International Institutions and Trade Implications
Assignment A
1. How International Monetary Funds helps its member countries
in their economic development?
The International Monetary Fund was created in 1945 to help
promote the health of the world economy through international
monetary cooperation. Headquartered in Washington D.C.,
International Monetary Fundalso known as the IMF or the Fund is the
world's central organization for international monetary
cooperation. The IMF's primary purpose is to ensure the stability
of the international monetary system for sustainable economic
growth and rising living standards. To maintain stability and
prevent crises in the international monetary system , the IMF
provides advice to its 185 member countries, encouraging them to
adopt policies that foster economic stability, reduce their
vulnerability to economic and financial crises, and raise living
standards. IMF also reviews national, regional, and global economic
and financial developments and it also serves as a forum where
member countries can discuss the national, regional, and global
consequences of their policies. The IMF also makes financing
temporarily available to member countries to help them address
balance of payments problems. And it provides technical assistance
and training to help countries build the expertise and institutions
they need for economic stability and growth.
The IMF's fundamental mission is to help ensure stability in the
international system by : 1. keeping track of the global economy
and the economies of member countries; 2. lending to countries with
balance of payments difficulties; and 3. giving practical help to
members The IMF helps countries to implement sound and appropriate
policies through its key functions of surveillance, technical
assistance, and lending.Surveillance: Keeping Track of The Global
Economy Every country that joins the IMF accepts the obligation to
subject its economic and financial policies to the scrutiny of the
international community. The IMF's mandate is to oversee the
international monetary system and monitor the economic and
financial policies of its 188 member countries. This process, known
as surveillance, takes place at the global level and in individual
countries and regions. The IMF considers whether domestic policies
promote countries own stability by examining risks they might pose
to domestic and balance of payments stability and advising on
needed policy adjustments. It also proposes alternatives in cases
where countries policies promote domestic stability but could
affect global stability.Consulting with member states The IMF
monitors members economies through regularusually
annualconsultations with each member country. During these
consultations, IMF staff discusses economic and financial
developments and policies with national policymakers, and often
with representatives of private sector, labor unions, academia, and
civil society. The staff assesses risks and vulnerabilities, and
considers the impact of fiscal, monetary, financial, and exchange
rate policies on the members domestic and balance of payments
stability and on global stability. The IMF offers advice on
policies to promote each countrys macroeconomic, financial, and
balance of payments stability, drawing on experience from across
its membership. The framework for these consultations is set forth
in the IMF Articles of Agreement and, more recently, in the
Integrated Surveillance Decision. These consultations are also
informed by membership-wide initiatives, including work to
systematically assess countries' vulnerabilities to crises; the
Financial Sector Assessment Program, which assesses countries
financial sectors and helps formulate policy responses to risks and
vulnerabilities; and the Standards and Codes Initiative in which
the IMF, along with the World Bank and other bodies, assesses
countries observance of internationally recognized standards and
codes of good practice in a dozen policy areas. Overseeing the
bigger world picture The IMF also closely monitors global and
regional trends. The IMFs periodic reports, the World Economic
Outlook, its regional overviews, the Fiscal Monitor, and the Global
Financial Stability Report, analyze global and regional
macroeconomic and financial developments. The IMFs broad membership
makes it uniquely well suited to facilitate multilateral
discussions on issues of common concern to groups of member
countries, and advance a shared understanding on policies to
promote stability. In this context, the Fund has been working with
the G-20 group of advanced and emerging economies to assess the
consistency of those countries policy frameworks with balanced and
sustained growth for the global economy. The Fund has reviewed its
surveillance mandate in light of the global crisis. It has
introduced a number of reforms to improve financial sector
surveillance within member countries and across borders, to enhance
understanding of interlinkages between macroeconomic and financial
developments (e.g. through a Spillover Report), and promote debate
on these matters. Data: In response to the financial crisis, the
IMF is working with members, the Financial Stability Board, and
other organizations to fill data gaps important for global
stability. Technical assistance: The IMF helps countries strengthen
their capacity to design and implement sound economic policies. It
provides advice and training on a range of issues within its
mandate, including fiscal, monetary, and exchange rate policies;
the regulation and supervision of financial systems; statistics
systems; and legal frameworks. Lending: Even the best economic
policies cannot completely eradicate instability or avert crises.
If a member country does experience financing difficulties, the IMF
can provide financial assistance to support policy programs that
will correct underlying macroeconomic problems, limit disruption to
the domestic and global economies, and help restore confidence,
stability, and growth. IMF financing instruments can also support
crisis prevention.
1. What is the role of World Bank in promoting International
Trade? What are the functions of IDA and IRDB?
The World Bank came into existence in 1944 at the Bretton Woods
conference. Itsformal name is the International Bank for
Reconstruction and Development (IBRD), which clearly states its
primary purpose of financing economic development.
The World Banks first loans were extended during the late 1940s
to finance the reconstruction of the war-ravaged economies of
Western Europe. When these nations recovered some measure of
economic self-sufficiency, the World Bank turned its attention to
assisting the worlds poorer nations. The World Bank has one central
purpose: to promote economic and social progress in developing
countries by helping raise productivity so that their people may
live a better and fuller life:
In 2009, the World Bank provided $46.9 billion for 303 projects
in developingcountries worldwide, with the financial and/or
technical expertise aimed at helping those countries reduce
poverty.
The Bank is currently involved in more than 1,800 projects in
virtually every sector and developing country. The projects are as
diverse as providing microcredit in Bosnia and Herzegovina, raising
AIDS-prevention awareness in Guinea, supporting education of girls
in Bangladesh, improving health care delivery in Mexico, and
helping East Timor rebuild upon independence and India rebuild
Gujarat after a devastating earthquake.
Today, The World Bank consists of two main bodies, the
International Bank for Reconstruction and Development (IBRD) and
the International Development Association (IDA), established in
1960.
The World Bank is part of the broader World Bank Group, which
consists of five interrelated institutions: the IBRD; the IDA;
theInternational Finance Corporation (IFC), which was established
in 1956; theMultilateral Investment Guarantee Agency (MIGA), which
was established in 1988; and the International Centre for
Settlement of Investment Disputes (ICSID), which was established in
1966. These additional members of the World Bank Group havespecific
purposes as well.
The IDA typically provides interest-free loans to countrieswith
sovereign guarantees. The current primary focus of the World Bank
centers on six strategic themes:
1. The poorest countries.Poverty reduction and sustainable
growth in the poorest countries, especially in Africa.
2. Postconflict and fragile states.Solutions to the special
challenges of postconflict countries and fragile states.
3. Middle-income countries.Development solutions with customized
services as well as financing for middle-income countries.
4. Global public goods.Addressing regional and global issues
that cross national borders, such as climate change, infectious
diseases, and trade.
5. The Arab world.Greater development and opportunity in the
Arab world.
6. Knowledge and learning.Leveraging the best global knowledge
to support development.
The World Bank provides low-interest loans, interest-free
credits, and grants to developing countries. Theres always a
government (or sovereign) guarantee of repayment subject to general
conditions. The World Bank is directed to make loans for projects
but never to fund a trade deficit. These loans must have a
reasonable likelihood of being repaid. The IDA was created to offer
an alternative loan option.
IDA loans are free of interest and offered for several decades,
with a ten-year grace period before the country receiving the loan
needs to begin repayment.
These loans are often called soft loans.
Since it issued its first bonds in 1947, the IBRD generates
funds for its development work through the international capital
markets.
The World Bank issues bonds, typically about $25 billion a year.
These bonds are rated AAA (the highest possible rating) because
they are backed by member states shared capital and by borrowers
sovereign guarantees. Because of the AAA credit rating, the World
Bank is able to borrow at relatively low interest rates. This
provides a cheaper funding source fordeveloping countries, as most
developing countries have considerably low credit ratings. The
World Bank charges a fee of about 1 percent to cover its
administrative overheads.
What Are the World Banks Current Role and Major Challenges
andOpportunities?Like the IMF, the World Bank has both its critics
and its supporters. The criticisms of the World Bank extend from
the challenges that it faces in the global operating environment.
Some of these challenges have complicated causes; some result from
the conflict between nations and the global financial crisis. The
following are four examples of the worlds difficult needs that the
World Bank tries to address:
1. Even in 2010, over 3 billion people lived on less than $2.50
a day.
1. At the start of the twenty-first century, almost a billion
people couldnt read a book or sign their names.1. Less than 1
percent of what the world spends each year on weaponswould have put
every child into school by the year 2000, but it didnthappen.
