The International Monetary Fund (IMF) is an international organization based in Washington, D.C., which consists of 189 member countries. The IMF works to promote global growth and economic stability by providing policies, advice, and financing to its members. It also works with developing countries to help them reduce poverty and achieve macroeconomic stability. It was founded in 1944 at the Bretton Woods Conference in New Hampshire and emerged in 1945 with twenty-nine member countries and the goal of rebuilding the international payment system. Today, it plays a central role in overcoming balance of payments difficulties and international financial crises. Concerns that non-North American companies will use Mexico as an export platform are addressed in NAFTA. For example, if two Japanese components are shipped to Mexico, subjected to "simple assembly" there, and then exported to the United States under NAFTA rules of origin, the finished product will not be classified as a Mexican product. Instead, it would be classified as a Japanese product because the added value in the assembly was too low to bring about the required transformation. As a result, U.S. Customs would impose the same tariffs as if the product were shipped directly from Japan to the United States. Increased North-South integration will also have a very positive impact on living standards in Latin America, which will likely lead to an increase in imports from the United States. Closer relations with Latin America will also foster an environment conducive to better political cooperation.
Another advantage is the proximity between the United States and Latin America. One problem with joint production between the U.S. and Asia is the large geographical distance between the U.S. and Asia, which can lead to quality control issues. Still, Mexico and the rest of Latin America are much closer than East Asia, which also means that shipping costs are cheaper. A country can change its ties, but only after negotiations with its trading partners, which could mean that they will be compensated for the loss of trade. One of the achievements of the Uruguay Round of multilateral trade negotiations was to increase the volume of trade under binding commitments (see table). In agriculture, 100% of products now have bound tariffs. The result: a significantly higher degree of market security for traders and investors. The North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) are two of the most well-known trade agreements, but there are a variety of others that regulate trade between countries. The main tasks of the secretariats are to provide technical support to the various Councils/Committees and Ministerial Conferences, to provide technical assistance to developing countries, to analyse world trade and to explain wto activities to the public and the media.
Since 1992, trade agreements such as the Tokyo Round and the Uruguay Round of GATT and NAFTA, as well as 200 other lesser-known trade agreements, have helped the United States by significantly reducing trade barriers. Since its introduction in 1994 and despite a Mexican recession, NAFTA has delivered on its promise. U.S. trade relations with Canada and Mexico are better, consumer goods prices are lower, the region is more competitive with fast-growing trading blocs in Europe and Asia, and trade and investment throughout North America have increased. In fact, U.S. exports to Mexico increased by 70% from 1993 to 1997, despite a sharp decline in Mexican domestic demand. In addition, U.S. exports to Mexico surpassed exports to Japan for the first time in 1997 — a country whose economy is 12 times larger than Mexico`s. Since 1990, about 27 bilateral, trilateral or multilateral free trade agreements have been signed in Latin America, according to the Inter-American Development Bank.
While these agreements are important in themselves, they now play a more important role in providing important cornerstones for the creation of a Free Trade Area of the Americas (FTAA) by 2005. The goal of the FTAA, which builds on the achievements of NAFTA, is to create a free trade area covering the entire Western Hemisphere by 2005. With U.S. participation, America will be the world`s largest trading region, with a combined gross domestic product of more than $9 trillion and a market of more than 750 million consumers. Open markets can be beneficial, but it also requires adjustments. WTO agreements allow countries to make gradual changes through progressive liberalization. Developing countries generally have more time to fulfil their obligations. By reducing barriers to trade through negotiations among member governments, the WTO system also removes other barriers between peoples and trading economies. In the early 1990s, GATT`s failure to remove non-tariff barriers had put the organization at risk. Its failure to successfully resolve disagreements between the United States and the European Community on agricultural subsidies and to conclude the Uruguay Round on time has raised doubts about the Organization`s ability to meet future challenges. In addition, the world`s decline in confidence in GATT has contributed to the speed with which countries have formed trading blocs.
Since the successful conclusion of the Uruguay Round GATT agreements, confidence in its successor organization, the WTO, has increased considerably. In fact, many believe that it will enforce the rules of international trade and resolve disputes between members better than its predecessor. In the same year, 40 governments successfully concluded negotiations on duty-free trade in computer products, and 70 members concluded a financial services agreement covering more than 95% of the trade in banks, insurance companies, securities and financial information. As part of his broader attempts to renegotiate U.S. international trade agreements, President Trump has threatened to withdraw from the WTO and call it a "disaster." A U.S. withdrawal from the WTO could disrupt trillions of dollars in global trade. Since 1992, trade agreements such as the Tokyo Round and the URUGUAY Round of GATT and the North American Free Trade Agreement (NAFTA), as well as 200 other lesser-known trade agreements, have been negotiated and implemented by the United States. Small enterprises have benefited from the resulting significant reduction in barriers to foreign trade.
But there are still obstacles. For example, high foreign tariffs have prevented many small U.S. companies from exporting. However, large companies have often circumvented these barriers by moving abroad and gaining secure and competitive access. Small businesses usually don`t have the resources to do this. By allowing the U.S. to participate in trade agreements, which reduces and eliminates foreign tariffs, small business products can be sold at more competitive prices, allowing them to export more goods and create new jobs. For example, the WTO has removed barriers to trade and strengthened trade between member countries. On the other hand, it has also maintained trade barriers where it makes sense in a global context. Therefore, the WTO is trying to offer negotiating mediation that benefits the global economy. Overall, the WTO`s task is to improve the stability and predictability of world trade. As a result, it tends to support free trade as opposed to protectionist policies and strongly advises against the use of quotas and other such import restrictions.
So far, you`ve seen international organizations like the WTO, the IMF, and the World Bank support global trade, but that`s only part of the story. Where global trade really gets a boost is trade agreements (also known as trade blocs). This is where the term "global economic integration" takes its bearings – from the process of changing barriers between and between nations to create a fully integrated global economy. Trade agreements differ in the level of free trade they allow between members and with non-members; each has a unique level of economic integration. We will look at four of them: regional trade agreements (RTAs) (also known as "free trade areas"), customs unions, common markets and economic unions. Since 1947, eight rounds of multilateral trade negotiations have taken place under the auspices of GATT. The objective of each round was to reduce or eliminate tariffs and, in some cases, non-tariff barriers to trade between the Parties. In September 1986, the Trade Ministers met in Punta del Este (Uruguay) to launch a new and final round of trade negotiations aimed at strengthening the GATT and extending its scope. This aspect added a different element from the previously negotiated GATT rounds of Kennedy and Tokyo, which focused mainly on tariff reductions.
After seven long years, a historic GATT agreement has been concluded. As trade agreements have evolved and helped small and large companies gain secure access to foreign markets, trade blocs have emerged. One of the most important trading blocs today is the European Union, which mainly involves the countries of Western Europe and extends eastward; the North American Free Trade Agreement between Canada, the United States and Mexico and extends southward; and an informal bloc in East Asia that is currently dominated by Japan but will soon be dominated by China. .