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UNIT 3 THE GLOBAL INSTITUTIONAL STRUCTURE - MS PRIYANKA WALDIA
 Bretton Woods Institutions-IMF and World Bank  General Agreement of Tariff and Trade  Uruguay  Round, Establishment Of WTO, Role, Functions and Various Agreement Of WTO  WTO in the present times  GATTS - Trade In Services  Concept Of Regional Integrations And Regional Blocks-ASEAN  EU; MERCOSUR; NAFTA  India and its Trading Partners 2
BRETTON WOODS INSTITUTIONS-IMF AND WORLD BANK Click to add picture
BRETTON WOODS INSTITUTIONS • The Bretton Woods agreement was negotiated in July 1944 by delegates from 44 countries at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire. • Contained 730 delegates from 44 nations in Bretton Woods. Largely influenced by ideas of British economist John Maynard Keynes and American Chief International Economist of the U.S. Treasury Department Harry Dexter White. • Attended by 44 countries to design a new international monetary system. • Led to the creation of IMF and the World Bank to prevent economic crises like the Great Depression of the 1930s. • Established the gold exchange standard, where currencies were pegged to the US dollar, which was backed by gold (this system ended in 1971).
5 • Under this agreement U.S dollar would be pegged to the value of gold and other currencies were pegged against the U.S dollar’s value • It came to an end in the early 1970s when President Richard M. Nixon announced that the U.S. would no longer exchange gold for U.S. currency. • Created two major institutions: – IMF : (grants the short term loans to develop the cyclical disturbance in economy.) – World bank : (long term loan for distressed economy and member countries )
6 CRUCIAL ROLE OF THE BRETTON WOODS CONFERENCE (1944) 1. Established IMF & World Bank – Ensured financial stability and economic development. 2. Created a Stable Monetary System – Introduced a dollar-based system to prevent currency fluctuations. 3. Promoted International Trade – Led to GATT (later WTO) to reduce trade barriers. 4. Prevented Economic Crises – Helped avoid Great Depression-like situations through financial aid. 5. Encouraged Global Cooperation – Countries worked together for economic stability. 6. Shaped Modern Economic Policies – Influenced financial and trade policies worldwide.
7 GLOBAL INSTITUTIONAL STRUCTURE • 1. Bretton Woods Institutions • These institutions were established to maintain global financial stability and economic development: • International Monetary Fund (IMF) – Provides short-term financial aid and stabilizes exchange rates. • World Bank – Offers long-term development loans to reduce poverty and support infrastructure. • 2. World Trade Organization (WTO) • Established in 1995, replacing GATT (General Agreement on • Tariffs and Trade). • Regulates global trade, resolves disputes, and promotes free trade agreements. • Key agreements: GATT (Goods), GATS (Services), TRIPS (Intellectual Property), AOA (Agriculture).
8 3. General Agreement on Tariffs and Trade (GATT) & Uruguay Round •GATT (1947) aimed to reduce trade barriers. •Uruguay Round (1986-1994) expanded trade rules and led to WTO formation. 4. Regional Economic Blocs Regional groups promote economic cooperation and trade: •ASEAN (Association of Southeast Asian Nations) – Southeast Asia’s trade and economic alliance. •EU (European Union) – A political and economic union with a common market. •MERCOSUR – South American trade bloc. •NAFTA (Now USMCA) – Trade agreement between the U.S., Canada, and Mexico. 5. India and Its Trading Partners •Major trading partners: USA, China, UAE, EU, Saudi Arabia, and ASEAN. •India is a WTO member and part of various trade agreements like SAFTA and RCEP negotiations.
9 IMPORTANCE OF GLOBAL INSTITUTIONAL STRUCTURE 1. Financial Stability – IMF prevents economic crises, World Bank funds development. 2. Promotes Trade – WTO and trade blocs (ASEAN, EU) reduce trade barriers. 3. Resolves Disputes – WTO settles trade conflicts, IMF advises on economic policies. 4. Economic Development – World Bank supports infrastructure, education, and healthcare. 5. Encourages Cooperation – Countries work together on trade, finance, and global issues. 6. Helps Developing Nations – Provides financial aid and technical assistance. 7. Strengthens Global Governance – Establishes fair trade and financial rules.
10 POST-WORLD WAR II ECONOMIC SITUATION 1. Economic Devastation – Many countries, especially in Europe and Asia, faced destruction of industries, infrastructure, and economies. 2. Currency Instability – Inflation and devaluation of currencies led to global financial instability. 3. Trade Barriers – Protectionism and high tariffs restricted international trade. 4. Need for Reconstruction – War-torn nations required financial aid to rebuild economies. 5. Fear of Another Great Depression – The economic collapse of the 1930s was a lesson, and countries wanted a stable financial system
11 BRETTON WOODS SYSTEM (1944) – A SOLUTION • To address these issues, 44 nations met at Bretton Woods, USA, and created a new global financial system. • Key Outcomes of Bretton Woods 1. Establishment of IMF – To provide short-term financial aid and stabilize currency exchange rates. 2. Creation of World Bank – To provide long-term loans for reconstruction and development. 3. Fixed Exchange Rate System – Currencies were pegged to the US dollar, which was backed by gold. 4. Promotion of Free Trade – Led to the creation of GATT (later WTO) to reduce trade barriers.
12 IMPACT OF BRETTON WOODS • Helped Europe and Japan rebuild economies (World Bank loans). • Restored global trade and prevented currency crises. • Created a stable monetary system, preventing financial collapses. • Laid the foundation for the modern economic order. Conclusion • The Bretton Woods System helped the world recover from World War II, preventing another economic crisis and creating a stable financial system that influenced global trade and development for decades.
The international monetary fund (IMF) is an international organization that promotes global economic growth and financial stability, encourages international trade, and reduces poverty. The IMF was originally created in 1945 as part of the bretton woods agreement, which attempted to encourage international financial cooperation by introducing A system of convertible currencies at fixed exchange rates
14 ORIGIN & ESTABLISHMENT • Established in 1944 at the Bretton Woods Conference in the USA. • Officially began operations on December 27, 1945 with 29 member countries. • Created to stabilize exchange rates and support economic recovery after World War II. • Headquarters: Washington, D.C., USA. • Currently has 190 member countries. OBJECTIVES OF IMF 1. Promote Global Monetary Cooperation – Encourage financial stability among nations. 2. Ensure Exchange Rate Stability – Prevent competitive devaluations of currencies. 3. Facilitate International Trade – Reduce trade barriers and boost economic growth. 4. Provide Financial Assistance – Help countries in economic crises with loans. 5. Reduce Global Poverty – Support economic reforms in developing nations.
15 GOVERNING BODY OF IMF • Board of Governors – Includes representatives from all 190 member countries (usually finance ministers or central bank heads). • Executive Board – 24 members oversee daily operations. • Managing Director – Heads the IMF; currently Kristalina Georgieva (since 2019). ROLE & IMPORTANCE OF IMF 1. Provides Financial Aid – Offers emergency loans to countries in crisis. 2. Monitors Global Economy – Analyzes economic trends and financial risks. 3. Offers Technical Assistance – Helps countries improve financial policies and governance. 4. Supports Exchange Rate Stability – Prevents sharp currency fluctuations. 5. Encourages Economic Reforms – Advises countries on sustainable economic policies.
16 ISSUES FACED BY IMF • Debt Burden – Many countries struggle to repay IMF loans. • Conditionality of Loans – Harsh economic policies (austerity measures) often required for financial aid. • Global Influence of Rich Nations – USA and European nations have more control over decisions. • Criticism for Structural Adjustment Programs (SAPs) – These policies sometimes lead to social hardships. CRITICISM & CONTROVERSIES • Western Dominance – The USA and European countries have more voting power. • Harsh Loan Conditions – IMF-imposed policies (austerity, privatization) often harm the poor. • Failure to Prevent Crises – Critics argue that IMF policies worsened crises in countries like Argentina and Greece. • Lack of Transparency – Decision-making is often secretive and benefits rich nations more.
The world bank is an international financial institution that provides funding and technical assistance to developing countries for infrastructure, economic development, and poverty reduction. 17 WHAT IS WORLD BANK?
18 ORIGIN & ESTABLISHMENT • Established in 1944 at the Bretton Woods Conference, along with the IMF. • Officially began operations on June 25, 1946. • Originally focused on rebuilding war-torn Europe, later shifted to global development. • Headquarters: Washington, D.C., USA. • Comprises 5 institutions, with the two main ones being: • International Bank for Reconstruction and Development (IBRD) – Lends to middle-income and creditworthy low-income countries. • International Development Association (IDA) – Provides low-interest loans and grants to the poorest nations. GOVERNING BODY OF THE WORLD BANK • Board of Governors – Representatives from all 189 member countries. • Executive Directors – 25 members oversee daily operations. • President – Leads the World Bank; currently Ajay Banga (since 2023). • Major Shareholders – USA, China, Japan, Germany, and the UK have the most voting power.
