The United Nations Conference on Trade and Development (UNCTAD)

Established in 1964 UNCTAD aimed at integrating developing countries into the world economy

Basic functions includes:

• serve as the focal point within the United Nations for

the integrated treatment of trade and development

issues

• undertake research, policy analysis, and data collection

in order to provide substantive inputs to experts

• facilitate cooperation with other organisations and

donor countries and provide technical assistance

to member countries

Common Fund for Commodities

(CFC)

Established in 1989 with the following objectives:

• To serve as a key instrument in attaining the agreed

objectives for the integrated programme for

commodities adopted by UNCTAD

• To facilitate the conclusion and functioning of ICAs

(international commodity agreements), particularly

concerning commodities of special interests to

developing countries

GSP is a non-contractual instrument by which industrialized countries unilaterally and on the basis of non-reciprocity extend tariff concessions to developing countries

EU GSP Scheme:

• Special Incentive Scheme

• US GSP Scheme

Generalized System of Preferences (GSP)

World Intellectual Property Organization (WIPO)

Established in 1970 as an international organisation to protectthe rights of creators and owners of intellectual property theworldover

Main functions:

• Advice and expertise in the drafting and revision of

national legislation important for whose WIPO

member states with obligations under TRIPS

agreement

• Comprehensive education and training programmes

at national and regional levels

International Trade Centre (ITC)

Created by GATT in 1964 ITC works in six areas:

• Product and market development

• Development of trade support services

• Trade information

• Human resource development

• International purchasing and supply management

• Needs assessment and programme design for trade

promotion

International economic integration

Major reasons for economic integration are:

• Neighbouring countries generally have a common

history and interest and they are more willing to

cooperate in each other’s policies

• Consumer tastes are likely t o be similar and

distribution channels can easily be established in

adjacent countries

• The distances that goods need to travel between

such countries are shortened

Preferential Trading Agreement (PTA)

Member countries reduce import tariffs on identified products fromone another

Free Trade Area (FTA)

Member countries remove all tariffs and non-tariff barriers among

themselves but are free to maintain their own tariffs and non-tariff

barriers with non-member countries.

Customs Union

In addition to eliminating trade barriers among member countries, acommon external trade policy is adopted for non-members

Types

Common Market

All restrictions on cross-border investment, movement of labour,

technology transfer, management, and sharing of capital resources

are eliminated to form a common market

Economic Union

The member countries in an economic union maintain a fiscal

discipline, stability in exchange rates, and stability in interest

rates by way of unified monetary and fiscal policy

Types (contd)

Major regional trade blocks (RTA’s)

High-income and low and middle-income economies

• Asia-Pacific Economic Cooperation (APEC)

• European Union (EU)

• North American Free Trade Area (NAFTA)

Latin America and the Caribbean

• Association of Caribbean States (ACS)

• Andean Group

• Group of Three

• Latin American Integration Association (LAIA)

• Southern Cone Common Market (MERCOSUR)

Africa

• Common Market for Eastern and Southern Africa (COMESA)

• Economic Community of West African States (ECOWAS)

• Southern African Development Community (SADC

Middle East and Asia

• Association of south-East Asian Nations (ASEAN)

• Bangkok Agreement

• East Asian Economic Caucus (EAEC)

• Gulf Cooperation Council (GCC)

• South Asian Association for Regional Cooperation (SAARC)

Major RTA’s (contd)

India’s participation in RTAs

• Framework Agreement on comprehensive economic cooperation between ASEAN and India

• Bangladesh-India-Myanmar-Sri Lanka-Thailand

economic cooperation (BIMST-EC)

• Indo-Sri Lanka Free Trade Agreement

• Bangkok Agreement

• Framework Agreement for establishing free trade

between India and Thailand

• SAARC preferential trading agreement (SAPTA)

South Asian Free Trade Agreement (SAFTA)

General Agreement on Tariffs and Trade

• Paved the way for the first effective worldwide tariff agreement.

• Basic Elements of the GATT:

– Trade shall be conducted on a nondiscriminatory basis

– Protection shall be afforded domestic industries through customs tariffs, not through such commercial measures as import quotas

– Consultation shall be the primary method used to solve global trade problems.

• Eliminating barriers to international trade (Uruguay Round):

– The General Agreement on Trade in Services (GATS)

– Trade-Related Investment Measures (TRIMs)

– Trade-Related Aspects of Intellectual Property Rights (TRIPs)

World Trade Organization• An institution, not an agreement as was GATT• Sets many rules governing trade between its 148 members• Provides a panel exports to hear and rule on trade disputes between

members.• Issues binding decisions• All member countries will have equal representation• For the first time, member countries, will undertake obligations to open

their markets and to be bound by the rules of the multilateral trading system.

• Trouble with U.S. ratification:– Concern for the possible loss of sovereignty over its trade laws to WTO– The lack of veto power– The role the U.S. would assume when a conflict arises over an individual

state’s laws that might be challenged by a WTO member.

• Skirting the Spirit of GATT and WTO

The International Monetary Fund

• Created to assist nations in becoming and remaining economically viable.

• Objectives of the IMF:– Stabilization of foreign exchange rates

– Establishment of freely convertible currencies to facilitate the expansion and balanced growth of international trade

• Special Drawing Rights (SDRs)– “paper gold”

The World Bank Group• Institution that has as its goal the reduction of poverty and the

improvement of living standards by promoting sustainable growth and investment in people.

• The World Bank has five institutions each of which performs the following services:

– Lending money to the government of developing countries

– Providing assistance to governments for developmental projects to the poorest developing countries.

– Lending directly to the private sector

– Providing investors with investment guarantees against “noncommercial risk.”

– Promoting increased flows of international investment

Protests against Global Institutions

• The basic complaint against the WTO, IMF and others is the amalgam of unintended consequences of globalizing:

– Environmental concerns

– Worker exploitation and domestic job losses

– Cultural extinction

– Higher oil prices

– Diminished sovereignty of nations

Summary

• The benefits from absolute or comparative advantage clearly can accrue to any nation.

• Increased pressure for protectionism from every region of the globe.

• The consumer seldom benefits from such protection.

• Free international markets help underdeveloped countries become self-sufficient.

• Freer trade will always be partially threatened by various governmental and market barriers that exist or are created for the protection of local businesses.

• The future of open global markets lies with the controlled and equitable reduction of trade barriers.