global trading factors

7/29/2019 global trading factors

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THE GENERAL AGREEMENT ON TARIFFS AND TRADE(GATT)

From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT) provided the rules for

much of world trade and presided over periods that saw some of the highest growth rates in

international commerce. It seemed well-established, but throughout those 47 years, it was a

provisional agreement and organization.

The original intention was to create a third institution to handle the trade side of international

economic cooperation, joining the two Bretton Woods institutions, the World Bank and the

International Monetary Fund

The GATT years: from Havana to Marrakesh

The WTOs creation on 1 January 1995 marked the biggest reform of international trade since

after the Second World War. It also brought to realityin an updated formthe failed attempt

in 1948 to create an International Trade Organization.

During that period, the trading system came under GATT, salvaged from the aborted attempt to

create the ITO. GATT helped establish a strong and prosperous multilateral trading system that

became more and more liberal through rounds of trade negotiations. But by the 1980s the system

needed a thorough overhaul. This led to the Uruguay Round, and ultimately to the WTO.

Did GATT succeed?

GATT was provisional with a limited field of action, but its success over 47 years in promotingand securing the liberalization of much of world trade is incontestable. Continual reductions in

tariffs alone helped spur very high rates of world trade growth during the 1950s and 1960s

around 8% a year on average. And the momentum of trade liberalization helped ensure that trade

growth consistently out-paced production growth throughout the GATT era, a measure of

countries increasing ability to trade with each otherand to reap the benefits of trade. The rush of

new members during the Uruguay Round demonstrated that the multilateral trading system was

recognized as an anchor for development and an instrument of economic and trade reform.


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The Uruguay Round, Passing from GATT to WTO

The last and largest GATT round, was the Uruguay Round which lasted from 1986 to 1994 and

led to the WTOs creation. Whereas GATT had mainly dealt with trade in goods, the WTO and

its agreements now cover trade in services, and in traded inventions, creations and designs

(intellectual property).


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GATT AND WTO TRADE ROUNDS

Name Start DurationCountr

iesSubjects covered Achievements

Geneva April 1946 7 months 23 Tariffs

Signing of GATT, 45,000

tariff concessions affecting

$10 billion of trade

Annecy April 1949 5 months 13 TariffsCountries exchanged some

5,000 tariff concessions

TorquaySeptember

19508 months 38 Tariffs

Countries exchanged some

8,700 tariff concessions,

cutting the 1948 tariff

levels by 25%

Geneva II January 1956 5 months 26Tariffs, admission

of Japan

$2.5 billion in tariff

reductions

DillonSeptember

196011 months 26 Tariffs

Tariff concessions worth

$4.9 billion of world trade

Kennedy

May 1964 37 months 62

Tariffs, Anti-

dumping

Tariff concessions worth

$40 billion of world trade

GATT ROUNDS
http://en.wikipedia.org/wiki/Kennedy_Roundhttp://en.wikipedia.org/wiki/Kennedy_Roundhttp://en.wikipedia.org/wiki/Dumping_(pricing_policy)http://en.wikipedia.org/wiki/Dumping_(pricing_policy)http://en.wikipedia.org/wiki/Dumping_(pricing_policy)http://en.wikipedia.org/wiki/Dumping_(pricing_policy)http://en.wikipedia.org/wiki/Kennedy_Round


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TokyoSeptember

197374 months 102

Tariffs, non-tariff

measures,

"framework"

agreements

Tariff reductions worth

more than $300 billion

dollars achieved

Uruguay September

198687 months 123

Tariffs, non-tariff

measures, rules,

services,

intellectual

property, dispute

settlement, textiles,

agriculture,

creation of WTO,

etc

The round led to the

creation of WTO, and

extended the range of trade

negotiations, leading to

major reductions in tariffs

(about 40%) and

agricultural subsidies, an

agreement to allow full

access for textilesand

clothing from developing

countries, and an extension

of intellectual property

rights.

DohaNovember

2001? 141

Tariffs, non-tariff

measures,

agriculture, labor

standards,

environment,

competition,

investment,

transparency,

patents etc

The round is not yet

concluded.
http://en.wikipedia.org/wiki/Uruguay_roundhttp://en.wikipedia.org/wiki/Uruguay_roundhttp://en.wikipedia.org/wiki/Doha_roundhttp://en.wikipedia.org/wiki/Doha_roundhttp://en.wikipedia.org/wiki/Doha_roundhttp://en.wikipedia.org/wiki/Uruguay_round


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WORLD TRADE ORGANIZATION WTOWTO located in Geneva, Switzerland, created by Uruguay Round (19861994) negotiations and

established in 1 January 1995. As of 4 April 2003, 146 countries have membership of WTO.