19 OBJECTIVES OF THE WORLD BANK 1. Reduce Global Poverty – Help low-income countries improve living standards. 2. Finance Infrastructure Projects – Build roads, dams, schools, and hospitals. 3. Promote Economic Development – Support reforms that improve business environments. 4. Provide Low-Interest Loans & Grants – Help countries finance long-term projects. 5. Encourage Sustainable Growth – Focus on climate change, education, and technology ROLE & IMPORTANCE OF THE WORLD BANK 6. Funds Large-Scale Development Projects – Supports infrastructure, healthcare, and education. 7. Provides Financial Aid to Poor Nations – Helps them improve economic conditions. 8. Encourages Economic Stability – Promotes policies for long-term growth. 9. Supports Sustainable Development – Invests in renewable energy and environmental protection. 10.Technical Assistance & Knowledge Sharing – Helps governments improve governance and policies
20 ISSUES FACED BY THE WORLD BANK • Debt Dependency – Many countries struggle to repay loans. • Bureaucracy & Slow Decision-Making – Funding approvals take a long time. • Environmental & Social Concerns – Some projects cause displacement or harm ecosystems. • Unequal Influence of Rich Nations – The USA and Europe dominate decision-making. CRITICISM & CONTROVERSIES • Western Dominance – The USA and Europe control key decisions. • Loan Conditionalities – Countries must adopt certain policies to receive loans. • Debt Burden on Poor Nations – Many developing countries struggle with repayment. • Failure to Address Corruption – Some funds are misused in recipient countries. • Environmental & Human Rights Issues – Some projects displace people and harm nature
21 DIFFERENCE BETWEEN IMF AND WORLD BANK Feature IMF (International Monetary Fund) World Bank Established 1944 (Bretton Woods Conference) 1944 (Bretton Woods Conference) Main Purpose Provides short-term financial assistance to stabilize economies Provides long-term loans for development projects Focus Monetary Stability & Crisis Management Economic Growth & Development Target Countries Countries facing balance of payment crises Developing countries needing infrastructure funding
22 Feature IMF (International Monetary Fund) World Bank Funding Source Contributions from member countries Borrowing from global financial markets Loan Conditions Requires strict economic reforms (austerity, tax changes) Loans based on project feasibility, fewer policy conditions Governing Body Executive Board (24 members) & Managing Director Board of Governors & World Bank President Examples of Work Helped Greece during the Eurozone crisis Funded roads, schools, healthcare
Click to add picture The general agreement on tariffs and trade (GATT), signed in 1947 by 23 countries, is a treaty minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies. It was intended to boost economic recovery after world war II.
24 HISTORY AND BACKGROUND •Full Form: General Agreement on Tariffs and Trade •Established: 1947 •Came into force: January 1, 1948 •Headquarters: Geneva, Switzerland •Number of Members: Started with 23 countries •Succeeded by: World Trade Organization (WTO) in 1995 OBJECTIVES OF GATT 1. Promote Free Trade – Reduce tariffs and eliminate quotas. 2. Encourage Economic Growth – By opening markets. 3. Avoid Discrimination – Treat all trading partners equally (Most Favoured Nation – MFN). 4. Prevent Trade Wars – Solve trade disputes peacefully. 5. Create Fair Competition – Make global trade rules transparent and fair.
25 KEY FEATURES • Negotiated through rounds of talks (e.g., Kennedy Round, Tokyo Round, Uruguay Round). • Focused mainly on trade in goods (not services or intellectual property). • Encouraged multilateral trade agreements rather than bilateral deals. • Laid the foundation for global trade rules. ISSUES FACED BY GATT • Limited Scope – Focused only on goods (not services or intellectual property). • Weak Enforcement – No strong mechanism to punish rule-breakers. • Increased Trade Disputes – As trade grew, so did disagreements. • Rise of Regional Trade Blocs – Undermined multilateral goals. • Complex Negotiations – Slow progress in rounds.
26 CRITICISM & CONTROVERSIES • Favored Developed Nations – Poorer countries had less influence. • Limited Inclusion – Didn’t cover services, agriculture, or intellectual property. • Weak Dispute Resolution – Countries often ignored rulings. • No Environmental/Social Considerations – Ignored issues like labor rights or pollution. • Inflexibility – Couldn’t handle complex modern trade issues. END OF GATT • Replaced by the WTO in 1995, after the Uruguay Round (1986–94). • GATT principles continued under “GATT 1994” within the WTO
MAJOR GATT ROUNDS 27 Round Years Key Outcome Geneva Round 1947 Initial agreement signed Kennedy Round 1964–67 Anti-dumping measures introduced Tokyo Round 1973–79 Reduced non-tariff barriers Uruguay Round 1986–94 Led to the creation of WTO
EVOLUTION TOWARDS THE ESTABLISHMENT OF WTO 28 1.Post-World War II (1940s) 1. World needed stable trade rules to avoid protectionism and economic conflicts. 2. In 1947, GATT (General Agreement on Tariffs and Trade) was signed by 23 countries to reduce tariffs and promote free trade. 2.GATT Success & Limitations (1948–1980s) 1. GATT helped increase global trade and reduce tariffs. 2. But it had limitations: 1. No focus on services, intellectual property, or agriculture. 2. No strong dispute settlement system. 3. Functioned as an agreement, not a permanent institution.
29 3. Uruguay Round (1986–1994) •The longest and most ambitious round of GATT negotiations. •Covered new areas like: • Trade in Services (GATS) • Intellectual Property (TRIPS) • Agriculture and textiles •Members agreed to create a permanent body to handle global trade. Objectives of Uruguay Round •Expand trade negotiations beyond just goods. •Cover new areas like services, agriculture, and intellectual property. •Create a permanent trade institution to replace GAT
30 FOUNDATION OF WTO • The outcomes of the Uruguay Round led to the creation of the WTO. • It was decided that a permanent organization was needed to handle trade more effectively than GATT. • This led to the signing of a formal agreement to establish the WTO.
31 MARRAKESH AGREEMENT (1994) • The Marrakesh Agreement was signed in April 1994 in Morocco. • It officially approved the creation of the World Trade Organization (WTO). • The WTO was established as the successor to GATT. • It included: • Stronger dispute settlement system • Permanent institutional structure • Wider coverage of trade issues
32 WTO COMES INTO EXISTENCE • The WTO was officially established on 1st January 1995. • It took over GATT’s responsibilities and expanded its reach. • It became the main international organization governing global trade rules. KEY POINTS TO REMEMBER • Uruguay Round = foundation of WTO • Marrakesh Agreement = legal creation of WTO • WTO (1995) replaced GATT with wider coverage and stronger enforcement.
33 OBJECTIVES, PRINCIPLES & AGREEMENTS OF WTO OBJECTIVES OF WTO 1. Promote Free Trade 1. Encourage trade in goods and services globally. 2. Fair Trade Rules 1. Develop rules that are transparent, fair, and reduce discrimination. 3. Dispute Settlement 1. Provide a neutral system for resolving trade disputes between countries. 4. Integration of Developing Countries 1. Help developing nations participate more in international trade. 5. Global Participation 1. Involve developing countries in regional and global trade initiatives, e.g., SAFTA, UNCTAD, NDFP
34 PRINCIPLES OF WTO 1. Most-Favoured Nation (MFN) – Equal treatment to all WTO members. 2. National Treatment – No discrimination between local and foreign goods after entry. 3. Free Trade – Reduce trade barriers through negotiation. 4. Transparency – Clear and predictable trade rules. 5. Fair Competition – No unfair practices like dumping or hidden subsidies. 6. Support to Developing Countries – Special help and flexibility in rules
35 MAJOR AGREEMENTS UNDER WTO  GATT – General Agreement on Tariffs and Trade • Deals with trade in goods • Aims to reduce tariffs and trade barriers  GATS – General Agreement on Trade in Services • Covers trade in services like banking, telecom, tourism  TRIPS – Trade-Related Aspects of Intellectual Property Rights • Sets rules for intellectual property protection (like patents, copyrights)  AoA – Agreement on Agriculture • Focuses on reducing subsidies and opening agricultural markets  SPS – Sanitary and Phytosanitary Measures • Ensures food safety and animal/plant health standards  TBT – Technical Barriers to Trade • Prevents standards and regulations from being used as trade barriers
36 1. GATT – GENERAL AGREEMENT ON TARIFFS AND TRADE • Original agreement signed in 1947, revised under WTO in 1994 (GATT 1994). • Focuses on trade in goods only. • GOALS: • Reduce tariffs and trade barriers. • Promote non-discriminatory trade among nations. • Improve market access and ensure fair competition. • KEY FEATURES:  Follows Most-Favoured Nation (MFN) and National Treatment principles.  Basis for WTO's trade in goods rules.
