3.2A: International Organisations

• World Trade

  • The amount of world trade increased fairly slowly from the 1970s to the mid 1990s.
  • There was a huge growth in export trade after 2002
  • A sharp dip in 2008-2009 due to the global recession / global financial crisis
  • It returned to 'normal' levels in 2011, but growth has been slow ever since.
  • In 2014, there is about US $19 trillion world trade in goods, compared with less than $1 trillion in the early 1970s.
• 'Protectionism'

  In the past, many countries protected their own industries and businesses by:

  • Demanding payment of taxes and tariffs on imported goods, so making them more expensive than home-produced goods.
  • Using quotas to limit the volume of imports, protecting home producers from foreign competition.
  • Banning foreign firms from operating in services like banking, retail and insurance.
  • Restricting, or banning, foreign companies from investing in their country.
• ​World Bank (International Bank for Reconstruction and Development)

  • Lends money and gives grants to developing countries to fund economic development.
  • Uses bank deposits placed by the world's wealthiest countries that agree to certain repayment conditions.
  • Focuses on natural disasters and humanitarian emergencies.
• International Monetary Fund (IMF)

  • Aims to maintain a stable international financial system, and this promotes free trade and globalisation.
  • Provides loans to countries facing short-term balance of payment difficulties.
  • Recipients must adopt structural adjustment and trade liberalisation programmes, including measures opening up the economy to FDI and free trade.
  • Force countries to sell off government assets to generate wealth in the private sector.
• World Trade Organisation (WTO)

  • Aims to reduce trade barriers (both tariff and non-tariff) and create free trade.
  • Headquartered in Geneva, Switzerland.
  • WTO was created to replace GATT rounds (General Agreement on Tariffs and Trade) in 1995.
• Foreign Direct Investment (FDI)

  Foreign Direct Investment is the financial capital flow from one country to another for the purpose of constructing physical capital, i.e. building a factory in another country.