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In 1944 an international conference took place in Bretton Woods, New Hampshire (USA). 44 countries attended this conference in order to restructure international finance and currency relationships. The participants of this conference created the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD/World Bank). Additionally, they agreed on implementing a system of fixed exchange rates with the U.S. dollar as the key currency.
The IMF is an international agency that attempts to stabilize currencies by monitoring the foreign exchange systems to member countries and by lending money to developing economies. The world bank is an international agency that provides loans and technical assistance to low and middle income countries with the goal of reducing poverty. It established the notion of fixing exchange rates within an international regime so as to minimize currency risk. .
Decisions are normally taken by consensus. All major decisions are made by the membership as a whole. In the WTO. the WTO is different from some other international organizations such as the World Bank and International Monetary Fund.WTO The WTO is run by its member governments. either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva). power is not delegated to a board of directors or the organization¶s head . In this respect.
Location: Geneva. Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986±94) Membership: 153 countries (since 23 July 2008) Budget: 194 million Swiss francs for 2010 Secretariat staff: 637 Head: Pascal Lamy (Director-General .
Functions Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations .
prevent the spread of disease or protect the environment. . the WTO is a place where member governments go. Essentially. to try to sort out the trade problems they face with each other. and in some circumstances its rules support maintaining trade barriers ² for example to protect consumers. negotiated and signed by the bulk of the world¶s trading nations. The first step is to talk. But the WTO is not just about liberalizing trade. At its heart are WTO agreements.
It¶s an organization for liberalizing trade. It operates a system of trade rules. It¶s a place for them to settle trade disputes. It¶s a forum for governments to negotiate trade agreements. There are a number of ways of looking at the WTO. .
freer ² barriers coming down through negotiation predictable ² foreign companies.Principle without discrimination ² a country should not discriminate between its trading partners (giving them equally ³most favoured. tariff rates and marketopening commitments are ³bound" in the WTO. more competitive ² discouraging ³unfair´ practices such as export subsidies and dumping products at below cost to gain market share. and special privileges . and it should not discriminate between its own and foreign products. services or nationals. investors and governments should be confident that trade barriers (including tariffs and non-tariff barriers) should not be raised arbitrarily. more beneficial for less developed countries giving them more time to adjust.nation´ or MFN status). greater flexibility.
High rates of unemployment and constant factory closures led governments in Western Europe and North America to seek bilateral market-sharing arrangements with competitors and to embark on a subsidies race to maintain their holds on agricultural trade. Continual reductions in tariffs alone helped spur very high rates of world trade growth during the 1950s and 1960s. Both these changes undermined GATT¶s credibility and effectiveness. but its success over 47 years in promoting and securing the liberalization of much of world trade is incontestable. drove governments to devise other forms of protection for sectors facing increased foreign competition. GATT¶s success in reducing tariffs to such a low level.Did GATT succeed? GATT was provisional with a limited field of action. . combined with a series of economic recessions in the 1970s and early 1980s.
more automatic than GATT¶s. WTO covers services and intellectual property as well. and the agreements themselves describe how the WTO is to function. WTO and its agreements are permanent As an int¶l organization. Its rulings cannot be blocked . nor did it provide for the creation of an int¶l organization. WTO dispute settlement is faster. GATT dealt with trade in goods. WTO has a sound legal basis because members have ratified it. Table 1: Differences between GATT and WTO GATT was ad hoc and provisional General Agreement was never ratified by members.
Because of the complexities of the issues involved and conflict of interests .THE URUGUAY ROUND The VIIIth and the latest round of Multilateral Trade Negotiations is known as Uruguay Round because it was held in Pantadel Este in Uruguay in September 1986. 'the Uruguay Round could not be concluded in December 1990 as' it was originally scheduled: This round concluded in 1993. .among the participating countries.
investment and information. (C) Patents:. the Uruguay Round agreement regarding patenting of seeds does not prevent farmers from retaining seeds for their own use or exchange of seeds. However. went much beyond goods to services.These were the highly protected sectors in developed as well as developing countries. . trademark. trade in textiles was restricted by the Multi-fiber Agreement (MFA). trade secrets. geographical appellations. industrial designs. (D) Farmers' Interest :. 'technology. Similarly. (B) Liberalization of Trade in Agriculture and Textile Goods :.One of major areas of objection in India is about Trips agreement. leading to . farmers' agitation.Contrary to the wrong propaganda in India.The major highlights of the Uruguay Round are: A) Expansion in the Sphere of Activities :. The Trips agreement includes seven areas of intellectual property rights namely copyright. integrated circuits and patents. however. it is only in the area of patents that India's present policy laws and regulations are not in conformity with TRIPs agreement. The Uruguay Round successfully brought about liberalization of both these sectors by dismantling the MFA and reducing import barriers on agricultural goods. The Uruguay Round.The traditional concerns of the GATT were limited to international trade in goods. It is important to note that of these seven areas. Farmers were patronized in various ways such as import of subsidized inputs and export subsidies. if should be noted that liberalization of agriculture by developed nations would benefit developing countries more as there is no reciprocity on the part of developing countries to liberalize agricultural sector in their countries.