37 2. GATS – GENERAL AGREEMENT ON TRADE IN SERVICES • Introduced during the Uruguay Round. • First multilateral agreement to regulate international trade in services. • COVERS SERVICES LIKE: • Banking • Insurance • Telecommunications • Education • Tourism, etc. • KEY FEATURES: • Ensures transparency and predictability in service regulations. • Promotes progressive liberalization of services. • Allows governments to maintain control over public services (e.g., education, health
38 3. TRIPS – TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS • Sets minimum global standards for protecting intellectual property (IP). • TYPES OF IP PROTECTED: • Patents – inventions, new technologies • Copyrights – books, music, software • Trademarks – brand names, logos • Geographical indications – Darjeeling Tea, Basmati Rice • Industrial designs and more • KEY FEATURES: • Ensures legal protection and enforcement of IP rights in all WTO countries. • Helps protect innovation and creativity. • Includes provisions for compulsory licensing during public health emergencies
39 4. AOA – AGREEMENT ON AGRICULTURE • Aimed to bring agriculture under global trade rules for the first time. • COVERS THREE PILLARS: 1. Market Access – Reduction of import restrictions/tariffs. 2. Domestic Support – Controls on subsidies that distort trade (like minimum support price). 3. Export Subsidies – Restrictions on direct payments to exporters. • KEY FEATURES: • Developed countries committed to reduce trade-distorting subsidies. • Developing countries allowed flexibility and longer implementation periods.
40 5. SPS AGREEMENT – SANITARY AND PHYTOSANITARY MEASURES • Deals with food safety and protection of animal and plant health. • KEY FEATURES: • Countries can take necessary health measures, but they must be: • Scientific • Non-discriminatory • Not used as hidden trade barriers • EXAMPLES: • Banning imports of poultry due to bird flu outbreaks. • Regulating pesticide levels in food products.
41 6. TBT AGREEMENT – TECHNICAL BARRIERS TO TRADE • Prevents countries from using technical regulations, product standards, or testing methods to unfairly block trade. • KEY FEATURES: • Encourages use of international standards. • Applies to: • Product labeling • Quality standards • Packaging rules • Certification systems
42 GATS – GENERAL AGREEMENT ON TRADE IN SERVICES WHAT IS GATS? • GATS is a WTO agreement that deals with international trade in services. • It was created during the Uruguay Round (1986–1994) and came into effect with the WTO in 1995. • It is the first multilateral agreement that governs trade in services like banking, education, telecom, tourism, etc. OBJECTIVES OF GATS 1. Liberalize global trade in services. 2. Ensure transparency and fairness in service trade. 3. Promote economic growth and development. 4. Give developing countries more access to global markets. 5. Provide a framework for future negotiations.
43 IMPORTANCE OF GATS • Encourages investment and technological growth. • Gives consumers more choices and better quality. • Helps developing nations access global service markets. • Reduces barriers and discrimination in services. KEY FEATURES OF GATS 1. Coverage • Applies to all service sectors except: • Government services (like police, education if not for commercial purposes) • Air traffic rights 2. Modes of Supply • GATS defines 4 modes of supplying services across borders:
44 Mode Description Example Mode 1 Cross-border supply An Indian IT firm providing online services to the US. Mode 2 Consumption abroad A foreign tourist using hotel services in India. Mode 3 Commercial presence A foreign bank opening a branch in India. Mode 4 Movement of natural persons Indian engineers working temporarily in UAE. 3. NON-DISCRIMINATION •MFN Principle: Equal treatment to all WTO members. •National Treatment: Foreign and domestic service providers must be treated equally. 4. TRANSPARENCY •Countries must publish their laws and regulations affecting trade in services. 5. FLEXIBILITY •Developing countries have the freedom to open their service sectors gradually.
45 CRITICISM/ISSUES • Pressure on developing countries to open sensitive service sectors (like health/education). • Risk of foreign dominance in local service markets. • Implementation challenges due to lack of resources.
46 CONCEPT OF REGIONAL INTEGRATION Regional integration means strengthening cooperation and coordination between neighboring countries through agreements. The goal is to: • Promote economic growth • Harmonize policies and laws • Improve trade, competitiveness, and stability
47 FUNCTIONS OF REGIONAL INTEGRATION 1. Trade Facilitation 1. Removes trade barriers like tariffs and quotas 2. Promotes smooth and legal international trade 2. Investment 1. Attracts foreign direct investment (FDI) 2. Encourages free flow of capital and helps economic development 3. Harmonization of Standards 1. Makes business easier by having common rules and policies 2. Reduces confusion and creates a business-friendly environment 4. Regional Stability 1. Promotes political peace and unity 2. Member countries support each other during crises
48 KEY PRINCIPLES OF REGIONAL INTEGRATION 1. Shared Interests Countries unite for common economic and strategic goals. 2. Cooperation & Coordination Policies, laws, and standards are aligned across countries. 3. Respect for Sovereignty Countries remain independent while working together. 4. Gradual Progress Integration occurs step-by-step: from trade to economy to politics. 5. Equality & Mutual Benefit All members benefit, especially developing or weaker economies. 6. Non-Discrimination All members are treated equally in trade and policies 7. Harmonization of Policies Aligning national laws and regulations to create a smooth trade and economic system
49 TYPES OF REGIONAL INTEGRATION 1. Free Trade Area (FTA) 1. Removal of tariffs among member countries (e.g., SAFTA). 2. Customs Union 1. FTA + common external tariffs on non-members. 3. Common Market 1. Customs union + free movement of goods, services, capital, and labor. 4. Economic Union 1. Deeper integration including shared economic policies and coordinated fiscal strategies. 5. Political Union 1. Integration of political systems (rare and advanced stage).
50 IMPLICATIONS OF REGIONAL INTEGRATION Implication How It Helps Trade & Growth Boosts economy by increasing trade and investment Competitiveness Industries improve with access to bigger markets Policy Coordination Makes rules easier, reduces cost for businesses Political Stability Strengthens peace and cooperation among member countries
51 REGIONAL BLOCKS EUROPEAN UNION (EU) Origin and Background • The EU traces its roots to the European Coal and Steel Community (ECSC) formed in 1952 by six countries: Belgium, France, Germany, Italy, Netherlands, Luxembourg. • Aim: Eliminate trade barriers in coal and steel to promote economic cooperation. • Evolved into European Economic Community (EEC) in 1957 under the Treaty of Rome.
52 Functions of the European Union (EU) 1. Economic Integration 1. Establishes a single market for goods, services, capital, and labor. 2. Promotes harmonized regulations and reduces trade barriers among members. 2. Common Currency 1. Introduction of the Euro under the European Monetary Union. 2. Controls inflation and stabilizes exchange rates within the Eurozone. 3. Regional Development 1. Promotes balanced development by investing in underdeveloped regions. 2. European Social Fund (ESF) and European Regional Development Fund (ERDF) help reduce economic differences. 4. Environmental Protection 1. Enforces climate change policies, renewable energy goals, and pollution control. 2. Leads in setting global environmental standards.
53 5. Consumer Protection 1. Sets high safety and quality standards for consumer goods. 2. Ensures transparency in labelling, pricing, and product information. 6. Foreign Relations & Trade 3. Acts as a single bloc in international trade negotiations. 4. Establishes Free Trade Agreements (FTAs) with other countries/regions. 7. Security and Justice 5. Cooperation among police and judicial authorities of member states. 6. Common immigration and asylum policies (e.g., Schengen Agreement). 8. Promoting Employment 7. Provides funds and training to tackle unemployment and skill gaps. 8. Ensures workers’ mobility across member nations.
54 Key Policies of the European Union 1. Common Agricultural Policy (CAP) 1. Supports farmers through subsidies and price controls. 2. Ensures food security and sustainable agriculture. 2. Common Fisheries Policy 1. Equal access to fishing waters. 2. Conservation of marine resources and sustainable fishing practices. 3. Competition Policy 1. Prevents monopolies and promotes fair business competition. 2. Regulates mergers, acquisitions, and state aid. 4. Common Commercial Policy 1. Unified external trade policy. 2. Negotiates trade deals and protects EU businesses globally.
55 5. Transport Policy 1. Promotes integrated and efficient transport networks. 2. Encourages environmentally friendly transportation. 6. Social Policy 3. Ensures social inclusion, equal opportunity, and protection for workers. 4. Addresses gender equality, healthcare, and working conditions. 7. Regional Policy 5. Reduces economic and social disparities between regions. 6. Funds infrastructure and innovation in less developed areas. 8. Digital Policy 7. Promotes digital transformation across sectors. 8. Ensures cybersecurity, privacy, and fair access to digital services. 9. Health Policy 9. Coordinates health threats (like pandemics). 10.Promotes high standards in public health, food safety, and medicine regulation
56 Objectives of EU • Create a common market. • Promote economic stability and growth. • Raise living standards. • Encourage closer relations among member states. • Ensure free movement of goods, services, capital, and people. Organization Structure • European Council: Main decision-making body, formulates policies, routine decisions. • European Commission: Executes decisions, proposes legislation. • Court of Justice: Resolves disputes, especially on policies and regulations. • Court of Auditors: Audits and monitors EU spending. • European Parliament: Approves budget, provides consultation. • Advisory Committees: Include Economic, Monetary, and Industry-specific bodies.