1. Fragile states such as Afghanistan, Rwanda, and Sri Lanka
face severedevelopment challenges: weak institutional capacity,
poor governance,political instability, and often ongoing violence
or the legacy of pastconflict.
Opportunities and Future Outlook for the World BankAs vocal as
the World Banks critics are, so too are its supporters. The World
Bank is praised by many for engaging in development projects in
remote locations around the globe to improve living standards and
reduce poverty. The World Banks current focus is on helping
countries achieve the Millennium Development Goals (MDGs), which
are eight international development goals, established in 2000 at
the Millennium Summit, that all 192 United Nations member states
and twenty-three international organizations have agreed to achieve
by the year 2015. They include reducing extreme poverty, reducing
child mortality rates, fighting disease epidemics such as AIDS, and
developing a global partnership for development.
TheWorld Bank is focused on the following four key issues:
1. Increased transparency.In response to the criticisms over
thedecades, the World Bank has made progress. More of the World
Banksdecision making and country assessments are available
publicly.
The World Bank has continued to work with countries to
combatcorruption both at the country and bank levels.
2. Expanding social issues in the fight on poverty.In 2001, the
World Bank began to incorporate gender issues into its policy. Two
years later the World Bank announced that it was starting to
evaluate all of its projects for their effects on women and girls,
noting that povertyis experienced differently by men and women and
a full understanding of the gender dimensions of poverty can
significantly change the definition of priority policy and program
interventions.
3. Improvements in countries competitiveness and
increasingexports. The World Banks policies and its role as a donor
have helpedimprove the ability of some countries to secure more of
the globalrevenues for basic commodities. In Rwanda, for example,
reformstransformed the countrys coffee industry and increased
exports.Kenya has expanded its exports of cut flowers, and Uganda
hasimproved its fish-processing industry. World Bank efforts have
alsohelped African financial companies develop.
4. Improving efficiencies in diverse industries and leveraging
theprivate sector. The World Bank has worked closely with
businesses inthe private sector to develop local infrastructure,
including power,transportation, telecommunications, health care,
and education.
In Afghanistan, for example, small dams are built andmaintained
by the locals themselves to support small industries processing
local produce.
The World Bank continues to play an integral role in helping
countries reduce poverty.
To facilitate the expansion and balanced growth ofinternational
trade
The World Bank consists of two main bodies, the IBRD and
theInternational Development Association (IDA).
The following are the main functions of the World Bank Groups
main bodies
THE INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) The
International Development Association complements the World Banks
other lending armthe International Bank for Reconstruction and
Development (IBRD)which serves middle-income countries with capital
investment and advisory services. IBRD and IDA share the same staff
and headquarters and evaluate projects with the same rigorous
standards. IDA is one of the largest sources of assistance for the
worlds 78 poorest countries, 39 of which are in Africa. It is the
single largest source of donor funds for basic social services in
the poorest countries. IDA lends money (known as credits) on
concessional terms. This means that IDA credits have no interest
charge and repayments are stretched over 35 to 40 years, including
a 10-year grace period. IDA also provides grants to countries at
risk of debt distress.
The main role of the IDA therefore, is typically to provide
interest-free loans to countrieswith sovereign guarantees.
The International Bank for Reconstruction and Development (IBRD)
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,
guarantees, risk management products, and analytical and advisory
services. Established in 1944 as the original institution of the
World Bank Group, IBRD is structured like a cooperative that is
owned and operated for the benefit of its 185 member countries.
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, which enables it to borrow at low cost and
offer clients good borrowing terms.
The main role of the IBRD therefore, is to make loans to
countries with the purpose of building economies and reducing
poverty.
3. How has formation of European Countries helped the members
countries in further improving their trade relations?
The European Union is a unique economic and political
partnership between 27 democratic European countries with the
objective to ensure peace, prosperity and freedom for its 498
million citizens in a fairer, safer world. The countries that make
up the EU (its member states) remain independent sovereign nations
but they pool their sovereignty in order to gain a strength and
world influence none of them could have on their own.
The European Union is based on the rule of law. This means that
everything that it does is derived from treaties, which are agreed
on voluntarily and democratically by all Member States. Previously
signed treaties have been changed and updated to keep up with
developments in society.
The main treaties are the following:
1 Treaty of Lisbon The Treaty of Lisbon was signed on 13
December 2007. It will have to be ratified by all 27 Member States
before it can enter into force, which is hoped to be before the
next European Parliament elections in June 2009. Its main
objectives are to make the EU more democratic, meeting the European
citizens expectations for high standards of accountability,
openness, transparency and participation; and to make the EU more
efficient and able to tackle today's global challenges such as
climate change, security and sustainable development. The agreement
on the Treaty of Lisbon followed the discussion about a
constitution. A "Treaty establishing a constitution for Europe" was
adopted by the Heads of State and Government at the Brussels
European Council on 17 and 18 June 2004 and signed in Rome on 29
October 2004, but it was never ratified.
2 Treaty of Nice The Treaty of Nice, signed on 26 February 2001,
entered into force on 1 February 2003. It dealt mostly with
reforming the institutions so that the Union could function
efficiently after its enlargement to 25 Member States. The Treaty
of Nice, the former Treaty of the EU and the Treaty of the EC have
been merged into one consolidated version. 3 Treaty of Amsterdam
The Treaty of Amsterdam, signed on 2 October 1997, entered into
force on 1 May 1999. It amended and renumbered the EU and EC
Treaties. Consolidated versions of the EU and EC Treaties are
attached to it. The Treaty of Amsterdam changed the articles of the
Treaty on European Union, identified by letters A to S, into
numerical form.
4 Treaty on European Union The Treaty on European Union, which
was signed in Maastricht on 7 February 1992, entered into force on
1 November 1993. 'The Maastricht Treaty changed the name of the
European Economic Community to simply "the European Community". It
also introduced new forms of co-operation between the Member State
governments - for example on defence, and in the area of "justice
and home affairs". By adding this inter-governmental co-operation
to the existing "Community" system, the Maastricht Treaty created a
new structure with three "pillars" which is political as well
economic. This is the European Union (EU).
5 Single European Act (SEA) The Single European Act (SEA),
signed in Luxembourg and the Hague, and entered into force on 1
July 1987, provided for the adaptations required for the
achievement of the Internal Market.
6 Merger Treaty The Merger Treaty, signed in Brussels on 8 April
1965 and in force since 1 July 1967, which provided for a Single
Commission and a Single Council of the then three European
Communities.
7 Treaty of Rome The Treaty of Rome, establishing the European
Economic Community (EEC), signed in Rome on 25 March 1957, and
entered into force on 1 January 1958. The Treaty establishing the
European Atomic Energy Community (Euratom) was signed at the same
time and the two are therefore jointly known as the Treaties of
Rome.
8 Treaty establishing the European Coal and Steel Community The
Treaty establishing the European Coal and Steel Community (ECSC),
which was signed on 18 April 1951 in Paris, entered into force on
23 July 1952 and expired on 23 July 2002. Moreover, the founding
treaties have been amended on several occasions, in particular when
new Member States acceded in 1973 (Denmark, Ireland, United
Kingdom), 1981 (Greece), 1986 (Spain, Portugal), 1995 (Austria,
Finland, Sweden) and 2004 (the Czech Republic, Cyprus, Estonia,
Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia).
Based on the Treaties, EU institutions can adopt legislation, which
is then implemented by the Member States. To see the full texts of
EU legislation, please consult Eur-Lex, the portal to European
Union Law. The texts published in the Official Journal (EUR-Lex)
are the only authentic versions.
The EU has a common external trade policy, which means that
trade policy is an exclusive competence of the EU and no member
state can negotiate its own international trade agreement.
The EUs trade policy is one of its most well-developed and
integrated policies. It evolved along with the common marketwhich
provides for the free movement of goods within the EUto prevent one
member state from importing foreign goods at cheaper prices due to
lower tariffs and then re-exporting the items to another member
withhigher tariffs. The scope of the common trade policy has been
extended partially to include trade in services, the defense of
intellectual property rights, and foreign direct investment. The
European Commission and the Council of Ministers work together to
set the common customs tariff, guide export policy, and decide on
trade protection or retaliation measures where necessary. EU rules
allow the Council to make trade decisions with qualified majority
voting, but in practice the Council tends to employ consensus.
The European Commission negotiates trade agreements with outside
countries and trading blocs on behalf of the Union as a whole. As a
result of the Lisbon Treaty, both the Council of Ministers and the
European Parliament must approve all such trade agreements before
they can enter into force. The process for negotiating and
concluding a new international trade agreement begins with
discussions among all three EU institutionsand a Commission impact
assessment, including a public consultation on the content and
options for any future trade accord. Provided there is a general
agreement to proceed, the Commission initiates an informal scoping
exercise with the potential partner country or trade bloc on the
range and extent of topics to be considered in the negotiations.
