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In our world today there are many forms of economy. The General Agreement on Tariffs and Trade, International Monetary Fund, and Third World Debt, give the new world a chance to develop their current trading policies. Throughout history, the countries of the world have traded and developed their economies, new systems have become known, also allowing the human race to cultivate along with it and acquire bigger and better necessities. Having money is a luxury only if a country or nation does not use it to promote itself. Throughout the twentieth century many organizations helped the developing nations manage their money, such as the IMF or The International Monetary Fund. Some nations developed and helped aid in solving crisis, others got involve with trade using GATT or General Agreement on Tariffs and Taxation.
With the good there is bad. While some nations have money to spend others are paying back a national debts, sometimes losing the ultimate price. The General Agreement on Tariffs and Trade or GATT, is a multilateral treaty that aims to promote trade among its members in manufactured and agricultural goods. The GATT was an international trade organization, and a treaty that had been in existence from 1948 to 1995. The ITO, or International Trade Organization was formed. The ITO was a proposed specialized agency of the United Nations.
GATT provides both a forum for discussing trade barriers and trade-related disputes and a code of conduct for its members. The members are called contracting parties. GATT was first signed in 1947, and was the main international agreement. The World Trade Organization (WTO) was set up. It was used to administer The General Agreement on Tariffs and Trade, and reduce barriers to trade in other areas not covered by the GATT. The WTO began operation on January 1, 1995.
The World Trade Organization is also a formally structured organization whose rules are legally binding on its member states. The organization provides a framework for international trade law. The World Trade Organization is based in Geneva, Switzerland, and is controlled by a general council made up of member states ambassadors who also serve on various subsidiary and specialist committees. The General Agreement on Tariffs and Trade was founded on the simple principle of nondiscrimination.
This explicated that if a nation reduced a tariff for another nation, the reduction on the tariff would apply to all of the other nations too. Like many things there was an exception or a loophole. The loophole allowed a nation to withdraw its tariff reduction if that tariff reduction seriously harmed to domestic producers of that country. In its existence, the GATT sponsored eight specially organized rounds of trade negotiations; the last one began in 1986 and ended in 1994. In 1994, the GATT treaty was one of the most ambitious international trade agreements to be signed by such a large number of nations. All of the 128 nations that were contracting parties to the new GATT pact end of 1994 became members of the WTO upon ratifying the GATT pact.
The IMF or International Monetary Fund is an organization that provides short-term credit to its more than 175 member nations. The IMF works to maintain orderly payment arrangements between countries and to promote growth of the world economy without inflation. It supports free trade in goods when a member nation encounters financial difficulty. The International Monetary Fund is an international organization of 183 member countries, was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payment adjustment. Since the IMF was established in 1946, its purposes have remained unchanged but its operations-which involve surveillance, financial assistance, and technical assistance- have developed to meet the changing needs of its member countries in an evolving world economy. The IMF was officially established on December 27, 1945 when 29 countries signed its Articles of Agreement, which has not changed the purposes of its organization, but has matured to meet the changing needs of the member countries.
In Argentina, this is the case. The Subcommittee on International Monetary Policy and Trade meet in an open session to continue its examination into the financial crisis in Argentina, including the activities of the International Monetary Fund (IMF) within this country. In 1991, the Argentine Government established a currency board to set the pesos value on a one-to one peg with the United States dollar in order to restrict hyperinflation. By the end of 200, Argentina defaulted on its total foreign debt of approximately $ 141 billion, which resulted in an economic crisis that spiraled into deadly protests. February 3, 2002, the Argentine Government declared that the local peso would free float and all dollar debts would be converted into pesos at a rate of one-to-one. In March of 2002, the International Monetary Fund agreed to a three-year $ 7. 2 billion arrangement with Argentina.
January 2001, the IMF augmented its earlier agreement by pledging another $ 7 billion to Argentina. The International Monetary Fund withheld its $ 1. 24 billion loan installment on December 5, 2001. The IMF pre conditionality for IMF assistance as it relates to Argentina. This recommendation was endorsed by the majority report of the Meltzer Commission, whose chairman, Dr. Allen Meltzer is testifying.
The Commission, which completed its report in March of 2000, was charged with studying the future of the, IMF the World Bank, and the regional multilateral development institutions. Since the IMF helps the debt stricken countries of the Third World through programs as the Poverty Reduction and Growth Facility (PRGF) and relief of debt under the Heavily Indebted Poor Countries (HIPC), it is necessary to know just how much debt the countries of the Third World are in. Since the early 1980 s, debt has stalked the international financial system sometimes a specter on the horizon. Developing nations owe roughly $ 2 trillion to the developed world, and the prospects for paying all of it back are slim.
Although the developing world as a whole is only about $ 35 billion behind in its interest payments, arrears on principal have grown to more than $ 90 billion, as seen in the latest World Bank figures. The crucial issue now, according to Eduardo Fernandez-Arias of the Inter-American Development Bank, is not so much debt as debt service: the interest charges that a country must pay to keep its creditors happy. Most loans to developing countries have floating rates, adjusted every three months to reflect the changing price of money on the international market. A nation whose contract specifies the London interbank offered rate (LIBOR) plus one percent, for example, would had been paying about 7. 5 perfect in August.
If world interest rates rise sharply, a nations obligations can quickly exceed its means. In addition to reducing debt-service burdens, the near halving of rates since the mid- 1980 s has attracted investors by increasing their confidence in developing economies. A country that does not have to struggle with debt service can pay more attention to internal economical stability. In reductions in debt service rather than economic development have produced the relative calm of the past few years, could another upturn in worldwide interest rates lead to a global storm like that of the early 1980 s? Many nations have managed to reduce their ratio of variable-rate debt to income, and fewer are borrowing to meet day-to-day needs.
Investors also have become more cautious: much of the capital that has been flowing into developing countries in the past few years has been in the form of loans to private businesses, which do have sovereign immunity, or direct investments in manufacturing plants. Such obligations are much more difficult to wipe out with a stroke of a finance ministers pen. With luck, the resiliency of these new arrangements will not be put to the test any time soon. As long as world interest rates stay low, debtor nations have more breathing space than they demand especially the worlds largest debt, or the U. S. Over the years economic development and world trade have remained major issues facing the world.
While debt has taken over Third World countries, other countries of the world have flourishing economies. The International Monetary Fund faces major economical issues of the world today, along with other organizations. While GATT, which was involved in world trade evolved into the WTO or World Trade Organization which today can also be easily known as the second GATT, since the purpose of the WTO remain practically the same. Making it very clear that no matter what the year, money is always linked with making change in the world.
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Research essay sample on International Monetary Fund World Trade Organization
