The Integration of Trade into the World - Assignment Example

How the multilateral trading system could be reformed to make it more effective in helping developing countries? Multilateral trading systems are present in contexts where there are understandings amongst different nations to share resources and use each others’ domains in order to extract benefits for all concerned. This indeed is a beneficial aspect which has been making the rounds of the trading world for a long time now. Multilateral trading regimes present a number of strong points as well as negatives which come along with it. The opportunities are there for the taking especially from the strengths that have been drawn whilst having a multilateral trading system in place. Furthermore, the litigations and trade embargo are termed as the potential threats which can thwart the generally sound basis of the multilateral trading systems present in almost all the continents of the world. International trade has been the motivating force behind the present day trading activities and multilateral trading systems. But with the more recent technological developments as well as reduced trade blockades, growth in trade is definitely on the rise. Developing counties have also stepped on this bandwagon, extracting the best out of their own respective economies through trade internationally as well as locally - within the country. The integration of trade into the world economy has really proved helpful for the developing countries as they can promote economic growth, development as well as poverty reduction within themselves. World trade has been increasing at an average rate of six percent for the last 20 years, which is twice the rate of world output. The integration of the world economy with the help of trade has lifted the living standards of the people within these developing nations, which is a positive sign. Sustained and consistent economic growth requires policies that can open trade and investment with the rest of the world. There is proof to it and it is that there has not been a single nation that has achieved economic stability without being open to the world for trade. International trade requires liberalization, i.e., openness to all and sundry within the world no matter what. The living standards are in direct proportion with them. There is a high need to promote and liberalize the manner in which trade is carried out within the world economy as the aspect of multilateral trading system suggests. It needs to be more generous to everyone and anyone as well as helpful for the developing nations so that more and more trade is carried out between the economic world markets. Agriculture is one such example of being more liberal for the international trade market. Liberalization by both industrial and developing nations is necessary to realize trade’s potential that acts as a driving force for economic growth and development. It is up to the industrial and developed nations to be more broadminded towards the developing ones so that trade barriers are removed in the wake of open trade between all the countries listed in the economic world. Some countries seem to benefit more than the others in the liberalization and globalization of trade. There of course, seem to be many losers as well as winners in this regard. But all in all, the development efforts they employ to the developing countries are a real plus for these nations. Countries that open their doors to the international economies have over the years enjoyed a considerable amount of growth and poverty alleviation. Thus within the realms of multilateral trading systems, free trade has really benefited them in the long run and will continue to do so for them while for those, which remain narrow-minded and keep themselves away from the international economies remain alone in their own gloom of poverty and illiteracy, i.e., in developing countries. Trade liberalization proves very helpful for any country’s economy but it encompasses within itself some negative factors like the increased food insecurity. Before trade was made liberalized, say for a particular country, the agricultural activities mainly emphasized on the production from local market but now all sorts of food products seem to enter in the local arena, which really has an insecure effect on the local man. There also seems to be a wide gap between the developing nation’s globalization and liberalization policies as opposed to the poverty that it has. The UN Human Development Report of 1999 proved that the rich are becoming even richer while the poor community is becoming more and more inferior. This seems to really have a negative effect on the developing countries’ ideas of entering into the international trade market because they would first seek refuge for their own men of the country then only think about capitalizing on their strengths and trade markets. If looked from a different angle, this seems to be quite rational, all one can do with respect to the industrial and developed nations is to encourage these developing ones more and more by granting them funds and the like so that their basic problems can be solved as well as their entrance into the international trade market is made easy and without any hiccups. GATT has been a specialized agency of the United Nations ever since its establishment in 1948. It was built as a temporary measure before the creation of International Trade Organization. The idea behind building the latter was laid to rest and GATT thus started to function as an agreement making body on tariffs and trade around the globe till the end of 1995. It aimed at basically reducing the tariffs as well as other hindrances, which grew up in the way of international trade between different countries of the world. This also comprised of the discrimination, which was meted out to the nations in international commerce. It sets its mission on finding out the ways in which mutual extensions can take place between the nations of GATT so that tariffs could be minimized for them substantially. It did not concern itself with development at any level