UNCTAD, WTO, IMF: Trade, Development, and Finance
UNCTAD: Fostering Equitable Global Economic Participation
The United Nations Conference on Trade and Development (UNCTAD) is a UN body that addresses economic and sustainable development issues. It focuses on trade, finance, investment, and technology. UNCTAD’s core principle is the right to natural resources and non-discrimination. Its primary objective is to help developing countries participate equitably in the global economy. UNCTAD supports developing countries in using trade, investment, finance, and technology for inclusive growth.
Challenges for Developing Countries
- Completely eradicating poverty.
- Social conflicts and tensions.
- Significant differences in standards of living.
- External debt, which is a major limitation to resolving financial and economic problems.
Globalization: Interdependence and Integration
Globalization is a process of change towards greater interdependence and integration of the world’s economies. It involves increased trade, the internationalization of companies, and a greater exchange of technologies and knowledge.
Multinational Companies: Key Players
Multinational companies are the main operators in the global economy. They organize production and allocate resources globally while maximizing benefits.
New Tendencies in the Global Economy
- Divergent recovery paths in the context of slower growth.
- Deepening inequalities in income and wealth.
- Growing pressures of indebtedness and thinning policy autonomy in developing economies.
Repercussions of Deglobalization
- Military conflicts.
- Nationalism.
Key institutions in global economics and finance include the IMF and World Bank, while the WTO governs trade.
GATT and the WTO: Promoting Free Trade
The General Agreement on Tariffs and Trade (GATT) aimed to eliminate tariffs in international trade and promote free trade by abolishing practices that distort competition. Its principles include non-discriminatory trade and the progressive reduction of tariffs.
Agreement on Subsidies and Countervailing Measures
This agreement regulates subsidies for industrial products and commodities to prevent unfair damage. It allows the establishment of mechanisms for monitoring and dispute resolution between member countries.
Objectives of the WTO
- Ensure the free flow of goods and services.
- Improve people’s lives.
- Apply multilateral trade agreements.
- Oversee WTO agreements.
- Provide technical assistance and training courses.
WTO Bodies
The WTO’s structure includes the Ministerial Conference, the General Council, and various Councils and Committees.
Dispute Settlement Mechanism (DSM)
The DSM provides security and predictability to the multilateral trading system. It preserves the rights and duties of member states.
Modes of Supply in Services Trade
- Cross-border supply
- Consumption abroad
- Commercial presence
- Presence of natural persons
TRIPS: Protecting Intellectual Property Rights
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) aims to reduce distortions and impediments to international trade. It promotes competent and adequate protection of intellectual property rights (IPRs), ensuring that IPR protection does not become a barrier to legitimate trade.
The Doha Development Agenda
- Agriculture: More market access, elimination of export subsidies, and reduction of domestic support.
- Non-Agriculture: Reduction or elimination of non-tariff barriers.
- Services: Improved market access and strengthened rules.
- Environment: Free trade in environmental goods and improved trade-environmental rule coherence.
IMF: Structure and Objectives
The International Monetary Fund (IMF) works to:
- Ensure exchange rate stability.
- Promote international monetary cooperation.
- Establish a multilateral payments system.
- Facilitate the expansion and balanced growth of international trade.
Quota Formula
The IMF quota formula is calculated as follows: (0.50 * GDP) + (0.30 * Openness) + (0.15 * Variability) + (0.05 * Reserves).
Structural Adjustment Programs and External Debt
Initiated in the 1980s, Structural Adjustment Programs aimed to increase savings, stabilize prices, open economies to trade and investors, reduce state intervention, and implement a free-market economy.
Impact of Preconditions on Poorer Countries
- Poorer countries were required to export more to pay debts.
- Forced global integration before they were ready.
- Cheaper raw materials primarily benefited developed countries.
- Governments increased exports to repay debts.