57 ASEAN (ASSOCIATION OF SOUTHEAST ASIAN NATIONS) Introduction to ASEAN • Established: August 8, 1967 • Founding Members: Indonesia, Malaysia, Philippines, Singapore, and Thailand • Headquarters: Jakarta, Indonesia • Motto: "One Vision, One Identity, One Community" • ASEAN is a regional organization formed to promote political, economic, and social cooperation and regional stability among Southeast Asian countries.
58 FUNCTIONS OF ASEAN 1. Promoting Economic Growth 1. Encourages trade and investment among member countries. 2. Works towards a single market through the ASEAN Economic Community (AEC). 2. Cultural and Educational Exchange 1. Supports cooperation in education, science, and culture. 3. Political and Security Cooperation 1. Maintains peace and stability in the Southeast Asian region. 2. Prevents external interference and resolves regional disputes peacefully. 4. Environmental Protection 1. Cooperates on issues like climate change, disaster management, and sustainable development. 5. Tourism Promotion 1. Encourages the growth of tourism within ASEAN member countries.
59 Key Policies of ASEAN 1. ASEAN Free Trade Area (AFTA) 1. Reduces tariffs and trade barriers among member nations. 2. Boosts intra-ASEAN trade. 2. ASEAN Economic Community (AEC) 1. Aims to create a single market and production base. 2. Ensures free flow of goods, services, capital, and skilled labor. 3. ASEAN Political-Security Community (APSC) 1. Promotes regional peace, human rights, and democratic values. 4. ASEAN Socio-Cultural Community (ASCC) 1. Focuses on social development, poverty eradication, and education. 2. Encourages cultural diversity and community building. 5. Disaster Management Policies 1. Coordinates responses to natural disasters and climate change under the ASEAN Agreement on Disaster Management and Emergency Response (AADMER).
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61 Objectives of ASEAN • To accelerate economic growth, social progress, and cultural development. • To promote regional peace and stability. • To enhance collaboration in education, agriculture, trade, industry, transportation, and more. • To provide mutual assistance in training and research. • To maintain close and beneficial cooperation with international and regional organizations.
62 MERCOSUR (SOUTHERN COMMON MARKET) Introduction to MERCOSUR • Full Form: Mercado Común del Sur (Southern Common Market) • Established: March 26, 1991 • Headquarters: Montevideo, Uruguay • Founding Members: Argentina, Brazil, Paraguay, and Uruguay • Main Language: Spanish and Portuguese • MERCOSUR is a regional trade bloc in South America that promotes free trade and the movement of goods, people, and currency.
63 FUNCTIONS OF MERCOSUR 1. Trade Liberalization 1. Removes tariffs and quotas among member countries. 2. Promotes free trade in goods and services. 2. Common External Tariff (CET) 1. Applies a uniform tariff on imports from non-member countries. 3. Economic Integration 1. Encourages investment and industrial cooperation among members. 4. Political Dialogue 1. Promotes democratic governance and regional peace. 5. Mobility 1. Citizens can travel and work freely within member countries (in most cases).
64 KEY POLICIES OF MERCOSUR 1. Customs Union 1. Applies common tariffs on imports from outside the bloc. 2. Trade Agreements 1. MERCOSUR has signed trade deals with countries like India, the EU, Egypt, and Israel. 3. Social and Labour Policies 1. Promotes social inclusion, labor rights, and poverty reduction. 4. Environmental Cooperation 1. Addresses climate change, biodiversity, and sustainable agriculture.
65 OBJECTIVES OF MERCOSUR • To promote economic growth and development. • To improve living standards and employment. • To increase competitiveness in the global market. • To foster peace and political stability in the region. • To promote scientific and technological cooperation.
66 CONCLUSION Aspect Details Founded 1991 (Treaty of Asunción) HQ Montevideo, Uruguay Founding Members Argentina, Brazil, Paraguay, Uruguay Main Goal Promote free trade & regional integration Language Spanish, Portuguese Type Customs Union and Economic Bloc
67 NAFTA – NORTH AMERICAN FREE TRADE AGREEMENT Introduction: • NAFTA stands for North American Free Trade Agreement. • It was signed between three countries: 🇺🇸 United States, 🇨🇦 Canada, and 🇲🇽 Mexico. • Came into effect on January 1, 1994. • Its main aim was to create a free trade zone in North America.
68 FUNCTIONS OF NAFTA 1. Promotes Free Trade • Eliminated tariffs (import taxes) and trade barriers among the US, Canada, and Mexico. • Made it easier and cheaper to buy and sell goods across borders. 2. Encourages Investment • Allowed businesses to invest freely in other member countries. • Increased cross-border investments in industries like manufacturing and agriculture. 3. Boosts Economic Growth • Created more trade opportunities, leading to increased production and employment. • Helped all three countries expand their economies through trade.
69 4. Protects Intellectual Property • Set rules to protect copyrights, trademarks, and patents across all three countries. 5. Ensures Fair Competition • Created a level playing field for businesses. • Prevented unfair trade practices like dumping and heavy subsidies. 6. Dispute Resolution • Established a structured system to handle trade disputes among member countries. • Avoided trade wars and political conflicts. 7. Improves Labor & Environmental Standards • Although limited at first, NAFTA included some rules on labor rights and environmental protection.
70 OBJECTIVES OF NAFTA: 1. Eliminate trade barriers (like tariffs and quotas) among member countries. 2. Promote fair competition in the free trade area. 3. Increase investment opportunities across the three countries. 4. Protect intellectual property rights. 5. Create a framework for resolving trade disputes. Criticism of NAFTA: • Some U.S. jobs shifted to Mexico due to lower wages. • Environmental concerns in industrial zones. • Farmers in Mexico faced competition from U.S. agricultural imports.
71 Update: • In 2020, NAFTA was replaced by a new agreement: • USMCA – United States–Mexico–Canada Agreement. • Also called NAFTA 2.0. • It updated rules on digital trade, labor, and environmental policies.
72 CONCLUSION Topic Details Full Form North American Free Trade Agreement Members USA, Canada, Mexico Started January 1, 1994 Main Aim Free trade and economic cooperation Replaced by USMCA (in 2020) Key Impact Boosted trade, some job shifts, reforms
73 INDIA AND ITS TRADING PARTNERS Introduction: • India is one of the largest economies in the world and plays an active role in global trade. • It trades goods and services with many countries across Asia, Europe, North America, Africa, and Oceania. • India's trade includes both exports and imports.