FUNCTIONS OF WTO Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations

WHAT IS WTOThere are a number of ways of looking at the WTO. Its an organization for liberalizing trade.

Its a forum for governments to negotiate trade agreements. Its a place for them to settle

trade disputes. It operates a system of trade rules.

Above all, its a negotiating forum :-

Essentially, the WTO is a place where member governments go, to try to sort out the trade

problems they face with each other.

Its a set of rules :-

At its heart are the WTO agreements, negotiated and signed by the bulk of the worlds

trading nations. These documents provide the legal ground-rules for international commerce.

They are essentially contracts, binding governments to keep their trade policies within agreed

limits. Although negotiated and signed by governments, the goal is to help producers of

goods and services, exporters, and importers conduct their business, while allowing

governments to meet social and environmental objectives.


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It helps to settle disputes :-

This is a third important side to the WTOs work. Trade relations often involve conflicting

interests. Agreements, including those painstakingly negotiated in the WTO system, often

need interpreting. The most harmonious way to settle these differences is through some

neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute

settlement process written into the WTO agreements.

PRINCIPALSOFTHEWORLDTRADINGSYSTEM1) Trade without discrimination

a)Most-favoured-nation (MFN) :-Under the WTO agreements, countries cannot normally discriminate between their

trading Partners. Grant someone a special favour (such as a lower customs duty rate

for one of their products) and you have to do the same for all other WTO members.

This principle is known as most-favoured-nation (MFN) treatment. It is so important

that it is the first article of the General Agreement on Tariffs and Trade (GATT),

which governs trade in goods. MFN is also a priority in the General Agreement on

Trade in Services (GATS) and the Agreement on Trade-Related Aspects of

Intellectual Property Rights (TRIPS) , although in each agreement the principle is

handled slightly differently. Together, those three agreements cover all three main

areas of trade handled by the WTO.

b)National Treatment :-Imported and locally-produced goods should be treated equally - at least after the

foreign goods have entered the market. The same should apply to foreign anddomestic services, and to foreign and local trademarks, copyrights and patents.

2) Freer TradeSince GATTs creation in 1947-48 there have been eight rounds of trade negotiations. A

ninth round, under the Doha Development Agenda, is now underway. At first these

focused on lowering tariffs (customs duties) on imported goods. As a result of the

negotiations, by the mid-1990s industrial countries tariff rates on industrial goods had

fallen steadily to less than 4%. Opening markets can be beneficial, but it also requires


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adjustment. The WTO agreements allow countries to introduce changes gradually,

through progressive liberalization. Developing countries are usually given longer to

fulfil their obligations.

3) PredictabilityWith stability and predictability, investment is encouraged, jobs are created and

consumers can fully enjoy the benefits of competition choice and lower prices. The

multilateral trading system is an attempt by governments to make the business

environment stable and predictable.

In the WTO, when countries agree to open their markets for goods or services, they

bind their commitments. For goods, these bindings amount to ceilings on customs tariff

rates. Sometimes countries tax imports at rates that are lower than the bound rates.

Frequently this is the case in developing countries. In developed countries the rates

actually charged and the bound rates tend to be the same.

4) Promoting Fair CompetitionThe rules on non-discrimination MFN and national treatment which we explained before

are designed to secure fair conditions of trade. So too are those on dumping (exporting at

below cost to gain market share) and subsidies. The issues are complex, and the rules tryto establish what is fair or unfair, and how governments can respond, in particular by

charging additional import duties calculated to compensate for damage caused by unfair

trade.

5) Encouraging development and economic reformThe WTO system contributes to development. On the other hand, developing countries

need flexibility in the time they take to implement the systems agreements. And the

agreements themselves inherit the earlier provisions of GATT that allow for special

assistance and trade concessions for developing countries.

Over three quarters of WTO members are developing countries and countries in transition

to market economies. During the seven and a half years of the Uruguay Round, over 60 of

these countries implemented trade liberalization programmes autonomously.


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Turkey has been a member of WTO since 26 March 1995,

For personal interest

Goods schedules of Turkey, Services schedules and MFN exemptions of Turkey , Trade Policy Reviews of Turkey, Dispute cases involving Turkey,

Turkey and the WTO

Turkey acceded to the GATT in 1951 under the Torguay Protocol as a developing country andhas participated in all rounds of all rounds of multilaterel trade negotiations actively including

the Uruguay Round with the single undertaking signed in Marrakesh on 15 April 1994, Turkey

became an original Member of WTO on 26 March 1995 and bound by the obligations of all

Uruguay Round Agrements excluding the Plurilaterel Agrements.

