IBM - RMB302 - Unit V

Unit V
International Institutions

International Institutions
Objectives and Functions of WTO
IMF
IBRD
UNCTAD
EU, NAFTA, ASEAN
SAARC, BRICS

United Nation
• History •
• United Nations (UN) formed by 51 states after World
War II to: “save succeeding generations from the
scourge of war”
• UN Charter signed on 24th October 1945: UN Day.
• Main Headquarters in New York, USA.
• 193 Member States to date, newest member South-
Sudan
• 6 official languages: Arabic, Chinese, English, French,
Russian & Spanish.
12/18/2018 Kartikeya Singh,SMS Varanasi 3

Organization Structure
United Nation
Secretariat
Security Council
International Court of Justice
Trusteeship Council
Economic and Social Councill
General Assembly

The Secretariat
• Administrative arm of the United Nations
• Services the other organs of the United
Nations
• Informs the world's media about the work of
the United Nations (Public Information)
• Organizes international conferences on issues
of worldwide concern; interprets speeches &
translates documents into the Organization's
official languages.

The International Court of Justice
• Principal judicial organ of the UN.
• Established in June 1945 by the Charter of the
UN.
• Work commenced in April 1946.
• 15 judges elected by the General Assembly and
Security Council for 9 year terms.
• Main role:
– settles legal disputes submitted to it by States & to
gives advisory opinions on legal questions referred to
it by authorized UN organs & specialized agencies

Security Council
• Main role: maintenance of international peace & security.
• 15 members;
• 5 permanent and 10 non-permanent.
• Non-permanent members elected from different regions in
the world to serve 2 year terms.
• Council on a 24-hr call (can meet any day, at any time)
• 9 out of 15 votes required to pass a resolution (no veto from
the permanent members!).
• Only UN-Organ which can enforce it’s resolutions – they are
legally binding

Security Council
• Actions the Security Council may take:
– Peaceful settlement of disputes (i.e. negotiations,
peace talks, good offices of the Secretary-General,
also Special Representatives of the Secretary-
general)
– Establish Peacekeeping Operations
– Enforcement measures (i.e. targeted sanctions,
multinational forces)

Trusteeship Council
• Has suspended it’s work, no longer active! Previously
supervised the administration of Trust Territories
placed under the Trusteeship System.
• Main goal:
– to promote the advancement of the inhabitants of Trust
Territories and their progressive development towards
self-determination.
– Special Committee on Decolonization still active to date!
– 17 non-self-governing territories remaining today

Economic and Social Council (ECOSOC)
• Main goal:
• To improve the world’s living standards and to promote the
respect of human rights – no peace & security without
economic & social stability!
• Coordinates the work of UN funds, programmes & specialized
agencies; i.e. UNHCR, UNICEF, WFP, UNEP, UN-HABITAT, ILO,
World Bank…
• Sets international standards; i.e. Children’s Rights
• World’s economic, social & environmental challenges are
discussed, debated and recommendations made by this
organ.

Economic and Social Council (ECOSOC)
• Main goal:
• to improve the world’s living standards and to promote the
respect of human rights – no peace & security without
economic & social stability!
• Coordinates the work of UN funds, programmes & specialized
agencies; i.e. UNHCR, UNICEF, WFP, UNEP, UN-HABITAT, ILO,
World Bank…
• Sets international standards; i.e. Children’s Rights
• World’s economic, social & environmental challenges are
discussed, debated and recommendations made by this
organ.

General Assembly
• Main deliberative, policymaking and representative organ of
the UN, also “World Parliament”.
• Comprises of all 193 member states.
• Provides a unique forum for multilateral discussion.
• Six main committees.
• Meets from September to December for it’s main session
each year. However, session lasts a year.
• Currently in 68th Session.

II. UNCTAD - United Nations Conference on Trade and
Development.

Development.
• The first UNCTAD met in March 1964 in Geneva.
• It was an ad hoc gathering of representatives of about 120
states which were members of the United Nations.
• It however, marked a turning point in international economic
relations and ushered a new era in the evolution of world
trade and development,
• Since it represented the first major Endeavour to examine all
the problems of International economic relations, with special
reference to the needs of developing countries.

Development.
• The first UNCTAD met in March 1964 in Geneva.
• It was an ad hoc gathering of representatives of about 120
states which were members of the United Nations.
• UNCTAD is the principal organ of the United Nations General
Assembly dealing with trade, investment, and development
issues.
• The organization's goals are to:
– maximize the trade, investment
– development opportunities of developing countries
– assist them in their efforts to integrate into the world economy on an
equitable basis.