whatsoever. Meanwhile, GATT conducted meetings between its members to meet its aims and objectives for which it started the whole process. The Agreement was quite successful in protecting domestic industries in the wake of lowered tariffs and elimination of import quotas. GATT was also a major force behind the provision of a framework for most worldwide tariff dealings in the period spanning between the years 1947 and 1994. Thus the aspect of multilateral trading systems is boosted by such initiatives if seen in the proper contexts. Whether or not GATT was able to achieve its objectives is a thing of the past now. Different countries have different perceptions about it and it would not be wrong to state that the world is much better without GATT being in place. It only made matters worse for the nations tied to each other through trade. The French Government thought that the whole process of GATT was very burdensome and awkward to handle and understand. It was in total opposition to its very existence. The rest of the world did not agree with this French notion. NAFTA is the other agency, which is now in place working at reducing the tariffs and trade restrictions for its member countries around the world. The people who used to oppose GATT for its policies are in favor of NAFTA and the ones with GATT are in total disagreement with NAFTA. On the same token, multilateral trading systems have run hand in hand with the biggest financial and economic organizations of the world. The World Trade Organization or WTO was established in 1995 as a consequence of the GATT negotiations which was termed as the Uruguay Round. Unlike, GATT, which focuses on reducing tariffs on trade and eliminating discriminatory attitude between its member countries, WTO has the added responsibility of keeping an eye on the policies of carrying out trade between different nations. WTO is also accountable for handling trade disputes, which happen amongst its member countries. Apart from all this, it helps the GATT in enforcing its agreements in every possible manner it can. GATT is no more but its policies are still in place by certain countries. WTO is a permanent body unlike the GATT but not a specialized agency of the United Nations. WTO always looks at reducing the subsidies and quotas on imported farm produce, automobiles and textiles. The same were not given any importance by GATT. World Trade Organization (WTO) has been made to supervise and liberalize the international trade as well as to operate the same globally. It has been working for the last ten years or so and success or failure is not a measure of the work that is being done within the realms of WTO. There are critics who are of the view that WTO has not achieved on its desired goals when it started and year in year out it has failed to touch those desired expectations of it. Then there are official reports which suggest that all is well within the reigns of WTO and it, as a global body, is meeting its goals and expectations since the time it was established. The two different viewpoints give an interesting debate into what the actual role of WTO has been over the years and what it can do in the coming times to do something productive and beneficial for its stakeholders. WTO has been a successor to General Agreement on Trade and Tariffs (GATT) which, similar to WTO operated in the wake of the operations of the international trade. The criticisms related with the existence of WTO include the basis of the rich getting richer by the day while the poor getting even poorer which is an alarming picture of the operative measures that are being taken care of by the WTO regimes. The criticism also stems from the fact that the management of global economy is not being carried out in a fair and equal manner, rather the emphasis is geared towards providing more value and return to the rich countries and multinational corporations. There seems to be a systematic bias towards the rich countries and this is a serious concern within the critics all said and done. What this does in the end is to harm the smaller countries which means that the poor populations residing within them lose out on receiving the aids that are so very facilitating for their betterment measures and the like. The effect of having WTO membership is an interesting debate if viewed in the proper contexts. The rich are getting all the returns on their investments while the poor nations are receiving the wrath of their existence which to any mind is an unfortunate development. The system should be such that there is a balance between the rich and the poor, the fortunate few and the deprived and more than anything else; the balance mechanism needs to be set straight in order to drop off the criticism attached with the existence of WTO for that matter. The people at the helm of affairs within the WTO regimes need to understand that proper measures within their organization could mean a more balanced approach to come in to the whole equation as this would ensure better delivery of services and the much needed aid within the deprived corporations, conglomerates and countries. WTO membership should mean that more help and assistance is provided to member nations, organizations and companies alike rather than being a campaign for the big companies and countries to pocket the resources of the poor ones. This indeed would shift the public relations aspect of WTO in the positive sense. The global markets could be provided more benefits and incentives to understand their own selves and the industrial basis if they are given more room for interacting with the big wigs present within the domains of the WTO and for this to happen, there is a dire need to have a balancing mechanism in place. Since the world is shrinking with the changing times as there is so much advancement in technological concerns and the like, the requirement is to make sure that WTO delivers quantity rather than raising concerns which are not to the benefit of any individual, party, organization or country on the same token. A lot of negativity is attached with the whole discussion of