74 Quiz: India’s Export Partners 1. What does India mainly export to other countries? A) Oil B) Agricultural products and textiles C) Cars only D) Water 2. Which country is India’s largest export partner as of 2024? A) China B) USA C) Russia D) Nepal 3. Which country in the Middle East is one of India’s top export destinations? A) Iran B) Iraq C) UAE D) Turkey
75 1. What does India mainly export to other countries? A) Oil B) Agricultural products and textiles C) Cars only D) Water Answer: B) Agricultural products and textiles 2. Which country is India’s largest export partner as of 2024? A) China B) USA C) Russia D) Nepal Answer: B) USA 3. Which country in the Middle East is one of India’s top export destinations? A) Iran B) Iraq C) UAE D) Turkey Answer: C) UAE
76 4. India exports software services mostly to which country? A) Bangladesh B) USA C) Nepal D) Sri Lanka 5. Which European country is among India's top export partners? A) Netherlands B) Portugal C) Greece D) Austria 6. Which country is India’s neighbor and also a key export destination? A) Pakistan B) Sri Lanka C) Bangladesh D) Bhutan
77 4. India exports software services mostly to which country? A) Bangladesh B) USA C) Nepal D) Sri Lanka Answer: B) USA 5. Which European country is among India's top export partners? A) Netherlands B) Portugal C) Greece D) Austria Answer: A) Netherlands 6. Which country is India’s neighbor and also a key export destination? • A) Pakistan B) Sri Lanka C) Bangladesh D) Bhutan Answer: C) Bangladesh
78 INDIA'S MAJOR EXPORT PARTNERS: THESE ARE COUNTRIES TO WHICH INDIA SELLS GOODS. Country Major Goods Exported USA Gems & jewellery, pharmaceuticals, IT services UAE Petroleum products, textiles, food items China Organic chemicals, cotton, ores Bangladesh Cotton, machinery, vehicles Netherlands Petroleum products, machinery UK Textiles, garments, pharma, machinery Germany Auto parts, chemicals, electronic equipment
79 INDIA’S MAJOR IMPORT PARTNERS 1. Which country is India’s largest import partner? A) Japan B) China C) USA D) South Africa 2. India imports the highest amount of — from China. A) Oil B) Electronics and machines C) Grains D) Diamonds 3. Which Gulf country is a major source of crude oil for India? A) UAE B) Saudi Arabia C) Qatar D) Iran
80 1. Which country is India’s largest import partner? A) Japan B) China C) USA D) South Africa Answer: B) China 2. India imports the highest amount of — from China. A) Oil B) Electronics and machines C) Grains D) Diamonds Answer: B) Electronics and machines 3. Which Gulf country is a major source of crude oil for India? A) UAE B) Saudi Arabia C) Qatar D) Iran
81 4. Which of the following is a major product India imports from the USA? A) Rice B) Technology and Aircraft C) Mangoes D) Rubber 5. India is a big importer of crude oil from — A) Sri Lanka B) Canada C) Iraq D) Thailand 6. India imports pulses mainly from — A) Australia B) Germany C) Indonesia D) Mexico
82 4. Which of the following is a major product India imports from the USA? A) Rice B) Technology and Aircraft C) Mangoes D) Rubber Answer: B) Technology and Aircraft 5. India is a big importer of crude oil from — A) Sri Lanka B) Canada C) Iraq D) Thailand Answer: C) Iraq 6. India imports pulses mainly from — A) Australia B) Germany C) Indonesia D) Mexico Answer: A) Australia
83 INDIA'S MAJOR IMPORT PARTNERS: THESE ARE COUNTRIES FROM WHICH INDIA BUYS GOODS. Country Major Goods Imported China Electronics, machinery, chemicals, fertilizers UAE Crude oil, gold, petroleum USA Aircraft, machinery, medical instruments Saudi Arabia Crude oil, fertilizers Iraq Crude oil Indonesia Palm oil, coal, minerals Russia Crude oil, fertilizers, defense equipment
84 Major Goods India Exports:  Gems and Jewellry  Petroleum Products  Pharmaceuticals  Engineering Goods  Textiles and Clothing Major Goods India Imports:  Crude Oil  Gold and Precious Metals  Electronics  Industrial Machinery  Fertilizers
85 Recent Trade Highlights (2024–2025):  USA is the top destination for Indian exports.  China is the largest source of Indian imports.  Trade with Russia has increased mainly for oil.  New Trade Agreements signed with Australia and UAE. Why Trading Partners are Important for India:  Boosts national income  Creates employment  Brings in better technology and resources  Improves diplomatic and international relations Click icon to add picture
86 WTO IN PRESENT TIMES 1. Active Role in Global Trade: WTO continues to manage and monitor international trade rules among 160+ member countries. 2. Dispute Resolution: Helps countries settle trade disputes fairly using its Dispute Settlement Body (DSB). 3. Focus on Developing Nations: WTO supports developing countries (like India) with technical assistance and special trade benefits. 4. Promoting Digital Trade: WTO is discussing new rules for e-commerce, digital goods, and online services. 5. Trade and Sustainability: WTO is now focusing more on green trade — promoting sustainable and eco-friendly trading practices.
87 6. COVID-19 Impact: WTO played a role during the pandemic by promoting fair access to medical goods, vaccines, and encouraging open borders. 7. Modern Challenges: •Trade tensions (e.g., US–China) •Rise in protectionism (countries putting up trade barriers) •Need to reform WTO rules to match current global trade needs 8. WTO Reforms in Talks: Members are discussing how to improve transparency, dispute settlement, and make it more efficient. 9. Support for Least Developed Countries (LDCs): WTO gives special support to low-income countries to help them grow through trade.

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UNIT 3 INTERNATIONAL BUSINESS [Autosaved].pptx

  • 1.
    UNIT 3 THE GLOBALINSTITUTIONAL STRUCTURE - MS PRIYANKA WALDIA
  • 2.
     Bretton WoodsInstitutions-IMF and World Bank  General Agreement of Tariff and Trade  Uruguay  Round, Establishment Of WTO, Role, Functions and Various Agreement Of WTO  WTO in the present times  GATTS - Trade In Services  Concept Of Regional Integrations And Regional Blocks-ASEAN  EU; MERCOSUR; NAFTA  India and its Trading Partners 2
  • 3.
  • 4.
    BRETTON WOODS INSTITUTIONS •The Bretton Woods agreement was negotiated in July 1944 by delegates from 44 countries at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire. • Contained 730 delegates from 44 nations in Bretton Woods. Largely influenced by ideas of British economist John Maynard Keynes and American Chief International Economist of the U.S. Treasury Department Harry Dexter White. • Attended by 44 countries to design a new international monetary system. • Led to the creation of IMF and the World Bank to prevent economic crises like the Great Depression of the 1930s. • Established the gold exchange standard, where currencies were pegged to the US dollar, which was backed by gold (this system ended in 1971).
  • 5.
    5 • Under thisagreement U.S dollar would be pegged to the value of gold and other currencies were pegged against the U.S dollar’s value • It came to an end in the early 1970s when President Richard M. Nixon announced that the U.S. would no longer exchange gold for U.S. currency. • Created two major institutions: – IMF : (grants the short term loans to develop the cyclical disturbance in economy.) – World bank : (long term loan for distressed economy and member countries )
  • 6.
    6 CRUCIAL ROLE OFTHE BRETTON WOODS CONFERENCE (1944) 1. Established IMF & World Bank – Ensured financial stability and economic development. 2. Created a Stable Monetary System – Introduced a dollar-based system to prevent currency fluctuations. 3. Promoted International Trade – Led to GATT (later WTO) to reduce trade barriers. 4. Prevented Economic Crises – Helped avoid Great Depression-like situations through financial aid. 5. Encouraged Global Cooperation – Countries worked together for economic stability. 6. Shaped Modern Economic Policies – Influenced financial and trade policies worldwide.
  • 7.
    7 GLOBAL INSTITUTIONAL STRUCTURE •1. Bretton Woods Institutions • These institutions were established to maintain global financial stability and economic development: • International Monetary Fund (IMF) – Provides short-term financial aid and stabilizes exchange rates. • World Bank – Offers long-term development loans to reduce poverty and support infrastructure. • 2. World Trade Organization (WTO) • Established in 1995, replacing GATT (General Agreement on • Tariffs and Trade). • Regulates global trade, resolves disputes, and promotes free trade agreements. • Key agreements: GATT (Goods), GATS (Services), TRIPS (Intellectual Property), AOA (Agriculture).
  • 8.
    8 3. General Agreementon Tariffs and Trade (GATT) & Uruguay Round •GATT (1947) aimed to reduce trade barriers. •Uruguay Round (1986-1994) expanded trade rules and led to WTO formation. 4. Regional Economic Blocs Regional groups promote economic cooperation and trade: •ASEAN (Association of Southeast Asian Nations) – Southeast Asia’s trade and economic alliance. •EU (European Union) – A political and economic union with a common market. •MERCOSUR – South American trade bloc. •NAFTA (Now USMCA) – Trade agreement between the U.S., Canada, and Mexico. 5. India and Its Trading Partners •Major trading partners: USA, China, UAE, EU, Saudi Arabia, and ASEAN. •India is a WTO member and part of various trade agreements like SAFTA and RCEP negotiations.
  • 9.
    9 IMPORTANCE OF GLOBAL INSTITUTIONALSTRUCTURE 1. Financial Stability – IMF prevents economic crises, World Bank funds development. 2. Promotes Trade – WTO and trade blocs (ASEAN, EU) reduce trade barriers. 3. Resolves Disputes – WTO settles trade conflicts, IMF advises on economic policies. 4. Economic Development – World Bank supports infrastructure, education, and healthcare. 5. Encourages Cooperation – Countries work together on trade, finance, and global issues. 6. Helps Developing Nations – Provides financial aid and technical assistance. 7. Strengthens Global Governance – Establishes fair trade and financial rules.
  • 10.
    10 POST-WORLD WAR IIECONOMIC SITUATION 1. Economic Devastation – Many countries, especially in Europe and Asia, faced destruction of industries, infrastructure, and economies. 2. Currency Instability – Inflation and devaluation of currencies led to global financial instability. 3. Trade Barriers – Protectionism and high tariffs restricted international trade. 4. Need for Reconstruction – War-torn nations required financial aid to rebuild economies. 5. Fear of Another Great Depression – The economic collapse of the 1930s was a lesson, and countries wanted a stable financial system
  • 11.
    11 BRETTON WOODS SYSTEM(1944) – A SOLUTION • To address these issues, 44 nations met at Bretton Woods, USA, and created a new global financial system. • Key Outcomes of Bretton Woods 1. Establishment of IMF – To provide short-term financial aid and stabilize currency exchange rates. 2. Creation of World Bank – To provide long-term loans for reconstruction and development. 3. Fixed Exchange Rate System – Currencies were pegged to the US dollar, which was backed by gold. 4. Promotion of Free Trade – Led to the creation of GATT (later WTO) to reduce trade barriers.
  • 12.