Following this dialogue, the Commission then formulates what are
known as negotiating directives (sometimes termed the negotiating
mandate), which sets out the Commissions overall objectives for the
future agreement. The directives are submitted to the Council for
its approval, and shared with the European Parliament. Provided the
Council approves the negotiating directives, the Commission then
launches formal negotiations for the new trade agreement on behalf
of the EU. Within the Commission, the department that handles EU
trade policythe Directorate General for Trade (DG Trade)leads the
negotiations but draws on expertise from across the Commission.
Typically, there are a series of negotiation rounds; the duration
of the negotiations varies but can range from two to three years or
longer. During the course of negotiations, the Commission is
expected to keep both the Council and the Parliament apprised of
its progress, and the Council and the Parliament may take the
opportunity to voice their respective views and concerns. The
Parliament may conduct its own oversight hearings through its
International Trade Committee (INTA). When negotiations reach the
final stage, both parties to the agreement initial the proposed
accord. It is then submitted to the Council and the Parliament for
review.
If the Council approves the accord, it authorizes the Commission
to formally sign the agreement. Once the new trade accord is
officially signed by both parties, the Council submits a draft
decision to conclude negotiations to the Parliament for its
consent. The Parliament reviews the signed agreement both in the
INTA Committee and in plenary session. Although the Parliament is
limited to voting yes or no to the new accord, it can indicate that
it would not support the agreement should it find fault with any of
its provisions, and can ask the Commission to review or address its
concerns. If parts of the trade agreement fall under member state
competence, all EU countries must also ratify the agreement
according to their national ratification procedures.
After Parliament gives its consent and following ratification in
the member states (if required), the Council adopts the final
decision to conclude the agreement. It may then be officially
published and enter into force.
4. What is the role of WTO in promoting International Trade
among member countries?
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 flows as
smoothly, predictably and freely as possible. The WTOs overriding
objective is to help trade flow smoothly, freely, fairly and
predictably. It does this by: Administering trade agreements Acting
as a forum for trade negotiations Settling trade disputes Reviewing
national trade policies The WTO has 153 members, accounting for
over 97% of world trade. Around 30 others are negotiating
membership. Decisions are made by the entire membership. This is
typically by consensus. A majority vote is also possible but it has
never been used in the WTO, and was extremely rare under the WTOs
predecessor, the General Agreement on Tariffs and Trade (GATT). The
WTOs agreements have been ratified in all members parliaments. The
WTOs top level decision-making body is the Ministerial Conference
which meets at least once every two years. Below this is the
General Council (normally ambassadors and heads of delegation in
Geneva, but sometimes officials sent from members capitals) which
meets several times a year in the Geneva headquarters. The General
Council also meets as the Trade Policy Review Body and the Dispute
Settlement Body. At the next level, the Goods Council, Services
Council and Intellectual Property (TRIPS) Council report to the
General Council. Numerous specialized committees, working groups
and working parties deal with the individual agreements and other
areas such as the environment, development, membership applications
and regional trade agreements. The WTO Secretariat, based in
Geneva, has around 625 staff and is headed by a Director General.
It does not have branch offices outside Geneva. Since decisions are
taken by the Members themselves, the Secretariat does not have the
decision-making role that other international bureaucracies are
given. The Secretariats main duties are to supply technical support
for the various councils and committees and the ministerial
conferences, to provide technical assistance for developing
countries, to analyze world trade, and to explain WTO affairs to
the public and media. The Secretariat also provides some forms of
legal assistance in the dispute settlement process and advises
governments wishing to become members of the WTO. The annualbudget
is roughly 189 million Swiss francs.
The WTOs rules the agreements are the result of negotiations
between the members. The current set were the outcome of the
1986-94 Uruguay Round negotiations which included a major revision
of the original General Agreement on Tariffs and Trade (GATT). GATT
is now the WTOs principal rule-book for trade in goods. The Uruguay
Round also created new rules for dealing with trade in services,
relevant aspects of intellectual property, dispute settlement, and
trade policy reviews. The complete set runs to some30,000 pages
consisting of about 30 agreements and separate commitments (called
schedules) made by individual members in specific areas such as
lower customs duty rates and services market-opening. Through these
agreements, WTO members operate a non-discriminatory trading system
that spells out their rights and their obligations. Each country
receives guarantees that its exports will be treated fairly and
consistently in other countries markets. Each promises to do the
same for imports into its own market. The system also gives
developing countries some flexibility in implementing their
commitments. It all began with trade in goods. From 1947 to 1994,
GATT was the forum for negotiating lower customs duty rates and
other trade barriers; the text of the General Agreement spelt out
important rules, particularly non-discrimination. Since 1995, the
updated GATT has become the WTOs umbrella agreement for trade in
goods. It has annexes dealing with specific sectors such as
agriculture and textiles, and with specific issues such as state
trading, product standards, subsidies and actions taken against
dumping. Banks, insurance firms, telecommunications companies, tour
operators, hotel chains and transport companies looking to do
business abroad can now enjoy the same principles of freer and
fairer trade that originally only applied to trade in goods. These
principles appear in the new General Agreement on Trade in Services
(GATS). WTO members have also made individual commitments under
GATS stating which of their services sectors they are willing to
open to foreign competition, and how open those markets are. The
WTOs Intellectual Property Agreement amounts to rules for trade and
investment in ideas and creativity. The rules state how copyrights,
patents, trademarks, geographical names used to identify products,
industrial designs, integrated circuit layout-designs and
undisclosed information such as trade secrets intellectual property
should be protected when trade is involved. The WTOs procedure for
resolving trade quarrels under the Dispute Settlement Understanding
is vital for enforcing the rules and therefore for ensuring that
trade flows smoothly. Countries bring disputes to the WTO if they
think their rights under the agreements are being infringed.
Judgements by specially-appointed independent experts are based on
interpretations of the agreements and individual countries
commitments. The system encourages countries to settle their
differences through consultation. Failing that, they can follow a
carefully mapped out, stage-by-stage procedure that includes the
possibility of a ruling by a panel of experts, and the chance to
appeal the ruling on legal grounds. Confidence in the system is
borne out by the number of cases brought to the WTO more than 300
cases in ten years compared to the 300 disputes dealt with during
the entire life of GATT (1947-94).
The Trade Policy Review Mechanisms purpose is to improve
transparency, to create a greater understanding of the policies
that countries are adopting, and to assess their impact. Many
members also see the reviews as constructive feedback on their
policies. All WTO members must undergo periodic scrutiny, each
review containing reports by the country concerned and the WTO
Secretariat. Over three-quarters of WTO members are developing or
least developed countries. All WTO agreements contain special
provision for them, including longer time periods to implement
agreements and commitments, measures to increase their trading
opportunities, provisions requiring all WTO members to safeguard
their trade interests, and support to help them build the
infrastructure for WTO work, handle disputes, and implement
technical standards.
The 2001 Ministerial Conference in Doha set out tasks, including
negotiations, for a wide range of issues concerning developing
countries. Some people call the new negotiations the Doha
Development Round. Before that, in 1997, a high-level meeting on
trade initiatives and technical assistance for least-developed
countries resulted in an integrated framework involving six
intergovernmental agencies, to help least-developed countries
increase their ability to trade, and some additional preferential
market access agreements. A WTO Committee on Trade and Development,
assisted by a Sub-Committee on Least-Developed Countries, looks at
developing countries special needs. Its responsibility includes
implementation of the agreements, technical cooperation, and the
increased participation of developing countries in the global
trading system.
Technical Assistance and Training The WTO organizes hundreds of
technical cooperation missions to developing countries annually. It
holds on average three trade policy courses each year in Geneva for
government officials. Regional seminars are held regularly in all
regions of the world with a special emphasis on African countries.
Training courses are also organized in Geneva for officials from
countries in transition from central planning to market economies.