Development.
• United Nations Conference on Trade and
Development Abbreviation UNCTAD
• Formation1964
• Headquarters - Geneva, Switzerland
• Website - www.unctad.org

Development.
• The creation of UNCTAD in 1964 was based on concerns of
developing countries over the international market, multi-
national corporations, and great disparity between developed
nations and developing nations.
• The organization grew from the view that existing institutions
like GATT (now replaced by the World Trade Organization,
WTO), the International Monetary Fund (IMF), and World
Bank were not properly organized to handle the particular
problems of developing countries.
• Later, in the 1970s and 1980s, UNCTAD was closely associated
with the idea of a New International Economic Order(NIEO).

Development.
• The first UNCTAD conference took place in Geneva in 1964,
• the second in New Delhi in 1968,
• the third in Santiago in 1972,
• fourth in Nairobi in 1976,
• the fifth in Manila in 1979,
• the sixth in Belgrade in 1983,
• the seventh in Geneva in 1987,
• the eighth in Cartagena in 1992,
• the ninth at Johannesburg (South Africa) in 1996,
• the tenth in Bangkok (Thailand) in 2000,
• the eleventh in São Paulo (Brazil) in 2004,
• the twelfth in Accra in 2008 and the thirteenth in Doha (Qatar) in
2012.

Unit IV – International Monitory
fund - IMF
• International Monetary Fund (IMF) : The Bretton
Woods Conference (1944) paved the way for the
establishment of the International Monetary
Fund (IMF). The Fund came into existence in
December, 1945 with a modest membership of
45 nations.
• At present 188 nations are members of the IMF.
• Head quarter - Washington DC in USA.- Mrs.
Christine Lagarde is the Head of IMF.
12/18/2018 Kartikeya Singh

Unit IV – Objective of IMF.
• Objectives of IMF : Article 1 of the Fund as amended in 1978, put the
following important aims and objectives of the fund
– To promote international monetary co-operation through a permanent
institution providing the machinery for consultation and collaboration on
international monetary problems.
– To facilitate smooth and stable growth of multilateral international trade.
– To promote stability in exchange and to avoid competitive exchange
depreciation.
– To remove temporary disequilibrium in the balance of payment of member
countries.
– To assist in the establishment of a multilateral system of payments in respect
of current transactions between members and in the elimination of foreign
exchange restrictions obstructing the growth of world trade.
– To shorten the duration and lessen the degree of disequilibrium in the
international balances of payments of members.

Unit IV – Management of IMF.
• IMF is controlled by board of
Governors.
• Each member country nominates
a Governor.
• All the nominated Governors
make the board of Governors.
• Each country also nominates an
alternate Governor who casts his
vote in the absence of the
governor.
• Each governor is allotted a
number of votes which is
determined by the quota allotted
to the respective country in the
capital of IMF.
1st January 1, 2011 the weigtage to
these currencies in SDR
Euro 37.4%
Japanese yen 9.4%
Pound Sterling 11.3%
US dollar 41.9%
100%

Unit IV- IBRD – International bank for
reconstruction and development.
• IBRD (World Bank)was established in December 1945 with the
IMF on the basis of the recommendation of the Bretton
Wood Conference. That is the reason why IMF and IBRD are
called `Bretton Wood Twins'. IBRD started functioning in June
1946. World Bank and IMF are Complementary institutions.
• Head office – Washington DC
• Headed by – Mr. Jim Yuong Kim

Unit IV – Objective of World Bank
• Reconstruction
• Economic Development
• Reducing Economic
disparities
• Raising Living Standard
• Productive International
Investment.

Unit V – GATT – General agreement on Tariff and Trade.
• The prolonged recession before
the World war II in the west was
due to the decades of
protectionism followed by the
industrialized countries. This led
to conduct of negotiations in
1947 among 23 countries in
order to prevent the protectionist
policies and to revive the
economies from the recession.
These negotiations of the
conferences resulted in the
General Agreement on Tariffs
and Trade (GATT) among the
participating countries. Thus
GATT has its origin in 1947 at the
conference of Geneva.

