week 1 Flashcards
What was the Atlantic Charter, and what were its main economic goals?
The Atlantic Charter, issued on August 14, 1941, outlined American and British goals for the post-war world. Its economic goals included eliminating discriminatory trade practices, reducing trade restrictions, promoting global cooperation, ensuring freedom of the seas, and avoiding the use of force.
Why did the United States promote free trade after World War II?
The U.S. believed that free trade would not only boost global prosperity but also contribute to lasting peace by reducing economic tensions and fostering cooperation among nations.
Which countries were involved in shaping the post-war economic order?
The United States, the United Kingdom, and other Allied nations played key roles in negotiating international economic policies for the post-war world.
What was the significance of the Bretton Woods Conference in 1944?
The conference established the framework for the post-war global economy, leading to the creation of institutions like the International Monetary Fund (IMF) and the World Bank to ensure financial stability and economic recovery.
How did the Atlantic Charter influence post-war international economic institutions?
It laid the groundwork for multilateral agreements and institutions such as the IMF, World Bank, and later the General Agreement on Tariffs and Trade (GATT), which promoted global trade and economic cooperation.
Bretton Woods Agreement
The agreement was reached in a 1944 summit held in New Hampshire, USA.
The summit was attended by 730 delegates representing 44 Allied nations.
The main goals were to create an efficient foreign exchange system, prevent competitive currency devaluations, and promote international economic growth.
What institutions were created as a result of the Bretton Woods Agreement?
The Bretton Woods system established a fixed exchange rate system where global currencies were pegged to the value of the U.S. dollar, and the U.S. dollar itself was backed by gold.
The agreement led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now known as the World Bank.
What was the main role of the IMF when it was first established?
The IMF was created to manage the international monetary system, ensuring stability through a fixed exchange rate system, where currencies were pegged to the U.S. dollar, which was convertible to gold.
How did the IMF manage the international monetary system under the Bretton Woods Agreement?
Under the Bretton Woods system, the IMF managed the fixed exchange rate regime by ensuring that currencies were pegged to the U.S. dollar, which could be exchanged for gold at $35 per ounce, creating stability in global currency markets.
What were the key functions of the IMF as an international forum?
- The IMF served as a place where member countries could consult on monetary and economic issues, cooperate on international financial challenges, and develop standardized rules for global financial transactions.
- The IMF provided temporary financial assistance to countries struggling with balance of payments problems, helping prevent financial crises and maintaining global monetary stability.
How has the IMF evolved since the collapse of the Bretton Woods system in 1971?
- After the collapse of the Bretton Woods system, the IMF shifted focus to crisis prevention, promoting financial stability, and addressing new global challenges like climate change and digital currencies.
- After the collapse of the Bretton Woods system in 1971, the U.S. stopped converting the dollar into gold.
What were the main goals of the IMF and the IBRD when they were established?
Both institutions were created to prevent the economic chaos of the 1930s and promote international economic cooperation. The IMF focused on short-term stability and monetary cooperation, while the IBRD focused on long-term development and poverty reduction.
When was the IBRD established, and what were its primary missions?
The IBRD was established in 1944 and began operations in 1946. Its primary missions were to provide loans and technical assistance for the reconstruction of Europe after World War II and to promote economic development in less developed countries.
The IBRD’s initial focus was on providing loans and assistance for the reconstruction of European nations devastated by World War II.
How does the IBRD promote economic development in less developed countries?
The IBRD promotes development by offering long-term loans for infrastructure projects, providing technical expertise for development programs, supporting poverty reduction initiatives, and helping create conditions for private investment.
What institutions are part of the World Bank Group?
The World Bank Group includes the International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID).
What was one of the recommendations made at the Bretton Woods Conference regarding international trade?
One recommendation was the establishment of an International Trade Organization (ITO) to promote trade and cooperation among nations.
What were the main goals of the Geneva Conference in 1947?
The Geneva Conference had two main goals: continuing negotiations on the ITO charter and conducting tariff reduction negotiations, which eventually led to the creation of the General Agreement on Tariffs and Trade (GATT).
What was the purpose of the London Conference in 1946?
The London Conference was the first meeting to start talking about making trade easier and setting up the basic rules for future talks.
What happened at the Havana Conference in 1947-1948?
The Havana Conference was the final preparatory meeting for the ITO. It focused on completing the ITO Charter, which resulted in the Havana Charter.
Why did the International Trade Organization (ITO) fail to be established?
The ITO failed because the United States Congress refused to ratify the Havana Charter in 1950, and this led other countries to abandon the organization as well.
What was the main purpose of the General Agreement on Tariffs and Trade (GATT)?
GATT was a legal agreement between many countries to help international trade by reducing or removing trade barriers like tariffs and quotas.
