It provides loans and grants to governments of
middle-income and creditworthy low-income countries.

The International Development Association (IDA)

The World Bank's concessional lending arm. It provides loans and grants at zero or near-zero
interest rates to low-income countries.

The International Finance Corporation (IFC)

IFC is the World Bank's private sector arm. It finances private sector projects in developing
countries.

The Multilateral Investment Guarantee Agency (MIGA)

This is the World Bank's political risk insurance arm. It provides insurance to investors
against political risks associated with foreign investments in developing countries.

The International Centre for Settlement of Investment Disputes (ICSID)

This is the World Bank's investment dispute resolution arm. It provides a forum for resolving
investment disputes between private investors and host governments.

In addition to these five core institutions, the World Bank Group also includes several other
entities that provide specialized services and expertise, such as the World Bank Institute
(WBI), the Independent Evaluation Group (IEG), the Inspection Panel, the Group Internal
Audit (GIA), and the Office of the Ombudsman.

The World Bank works with a variety of partners in developing countries, including
governments, civil society organizations, the private sector, and other international
organizations. The bank's partnerships are essential for achieving its goals of reducing
poverty, promoting economic growth, and improving the lives of people in developing
countries.

Impact of the World Bank

The World Bank has made a significant impact on the lives of people in developing countries.
The bank's loans and grants have helped to finance infrastructure projects, education
programs, and health initiatives. The bank's research has also provided valuable insights into
the challenges and opportunities facing developing countries.

However, the World Bank has also been criticized for its policies and practices. Some critics
argue that the bank's lending practices are too focused on infrastructure projects that benefit
large corporations, while others argue that the bank's policies are too focused on economic
growth and do not adequately address poverty and inequality.

Despite these criticisms, the World Bank remains an important institution in the global fight
against poverty and inequality. The bank's resources and expertise are vital to helping
developing countries achieve their economic and social goals.