The WTO has set up reference centres in over 100 trade ministries
and regional organizations in capitals of developing and
least-developed countries. These centres provide computers and
internet access to enable ministry officials to keep abreast of
events in the WTO through online access to the WTOs immense
database of official documents and other material. Efforts are also
being made to help countries that do not have permanent
representatives in Geneva.The ultimate goal of the multilateral
institution of GATT (WTO) is the provision of free global trade and
economic relationship among members and that GATT is designed to
achieve free trade and to improve market access by-(a) Having all
protection take the form of tariffs;(b) Holding multilateral
negotiation at which those tariffs are lowered and bound;(c)
Ensuring that these agreements are implemented by requiring that
any increase in a bound tariff must be compensated by the reduction
of another;(d) Providing a mechanism by which signatories can
settle disputes.The success of WTO in its role of increasing world
trade is measured in accordance with the volume and growth of world
trade and although this went up by 25% in the last 8 years, the
benefits of that increase are not equitably shared among member
states. For instance, only 0.03% of the world trade represented by
the least developed countries which accounts for 20% of the worlds
population.3. administering the Understanding on Rules and
Procedures Governing the Settlement of Disputes or the Dispute
Settlement Understanding which is Annex 2 to the agreement setting
it up, 5. administering the Trade Policy Review Mechanism in Annex
3 of the agreement setting it up, and 6. cooperating as appropriate
with the International Monetary Fund and the International Bank for
Reconstruction and Development [a.k.a. the World Bank] with a view
to achieving greater coherence in global economic policy making.
This is aimed at building better understanding and coordination
between a trade organisation like WTO and monetary institutions
like IMF and World Bank. It may be said in passing that these are
two financial institutions without good reputation with developing
countries and that are seen by them to have been recommending
economic reforms and structural adjustment programmes that destroy,
rather than rebuild, their economies. The success of WTO in its
role of increasing world trade is measured in accordance with the
volume and growth of world trade and although this went up by 25%
in the last 8 years, the benefits of that increase are not
equitably shared among member states. For instance, the least
developed countries [LCDs] represent 20% of the worlds population
but they generate only 0.03% of the world trade flows.
Structural Organisation of WTO.The WTO Constitution and Charter
provided that all GATT contracting parties were members of it and
it has a Ministerial Conference which is its highest
decision-making body under the governance structure set up by the
Agreement establishing the WTO. The Conference of Ministers meets
at least oncein two years bringing together all the countries and
Customs Unions which, are members of WTO. The Conference can take
decisions on all matters under any of the WTO Agreements. Previous
Ministerial Conferences of WTO had been held in Singapore in 1996,
Geneva in 1998, in Seattle, USA in 1999 and the next one is to be
held in Doha, Qatar between 9 to 13November, 2001. Already WTO
members have started making proposals, or request lists which are
their negotiating objectives for this new round, on the structure
and contents of the new negotiations to be held in Doha which
comprise about 2000 services proposals ranging from services of
accounting, audiovisual, computer, business, distribution,
education, energy, environmental, legal, professional
telecommunications, air and maritime transport services and related
services to mention a few. However, whilst many developed and
industrialised countries, their economic communities and developing
countries which have already had breakthroughs in certain services
dominate the proposals already sent for negotiations in a way that
their national interests and commercial interests are protected and
advanced, the African countries are yet to make their proposals at
the conference if any, known. For instance, the proposals of Korea
[a major ship-owning country] show that it supports negotiation for
liberalization in the Maritime Transport Services [MTS] by
eliminating or reducing market barrier that remain in many member
countries and that negotiations on MTS be resumed based on the
Decision on MTS adopted on 28June, 1996, Australias proposals show
that its policy objective is a competitive industry which observes
international standards of safety and environmental pollution in
MTS by eliminating market access barriers. However, it has been
argued that negotiations on maritime transport services will be
particularly difficult, because of the unwillingness of the
powerful US maritime lobby which is strongly opposed to MTS being
negotiated at a multilateral level. In the same paper, Mr. McKay
revealed that the Jones Act had been excluded from GATT since it
was set up in 1947, due to the insistence of the US and despite the
objections of other countries, on the grounds that it applied to
domestic trade and had been in force 27 years before GATT.
Changes in the rules applied by WTO are made through
multilateral negotiations called rounds during which many issues
are negotiated together and trade-offs [or reciprocity] between
different issues are made, that is to say one country gives a
concession in an area such as lowering tariffs for a certain
product, in return for another country acceding to a certain
agreement. This is also called bartering benefits. GATT enforced
phased-in tariff reductions worldwide and until the Uruguay Round
which ended in 1994 trade negotiations were mainly on
non-agricultural goods because the US wanted to protect its farming
sector. However, due to the expansion of the corporate interests of
the developed countries, more issues have now been included in
GATT/WTO talks. Parts of the structure of WTO are the different
Councils established to supervise the obligations in the key areas
of trade and investment that were goods, services and intellectual
property. There were also several annexes prescribing treaty rights
and duties of contracting parties, dispute resolution mechanisms
were established generally and specifically for key areas like GATS
and TRIPS. The dispute mechanism is such that decisions are reached
by consensus, that is, where no member present at a meeting where
the decision is to be taken raises an objection to the proposed
decision; no vote of contracting members is taken. If mediation,
consultation or conciliation does not resolve a dispute, a
complaints panel of trade experts to report to the contracting
parties will be raised to look into the matters. Appeals against
its decision are allowed only on issues of law to a body of legal
experts, but should the relevant party not comply, the Dispute
Settlement Body [DSB] comprising WTO members by consensus, can
sanction the complainant to withdraw the benefits. By this means
the handicap of dispute resolution in the GATT system was overcome.
The WTO therefore has an effective enforcement capability.
The Trade Policy Review Mechanism [TPRM] of WTO looks at the
general trade policies of members to see if they have or will have
any adverse effects on member countries and as such is in a
position to raise potential international trade problems before
they raise their ugly heads and affect the trading world. With the
aforesaid structure in place, the WTO is able to perform its role
in international trade as set out in the Agreement establishing it.
However, one of the criticisms of WTO is that it has been hijacked
and is strongly influenced by the industrialised countries of the
US, Canada, EU and Japan [a.k.a. the quad] and their corporations
which have found WTO as a useful tool to expand their markets at
the expense of the developing countries thereby creating
inequities. Whilst exports from developing countries face
impediments in accessing the markets of developed countries due to
high tariffs, the developed countries gain access to the markets of
developing countries through new agreements on telecommunications,
information technology and financial services which they imposed on
the basis of acting in the interests of trans-nationalcorporations
[TNCs]. The Trade Related Intellectual Property Rights Agreement
[TRIPS] is seen as protecting the rights of corporations at the
expense of indigenous communities whose shared knowledge will be
patented by other thereby making developing countries lose billons
of dollars to TNCs which stand to control all the patents of
developing countries. Developing countries make up three quarters
of the membership and should be able to influence the agenda and
decisions of WTO by their votes, but they have never used this to
their advantage because of fear of reprisals from the developed
countries on whose aid, security, imports, exports they depend.
Another disadvantage for signatories to the WTO Agreement that
are developing countries, is that they lack enough human, material
and technical resources to cope with the several meetings involved
per week and so they enter negotiations less prepared than the
developed countries. They also lack the legal expertise and cost
for the dispute settlement mechanism of WTO and the basis on which
the system is run- whether a country is violating free trade rules-
is not most appropriate to their development needs.
In its editorial of 23October, 2001, titled Reviewing the WTO
Treaty, a Nigerian Newspaper captured the view of developing
countries about WTO when it said: The WTO for all that it is worth
is a multilateral body of rich and poor nations which establishes a
treaty to bind them together in trade and in the area of trade and
tariffs. The essence is to eliminate barriers to free trade and
ensure unrestricted movement of goods and services across borders.
It is an association of unequal trade partners that thrives on
unequal exchange and unequal bargaining power. Thus, over the
years, beginning from its GATT predecessor, WTO has been used by
industrialised nations as an instrument of neo-colonialism through
which the economies of less-developed members are turned into
dumping grounds of industrialised goods thuslimiting their capacity
for industrialisation. Apart from the difficulty in penetrating the
markets of developed countries by the less developed economies,
most of the agreements are lopsidedly in favour of the former. Two
of such agreements have caused so much furore in the third world.