From 1948 to 1995 was the only instrument available for international trade rules until it was replaced by the World Trade Organization (WTO) in 1995.
When and where did the first GATT negotiations take place, and what was their outcome?
The first GATT negotiations happened in Geneva from April to October 1947. During this time, 23 nations agreed to lower tariffs and reduce trade restrictions.
what was the main result if GATT?
The 1947 trade negotiations were the largest ever, much bigger than any before. In just six months, nearly 1,000 formal meetings were held in Geneva, plus many informal talks. Around 760 people worked on both tariff negotiations and discussions about the trade Charter. This was a huge achievement in international trade.
What were the core principles of GATT?
GATT had four main principles:
1. Most Favored Nation (MFN) Treatment – If one country gave a trade benefit to another, it had to give the same benefit to all GATT members.
2. National Treatment – Imported goods had to be treated the same as local goods once they entered the market.
Elimination of 3. Quantitative Restrictions – GATT did not allow import limits (quotas) and preferred using tariffs instead.
4. Transparency – Countries had to publish their trade rules and follow them fairly.
How did GATT influence international trade before being replaced by the World Trade Organization (WTO)?
The GATT governed postwar international trade relations for almost fifty years. Under the GATT’s aegis, eight rounds of
trade negotiations resulted in significant tariff reductions among its members before it was superseded by the World Trade
Organization in 1995.
What are the main functions of the WTO as outlined in Article III of the WTO Agreement?
The WTO has several key functions, including:
- Facilitating the implementation, administration, and operation of WTO agreements.
- Acting as a forum for negotiating new trade rules.
- Settling trade disputes between its members.
- Reviewing the trade policies of its members.
- Cooperating with other international and non-governmental organizations.
- Providing technical assistance to developing countries.
what is the primary role of WTO?
The WTO primarily serves a facilitative role, providing its members with instrumental resources, rather than a true function of global governance of cooperation among States in trade matters.
What is the objective of the WTO?
The objective of the WTO is to help its members use trade to raise living standards, create jobs, and improve people’s lives.
The fundamental goal of the WTO is to improve the welfare of people around the world.
What role does the WTO play in trade negotiations and dispute resolution?
The WTO operates the global system of trade rules and helps developing countries build their trade capacity.
t also provides a forum for its members to negotiate trade agreements and to solve issues.
What does the WTO agreement recognize about trade?
The WTO’s agreement recognizes that trade should be conducted with a view to raising standards of living, ensuring full employment, increasing real income, and expanding global trade in goods and services while allowing for the optimal use of the world’s resources.
What is the role of the WTO in reducing trade barriers?
Negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade) and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies, product standards, etc.).
How does the WTO administer and monitor trade rules?
Administering and monitoring the application of the WTO’s agreed rules for trade in goods, trade in services, and trade-related intellectual property rights.
What role does the WTO play in dispute resolution?
Settling disputes among our members regarding the interpretation and application of the agreements.
How does the WTO support developing countries?
Building capacity of developing country government officials in international trade matters.
What educational and research activities does the WTO conduct?
Conducting economic research and collecting and disseminating trade data in support of the WTO’s other main activities.
Explaining to and educating the public about the WTO, its mission, and its activities.
What do WTO agreements cover?
.The WTO agreements cover goods, services, and intellectual property.
They spell out the principles of liberalization and the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers and to open and keep open services markets. They set procedures for settling disputes.
Are WTO agreements fixed, or can they change over time?
These agreements are not static; they are renegotiated from time to time, and new agreements can be added to the package. Many are now being negotiated under the Doha Development Agenda, launched by WTO trade ministers in Doha, Qatar, in November 2001.
When do countries bring disputes to the WTO?
If a country feels another country is not following WTO trade rules, they ask the WTO to help solve the problem.
Countries go to the WTO when they believe their rights under the agreements are being violated
Who makes decisions in WTO trade disputes?
Special independent experts study the case and decide based on trade agreements and promises made by countries.
What are the key non-discrimination rules in the WTO system?
These are fundamental principles of the WTO system, primarily consisting of:
* The Most Favored Nation (MFN) principle – requiring members to extend the same treatment to all other WTO members.
* National Treatment principle – requiring imported goods to be treated no less favorably than domestic goods.
How does the WTO regulate market access for goods and services?
These rules govern how countries can regulate entry to their markets, including:
* Tariff commitments and bindings.
* Prohibition of quantitative restrictions.
In what situations can countries restrict trade under WTO rules?
Countries can restrict trade for legitimate policy objectives, such as:
* Protection of public health and safety.
* Environmental protection.
* National security concerns.
What measures does the WTO have to prevent unfair trade practices?
These rules address practices considered unfair in international trade, including:
* Anti-dumping measures against products sold below normal value.
* Countervailing duties to offset subsidies.
