CHAPTER 3&4: GUEV

MONT ARA
WORLD TRADE BY P
ECAL
V
INEDA O
ORGANIZATION,
INTERNATIONAL
MONETARY FUND,
WORLD BANK
World T r a d e O r g a n i z a t i o n
WTO
The WTO headquarters is located in Geneva, Switzerland with 152
member states as of 2008 (Trachtman, 2007)
WTO is an independent multilateral organization that became
responsible for trade in services, non-tarriff-related barriers to trade, and
other broader areas of trade liberalization.
"differences between nations in relation to regulations on items as
manufactured goods or food. A given nation can be taken to task for
such regulations if they are deemed to be an unfair restraint on the
trade in such items" Ritzer (2015)
The general idea where the WTO is based was that of neoliberalism.
This means that by reducing or eliminating barriers, all nations will
benefit.
WORL TRADE ORGANIZATION
DEFINITION ACCORDING TO WTO ITSELF:

“The World Trade Organization (WTO) is the only international organization

dealing with the global rules of trade between nations. Its main function is to
ensure that trade flow as as smoothly, predictably and freely as possible.”

FUNCTIONS OF WTO: THE AGREEMENTS:

Amnindersekhon. (2016, July 5). world trade organisation [Slide show]. SlideShare. [Link]
WORL TRADE ORGANIZATION
Significant Critisms to WTO:
1. One is that trade barriers created by developed countries cannot be
countered enough by WTO, especially in agriculture.

A concrete case was that the emerging markets in the Global South made the
majority in the WTO, but they suffered under the industrial nations which
supported the agriculture with subsidies. Grain prices increased and food
riots occurred in many member states of WTO, like Mexico, Egypt, and
Indonesia in 2008.

2. The decision-making processes were heavily influenced by larger trading

powers, in the so-called Green Room, while excluding smaller powers in
meetings.
Lastly, Ritzer (2015) also pointed out that International Non-Government
Organizations (INGOs) are not involved, leading to the staging of "regular
protests and demonstrations against the WTO"
INTERNATIO N A L M O N E T A R Y
FUND (IMF) The International Monetary Fund (IMF) is an organization of
186 countries, deals with exchange rates, balance of
payments, international capital flows, and the monitoring of
member states and their macroeconomic policies.

The IMF works to foster global growth and economic

stability. It provides policy advice and financing to
members in economic difficulties and also works with
developing nations to help them achieve macroeconomic
stability and reduce poverty.
An example of such is their investment in education
since 1962 in developing nations like Bangladesh,
Chad, and Afghanistan.
H O W IM F W A S E S T A B L IS H E D
1. Cooperation and reconstruction (1944-71)
During the Great Depression of the 1930s, countries attempted to shore up their failing economies by sharply
raising barriers to foreign trade, devaluing their currencies to compete against each other for export markets,
and curtailing their citizens' freedom to hold foreign exchange. These attempts proved to be self-defeating.
World trade declined sharply, and employment and living standards plummeted in many countries.

2. The Bretton Woods agreement

The International Monetary Fund (IMF) was established to promote international economic cooperation after
World War II. It was conceived in July 1944 at the Bretton Woods Conference and formally came into existence in
December 1945 with 29 member countries signing its Articles of Agreement. The IMF began operations on
March 1, 1947, and later that year, France became the first borrower. From 1945 to 1971, member countries
followed the par value system, maintaining fixed exchange rates tied to the U.S. dollar until its collapse in 1971.

3. The end of the Bretton Woods System (1972-81)

By the early 1960s, the U.S. dollar was perceived as overvalued under the Bretton Woods system. In August 1971,
President Richard Nixon announced a "temporary" suspension of the dollar's convertibility into gold, leading to
the collapse of the system. Since then, IMF members have been free to choose their exchange rate
arrangements, including floating exchange rates, currency pegs, currency adoption, participation in currency
blocs, or monetary unions.
 Functions of IMF
Economic and Financial Surveillance
IMF promotes economic stability and global growth by encouraging countries to adopt sound
economic and financial policies. They regularly monitor global, regional, and national economic
developments.

Technical Assistance and Training

IMF offers technical assistance and training to help member countries strengthen their capacity to
design and implement effective policies, It is offered in several areas such as fiscal policy,
monetary and exchange rate policies, banking and financial system supervision and
regulation, and statistics.

IMF Lending
In the event that member countries experience difficulties financing their balance of payments,
the IMF is also a funcd that can be tapped to facilitate recovery.
WORLD BANK (WB)
The World Bank, officially the International Bank for Reconstruction and Development (IBRD)
is the most important element of the World Bank Group (WBG)( Gilbert and Vines 2000).
The IBRD or the Bank was established in 1944 at Bretton Woods and began operations in
1946.
Membership is open to all member states of the IMF, and as of this writing, it includes 184
nations. It provides funds to government sponsored or guaranteed programs in so called
Part II countries. It also provides advice and analytical services to such states.
MISSION OF THE BANKS
Encouraging development of productive facilities abd resources in less developed countries;
Funding for productive purposes when private capital cannot be obtained om reasonable terms:
Encouraging international investments in order to promote international trade and development
and equilibrium in balance of payments; and
Helping member countries improve their productivity, standard at living, and labor
conditions(Bradlow, 2007)
Over the years, the Bank has expanded far beyond its original focus
on projects involving physical infrastructure capable of generating
income. It now deals with a broad range of issues related to
economic development including “population, education, health,
social security, environment, culture, aspects of macroeconomic
policy and structural reform, and poverty alleviation”. Support is also
given to help women deal with gender inequality and discrimination.
The Bank continues to expand its range of concerns and activities.
NGOs and affected people have grown increasingly involved in
projects financed by the bank.
 Since the 1980's, the operations of the bankhave become increasingly
controversial,
1. The Bank is seen as dominated by rich developed nations, and less developed
countries and non-states have little say in it.
2. There are concerns that the Bank serves certain interest and thereby
adversely affects those of others especially the poor and less developed
nations.
3. As a result of its expanded mandate described above, the Bank is seen as
having lost focus and encroaching on the activities of other agencies.

In the late 2007, a controversy arose over the Bank’s annual World
Development Report that devoted to agriculture. Given its mandate to use
funds from rich nations to reduce poverty in poor ones, the report was a
shocker since it showed that the bank had long neglected agriculture in sub-
Saharan Africa. This neglect occurred in spite the of the fact that sub-
Saharan is one of the poorest regions in the world and one that is almost
totally dependent on agriculture.
With the 2007 World Development Report, the bank announced its intention to
return to a focus on agriculture in developing nations, especially in Africa. It is
late in doing so since both Bill and Melinda Gates and the Rockefeller
foundations have already been focusing on this issue in Africa. While many of
the details are to be worked out and negotiated with African governments, the
bank has decided to shift back to an earlier focus on agriculture from later
concerns with such issues as health( e.g., AIDs) and primary education. Of
course, the Bank, like the IMF, has become deeply immersed in the economic
issues produced by the Great Recession and that might sidetrack it, at least for
a time. Even before the Recession, the Bank was following and concerned
about debt levels, especially of developing countries.
In spite of a wide range of difficulties, the Bank is an important
force globally.
1. It is a forum for a vast number of nations to discuss
development and development financing.
2. It remains a significant source of funds for developing
countries
3. It is an important source of information on development and
provides valuable advice and support to the nations that are
its member