One of the major achievements of the Uruguay round is the making of rules and regulations more transparent which has made unilateral actions more difficult. Again direct subsidies to be cut by :36% over the same period. India remains unaffected by these provisions. pharmaceutical.3% in developing countries and by 20% in developed countries over a period of 6 years. the developed countries are committed to effect tariff cut by 36% over a period of 6 years.Developing countries were very apprehensive about the proposal to liberalize trade in services. and European Community (EC) on this issue left.Export subsidies to farmers to be cut by 13. etc. the service sector largely unaffected. (F) Tariff Cut:. which has replaced the GATT. However. . In industrial countries. wood and wood products.While developing countries have to cut tariffs by 24% over the period of next 10 years.S. The results of Uruguay round are to be implemented by the newly set up WTO. the difference of opinion between the U. (H) Establishment of the WTO :. All these are applicable provided the value of subsidies is more than 10% of the value of output. (G) Trade in Services :. tariffs would be totally eliminated in several sectors like steel. Agriculture subsidies in India are much below 10% of the total value of output and therefore.(E) Subsidies:.
consults. 1947. when the 29 participating countries at the conference of Bretton Woods signed its Articles of Agreement. 1945. Furthermore. It facilitates world trade expansion and thereby contributes to the promotion and maintenance of high levels of employment and real income. It commenced its financial operations on March 1. the IMF ensures exchange rate stability to avoid competitive exchange depreciation. Moreover. The IMF is an international organization. and collaborates on monetary problems. which today consists of 183 member countries. member countries with disequilibrium's in their balance of payments are provided with the opportunity to correct their problems by making the financial resources of the IMF available for them .IMF Purpose: The IMF was officially established on December 27. It eliminates foreign exchange restrictions and assists in creating systems of payment for multilateral trade. The purposes of the IMF are to promote international monetary cooperation by establishing a global monitoring agency that supervises.
which consists of one Governor (usually the minister of finance or the head of the central bank) of each member country. which is formed of 24 Executive Directors who meet at least three times a week to supervise the implementation of the IMF¶s policies. The highest authority is the Board of Governors. there is an equal number of Alternates (representative Governors).Organisation The IMF has no control over national economic policies of its members. The IMF¶s day-to-day work is managed by the Executive Board. who has as many votes as the quota regulation assigns to his country. . On the contrary. the chain of command runs from the governments of the member countries to the IMF. The Board of Governors gathers only on the occasion of annual meetings. The member countries with the highest quotas send one Executive Director to the Board. Additionally.
It provides ³nearly $16 billion in loans annually to its client countries. it encourages foreign direct investment by making guarantees or accepting partnerships with investors. advisory. nongovernmental institutions and private enterprises. It is active in more than 100 developing economies. It supports the restructuring process of economies and provides capital for productive investments. It uses its financial resources. highly trained staff. It offers financial services. It forms assistance strategies by cooperating with government agencies. analytical.´ Its goals are to improve living standards and to eliminate the worst forms of poverty. and capacity building . The World Bank aims to keep payments in developing countries balanced and fosters international trade. and equitable growth in the fight against poverty.World Bank Goals The World Bank is the world¶s most important source of financial aid for developing nations. Furthermore. sustainable. and extensive knowledge base to help each developing country onto a path of stable.
Organization The World Bank is an independent organization of the United Nations. . The highest authority of the World Bank is the Council of Governors. which consists of one representative of each country. has to be a member of the IMF. government and then confirmed by the Executive Board. Each country that wants to join it.S. The President of the World Bank is de facto elected by the U. The Executive Board consists of five Directors to whom the Council of Governors transfers responsibility for nearly all issues. He is involved in the current activities.
At its Annual Meeting in September 2006. broadening the provision of free-standing knowledge services and making it easier for clients to deal with the Bank. which enables it to borrow at low cost and offer clients good borrowing terms. risk management products. IBRD is overhauling financial and risk management products. and analytical and advisory services. IBRD raises most of its funds on the world's financial markets and has become one of the most established borrowers since issuing its first bond in 1947. The income that IBRD has generated over the years has allowed it to fund development activities and to ensure its financial strength. . the World Bank ² with the encouragement of its shareholder governments ² committed to make further improvements to the services it provides its members. IBRD is structured like a cooperative that is owned and operated for the benefit of its 187 member countries. guarantees. To meet the increasingly sophisticated demands of Middle-income group. Established in 1944 as the original institution of the World Bank Group. The International Bank for Reconstruction and Development (IBRD) aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans.
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