* Safeguard measures to protect domestic industries from sudden import surges.
How does the WTO promote harmonization of national trade regulations?
These rules aim to reduce technical barriers to trade by:
* Establishing international standards.
* Promoting regulatory convergence.
What are the sources of WTO law besides the WTO Agreement?
Other sources of WTO law include WTO case law, customary international law, and general principles of law.
The rulings are legally binding only on the parties involved in the specific dispute.
What did the Appellate Body rule in the US – Stainless Steel case (2008)?
The Appellate Body ruled that ensuring security and predictability in the dispute settlement system means that, unless there are strong reasons, the same legal question should be resolved the same way in future cases.
What are the key principles that form the foundation of the WTO agreements?
The key principles are:
* Non-discrimination
* Opening trade
* Predictability and transparency
* Fair competition
* Support for less developed countries
* Protection of the environment
* Inclusion
* Partnerships
* Digital trade
Who runs the WTO and makes its decisions?
The WTO has a complex institutional structure with numerous permanent and temporary bodies to carry out its tasks.
The WTO is run by its member governments. All major decisions are made by the membership, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
Decisions are normally taken by consensus.
Is power centralized in the WTO, or is it shared among members?
Power is not delegated to a board of directors or the organization’s head. The rules are enforced by the members themselves under agreed procedures that they negotiated, including the possibility of trade sanctions.
Why is reaching decisions by consensus important in the WTO?
Reaching decisions by consensus among some 150 members can be difficult, but its main advantage is that decisions made this way are more acceptable to all members.
What is the top decision-making body of the WTO?
he topmost decision-making body of the WTO is the Ministerial Conference.
What powers does the Ministerial Conference have within the WTO?
The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements. It is competent to make decisions on ALL WTO matters. It also has the power to adopt authoritative interpretations of the WTO agreements, grant waivers of WTO obligations, adopt amendments to the WTO agreements, make decisions on accession to the WTO, and appoint the WTO Director-General.
How often does the Ministerial Conference meet, and who participates?
he Ministerial Conference usually meets every two years. It consists of representatives at the ministerial level from all WTO Members, which are countries or customs unions.
What is the role of the General Council in the WTO?
he General Council exercises all the powers of the Ministerial Conference in between its sessions. It acts on behalf of the Ministerial Conference on all WTO affairs.
Who makes up the General Council, and how often does it meet?
The General Council consists of ambassador-level diplomats of all WTO Members. It normally meets every two months in Geneva.
What are the two alter egos of the General Council?
The two alter egos of the General Council are the Dispute Settlement Body (DSB) and the Trade Policy Review Body (TPRB). All three are the same, as stated in the Agreement Establishing the WTO, although they meet under different terms of reference.
What is the role of the WTO Secretariat, and where is it located?
The WTO Secretariat, located in Geneva, Switzerland, supports WTO activities by providing technical assistance to developing countries, offering information to the public and the media, and giving administrative and legal assistance.
Who leads the WTO Secretariat, and how are they appointed?
The WTO Secretariat is headed by the WTO Director-General, who is appointed by the Ministerial Conference.
Who is the current WTO Director-General?
Ngozi Okonjo-Iweala is the seventh Director-General of the WTO.
What is the role of the WTO Secretariat, and where is it located?
The WTO Secretariat, located in Geneva, Switzerland, supports WTO activities by providing technical assistance to developing countries, offering information to the public and the media, and giving administrative and legal assistance.
How many countries are currently seeking to join the WTO?
Over 20 countries are seeking to join the WTO.
How many members does the WTO have, and what percentage of world trade and population do they represent?
The WTO has over 160 members (164) representing 98 percent of world trade and 99.5 percent of the world’s population.
What must a government do to join the WTO?
To join the WTO, a government must bring its economic and trade policies in line with WTO rules and negotiate its terms of entry with the WTO membership.
What does membership in the WTO involve?
All members have joined the system through negotiation, meaning membership involves a balance of rights and obligations.
What are countries negotiating to join the WTO called?
Countries negotiating membership are WTO “observers.”
What is the process for a country to join the WTO?
The process for a country to join the WTO involves several steps:
- “Tell us about yourself”: The applying government must submit a memorandum describing its trade and economic policies.
- “Work for us”: The country must align its national laws, regulations, and administrative procedures with WTO obligations and negotiate market access concessions.
- “Let’s draft membership terms”: Once the working party examines the country’s trade regime and completes bilateral market access negotiations, the membership terms are finalized.
- “The decision”: The final package, including the report, protocol, and commitments, is presented to the WTO General Council or Ministerial Conference. If a two-thirds majority approves, the country can sign the protocol and join.
- Parliamentary ratification: In some cases, the country’s parliament or legislature must ratify the agreement before full membership is achieved.
