Unit 4.

International Economic
Institutional And Agreements.
Introduction
An organisation which combine Two and more country as
its members for a mutual financial concern regulated by
central body form an international cooperation is the
main concern of multinational institution witch are
dealing with the problem of social , cultural, economical,
technical ,or Humanisation nature.
There are various field which is international cooperation
is needed like governance , security, finance , scientific
research, envirmental, OR the Realisation ,of joint
technical, economical finance, OR social project.
Major International regulatory bodies are as follows.
1) WTO ( World Trade Organisation)
2) UNCTAD (United nation conference on Trade and
Development)
3) World Bank.
4)IMF (International Monetary Fund.)
WTO : World Trade Organisation
World Trade Organisation is a global institution which
deals with set of low to administered and liberalise
International trade between different nation.
It Was establish on 1, January 1995.
WTO is a fretwork for formulising and negotiation
trade agreement between on GATT ( General agreement
tariffs and trade ) which was introduce in 1947 .
Head quarters of WTO is at Geneva , Switzerland .
The WTO act as a fretwork for formulizing and
negotiating trade agreement between nations.
Objective of world trade Organization
(WTO)
1) To help the people of the member nations in
improving standard.
2) To help the member country in increases effective
demand and also help to achieving full employee.
3) To set and execute rules for international trade
4)To present a panel for negotiating and controlling
additional trade liberalization
5)To solve trade conflicts
6)To improve the clarity of decision-making methods
Principle of WTO
1) Trade without Discrimination
i) Most – favoured –nation (MNF) Treating other
people Equally.
 WTO state that all country have to treated member of
country equally.
A country have to treated member of country equally .
A country cannot decimation people on any ground .
It should have some roles for all members of WTO .
 ii) National Treatment –Treating foresting and locals
equally.
The goods and services ether imported or product
domestically ,have to treated equally .
The foreign goods should be treated in the same way
as the domestics goods, when they enter national
boundaries of country .
2) Free trade – gradually through Negotiations .
As free trade economic development worldwide .
WTO aims to promote free tread equally.
3) Predictability – through Binding and
transparency
While doing business , it is very important for the
parties to have transference and stability between
them.
4) Promoting fair competition. – Apart from being
an organisation that encourages free tread . WTO an
institution committed to promote open and fear
competition between member country .
5) Encouraging Development and economic reform
.
WTO encourage and focuses and economic
development of its country .following the provision
under GATT agreement , WTO provide concessions, in
tread and individual support to the developing member
county.
Agreement of WTO
1) Goods
2) services
3) Intellectual property
4) Disputed settlement
5) policy Review
6) Development and Tread
7) Technical assistant and Training .
Function of WTO
1) Helping and developing and translating economics .
2) Specialised help for export .
3) WTO in global Economic policy –Making .
4) Taking Information
5) Giving information to public
6) Encouraging Development and economic Reform.
Impact of WTO
1) Positive impact of WTO
a) Promoting international Pease
b) Rules make life easier for all
c) Reducing the cost of living .
d) It provide a more choice of product and quality.
e) trade rise the level of income and economics .
f) Achieving full Employment .
g) Government are protected from lobbying .
h) system promotes Good governance .
2) Negative Impact of WTO
1) Fundamentally Undemocratic
2) Tramples labour and human right
3) Increasing Inequality
4) Hurt poor and small country in favour of rich and
powerful country .
5)Undermines local level decision making and
national sovereignty.
IMF (INTERNATIONAL MONETARY
FUND)
Objective Of IMF
1) To promoted global Monetary corporation
2) To facilitated the growth of international trend .
3) To Assist in the establishment multivalent system of
payment
4) To promote exchange stability.
5) to give confidence to the member .
6) To deal with disequilibrium in the international
balance of payment.
Functions of IMF
1) surveillance
i) country surveillance
ii) Regional surveillance .
iii) Global surveillance .
2) Lending
3) Technical assistance.