    12 IMPACT OF BRETTONWOODS • Helped Europe and Japan rebuild economies (World Bank loans). • Restored global trade and prevented currency crises. • Created a stable monetary system, preventing financial collapses. • Laid the foundation for the modern economic order. Conclusion • The Bretton Woods System helped the world recover from World War II, preventing another economic crisis and creating a stable financial system that influenced global trade and development for decades.
  • 13.
    The international monetary fund(IMF) is an international organization that promotes global economic growth and financial stability, encourages international trade, and reduces poverty. The IMF was originally created in 1945 as part of the bretton woods agreement, which attempted to encourage international financial cooperation by introducing A system of convertible currencies at fixed exchange rates
  • 14.
    14 ORIGIN & ESTABLISHMENT •Established in 1944 at the Bretton Woods Conference in the USA. • Officially began operations on December 27, 1945 with 29 member countries. • Created to stabilize exchange rates and support economic recovery after World War II. • Headquarters: Washington, D.C., USA. • Currently has 190 member countries. OBJECTIVES OF IMF 1. Promote Global Monetary Cooperation – Encourage financial stability among nations. 2. Ensure Exchange Rate Stability – Prevent competitive devaluations of currencies. 3. Facilitate International Trade – Reduce trade barriers and boost economic growth. 4. Provide Financial Assistance – Help countries in economic crises with loans. 5. Reduce Global Poverty – Support economic reforms in developing nations.
  • 15.
    15 GOVERNING BODY OFIMF • Board of Governors – Includes representatives from all 190 member countries (usually finance ministers or central bank heads). • Executive Board – 24 members oversee daily operations. • Managing Director – Heads the IMF; currently Kristalina Georgieva (since 2019). ROLE & IMPORTANCE OF IMF 1. Provides Financial Aid – Offers emergency loans to countries in crisis. 2. Monitors Global Economy – Analyzes economic trends and financial risks. 3. Offers Technical Assistance – Helps countries improve financial policies and governance. 4. Supports Exchange Rate Stability – Prevents sharp currency fluctuations. 5. Encourages Economic Reforms – Advises countries on sustainable economic policies.
  • 16.
    16 ISSUES FACED BYIMF • Debt Burden – Many countries struggle to repay IMF loans. • Conditionality of Loans – Harsh economic policies (austerity measures) often required for financial aid. • Global Influence of Rich Nations – USA and European nations have more control over decisions. • Criticism for Structural Adjustment Programs (SAPs) – These policies sometimes lead to social hardships. CRITICISM & CONTROVERSIES • Western Dominance – The USA and European countries have more voting power. • Harsh Loan Conditions – IMF-imposed policies (austerity, privatization) often harm the poor. • Failure to Prevent Crises – Critics argue that IMF policies worsened crises in countries like Argentina and Greece. • Lack of Transparency – Decision-making is often secretive and benefits rich nations more.
  • 17.
    The world bankis an international financial institution that provides funding and technical assistance to developing countries for infrastructure, economic development, and poverty reduction. 17 WHAT IS WORLD BANK?
  • 18.
    18 ORIGIN & ESTABLISHMENT •Established in 1944 at the Bretton Woods Conference, along with the IMF. • Officially began operations on June 25, 1946. • Originally focused on rebuilding war-torn Europe, later shifted to global development. • Headquarters: Washington, D.C., USA. • Comprises 5 institutions, with the two main ones being: • International Bank for Reconstruction and Development (IBRD) – Lends to middle-income and creditworthy low-income countries. • International Development Association (IDA) – Provides low-interest loans and grants to the poorest nations. GOVERNING BODY OF THE WORLD BANK • Board of Governors – Representatives from all 189 member countries. • Executive Directors – 25 members oversee daily operations. • President – Leads the World Bank; currently Ajay Banga (since 2023). • Major Shareholders – USA, China, Japan, Germany, and the UK have the most voting power.
  • 19.
    19 OBJECTIVES OF THEWORLD BANK 1. Reduce Global Poverty – Help low-income countries improve living standards. 2. Finance Infrastructure Projects – Build roads, dams, schools, and hospitals. 3. Promote Economic Development – Support reforms that improve business environments. 4. Provide Low-Interest Loans & Grants – Help countries finance long-term projects. 5. Encourage Sustainable Growth – Focus on climate change, education, and technology ROLE & IMPORTANCE OF THE WORLD BANK 6. Funds Large-Scale Development Projects – Supports infrastructure, healthcare, and education. 7. Provides Financial Aid to Poor Nations – Helps them improve economic conditions. 8. Encourages Economic Stability – Promotes policies for long-term growth. 9. Supports Sustainable Development – Invests in renewable energy and environmental protection. 10.Technical Assistance & Knowledge Sharing – Helps governments improve governance and policies
  • 20.
    20 ISSUES FACED BYTHE WORLD BANK • Debt Dependency – Many countries struggle to repay loans. • Bureaucracy & Slow Decision-Making – Funding approvals take a long time. • Environmental & Social Concerns – Some projects cause displacement or harm ecosystems. • Unequal Influence of Rich Nations – The USA and Europe dominate decision-making. CRITICISM & CONTROVERSIES • Western Dominance – The USA and Europe control key decisions. • Loan Conditionalities – Countries must adopt certain policies to receive loans. • Debt Burden on Poor Nations – Many developing countries struggle with repayment. • Failure to Address Corruption – Some funds are misused in recipient countries. • Environmental & Human Rights Issues – Some projects displace people and harm nature
  • 21.
    21 DIFFERENCE BETWEEN IMFAND WORLD BANK Feature IMF (International Monetary Fund) World Bank Established 1944 (Bretton Woods Conference) 1944 (Bretton Woods Conference) Main Purpose Provides short-term financial assistance to stabilize economies Provides long-term loans for development projects Focus Monetary Stability & Crisis Management Economic Growth & Development Target Countries Countries facing balance of payment crises Developing countries needing infrastructure funding
  • 22.
    22 Feature IMF (International Monetary Fund) WorldBank Funding Source Contributions from member countries Borrowing from global financial markets Loan Conditions Requires strict economic reforms (austerity, tax changes) Loans based on project feasibility, fewer policy conditions Governing Body Executive Board (24 members) & Managing Director Board of Governors & World Bank President Examples of Work Helped Greece during the Eurozone crisis Funded roads, schools, healthcare
  • 23.
    Click to addpicture The general agreement on tariffs and trade (GATT), signed in 1947 by 23 countries, is a treaty minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and subsidies. It was intended to boost economic recovery after world war II.
  • 24.
    24 HISTORY AND BACKGROUND •FullForm: General Agreement on Tariffs and Trade •Established: 1947 •Came into force: January 1, 1948 •Headquarters: Geneva, Switzerland •Number of Members: Started with 23 countries •Succeeded by: World Trade Organization (WTO) in 1995 OBJECTIVES OF GATT 1. Promote Free Trade – Reduce tariffs and eliminate quotas. 2. Encourage Economic Growth – By opening markets. 3. Avoid Discrimination – Treat all trading partners equally (Most Favoured Nation – MFN). 4. Prevent Trade Wars – Solve trade disputes peacefully. 5. Create Fair Competition – Make global trade rules transparent and fair.
  • 25.
    25 KEY FEATURES • Negotiatedthrough rounds of talks (e.g., Kennedy Round, Tokyo Round, Uruguay Round). • Focused mainly on trade in goods (not services or intellectual property). • Encouraged multilateral trade agreements rather than bilateral deals. • Laid the foundation for global trade rules. ISSUES FACED BY GATT • Limited Scope – Focused only on goods (not services or intellectual property). • Weak Enforcement – No strong mechanism to punish rule-breakers. • Increased Trade Disputes – As trade grew, so did disagreements. • Rise of Regional Trade Blocs – Undermined multilateral goals. • Complex Negotiations – Slow progress in rounds.
  • 26.
    26 CRITICISM & CONTROVERSIES •Favored Developed Nations – Poorer countries had less influence. • Limited Inclusion – Didn’t cover services, agriculture, or intellectual property. • Weak Dispute Resolution – Countries often ignored rulings. • No Environmental/Social Considerations – Ignored issues like labor rights or pollution. • Inflexibility – Couldn’t handle complex modern trade issues. END OF GATT • Replaced by the WTO in 1995, after the Uruguay Round (1986–94). • GATT principles continued under “GATT 1994” within the WTO
  • 27.
    MAJOR GATT ROUNDS 27 RoundYears Key Outcome Geneva Round 1947 Initial agreement signed Kennedy Round 1964–67 Anti-dumping measures introduced Tokyo Round 1973–79 Reduced non-tariff barriers Uruguay Round 1986–94 Led to the creation of WTO
  • 28.
    EVOLUTION TOWARDS THE ESTABLISHMENTOF WTO 28 1.Post-World War II (1940s) 1. World needed stable trade rules to avoid protectionism and economic conflicts. 2. In 1947, GATT (General Agreement on Tariffs and Trade) was signed by 23 countries to reduce tariffs and promote free trade. 2.GATT Success & Limitations (1948–1980s) 1. GATT helped increase global trade and reduce tariffs. 2. But it had limitations: 1. No focus on services, intellectual property, or agriculture. 2. No strong dispute settlement system. 3. Functioned as an agreement, not a permanent institution.