Unit V – GATT – General
agreement on Tariff and Trade.
• The birth of GATT
• 30th October 1947, the General Agreement of
Tariffs and Trade was signed by 23 countries.1947
• 1st January 1948
• GAAT Came into force1948
• Second Round at Annecy, France.
• Exchanged some 5000 tariff concessions.1949

•Third Round at Torquay U K
•The contracting parties exchanged
some 8700 concessions.
1950
•Fourth Round at Geneva, Switzerland.
•Got some $ 2.5 billion worth of tariff
reduction.
195 6
•Fifth Round, Dillon round
•Tariff concessions worth $4.9 billion of
world trade
19 6 0

agreement on Tariffs and Trade.
•Short term arrangement
•Covering cotton textile(Exception)19 6 1
•Kennedy round, Fifth round.
•Trade negotiation was formally
opened.
19 6 4
•A new chapter, Sixth round.
•Many newly independent countries
participated in the agreement.
19 6 5

•The Tokyo round, Seventh round
•Comprehensive body covering tariff
and non tariff matter
1973
•The arrangement regarding
International Trade in textile.
•Known as Multifibre
arrangement(MFA)
1974
•Uruguay Round, Eighth round.
•Went upto 7 and half years.
1986

•Successful conclusion of the
Uruguay round
•15th December 1993. Geneva,
Switzerland
1993
•The final act of U rugway round
signed
•Marrakesh, Morocco, 15 April
1994
1994
•World Trade Organisation came
into force. 1st January 1995.
•Geneva was accepted as
headquarter.
1995

URUGUAY ROUND AND ARTHUR
DUNKEL PROPOSAL

Unit V – Uruguay Round Package
• The draft proposals proposed by Arthur Dunkel in the
Uruguay Round of GATT include
1. Market Access.
2. Agriculture.
3. Trade Related Intellectual Property Rights(TRIPs).
4. Trade Related Investment Measures (TRIMs)
5. Trade in Services.
6. Textile.
7. Institutional Matter.

Unit V – Uruguay Round Package –
1.Market Access
– Arthur Dunkel suggested that the Government control in
marketing activities and operation will have to be
slackened. The member Governments will have to abolish
the barriers related to the market access.
– First, Both developing and developed countries agreed to
significantly increase their share of industrial product
imports.
– Second, The average tariff on developed countries’
imports of industrial products was cut by 40 per cent on
imports from all sources, and by 37 per cent on imports
from developing countries.
– Third, substantial progress was made with regard to non-
tariff barriers

2. Agriculture
 Member Government are suggested to reduce the
subsidy on fertilizers, seeds and other inputs and
eliminate the administered pricing in respect to
agricultural sector.
 The proposal include :-
 How a country can remove his subsidy in different phases.
 A supplementary agreement on the modalities by which
subsidy would be removed.
 A decision on application of sanitary and phycosanitary
measures and
 A declaration on measures to assist for food importing
countries.

2. Agriculture
Amber box
Blue box
Green box
Total Aggregate Measurement of
Support (AMS)
De Minimis –Minimum Limit
5% - Developed Countries
10% - Developing Countries

Unit V – Uruguay Round Package - 3. TRIPs Trade
Related Intellectual Property Rights
• Dunkel proposal regarding trade intellectual
property rights (TRIPs) in respect of business
and commerce include :
– Protection of patents – 20 years
– Copy rights – 50 years
– Design – 10 years
– Trade Marks – 7 years
– Trade Secrets -

Unit V – Uruguay Round Package – 4. TRIMS - Trade
Related Investment Measures
– Abolition of Restrictions imposed on foreign capital.
– Offering equal rights to the foreign investor equal to
those of the domestic investor.
– No restriction on investment
– No limitations or ceiling on the quantum of foreign
investment.
– Granting of permission without restrictions to import
raw materials and other companies.
– No force on the foreign investors to use total products
or materials.

Unit V – Uruguay Round Package – 5. Trade in Services.
• Trade in services like, insurance, travel,
tourism, hotel, banking, maritime,
transportation, mobility of human resources
etc. have been included in the proposal
• GATS – General agreement in Trade in services
provides a multilateral framework of
principles and services.
• GATS governs trade in services.

6. Textile.
• An attempt was made to
re-integrate textile into
GATT in order to do away
with Multi Fiber
Arrangement.(MBA).
• Textile was included in
Dunkel Proposal
• Developed countries
dismantled the import
quotas on garment and
textile from 1st January,
2005.
• Strategies for Textile
firms.
– Product Specialization
– Cross-border cooperation
– Improve sourcing skills
– Focus on higher value
products
– More flexible rules of
origin
– Interregional Cooperation
– Creation of Conducive
Environment.

Unit V – Uruguay Round Package – 7. Institutional
Matter.
• It handles the grievances of two participating
nations.
• Try to remove barriers to trade
• Try to implement guidelines of the WTO/GATT.
• Takes care of the breach of the law.