These are in the areas of agriculture and textiles. Signatories are
to lower tariffs, reduce subsidies; but with developed countries
refusing to eliminate other forms of domestic restriction already
in place in their economies. An organisation known as Global
Exchange has listed the following ten reasons why the WTO should be
opposed namely, it only serves the interests of multinational
corporations which write its rules and have inside access to the
negotiations, it is a stacked court because its dispute panel
consists of three trade bureaucrats who are not screened for
conflict of interests, it tramples over labour and human rights
because it has refused to address the impacts of free trade on
labour rights and it is being used by corporations to dismantle
environmental protections which it calls barriers to trade. Other
stated reasons to oppose WTO are that it is killing people by
strongly defending intellectual property rights, [patents and
copyrights and trade marks] at the expense of health and human
lives by supporting pharmaceutical companies blockage of developing
countries access to less expensive generic lifesaving drugs, the US
adoption of the WTO under the fast track method which limits public
debate by not allowing amendments in its Legislature, was
undemocratic, it undermines local development and penalizes poor
countries because its rules prevent developing countries from
following the same policies that developed countries pursued for
protecting young domestic industries until they can be
internationally competitive, it is increasing inequality, it
undermines national sovereignty by creating a supranational court
system that can economically sanction countries to force them to
comply withits Rulings thereby replacing national governments with
an un-elected, unaccountable corporate-backed government, and there
is a growing opposition against free trade and the WTO and
succeeded in disrupting the Seattle ministerial meeting in 1999. It
has often been suggested that the recent bombing of the WTO
twin-towers in New York City on 11September, 2001 by terrorists was
partly caused by the general disenchantment with the unfair
practices of the WTO and its manipulation by the US. Workers Unions
in African countries have come together under the Organisation of
African Trade Union Unity [OATUU] and are among groups and labour
unions which are threatening to disrupt the Doha Ministerial
Conference because of WTOs support for globalisation. Already the
Nigerian Labour Congress has threatened strikes and protests to
frustrate any intention by the Nigerian Government to enter into
any fresh talks with WTO. It then called on the Federal Government
of Nigeria to reconsider its role in the forthcoming Doha Round of
negotiations because the negotiations are to involve environmental
issues and investment where the developed countries have a
comparative advantage, its role in the previous round was a
disaster and the countrys representatives during the Abacha regime
failed to use someof the clauses of the WTO Agreements giving
Nigeria a grace period of five to ten years before getting into
them Some Nigerians and some legislators have also called for
Nigerias withdrawal from WTO whilst the Federal Government of
Nigeria has set up a ten-man Committee to review Nigerias
membership of WTO. It was charged with looking into the WTO
Agreement with a view to reviewing and ensuring that Nigerian
industries are protected and that the national economy is
encouraged to grow and expand and to ensure the stoppage of dumping
of goods in Nigeria. Some have also argued that it is in Nigerias
national and commercial interests to immediately withdraw from WTO
Agreement and take necessary trade and tariff measures for four to
five years to protect its local industries and economy.
5. African Development bank have played a very important role is
economic development of the African nations. Comment.
The African Development Bank (AfDB) Group is a regional
multilateral development finance institution established to
contribute to the economic development and social progress of
African countries that are the institutions Regional Member
Countries (RMCs). The AfDB was founded following an agreement
signed by member states on August 14, 1963, in Khartoum, Sudan,
which became effective on September 10, 1964. The AfDB comprises
three entities: the African Development Bank (ADB), the African
Development Fund (ADF) and the Nigeria Trust Fund (NTF). As the
premier development finance institution on the continent, the AfDBs
mission is to help reduce poverty, improve living conditions for
Africans and mobilize resources for the continents economic and
social development. The AfDB headquarters is officially in Abidjan,
Cte dIvoire. However, due to recent events in Cte dIvoire, the
institutions activities have temporarily been relocated to Tunis,
Tunisia.The African Development Bank Group Comprises of The African
Development Bank, The African Development Fund and The Nigeria
Trust Fund. The overarching objective of the African Development
Bank Group is to spur sustainable economic development and social
progress in its regional member countries (RMCs), thus contributing
to poverty reduction. The Bank Group achieves this objective by
mobilizing and allocating resources for investment in RMCs; and
providing policy advice and technical assistance to support
development efforts. The African Development Bank is the Group's
parent organization. The Agreement establishing the African
Development Bank was adopted and opened for signature at the
Khartoum,Sudan, conference on August 4, 1963. This agreement
entered into force on September 10, 1964. The Bank began effective
operations on July 1, 1966. Its major role is to contribute to the
economic and social progress of its regional member countries -
individually and collectively. As of 31 December 2011, the African
Development Bank's authorized capital is subscribed to by 78 member
countries made up of 53 independent African countries (regional
members) and 25 non-African countries (non-regional members). The
institutions resources come from ordinary and special resources.
Ordinary resources comprise: the subscribed shares of the
authorized capital, a portion of which is subject to call in order
to guarantee ADB borrowing obligations; funds received in repayment
of ADB loans; funds raised through ADB borrowings on international
capital markets; income derived from ADB loans; and other income
received by the Bank, e.g. income from other investments.Under
Article 8 of the Agreement establishing the AfDB, the Bank is
authorized to establish or be entrusted with administering and
managing special funds which are consistent with its purposes and
functions. In line with this provision, the African Development
Fund (ADF) was established with non-African states in 1972 and the
Nigeria Trust Fund (NTF) with the Nigeria Government in 1976. Other
special and trust funds include: the Arab Oil Fund; the Special
Emergency Assistance Fund for Drought and Famine in Africa; the
Special Relief Fund The ADB is a multilateral development bank
whose shareholders comprise 53 African countries (regional member
countries RMCs) and 24 non-African countries (nonregional member
countries non-RMCs). It was established in 1964 and officially
began operations in 1967. It is headquartered in Abidjan, Cte
dIvoire; however, because of political instability in Cte dIvoire,
the ADB Governors Consultative Committee (GCC), at a meeting in
February 2003 in Accra, Ghana, decided to move the Bank to its
current temporary location in Tunis, Tunisia. The Bank Groups
primary objective is to promote sustainable economic growth to
reduce poverty in Africa. It achieves this objective by financing a
broad range of development projects and programs through public
sector loans (including policy-based loans), private sector loans,
and equity investments; technical assistance for institutional
support projects and programs; public and private capital
investment; assistance in coordinating RMC development policies and
plans; and grants of up to US$ 500,000 in emergency support. The
Bank prioritizes national and multinational projects and programs
that promote regional economic cooperation and integration.
The Agreement Establishing the African Development Bank
designates the Board of Governors as the institutions highest
policy-making organ, with one representative from each member
country. The Board of Governors issues general directives on the
Banks operations and approves amendments to the Agreement, the
admission of new members, and strategies to increase the Banks
capital. The ADB Board of Governors elects an 18-member Board of
Directors to which it delegates its powers, with the exception of
those reserved to it in the Agreement. Twelve Directors are elected
from RMCs and 6 from non-RMCs for a 3-year term, renewable for one
term. The Board of Directors oversees all Bank operations. The
Boards of Governors elect the president of the Bank Group for a
5-year term, renewable for one term. The president, who must be
from an RMC, chairs the Board of Directors, appoints
vice-presidents in consultation with the Boards and manages the
Banks daily operations.
The ADB provides loans to its clients on non-concessional terms.
In 1997, it introduced 3 new loan products to meet the needs of its
clients: a single-currency variable-rate loan, a single-currency
floating-rate loan, and a single-currency fixed rate loan. The
interest rate for the single-currency variable-rate loan is based
on the quarters average cost of all outstanding Bank borrowings
specifically allocated to fund these loans. The interest rate for
the floating-rate loan is based on the 6 month LIBOR in the basket
of currencies offered by the Bank. The rate for fixed-rate loans is
based on the Banks cost of borrowing to fund them. The repayment
terms for Bank loans are as follows: Repayment period of up to 20
years, including a grace period not exceeding 5 years for public
sector loans; Repayment period of up to 14 years, including a grace
period not exceeding 4 years for publicly guaranteed lines of
credit; and Repayment period of 5 to 20 years, including a grace
period of 1 to 3 years for private sector loans. The ADF is the
lending arm of the ADB, it comprises the ADB and State
Participants, was created in 1973 and became operational in 1974.
Its main objective is to reduce poverty in RMCs by providing
low-income RMCs with concessional loans and grants for projects and
programs, and with technical assistance for studies and
capacity-building activities. The Agreement Establishing the
African Development Fund (ADF) designates the Board of Governors as
the Funds highest policy-making organ. The Board of Governors meets
at least once a year. The ADF Board of Directors includes 6
Executive Directors from non-RMCs nominated by their constituencies
and 6 Executive Directors representing the ADB; it oversees the
general operations of the Fund. The Funds resources come from
contributions and periodic replenishments by participants, usually
on a 3-year basis. No interest is charged on ADF loans; however,
the loans carry a service charge of 0.75 percent per annum on
outstanding balances, and a commitment fee of 0.50 percent per
annum on undisbursed commitments. Project loans have a 50-year
repayment period, including a 10-year grace period. Lines of credit
have a 20-year repayment period with a 5-year grace period. The
Fund also provides grants to RMCs; these do not carry any interest
charges.