  • 29.
    29 3. Uruguay Round(1986–1994) •The longest and most ambitious round of GATT negotiations. •Covered new areas like: • Trade in Services (GATS) • Intellectual Property (TRIPS) • Agriculture and textiles •Members agreed to create a permanent body to handle global trade. Objectives of Uruguay Round •Expand trade negotiations beyond just goods. •Cover new areas like services, agriculture, and intellectual property. •Create a permanent trade institution to replace GAT
  • 30.
    30 FOUNDATION OF WTO •The outcomes of the Uruguay Round led to the creation of the WTO. • It was decided that a permanent organization was needed to handle trade more effectively than GATT. • This led to the signing of a formal agreement to establish the WTO.
  • 31.
    31 MARRAKESH AGREEMENT (1994) •The Marrakesh Agreement was signed in April 1994 in Morocco. • It officially approved the creation of the World Trade Organization (WTO). • The WTO was established as the successor to GATT. • It included: • Stronger dispute settlement system • Permanent institutional structure • Wider coverage of trade issues
  • 32.
    32 WTO COMES INTOEXISTENCE • The WTO was officially established on 1st January 1995. • It took over GATT’s responsibilities and expanded its reach. • It became the main international organization governing global trade rules. KEY POINTS TO REMEMBER • Uruguay Round = foundation of WTO • Marrakesh Agreement = legal creation of WTO • WTO (1995) replaced GATT with wider coverage and stronger enforcement.
  • 33.
    33 OBJECTIVES, PRINCIPLES & AGREEMENTSOF WTO OBJECTIVES OF WTO 1. Promote Free Trade 1. Encourage trade in goods and services globally. 2. Fair Trade Rules 1. Develop rules that are transparent, fair, and reduce discrimination. 3. Dispute Settlement 1. Provide a neutral system for resolving trade disputes between countries. 4. Integration of Developing Countries 1. Help developing nations participate more in international trade. 5. Global Participation 1. Involve developing countries in regional and global trade initiatives, e.g., SAFTA, UNCTAD, NDFP
  • 34.
    34 PRINCIPLES OF WTO 1.Most-Favoured Nation (MFN) – Equal treatment to all WTO members. 2. National Treatment – No discrimination between local and foreign goods after entry. 3. Free Trade – Reduce trade barriers through negotiation. 4. Transparency – Clear and predictable trade rules. 5. Fair Competition – No unfair practices like dumping or hidden subsidies. 6. Support to Developing Countries – Special help and flexibility in rules
  • 35.
    35 MAJOR AGREEMENTS UNDERWTO  GATT – General Agreement on Tariffs and Trade • Deals with trade in goods • Aims to reduce tariffs and trade barriers  GATS – General Agreement on Trade in Services • Covers trade in services like banking, telecom, tourism  TRIPS – Trade-Related Aspects of Intellectual Property Rights • Sets rules for intellectual property protection (like patents, copyrights)  AoA – Agreement on Agriculture • Focuses on reducing subsidies and opening agricultural markets  SPS – Sanitary and Phytosanitary Measures • Ensures food safety and animal/plant health standards  TBT – Technical Barriers to Trade • Prevents standards and regulations from being used as trade barriers
  • 36.
    36 1. GATT –GENERAL AGREEMENT ON TARIFFS AND TRADE • Original agreement signed in 1947, revised under WTO in 1994 (GATT 1994). • Focuses on trade in goods only. • GOALS: • Reduce tariffs and trade barriers. • Promote non-discriminatory trade among nations. • Improve market access and ensure fair competition. • KEY FEATURES:  Follows Most-Favoured Nation (MFN) and National Treatment principles.  Basis for WTO's trade in goods rules.
  • 37.
    37 2. GATS –GENERAL AGREEMENT ON TRADE IN SERVICES • Introduced during the Uruguay Round. • First multilateral agreement to regulate international trade in services. • COVERS SERVICES LIKE: • Banking • Insurance • Telecommunications • Education • Tourism, etc. • KEY FEATURES: • Ensures transparency and predictability in service regulations. • Promotes progressive liberalization of services. • Allows governments to maintain control over public services (e.g., education, health
  • 38.
    38 3. TRIPS –TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS • Sets minimum global standards for protecting intellectual property (IP). • TYPES OF IP PROTECTED: • Patents – inventions, new technologies • Copyrights – books, music, software • Trademarks – brand names, logos • Geographical indications – Darjeeling Tea, Basmati Rice • Industrial designs and more • KEY FEATURES: • Ensures legal protection and enforcement of IP rights in all WTO countries. • Helps protect innovation and creativity. • Includes provisions for compulsory licensing during public health emergencies
  • 39.
    39 4. AOA –AGREEMENT ON AGRICULTURE • Aimed to bring agriculture under global trade rules for the first time. • COVERS THREE PILLARS: 1. Market Access – Reduction of import restrictions/tariffs. 2. Domestic Support – Controls on subsidies that distort trade (like minimum support price). 3. Export Subsidies – Restrictions on direct payments to exporters. • KEY FEATURES: • Developed countries committed to reduce trade-distorting subsidies. • Developing countries allowed flexibility and longer implementation periods.
  • 40.
    40 5. SPS AGREEMENT– SANITARY AND PHYTOSANITARY MEASURES • Deals with food safety and protection of animal and plant health. • KEY FEATURES: • Countries can take necessary health measures, but they must be: • Scientific • Non-discriminatory • Not used as hidden trade barriers • EXAMPLES: • Banning imports of poultry due to bird flu outbreaks. • Regulating pesticide levels in food products.
  • 41.
    41 6. TBT AGREEMENT– TECHNICAL BARRIERS TO TRADE • Prevents countries from using technical regulations, product standards, or testing methods to unfairly block trade. • KEY FEATURES: • Encourages use of international standards. • Applies to: • Product labeling • Quality standards • Packaging rules • Certification systems
  • 42.
    42 GATS – GENERALAGREEMENT ON TRADE IN SERVICES WHAT IS GATS? • GATS is a WTO agreement that deals with international trade in services. • It was created during the Uruguay Round (1986–1994) and came into effect with the WTO in 1995. • It is the first multilateral agreement that governs trade in services like banking, education, telecom, tourism, etc. OBJECTIVES OF GATS 1. Liberalize global trade in services. 2. Ensure transparency and fairness in service trade. 3. Promote economic growth and development. 4. Give developing countries more access to global markets. 5. Provide a framework for future negotiations.
  • 43.
    43 IMPORTANCE OF GATS •Encourages investment and technological growth. • Gives consumers more choices and better quality. • Helps developing nations access global service markets. • Reduces barriers and discrimination in services. KEY FEATURES OF GATS 1. Coverage • Applies to all service sectors except: • Government services (like police, education if not for commercial purposes) • Air traffic rights 2. Modes of Supply • GATS defines 4 modes of supplying services across borders:
  • 44.
    44 Mode Description Example Mode1 Cross-border supply An Indian IT firm providing online services to the US. Mode 2 Consumption abroad A foreign tourist using hotel services in India. Mode 3 Commercial presence A foreign bank opening a branch in India. Mode 4 Movement of natural persons Indian engineers working temporarily in UAE. 3. NON-DISCRIMINATION •MFN Principle: Equal treatment to all WTO members. •National Treatment: Foreign and domestic service providers must be treated equally. 4. TRANSPARENCY •Countries must publish their laws and regulations affecting trade in services. 5. FLEXIBILITY •Developing countries have the freedom to open their service sectors gradually.
  • 45.
    45 CRITICISM/ISSUES • Pressure ondeveloping countries to open sensitive service sectors (like health/education). • Risk of foreign dominance in local service markets. • Implementation challenges due to lack of resources.
  • 46.
    46 CONCEPT OF REGIONALINTEGRATION Regional integration means strengthening cooperation and coordination between neighboring countries through agreements. The goal is to: • Promote economic growth • Harmonize policies and laws • Improve trade, competitiveness, and stability
  • 47.
    47 FUNCTIONS OF REGIONALINTEGRATION 1. Trade Facilitation 1. Removes trade barriers like tariffs and quotas 2. Promotes smooth and legal international trade 2. Investment 1. Attracts foreign direct investment (FDI) 2. Encourages free flow of capital and helps economic development 3. Harmonization of Standards 1. Makes business easier by having common rules and policies 2. Reduces confusion and creates a business-friendly environment 4. Regional Stability 1. Promotes political peace and unity 2. Member countries support each other during crises
  • 48.
    48 KEY PRINCIPLES OFREGIONAL INTEGRATION 1. Shared Interests Countries unite for common economic and strategic goals. 2. Cooperation & Coordination Policies, laws, and standards are aligned across countries. 3. Respect for Sovereignty Countries remain independent while working together. 4. Gradual Progress Integration occurs step-by-step: from trade to economy to politics. 5. Equality & Mutual Benefit All members benefit, especially developing or weaker economies. 6. Non-Discrimination All members are treated equally in trade and policies 7. Harmonization of Policies Aligning national laws and regulations to create a smooth trade and economic system
  • 49.