Benefit of IMF
 Economic surveillance.
Loans to country.
Technical assistance and economic training.
Preparing economical Report .
Providing the machinery for international monetary
problem.
UNCTAD (United Nations Conference on
trade and Development )
Objective of UNCTAD
To encourage international trade between develop and
developing country to develop the underdelop country
To develop principal and policies of international
trade so as deal with the problems of economic
development.
Relieve and facilitated International coordination by
Negotiations Multilateral trade agreement between
united nations for increasing Trade.
Organisational Structure of UNCTAD
1) secretary – General
2) Deputy secretary – General
3) Division on globalization and development
strategies.
4) Division , on Investment Trade in goods and service
on commodities
5) Division on service infrastructure for development
and trade efficiency.
6) Division of management.
Functions of UNCTAD
Development of developing country .
Increasing development of developing country.
Increasing financial assessment.
Development of latest development country.
Transfer for technology.
Resolving liabilities issue .
Obtaining Assistance for developed country.
Trade Agreements.
Definition- Trade agreement Refers to as contract
between two or more country regarding exchange of
goods ,if it is between two country is called as bilateral
trade agreement if it is more than two country it is
know as multilateral trade agreement.
Types of trade agreement.
1)Bilateral agreement.
2) Multilateral (Regional) agreement.
1)Bilateral agreement
These formulating rules help in and regulation
regarding trade between two nations .EX – free trade
agreement between Canada and USA .
2) Multilateral (Regional) agreement.
These include farming of rules and regulation regarding
trade among many nations .it done in the form of
international trade union like , WTO,EU,NAFTA.
EX- GATT regulates WTO, many treats like ,treaty of
Rome , Regulate European union .
Instrument of Trade policy.
Definition- A collection of rules, regulation , standard
and objective indeed basically to limit the import is
know as trade policy.
Type of Instrument trade policy
1) Restriction of import.
2) Rustication of Export.
3)Import Liberalisation.
4) Export Augmentation.
Tariff Barriers
Tariff barriers are regularly use in import and export , they
are in the form of taxes impose on product in the
international market, the tariff barrier imposed on import
and export are called as import tariff and export tariff.
Classification of Tariff
Direction
Purpose
Length
Rate
Distribution point.
 •
Non Tariff Berries
Subsidies
Voluntary Export Restraints .
Anti dumping policy.
Customs valuations .
Import quotes .
Administrative policy.
Local content Requirement.
Standards .
Reciprocal Requrement.
(BOP) Balance of Payment .
Balance of payment is defined as collective conclusion
made on the basis of the account of tangible and
intangible goods witch are imported and exported by
the nation , It help in giving complete giving about
entered trade with the foreign country and real image
of standing position of the nation in the international
market.
Definition- Balance of payment is a systematic record
of all economic Transactions between the residence of
the reporting country and resident of foreign country
during a given of time .
Significance of balance payment
Prediction
Display pressure
Indicator to Obligations.
 Evaluated the constantly.
Component of Balance of payment
1) current account
2) Capital account
3) Official Reserve Account.
4) Residual atoms .
International Financial Reporting Standards
( IFRS)
Features of IFRS
1) Principle base Approach
2) Fair value accounting .
3) comprehensive income
4) Consolidation
5) Transparency
Objective of IFRS
1) To encourage the application of the standard under
the IFRS amongst various stock holder to the
maximum possible event.
2) To take into account stability ,the requirement of an
array size of type and entity in different economic
setting revelling in the world.
3) As the standard and interpreparation were organise
from IASB , one of the objective of IFRS is to facilitates
its adopted by various business .
Need for IFRS
1) Improve constancy and transparency of financial
report .
2) Benefit of economy.
3)Level of confidence .
4) Risk evaluation
5) Merger and take over activity
6) Investment
7) Opportunities for accounting professional.
Importance of IFRS in global
Standard format
Greater comparability.
More flexibility
International Expansion
Better understanding of investment opportunities
Reduce investor cost.