The Nigeria Trust Fund NTF is a special ADB fund created in 1976
by agreement between the Bank Group and the Government of the
Federal Republic of Nigeria. Its objective is to assist the
development efforts of low-income RMCs whose economic and social
conditions and prospects require concessional financing. The NTF
became operational in April 1976 following approval of the
Agreement Establishing the Nigeria Trust Fund by the Board of
Governors. Its initial capital of US$ 80.0 million was replenished
in 1981 with US$ 71.0 million. Under the terms of the Agreement
Establishing the NTF, the operations of the Fund were envisaged to
come to an end 30 years after the Agreement came into force.
Although the Bank and the Nigerian authorities agreed to 2 one-year
extensions of the Agreement from its original expiry date of April
25, 2006, no new loans or grants have been approved from the NTF
window since that date. In November 2006 an evaluation of
activities of the Fund was commissioned and the exercise was
completed in July 2007. On the basis of the evaluation exercise,
findings and recommendations, and subsequent to the meetings held
between the Bank and the Nigerian authorities in November 2007, the
Agreement has been extended for a period of 10 years starting from
April 26, 2008.The AfDBs primary objective is to assist African
countries individually and collectively - in their efforts to
achieve economic development and social progress. To this end, the
institutions main challenge is to reduce poverty on the continent.
Combating poverty is at the heart of the continents efforts to
attain sustainable economic growth. The Bank therefore seeks to
stimulate and mobilize internal and external resources to promote
investments as well as provide RMCs with technical and practical
assistance. In partnership with various international and
development organizations, including the United Nations, the World
Bank, and the International Monetary Fund, the AfDB has, since
2000, undertaken to support RMCs in their efforts to attain the
Millennium Development Goals (MDGs)The African Development Bank
Group finances projects, programs and studies in the areas of
agriculture, health, education, public utilities, transport and
telecommunications, the industry and the private sector. The Bank
Group has, since 1968, also sought to finance non-project
operations, including structural adjustment loans, policy-based
reforms and various forms of technical assistance and policy
advice. The AfDB Group has also widened the scope of its activities
to cover new initiatives such as the New Partnership for Africas
Development (NEPAD), water and sanitation as well as HIV/AIDS. The
Bank Group is also involved in important initiatives on debt
reduction, to the tune of US$ 5.6 billion under the Highly Indebted
Poor Countries (HIPC) Initiative, which aims at reducing the debt
stock of 33 eligible countries to sustainable levels. In 2006, the
AfDB Group also made a commitment to cancel nearly US$9 billion
owed by the countries concerned in order to help them attain the
MDGs.Each member country is represented at the AfDBs Board of
Governors, the Banks highest decision-making body. The Board of
Governors elects the President during a session held in camera,
open only to Governors and Alternate Governors of regional member
countries and non-regional member countries. The presidential
candidate is introduced by the Governor of the regional member
country whose nationality they hold, and is elected for a five-year
term, renewable once. The Board of Directors is responsible for the
conduct of the Banks general operations and accordingly, has the
authority to exercise all the Banks rights except those reserved
exclusively for the Board of Governors. The AfDB President is
responsible for the Banks management under the supervision of the
Board of Directors. In this regard, he takes responsibility for the
proper application of policies and guidelines issued by the Board.
In July 2006, the Bank launched a major institutional reform aimed
at strengthening the effectiveness of its operations on the ground,
on the one hand, and on the other, to enhance its position as a
centre for the exchange of knowledge in Africa. The Bank Group
currently has about 1,500 employees, with the majority of them
being Africans. The institution also hires from all parts of the
world provided the candidates are nationals of non-regional members
of the institution. While carrying out the Banks affairs, the
President is supported by the Chief Economist along with five Vice
Presidents who supervise 30 departments with 57 organizational
divisions and 6 units. The Banks activities are controlled by the
audit department, an independent evaluation unit and the internal
administrative tribunal. In order to improve the quality of its
interventions and dialogue with beneficiaries, the Bank Group has
established offices in 25 regional member countries, with some of
the offices covering many countries.AfDB funds are derived from
subscriptions by member countries, especially non-regional member
countries, borrowings on international markets and loan repayments.
Its resources also come from ADF and Nigeria Trust Fund (NTF)
capital increases. The role of the ADF is to provide the
institutions regional member countries with resources to boost
their productivity and economic growth. Its resources are derived
directly from special contributions from states participants,
especially non-regional member countries. Similarly, the NTF was
established by the Nigerian government in 1976 to help the
institutions most underprivileged member countries and provide 2-4%
interest rate loans repayable over 25 years.
Most AfDB resources and projects are intended for its regional
member countries (RMCs). Countries are classified under three
categories on the basis of two criteria: (i)
country-creditworthiness and (ii) GNI per capita. The first
category comprises not creditworthy countries with a GNI per capita
below an established threshold updated annually (in fiscal year
2013-2014: $1,205). Countries in the first category are only
eligible for concessional resources from the African Development
Fund window. The second category contains countries with a GNI per
capita below the operational GNI cut off but creditworthy: these
are called blend countries and are eligible for ADF and ADB
resources. Finally, the third category is made up of countries
above the operational GNI cut off and creditworthy. Those countries
are eligible to ADB resources only. The Groups credit policy has
been reviewed in May 2014, enabling, under certain conditions, an
ADF eligible country to borrow non-concessional resources from the
AfDB window.The overriding objective of the AfDB is to improve
living conditions on the continent through various initiatives. For
example, Africa has the lowest water resources development level,
with only 4% of its annual resources invested in water. Nearly 40%
of the cultivated areas are irrigated and the energy potential is
virtually untapped. The management and development of water
resources are among the most crucial issues facing Africa. To take
up these enormous challenges on the continent, the AfDB has led
many water-related activities. The most important include the AfDB
Rural Water Supply and Sanitation (RWSSI) which will grant access
to an extra 33 million people to safe drinking water and sanitation
by 2010. The Bank also participates in other major initiatives such
as the African Water Facility (AWF) and the NEPADs Water and
Sanitation Programme. In the same vein, agriculture and rural
development are among the AfDBs priorities. Projects to support the
provision of rural infrastructure and the expansion of private
agribusiness geared towards food security in Africa have been
implemented. Road infrastructure, indispensable to regional
integration and key to reaching isolated populations, is at the
core of the Banks priority actions and projects
Assignment B
1. Critically examine the role of the following organization in
promoting International trade0. UNCTAD0. International Trade Centre
( ITC ), Geneva0. Centre for Promotion of Imports from Developing
Countries
i. UNCTAD
ObjectivesThe objective of UNCTAD is (a) to reduce and
eventually eliminate the trade gap between the developed and
developing Countries, and (b) and to accelerate the rate of
economic growth of the developing world.Functions:The main
Functions of the UNCTAD are:(i) To promote international trade
between developed and developing countries with a view to
accelerate economic development.(ii) To formulate principles and
policies on international trade and related problems of economic
development.(iii) To make proposals for putting its principles and
policies into effect, (iv) To negotiate trade agreements.(iv) To
review and facilitate the coordination of activities of the other
U.N. institutions in the field of international trade.(v) To
function as a centre for a harmonious trade and related documents
in development policies of governments.Activities:The important
activities of UNCTAD include (a) research and support of
negotiations for commodity agreements; (b) technical elaboration of
new trade schemes; and (c) various promotional activities designed
to help developing countries in the areas of trade and capital
flows.
About UNCTAD Established in 1964, UNCTAD (United Nations
Conference on Trade and Development) promotes the
development-friendly integration of developing countries into the
world economy. UNCTAD has progressively evolved into an
authoritative knowledge-based institution whose work aims to help
shape current policy debates and thinking on development, with a
particular focus on ensuring that domestic policies and
international action are mutually supportive in bringing about
sustainable development. The organization works to fulfil this
mandate by carrying out three key functions: It functions as a
forum for intergovernmental deliberations, supported by discussions
with experts and exchanges of experience, aimed at consensus
building. It undertakes research, policy analysis and data
collection for the debates of government representatives and
experts. It provides technical assistance tailored to the specific
requirements of developing countries, with special attention to the
needs of the least developed countries and of economies in
transition. When appropriate, UNCTAD cooperates with other
organizations and donor countries in the delivery of technical
assistance.
