Following are important international institutions related to international trade. I. World Bank The World Bank (the World Bank was known as the International Bank for Reconstruction and Development (IBRD) before its growth and expansion) was set up to assist the reconstruction of war affected countries and to facilitate the development of the underdeveloped nations of the world. Moreover, apart from investing in infrastructure development, agriculture, health and industry, the World Bank is significantly involved in programmes to remove poverty, increasing the income of the poor and providing technological support. Five Agencies of World Bank
1. International Bank for Reconstruction and Development (IBRD): The International Bank for Reconstruction and Development (IBRD), established in 1945, which provides debt financing on the basis of sovereign guarantees.
2. International Finance Corporation (IFC): The International Financial Corporation (IFC), established in 1956, which provides various forms of financing of without sovereign guarantees, primarily to the private sector.
3. International Development Association (IDA): The International Development Association (IDA), established in 1960, which provides concessional financing (interestfree loans or grants), usually with sovereign guarantees.
4. Multilateral Investment Guarantee Agency (MIGA): The Multilateral Investment Guarantee Agency (MIGA), established in 1988, which provides insurance against certain types of risks, including political risk, primarily to the private sector. The Multinational Investment Guarantee Agency, or MIGA, was established in April 1988 with the objective of encouraging foreign direct investment in the less developed countries. It aims at insuring investors against political and non-commercial risks, providing advisory services, etc..
5. International Centre for Settlement of Investment Disputes (ICSID): The International Centre for Settlement of Investment Disputes (ICSID), established in 1966, which works with governments to reduce investment risk.
Other Institutions:
1. UNCTAD: The United Nation Conference on Trade and Development, or UNCTAD, was established in 1964 with the objective of integrating the developing countries with the world economy through discussions. It undertakes activities such as collecting research and data for policy making and extending technical assistance to the less developed countries as per their requirements.
2. ITPO: The ITPO, or the Indian Trade Promotion Organisation, was formed on January 1, 1992, under the Companies Act, 1956. Its main objective is to maintain close interactions among traders, industry and the government. In order to fulfill this objective, the ITPO organizes trade fairs and exhibitions within and outside the country, thereby helping export firms to interact with international trade bodies.
3. INTERNATIONAL MONETARY FUND: The IMF, or the International Monetary Fund, came into existence in 1945 with the objective of creating and ensuring a healthy international monetary system. In 2005, it had 191 members. It aims at facilitating a system of international payments and adjustments in exchange rates among national currencies in order to bring about balanced growth at the international level and increase the levels of employment and income
4. WORLD TRADE ORGANIZATION (WTO): Probably the only issue in economics where economists have a unanimous approach that free trade will bring about greater specialization and through comparative advantage will increase productivity and the rate of economic growth. For a long time, an effort is being made to bring all countries under preview of multilateral trade agreements.
WTO AGREEMENTS
Major WTO agreements are as follows:
1. GATT: General Agreements on Trade and Tariff which preceded WTO is very much a part of WTO agreements.
2. Agreements on Textile and Clothing (ATC): Under the ATC, the developed countries agreed to remove quota restrictions in a phased maimer during a period of 10 years starting from 1995. It is considered as a landmark achievement of WTO which made trade in clothing and textile as quota free.
3. Agreement on Agriculture (AOA): It is a significant step in an orderly and fair trade in agricultural products. The developed countries have agreed to lower down the customs duties on their imports and subsidies to the exports of agricultural products. The developing countries have been exempted from making similar reciprocal offers.
4. General Agreement on Trade in Services (GATS): Due to GATS the basic rules which govern trade in goods have become applicable to trade in services.
5. Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS): The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulations as applied to nationals of other WTO members. It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994. The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date. In 2001, developing countries, concerned that developed countries were insisting on an overly narrow reading of TRIPS, initiated a round of talks that resulted in the Doha declaration. The Doha declaration is a WTO statement that clarifies the scope of TRIPS, stating for example that TRIPS can and should be interpreted in light of the goal “to promote access to medicines for all.”