The main subjects of Uruguay Round

Customs taxes in industries Textiles and Clothing Intellectual and Industrial Property Rights Agriculture Services Anti-damping Government Aids The public tenders GATT rules

Customs taxes

The first impact of Uruguay Round on Turkeys economy come into being at tariffs. The result of

lower custom taxes Distance Easts and the Central Europes poor-quality goods enter turkey

market. The consumer will be interested these goods , because they are cheap.


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Textiles and Clothing

One of the most importent aspects of the Customs Union between Turkey and the Europen

Union is the Turkeys adoption of the EUs textiles and clothing restraints included in the

Common Commercial Policy measures, in conformity with the Article XXIV of GATT 1994.

Remove customs taxes and amount restricts provide export easiness to turkeys textile and

clothes in short and middle fixed term.

Intellectuel and Industrial Property Rights

when pruducers works imitation techonology the industrialed countries be faced with difficults.

ntellectual and industrial property rights acceptance increase Turkeys confidence ininternational markets and the foreign capitals movement force.

Agriculture

Subventions bring forth wrong competitions.when support politics in agricultere reduce it is a

problem for countries trying development agriculture economy.

Services

Turkey has advanced in service sector in last ten years. It can enter international competitions

like in banking, transportations and tourism.

Anti-damping and Goverment Aids

In generally, goverment aids and encouragement export politics are prohibition in international

trade. Turkey continue encouragement politics 8+2=10 years.But it wouldnt be excessive.

Public Tenders

Regional and local administrations works be taken international public tenders contents.

Particularly, this new practise effect Turkeys contractor firms. It wouldnt cause a problem

because local firms have superior competitive force in international tender.


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THE ASIAN DEVELOPMENT BANK INTRODUCTION

The Asian Development Bank (ADB) is a regional development bank established on 22

August 1966 to facilitate economic development of countries in Asia. The bank admits the

members of the United Nations Economic and Social Commission for Asia and the Pacific

and non-regional developed countries. From 31 members at its establishment, ADB now has

67 members - of which 48 are from within Asia and the Pacific and 19 outside. ADB was

modeled closely on the World Bank, and has a similar weighted voting system where votesare distributed in proportion with member's capital subscriptions. At present, both the United

States and Japan hold 552,210 shares, the largest proportion of shares at 12.756% each. China

holds 228,000 shares (6.429%), India holds 224,010 shares (6.317%), the 2nd and 3rd largest

proportion of shares respectively.

HISTORY1962-1972

ADB was originally conceived by some influential Japanese who formulated a "private plan"

for a regional development bank in 1962, which was later endorsed by the government. The

Japanese felt that its interest in Asia was not served by the World Bank and wanted to

establish a bank in which Japan was institutionally advantaged. Once the ADB was founded

in 1966, Japan took a prominent position in the bank; it received the presidency and some

other crucial "reserve positions" such as the director of the administration department. By theend of 1972, Japan contributed $173.7 million (22.6% of the total) to the ordinary capital

resources and $122.6 million (59.6% of the total) to the special funds. In contrast, the United

States contributed only $1.25 million for the special fund.
http://en.wikipedia.org/wiki/Multilateral_development_bankhttp://en.wikipedia.org/wiki/United_Nations_Economic_and_Social_Commission_for_Asia_and_the_Pacifichttp://en.wikipedia.org/wiki/Developed_countryhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/PRChttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/PRChttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/Developed_countryhttp://en.wikipedia.org/wiki/United_Nations_Economic_and_Social_Commission_for_Asia_and_the_Pacifichttp://en.wikipedia.org/wiki/Multilateral_development_bank


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LENDINGThe ADB offers "hard" loans from ordinary capital resources (OCR) on commercial terms,

and the Asian Development Fund (ADF) affiliated with the ADB extends "soft" loans from

special fund resources with concessional conditions. For OCR, members subscribe capital,

including paid-in and callable elements, a 50 percent paid-in ratio for the initial subscription,

5 percent for the Third General Capital Increase (GCI) in 1983 and 2 percent for the Fourth

General Capital Increase in 1994. The ADB borrows from international capital markets with

its capital as guarantee.

In 2009, ADB obtained member-contributions for its Fifth General Capital Increase of 200%,

in response to a call by G20 leaders to increase resources of multilateral development banks

so as to support growth in developing countries amid the global financial crisis. For 2010 and

2011, a 200% GCI allows lending of $12.5-13.0 billion in 2010 and about $11.0 billion in

2011.With this increase, the bank's capital base has tripled from $55 billion to $165 billion.

EFFECTIVENESSGiven ADB's annual lending volume, the return on investment in lesson-learning for

operational and developmental impact is likely to be high; maximizing it is a legitimate

concern. All projects funded by ADB are evaluated to find out what results are being

achieved, what improvements should be considered, and what is being learned.