The UNCTAD secretariat The UNCTAD secretariat provides
substantive and technical services to the intergovernmental bodies
of UNCTAD in their discussions and deliberations. Since its
inception in 1964, the secretariat has thus serviced twelve
sessions of the United Nations Conference on Trade and Development,
meeting every four years, with the twelfth session having taken
place in Accra, Ghana in April 2008. It has also fully serviced
three United Nations Conferences on the Least Developed Countries,
meeting every 10 years with the third Conference having taken place
in Brussels, Belgium, in May 2001. The secretariat undertakes
research, policy analysis and data collection to provide
substantive inputs for the discussions of the experts and
government representatives in these intergovernmental bodies. It
also provides a series of technical assistance programmes and
projects in support of developing countries, paying particular
attention to the special handicaps of the least developed
countries. The Secretary-General of UNCTAD is Dr. Supachai
Panitchpakdi (Thailand), who took office on 1 September 2005. In
performing its functions, the secretariat works together with
member Governments and interacts with organizations of the United
Nations system and regional commissions, as well as with
governmental institutions, non-governmental organizations, the
private sector, including trade and industry associations, research
institutes and universities worldwide.
Overview of the main activities
Trade and commodities 1 Commodity diversification and
development Promotes the diversification of production and trade
structures. Helps Governments to formulate and implement
diversification policies and encourages enterprises to adapt their
business strategies and become more competitive in the world
market.
2 Competition and consumer policies Provides analysis and
capacity building in competition and consumer protection laws and
policies in developing countries. Publishes regular updates of a
Model Law on Competition.
3 Trade Negotiations and Commercial Diplomacy Assists developing
countries in all aspects of their trade negotiations.
4 Trade Analysis and Information System (TRAINS) Comprehensive
computer-based information system on trade control measures that
uses UNCTADs database. The CD-ROM version includes 119
countries.
5 Trade and environment Assesses the trade and development
impact of environmental requirements and relevant multilateral
agreements and provides capacity-building activities to help
developing countries participate in and derive benefits from
international negotiations on these matters. Investment and
enterprise development 1 International investment and technology
arrangements: Helps developing countries to participate more
actively in international investment rule making at the bilateral,
regional and multilateral levels. These arrangements include the
organization of capacity-building seminars and regional symposia
and the preparation of a series of issues papers.
2 Investment Policy Reviews: Intended to familiarize Governments
and the private sector with the investment environment and policies
of a given country. Reviews have been carried out in a number of
countries, including Ecuador, Egypt, Ethiopia, Mauritius, Peru,
Uganda and Uzbekistan.
3 Investment guides and capacity building for the LDCs: Some of
the countries involved are Bangladesh, Ethiopia, Mali, Mozambique
and Uganda. 4 Empretec: Promotes entrepreneurship and the
development of small and medium-sized enterprises. Empretec
programmes have been initiated in 27 countries, assisting more than
70,000 entrepreneurs through local market-driven business support
centres.
Macroeconomic policies, debt and development financing 1 Policy
analysis and research on issues concerning global economic
interdependence, the international monetary and financial system,
and macroeconomic and development policy challenges. 2 Technical
and advisory support to the G24 group of developing countries (the
Intergovernmental Group of 24) in the World Bank and the
International Monetary Fund; advisory services to developing
countries for debt rescheduling negotiations under the Paris
Club.
3 DMFAS programme: Computer-based debt management and financial
analysis system specially designed to help countries manage their
external debt. Started in 1982, and now installed in 62
countries.
Technology and Logistics 1 ASYCUDA programme: Integrated customs
system that speeds up customs clearance procedures and helps
Governments to reform and modernize their customs procedures and
management. Installed in over 80 countries, ASYCUDA has become the
internationally accepted standard for customs automation.
2 ACIS programme: Computerized cargo tracking system installed
in 20 developing countries of Africa and Asia.
3 E-Tourism Initiative: Linking sustainable tourism and
Information and communication technologies (ICTs) for development,
UNCTAD has developed this Initiative to help developing countries'
destinations to become more autonomous by taking charge of their
own tourism promotion by using ICT tools.
4 Technology: Services the UN Commission on Science and
Technology for Development and administers the Science and
Technology for Development Network; carries out case studies on
best practices in transfer of technology; undertakes Science,
Technology and Innovation Policy Reviews for interested countries,
as well as capacity-building activities.
5 Train ForTrade programme: Builds training networks and
organizes training in all areas of international trade to enable
developing countries to increase their competitiveness. Currently
developing distance learning programmes focusing on the LDCs.
ii) INTERNATIONAL TRADE CENTRE (ITC) GENEVA
ITC is the joint cooperation agency of UNCTAD and WTO for
business aspects of trade development. Originally created by the
General Agreement on Tariffs and Trade (GATT) in 1964, ITC has been
operated since 1968 under the joint aegis of GATT/WTO and the UN,
the latter acting through the United Nations Conference on Trade
and Development (UNCTAD). It is the focal point in the UN system
for technical cooperation with developing countries and economies
in transition in trade promotion and export development.
While UNCTAD and WTO work principally with governments, ITC
works with the business community. In this context, the ITC
clarifies the business implications of multilateral trade
agreements and assists business in understanding, shaping and
benefiting from trade rules. As a subsidiary agency of UNCTAD and
the WTO, the ITC is subject to the governing bodies of both. ITC is
also subject to the internal oversight procedures of the UN. The
Executive Director of ITC is appointed by the Director-General of
WTO and the Secretary-General of UNCTAD. Both UNCTAD and WTO are
represented in the Joint Advisory Group supervising ITCs work, and
have a number of joint technical assistance activities with ITC,
which include: The Joint Integrated Technical Assistance Programme
(JITAP)through which the three organisations provide Trade Related
Technical Assistance (TRTA) to selected LDCs and other African
countries, mainly focusing on building their capacity to
participate in the trading system. In the provision of TRTA, there
is a clear division of labour between the ITC and UNCTAD and WTO.
While ITC focuses on trade promotion, UNCTAD and WTO focus on trade
policy and regulation. Nonetheless, ITC has developed new
competencies in specific specialised aspects of trade policy and
regulation in areas related to business advocacy and business
participation in the trading system. In joining their respective
field of competence, the programme is aimed at avoiding duplication
and enhance complementarities. The Integrated Framework for Least
Developed Countries (IF)Within the IF, the WTO not only cooperates
with ITC and UNCTAD, but also with other main agencies and
institutions, namely the IMF, UNDP and the World Bank. WTO
participates also to the Business for Development (B4D)
initiatives. Regional B4D meetings are regularly organized with the
support of WTO Secretariat, UNCTAD and the Geneva-based Missions.
This mechanism intends to enable the private sector in developing
countries to define their national priorities for the WTO
negotiations, and to encourage governments to be more mindful of
business concerns. JITAP, the IF and B4D are specific examples of
Aid for Trade a much wider initiative aimed at helping developing
countries, and the least-developed in particular, to build the
supply side capacity and trade-related infrastructure they need to
benefit more from trade opening and the WTO. Here too the WTO and
ITC are working closely together to advance this initiative. ITC is
one of the key international organizations represented on the
Director-General's Advisory Group on Aid for Trade, where it's
private sector expertise and orientation is particularly relevant
to the WTO's efforts to better mobilize, monitor and evaluate Aid
for Trade.
About ITC The International Trade Centre was established in 1964
to enable small business export success in developing countries by
providing trade development programmes to the private sector, trade
support institutions and policymakers. ITC works in partnership
with the World Trade Organization (WTO) and the United Nations
Conference on Trade and Development (UNCTAD), supporting their
regulatory, research and policy strategies and helping to turn them
into practical projects. ITCs goal is to help developing countries
to achieve sustainable development through exports; activating,
supporting and delivering projects with an emphasis on
competitiveness and to achieve the mandate, it work with national,
regional and international bodies.
Goals and Objectives The goal of ITC is to help developing and
transition countries to achieve sustainable human development
through exports and it has taken the following initiative to
fulfill its goal
AID for Trade Aid for Trade is the new frontier of development
assistance. It is primarily a vehicle for enabling developing
countries, particularly least developed countries, to integrate
better into the multilateral rules-based trading system. ITC can
legitimately claim to be the 100% aid for trade organization. The
three strategic objectives of ITC correspond closely to at least
three of the five parts of the Aid for Trade agenda. ITC
contributes the business perspective, offering solutions to
supply-side constraints that keep developing countries from
participating more fully in world trade.
Trade for the millennium development goals The world development
agenda is focused on the Millennium Development Goals (MDGs). They
emerged from the Millennium Declaration signed by world leaders at
the largest summit meeting ever assembled at the UN General
Assembly in September 2000. ITC has achieved notable success in
addressing the MDGs as integral components of its programmes. The
MDGs have served as critical benchmarks for ITC in its efforts to
reduce poverty and enhance the competitiveness of enterprises in
poor communities by promoting their integration into the global
value chain. Exports can have an immediate and tangible impact on
peoples lives, both in the well-established trading countries and
in those emerging from disruption and conflict. Exports generate
employment and better incomes, contribute to womens empowerment and
bring environmental benefits.