globalization and WTO and this could be reduced drastically if the top-notch realize their responsibility towards providing more relief to the under-privileged nations and organizations and this needs to start as soon as possible. The global financial systems of the world are analyzed by the International Monetary Fund (IMF), which is a world body taking care of the world’s financial centers and organizations spread across the globe. It observes the different exchange rates, balance of payments, transfer of debts towards poorer nations and so on and so forth. IMF offers a host of financial assistances where the technical expertise is just a part of the whole related package. The IMF takes care of more than 185 nations under its fold and this is the reason it is accredited as a body which oversees the financial basis of the world’s top players so that an equality basis could be established between the rich and the poor, the elite and the impoverished and so on. Global monetary competition is one of the significant points as to why IMF has lingered on the bandwagon of advocating financial measures and regimes on a global level since this is something that will continue to shape the world in which we live in. It would provide security means in terms of global facilitation of international trade and logistics as well as assist in planning out the intricacies related with the networks of financial hubs and depositories. More than anything else, the role of the IMF has there in the wake of improving employment rates at the global front since it establishes different jobs and makes sure right people are appointed so that the jobs could bring out the very best from them, thus the end result is of prosperity and opulence in different regions of the world. Within the study of the multilateral trading systems, sustainable economic growth is thus the end result of all these measures that are taken on the part of the IMF regimes and what they in essence want is to reduce poverty in the poor nations of the world as well as to bring about an amendment in the different policies of the world which go against equality and the related rights. IMF knows that its role is predominant in such a situation and it has to understand the psyche of the financial centers before moving on any further. In a changing capitalistic business environment which is spread all over the world, IMF has sustained itself on the principles of removing poverty right from the deep root levels. What this means is that the motto of IMF is to understand the psyche of the rich nations and to adopt policies which would make the poor and under-privileged member states to get back on their feet or to make them stand at a position from where they can reach ascendancy. This will harness their hidden strengths and provide avenues of strength so that problems could be brought to a halt at the earliest. IMF finds out the mechanisms through which these problems could be detected and then tries to ascertain the exact basis under which problems do arise. What this gives IMF is a pathway to block the way for the troubles that come in the way of the member states and also present a destination where these countries have to reach at a certain point in time within the future. The aspect of removing poverty from the member nations’ economies is an interesting aspect since IMF has to take care of the profits and incentives of the rich nations as well whilst providing benefits to the already down trodden nations. This has to be a balancing act since the rich nations would not tolerate steps that would mean derailing their financial progress on a continuous basis. What IMF has to comprehend in such a situation is the fact that it indeed must balance between the two and not look to benefit any one party at a single instance. The additional facilities that have been set up by the IMF have played a vital role at helping the problems of the nations which have high debts written next to their names. IMF has played its role at making these nations understand what is expected of them in the long run and how they could cope with the external pressures on a consistent basis. The end result is to have a system which is based on multilateral trade between the nations and for that all possible steps are indeed being undertaken. Trade can only be made possible when there is a decent enough endeavor on the part of the bodies and organizations to drop down the barriers and pave the way so that the hurdles could be eased out nonetheless. This could only be made possible when the different trade regimes agree on a single principle and for this to happen the understanding in thinking and mindset is of utmost importance. It is up to the particular people who are at the helm of affairs within these regimes to understand the manner in which these bodies operate and work under and when they qualify each other on a single platform, then only can one find out the best manner in which countries can move forward and work in unison with each other, for the betterment of the whole international regime related with trade. The need is to understand what is the lynchpin in the whole equation and then to address the same in the proper context. Multilateral trading systems can bring about harmony and a sense of easiness within the nations if done in a proper manner with sound help from the world’s leading financial and economic bodies. Bibliography Aase, Sara. (2004). Is Globalization a Powerful Force for Good or a Means of Exploitation? New World Order UMN news Carvounis, Chris C. (1986). The Foreign Debt/National Development Conflict: External Adjustment and Internal Disorder in the Developing Nations. Quorum Books Cline, William. (2004). "Conclusion", Trade Policy and Global Poverty. Peterson Institute. Coakley, Robert W. (1955). Global Logistics and Strategy. Office of the Chief of Military History Deardorff, Alan V. & Stern, Robert M. (2003). Enhancing the Benefits for Developing Countries in the Doha Development Agenda Negotiations. University of Michigan Ebert, Ronald J. (1990). 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