There are two types of evaluation: independent and self-evaluation. Self-evaluation is

conducted by the units responsible for designing and implementing country strategies,

programs, projects, or technical assistance activities. It comprises several instruments,

including project/program performance reports, midterm review reports, technical assistance

or project/program completion reports, and country portfolio reviews. All projects are self-

evaluated by the relevant units in a project completion report. ADBs project completion

reports are publicly disclosed on ADBs Internet site. Client governments are required to

prepare their own project completion reports.
http://en.wikipedia.org/wiki/G20http://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/G20


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Independent evaluation is a foundation block of organizational learning: It is essential to

transfer increased amounts of relevant and high-quality knowledge from experience into the

hands of policy makers, designers, and implementers. ADBs Independent Evaluation

Department (IED) conducts systematic and impartial assessment of policies, strategies,

country programs, and projects, including their design, implementation, results, and

associated business processes to determine their relevance, effectiveness, efficiency, and

sustainability following prescribed methods and guidelines. It also validates self-evaluations.

By this process of evaluation, ADB demonstrates three elements of good governance:

accountability, by assessing the effectiveness of ADB's operations; transparency, by

independently reviewing operations and publicly reporting findings and recommendations;

and improved performance, by helping ADB and its clients learn from experience to enhance

ongoing and future operations.

Operations evaluation has changed from the beginnings of evaluation in ADB in 1978.

Initially, the focus was on assessing after completion the extent to which projects had

achieved their expected economic and social benefits. Operations evaluation now shapes

decision making throughout the project cycle and in ADB as a whole. Since the establishment

of its independence in 2004, IED reports directly to ADBs Board of Directors through the

Board's Development Effectiveness Committee. Behavioral autonomy, avoidance of conflicts

of interest, insulation from external influence, and organizational independence have made

evaluation a dedicated toolgoverned by the principles of usefulness, credibility,

transparency, and independencefor greater accountability and making development

assistance work better. Independent Evaluation at the Asian Development Bank presents a

perspective of evaluation in ADB from the beginnings and looks to a future in which

knowledge management plays an increasingly important role.

In recent years, there has been a major shift in the nature of IED's work program from a

dominance of evaluations of individual projects to one focusing on broader and more

strategic studies. To select priority topics for evaluation studies, IED seeks input from the

Development Effectiveness Committee, ADB Management, and the heads of ADB

departments and offices. The current thrusts are to improve the quality of evaluations by

using more robust methodologies; give priority to country/sector assistance program

evaluations; increase the number of joint evaluations; validate self-evaluations to shorten the

learning cycle; conduct more rigorous impact evaluations; develop evaluation capacity, both
http://en.wikipedia.org/wiki/Good_governancehttp://en.wikipedia.org/wiki/Good_governance


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in ADB and in DMCs; promote portfolio performance; evaluate business processes; and

disseminate findings and recommendations and ensure their use. IED's work program has

also been reinterpreted to emphasize organizational learning in a more clearly defined results

architecture and results framework. It entails conducting and disseminating strategic

evaluations (in consultation with stakeholders), harmonizing performance indicators and

evaluation methodologies, and developing capacity in evaluation and evaluative thinking. All

evaluation studies are publicly disclosed on IED's website (some evaluations of private sector

operations are redacted to protect commercially confidential information). IED's evaluation

resources are displayed by resource type, topic, region and country, and date. Leanings are

also gathered in an online Evaluation Information System offering a database of lessons,

recommendations, and ADB Management responses to these. Details of ongoing evaluations

and updates on their progress are made public too.

Beginning 2006, acting within the knowledge management framework of ADB, IED has

applied knowledge management to lesson learning, using knowledge performance metrics.

Learning Lessons in ADB sets the strategic framework for knowledge management in

operations evaluation. Improvements have been made that hold promise not only in IED but,

more importantly, vis--vis its interfaces with other departments and offices in ADB,

developing member countries, and the international evaluation community. In the medium

term, IED will continue to improve the organizational culture, management system, business

processes, information technology solutions, community of practice, and external relations

and networking for lesson learning. Among the new knowledge products and services

developed, Learning Curves are handy, two-paged quick references designed to feed findings

and recommendations from evaluation to a broader range of clients Evaluation News report

on events in monitoring and evaluation. Evaluation Presentations offer short photographic or

Power point displays on evaluation topics. Auditing the Lessons Architecture highlights the

contribution that knowledge audits can make to organizational learning and organizational

health.

Of the 1,106 ADB-funded projects evaluated and rated so far (as of December 2007), 65%

were assessed as being successful, 27% partly successful and 8% as unsuccessful.

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