Strategic Partnership ITC has partnered with trade support
institutions to deliver integrated solutions for export impact for
good ITC plays a critical role in the development of trade support
institutions (TSIs). ITC channels the majority of its technical
support services through trade support institutions to ensure the
widest dissemination and the sustainable transfer of knowledge and
expertise. It will further develop, and better implement,
benchmarking methodologies and tools to enable them to deliver
outcomes and measure their performance at the international
level.
Capacity Building We advise business on making the most of an
open trading system and attend to the specific trade development
needs of least developed countries. We help countries apply the
benefits of new technologies, provide support to women
entrepreneurs and promote environmentally friendly export
initiatives. Then we provide the resources for success:
facilitating profitable business generation helping to develop the
right products and services identifying where the market is and
connecting business helping develop skills and technical capacity
for ongoing success.
Overview of its services ITC delivers five complementary
business services
Business and trade policy ITC ensures that business priorities
are integrated into national trade policies and that small business
needs are taken into consideration in the negotiation of
international trade agreements. It also help small businesses to
conduct business strategically in todays increasingly competitive
global trading system. Its main objective is to actively link
businesses with policymakers through local trade support
institutions.
Export strategy ITC helps policymakers and governments, as well
as enterprises, to develop successful export development
strategies, compatible with national planning frameworks and action
plans proposed in diagnostic studies.
Strengthening trade support institutions ITC plays a critical
role in the development of TSI networks. It develop and implement
benchmarking methodologies and tools to enable TSIs to network more
effectively and measure their performance at the international
level.
Trade intelligence ITC provide trade data, information, analysis
and related capacity building to enterprises, TSIs and policymakers
to facilitate decision-making on export-related matters.
Exporter competitiveness ITC develop and deliver tools and
services responding to the specific needs of exporting enterprises,
with the aim of making them more competitive. These services are
delivered in cooperation with, and through, TSIs by certifying
trainers and programmes. Areas covered include enterprise
management, procurement and supply chain management, quality and
standards, export packaging, logistics and distribution. We also
develop marketing and business environment solutions.
iii) CENTRE FOR PROMOTION OF IMPORTS FROM DEVELOPING
COUNTRIES
CBI (Centre for the Promotion of Imports from developing
countries) is part of the Netherlands Enterprise Agency and
commissioned by the Ministry of Foreign Affairs of the Netherlands.
Established in 1971 in order to support producers / exporters to
get a foothold on the market in the Netherlands, support to
Business Support Organisations in improving their capabilities and
to act as a Matchmaker between suppliers and buyers. In 1991 the
activities were expanded to EU.
The organisation has four departments dealing with: market
information and training; export coaching; institutional
development of business support organisations; general affairs and
accounting.
Mission CBI contributes to the equitable economic development of
selected developing countries by providing export marketing and
management support to their SME exporters and Business Support
Organisations with the purpose of increasing exports to Europe. CBI
stimulates and supports economic activities that are sustainable,
socially responsible and environmentally sound. This implies
compliance with international social standards, more specifically
ILO Conventions, and European consumer health, safety and
environmental requirements. Requirements are both legislative and
market driven. CBI works with clients who subscribe and strive to
comply with these standards and requirements.
Competencies In order to accomplish its mission CBI concentrates
on five core competencies. These are:
Market knowledge CBI has an intimate knowledge of the
structures, characteristics, developments and requirements of
markets in the European Union.
Product and production improvement CBI is able to provide
technical assistance in improving products and production processes
that contribute to the competitiveness on the EU markets.
Quality control Quality is of main concern to the consumers and
end users in the European Union. There are multiple rules,
regulations and standards on quality (originating from) stipulated
by the European Union, national governments, trade & industry,
non-governmental organisations, etc. CBI is able to coach exporters
and business support organisations in meeting the requirements in
this regard.
Export marketing and management CBI is able to provide technical
assistance and training on improving export marketing and
management knowledge and skills within companies and business
support organisations.
Market entry Through its knowledge of the markets and its long
year experience CBI is able to provide guidance and market entry
services to companies in gaining access to, maintaining and
expanding market share on the EU markets. For disciplines beyond
our core competencies, CBI cooperates with various other
specialized organisations.
Overview of the services The CBI offers the following
services:
Market information The market information services of CBI
include a variety of tools to keep exporters and Business Support
Organisations (BSOs) in developing countries in step with the very
latest developments on the EU market.
Company database The on-line company database presents a wide
range of CBI-trained exporters from developing countries. All of
these exporters have been audited by the CBIs European experts and
have received extensive coaching for doing business in Europe
through our export coaching programmes (ECPs).
Export Coaching The export coaching activities are designed to
assist entrepreneurs in developing countries in entering and
succeeding on the EU market and/or consolidating or expanding their
existing market share.
Training The CBI provides tailorised training for exporters and
BSOs in many fields, including the following: - General export
marketing and management; - Trade promotion; - Managing
international trade fair participations; and - Developing
client-oriented market information systems.
BSO development The institutional capacity development support
for selected BSOs focuses on: - Export marketing and management; -
Market information services and systems; - Institutional
development and organisational strengthening; and - Export
diversification. The CBI is active in a number of specific market
sectors and has built its client base around those sectors.
1. Briefly evaluate the main features of African Union? Analyze
the impact of formation of this union on International Trade.
Introduction The advent of the African Union (AU) can be
described as an event of great magnitude in the institutional
evolution of the continent. On 9.9.1999, the Heads of State and
Government of the Organisation of African Unity issued a
Declaration (the Sirte Declaration) calling for the establishment
of an African Union, with a view, inter alia, to accelerating the
process of integration in the continent to enable it play its
rightful role in the global economy while addressing multifaceted
social, economic and political problems compounded as they are by
certain negative aspects of globalisation. The main objectives of
the OAU were, inter alia, to rid the continent of the remaining
vestiges of colonization and apartheid; to promote unity and
solidarity among African States; to coordinate and intensify
cooperation for development; to safeguard the sovereignty and
territorial integrity of Member States and to promote international
cooperation within the framework of the United Nations. Indeed, as
a continental organization the OAU provided an effective forum that
enabled all Member States to adopt coordinated positions on matters
of common concern to the continent in international fora and defend
the interests of Africa effectively. Through the OAU Coordinating
Committee for the Liberation of Africa, the Continent worked and
spoke as one with undivided determination in forging an
international consensus in support of the liberation struggle and
the fight against apartheid.
Advent of the AU The OAU initiatives paved the way for the birth
of AU. In July 1999, the Assembly decided to convene an
extraordinary session to expedite the process of economic and
political integration in the continent. Since then, four Summits
have been held leading to the official launching of the African
Union: The Sirte Extraordinary Session (1999) decided to establish
an African Union The Lome Summit (2000) adopted the Constitutive
Act of the Union. The Lusaka Summit (2001) drew the road map for
the implementation of the AU The Durban Summit (2002) launched the
AU and convened the 1st Assembly of the Heads of States of the
African Union.
The Vision of the AU The AU is Africa's premier institution and
principal organization for the promotion of accelerated
socio-economic integration of the continent, which will lead to
greater unity and solidarity between African countries and peoples.
The AU is based on the common vision of a united and strong Africa
and on the need to build a partnership between governments and all
segments of civil society, in particular women, youth and the
private sector, in order to strengthen solidarity and cohesion
amongst the peoples of Africa. As a continental organization it
focuses on the promotion of peace, security and stability on the
continent as a prerequisite for the implementation of the
development and integration agenda of the Union.
The Objectives of the AU To achieve greater unity and solidarity
between the African countries and the peoples of Africa; To defend
the sovereignty, territorial integrity and independence of its
Member States; To accelerate the political and socio-economic
integration of the continent; To promote and defend African common
positions on issues of interest to the continent and its peoples;
To encourage international cooperation, taking due account of the
Charter of the United Nations and the Universal Declaration of
Human Rights; To promote peace, security, and stability on the
continent; To promote democratic principles and institutions,
popular participation and good governance; To promote and protect
human and peoples' rights in accordance with the African Charter on
Human and Peoples' Rights and other relevant human rights
instruments; To establish the necessary conditions which enable the
continent to play its rightful role in the global economy and in
international negotiations; To promote sustainable development at
the economic, social and cultural levels as well as the integration
of African economies; To promote co-operation in all fields of
human activity to raise the living standards of African peoples; To
coordinate and harmonize the policies between the existing and
future Regional Economic Communities for the gradual attainment of
the objectives of the Union; To ad