Lecture 7: Globalisation's Multilateral Organisations

Question 1

What organisations are involved in economic globalisation?

Answer 1

• The WTO
• The IMF
• World Bank
• G20 and G8
• OECD

Question 2

The WTO

Answer 2

• The multilateral approach to trade facilitation
• The GATT signed after WW2
• World Trade Organisation formed in 1994 to provide ongoing GATT forum
• 160 member countries
• WTO is a key driver of globalisation as it is dedicated to liberalising trade in both good and services

Question 3

Roles of WTO

Answer 3

• Reduce obstacles to international trade, and so contribute to economic growth and development

Main functions:

• provide a forum for trade negotiations between member countries
• Administering WTO trade agreement
• Settling trade disputes
• Monitoring compliance of national trade policies amongst member countries

Question 4

WTO and Trade

Answer 4

Objective is to ensure that trade flows as smoothly and freely as possible

Question 5

What are the 3 key principles of WTO?

Answer 5

1. MFN - Most favoured nation
   - Cannot discriminate between their trading partners
2. National Treatment
   - Treating foreigners and locals equally
   - Imported and locally-produced goods should be treated equally
3. Tariff binding
   - When countries agree to reduce tariffs and other trade restrictions these concessions become bound

Question 6

Why do nations want to join the WTO?

Answer 6

• Benefits of trade
• It offers nondiscriminatory trade treatment
• It offers a politcally acceptable route towards trade liberalisation
• It offers a vote in world trade rules
• It provides a forum for settlement of trade disputes

Question 7

WTO criticisms

Answer 7

• WTO is undemocratic, it undermines national sovereignty
• WTO presents a world security danger
• WTO disrespects labour and human rights
• WTO is destroying the environment
• WTO is increasing inequality

Question 8

The IMF

Answer 8

International Monetary Fund - is to promote international monetary cooperation and exchange rate stability

Question 9

IMF Functions

Answer 9

• Monitoring of economic and financial developments and the provision of policy advice, aimed especially at crisis-prevention
• Lends to countries with financial difficulties
• Provides countries with technical assistance and training in its areas of expertise
• Controlled by Minsters of Finance from member countries

Question 10

The World Bank & its functions

Answer 10

• Is not a “bank”, it is one of United Nations specialised agencies
• 188 member countries, controlled by a Board of Governors who are member country ministers
• Role: to reduce world poverty
• The Bank functions include provision low-interest loans, interest-free credit, and grants to developing countries for specific development related purposes