Ministerial Conference
General Council
Dispute Settlement
Body
CT in Goods CT in Services
CT in Intellectual
rights
Director General
Secretariat of the
WTO
Trade Policy Review Body
Committee for
trade and
development
Committee on
balance of
payment
C. On Budget
Finance

Unit V – WTO – 1st Ministerial Conference
• Singapore, 9th December,
1996.(128 countries)
• Reaffirmation of International
labour organisation work.
• Rejected the use of labour
standards for projectionist
purposes.
• Understanding of dispute
settlement procedure.
• Work group for conducting a
study on transparency in
government procurement
practices,
• Establish a working group to
examine the relation between
trade and investment.
• Organise a meeting with
UNCTAD(UN conference on
trade development), to help
developing countries.
• Talks related to TRIMs

Unit V – WTO – 2nd Ministerial
Conference
• Geneva, 18th May, 1998 (132
countries)
– Setting up of a mechanism to
ensure full and faithful
implementation of existing
multilateral agreements.
– Rejection of projectionist
measures and accepting for
open and transparent rule-
based trading system.

Unit V – WTO – 3rd Ministerial
Conference
• Seattle, 3rd December, 1999, (135 countries).
– This meeting was a failure.
– Dispute erupted on transparency and imposition of
the views of the rich countries.
– Major contention was of exploitation.
– Protestors called it a “wrong trade organisation”.
– Reason for the failure:-
• American reluctance on inclusion of labour standards
• European Union was reluctant to liberalise agriculture.

Unit V – WTO – 4th Ministerial
Conference
• Doha, Qatar, 9-13 November, 2001,(142
countries).
• Declaration included :
– Reduction in Industrial tariffs
– Phasing out of agriculture export subsidies.
– Promoting the trade in services
– Providing special and differential treatment for
developing countries.
– Negotiations on setting up a multilateral
agreement on transparency in government
procurement.
– Negotiations to further expedite movement,
release and clearance of goods.

Unit V – WTO – 5th Ministerial
Conference
• Cancun, Mexico,
10 to 14 September 2003,
– TRIPS and public health
– Geographical indications in general
– Geographical indications: the
multilateral register for wines and
spirits
– Geographical indications: extending the
“higher level of protection” beyond
wines and spirits
– Reviews of TRIPS provisions.
– Non-violation complaints.
– Technology transfer

No. Date Host City
1st 9–13 December 1996 Singapore
2nd 18–20 May 1998 Geneva, Switzerland
3rd 30 November – 3 December 1999 Seattle, United States
4th 9–14 November 2001 Doha, Qatar
5th 10–14 September 2003 Cancún, Mexico
6th 13–18 December 2005 Hong Kong
7th 30 November – 2 December 2009 Geneva, Switzerland
8th 15–17 December 2011 Geneva, Switzerland
9th 3–6 December 2013 Bali, Indonesia

Unit V – WTO and the India.
• A growth Story….
(WTO). Roberto
Azevedo Joined after
France'sPascal Lamy

Unit V – WTO and India
• Favorable Impact :-
a) Increase in export earnings
• Growth in merchandise exports.
• Growth in Service exports.
b) Agricultural Export
c) Textile and clothing
d) Foreign Direct Investment
e) Multilateral rule and discipline.

Unit V – WTO and India
• Unfavorable Impact :-
I. TRIPS
 Pharma companies
 Agricultural output.
 Micro ornanism
II. TRIMS
III. GATS.
IV. Trade and Non-Tariff Barrier
V. LDC Exports..

Unit V – WTO and Anti Dumping
Measures.
• Dumping :- The sale of goods abroad at a price
which is lower than the selling price of same
goods at the same time in the same
circumstances at home, taking account of
difference in transport costs.
• Dumping means selling the product at below
the on going market price and or at the price
below the cost of production.

Unit V – Impact of Globalisation
• See the text box….

Unit V – WTO members..
• List of WTO Members(see the text box).

Headquarters Kathmandu, Nepal
Official languages English
Membership
8 members[show]
9 observers[show]
Leaders
Directors:
Afghanistan Md Ibrahim Ghafoor
Bangladesh MJH Jabed
Bhutan Singye Dorjee
India L. Savithri
Maldives
a
Fathimath Najwa
Nepal Harpal Sing Nepali
[
Pakistan Ahmar Ismail
Sri Lanka Prasanna Gamage
Establishment 8 December 1985
GDP (PPP) 2014 estimate
Total US$ 9.05 trillion
GDP (nominal) 2014 estimate
Total US$ 2.599 trillion
Website
www.saarc-sec.org

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