    49 TYPES OF REGIONALINTEGRATION 1. Free Trade Area (FTA) 1. Removal of tariffs among member countries (e.g., SAFTA). 2. Customs Union 1. FTA + common external tariffs on non-members. 3. Common Market 1. Customs union + free movement of goods, services, capital, and labor. 4. Economic Union 1. Deeper integration including shared economic policies and coordinated fiscal strategies. 5. Political Union 1. Integration of political systems (rare and advanced stage).
  • 50.
    50 IMPLICATIONS OF REGIONAL INTEGRATION ImplicationHow It Helps Trade & Growth Boosts economy by increasing trade and investment Competitiveness Industries improve with access to bigger markets Policy Coordination Makes rules easier, reduces cost for businesses Political Stability Strengthens peace and cooperation among member countries
  • 51.
    51 REGIONAL BLOCKS EUROPEAN UNION(EU) Origin and Background • The EU traces its roots to the European Coal and Steel Community (ECSC) formed in 1952 by six countries: Belgium, France, Germany, Italy, Netherlands, Luxembourg. • Aim: Eliminate trade barriers in coal and steel to promote economic cooperation. • Evolved into European Economic Community (EEC) in 1957 under the Treaty of Rome.
  • 52.
    52 Functions of theEuropean Union (EU) 1. Economic Integration 1. Establishes a single market for goods, services, capital, and labor. 2. Promotes harmonized regulations and reduces trade barriers among members. 2. Common Currency 1. Introduction of the Euro under the European Monetary Union. 2. Controls inflation and stabilizes exchange rates within the Eurozone. 3. Regional Development 1. Promotes balanced development by investing in underdeveloped regions. 2. European Social Fund (ESF) and European Regional Development Fund (ERDF) help reduce economic differences. 4. Environmental Protection 1. Enforces climate change policies, renewable energy goals, and pollution control. 2. Leads in setting global environmental standards.
  • 53.
    53 5. Consumer Protection 1.Sets high safety and quality standards for consumer goods. 2. Ensures transparency in labelling, pricing, and product information. 6. Foreign Relations & Trade 3. Acts as a single bloc in international trade negotiations. 4. Establishes Free Trade Agreements (FTAs) with other countries/regions. 7. Security and Justice 5. Cooperation among police and judicial authorities of member states. 6. Common immigration and asylum policies (e.g., Schengen Agreement). 8. Promoting Employment 7. Provides funds and training to tackle unemployment and skill gaps. 8. Ensures workers’ mobility across member nations.
  • 54.
    54 Key Policies ofthe European Union 1. Common Agricultural Policy (CAP) 1. Supports farmers through subsidies and price controls. 2. Ensures food security and sustainable agriculture. 2. Common Fisheries Policy 1. Equal access to fishing waters. 2. Conservation of marine resources and sustainable fishing practices. 3. Competition Policy 1. Prevents monopolies and promotes fair business competition. 2. Regulates mergers, acquisitions, and state aid. 4. Common Commercial Policy 1. Unified external trade policy. 2. Negotiates trade deals and protects EU businesses globally.
  • 55.
    55 5. Transport Policy 1.Promotes integrated and efficient transport networks. 2. Encourages environmentally friendly transportation. 6. Social Policy 3. Ensures social inclusion, equal opportunity, and protection for workers. 4. Addresses gender equality, healthcare, and working conditions. 7. Regional Policy 5. Reduces economic and social disparities between regions. 6. Funds infrastructure and innovation in less developed areas. 8. Digital Policy 7. Promotes digital transformation across sectors. 8. Ensures cybersecurity, privacy, and fair access to digital services. 9. Health Policy 9. Coordinates health threats (like pandemics). 10.Promotes high standards in public health, food safety, and medicine regulation
  • 56.
    56 Objectives of EU •Create a common market. • Promote economic stability and growth. • Raise living standards. • Encourage closer relations among member states. • Ensure free movement of goods, services, capital, and people. Organization Structure • European Council: Main decision-making body, formulates policies, routine decisions. • European Commission: Executes decisions, proposes legislation. • Court of Justice: Resolves disputes, especially on policies and regulations. • Court of Auditors: Audits and monitors EU spending. • European Parliament: Approves budget, provides consultation. • Advisory Committees: Include Economic, Monetary, and Industry-specific bodies.
  • 57.
    57 ASEAN (ASSOCIATION OFSOUTHEAST ASIAN NATIONS) Introduction to ASEAN • Established: August 8, 1967 • Founding Members: Indonesia, Malaysia, Philippines, Singapore, and Thailand • Headquarters: Jakarta, Indonesia • Motto: "One Vision, One Identity, One Community" • ASEAN is a regional organization formed to promote political, economic, and social cooperation and regional stability among Southeast Asian countries.
  • 58.
    58 FUNCTIONS OF ASEAN 1.Promoting Economic Growth 1. Encourages trade and investment among member countries. 2. Works towards a single market through the ASEAN Economic Community (AEC). 2. Cultural and Educational Exchange 1. Supports cooperation in education, science, and culture. 3. Political and Security Cooperation 1. Maintains peace and stability in the Southeast Asian region. 2. Prevents external interference and resolves regional disputes peacefully. 4. Environmental Protection 1. Cooperates on issues like climate change, disaster management, and sustainable development. 5. Tourism Promotion 1. Encourages the growth of tourism within ASEAN member countries.
  • 59.
    59 Key Policies ofASEAN 1. ASEAN Free Trade Area (AFTA) 1. Reduces tariffs and trade barriers among member nations. 2. Boosts intra-ASEAN trade. 2. ASEAN Economic Community (AEC) 1. Aims to create a single market and production base. 2. Ensures free flow of goods, services, capital, and skilled labor. 3. ASEAN Political-Security Community (APSC) 1. Promotes regional peace, human rights, and democratic values. 4. ASEAN Socio-Cultural Community (ASCC) 1. Focuses on social development, poverty eradication, and education. 2. Encourages cultural diversity and community building. 5. Disaster Management Policies 1. Coordinates responses to natural disasters and climate change under the ASEAN Agreement on Disaster Management and Emergency Response (AADMER).
  • 60.
  • 61.
    61 Objectives of ASEAN •To accelerate economic growth, social progress, and cultural development. • To promote regional peace and stability. • To enhance collaboration in education, agriculture, trade, industry, transportation, and more. • To provide mutual assistance in training and research. • To maintain close and beneficial cooperation with international and regional organizations.
  • 62.
    62 MERCOSUR (SOUTHERN COMMONMARKET) Introduction to MERCOSUR • Full Form: Mercado Común del Sur (Southern Common Market) • Established: March 26, 1991 • Headquarters: Montevideo, Uruguay • Founding Members: Argentina, Brazil, Paraguay, and Uruguay • Main Language: Spanish and Portuguese • MERCOSUR is a regional trade bloc in South America that promotes free trade and the movement of goods, people, and currency.
  • 63.
    63 FUNCTIONS OF MERCOSUR 1.Trade Liberalization 1. Removes tariffs and quotas among member countries. 2. Promotes free trade in goods and services. 2. Common External Tariff (CET) 1. Applies a uniform tariff on imports from non-member countries. 3. Economic Integration 1. Encourages investment and industrial cooperation among members. 4. Political Dialogue 1. Promotes democratic governance and regional peace. 5. Mobility 1. Citizens can travel and work freely within member countries (in most cases).
  • 64.
    64 KEY POLICIES OFMERCOSUR 1. Customs Union 1. Applies common tariffs on imports from outside the bloc. 2. Trade Agreements 1. MERCOSUR has signed trade deals with countries like India, the EU, Egypt, and Israel. 3. Social and Labour Policies 1. Promotes social inclusion, labor rights, and poverty reduction. 4. Environmental Cooperation 1. Addresses climate change, biodiversity, and sustainable agriculture.
  • 65.
    65 OBJECTIVES OF MERCOSUR •To promote economic growth and development. • To improve living standards and employment. • To increase competitiveness in the global market. • To foster peace and political stability in the region. • To promote scientific and technological cooperation.
  • 66.
    66 CONCLUSION Aspect Details Founded 1991(Treaty of Asunción) HQ Montevideo, Uruguay Founding Members Argentina, Brazil, Paraguay, Uruguay Main Goal Promote free trade & regional integration Language Spanish, Portuguese Type Customs Union and Economic Bloc
  • 67.
    67 NAFTA – NORTHAMERICAN FREE TRADE AGREEMENT Introduction: • NAFTA stands for North American Free Trade Agreement. • It was signed between three countries: 🇺🇸 United States, 🇨🇦 Canada, and 🇲🇽 Mexico. • Came into effect on January 1, 1994. • Its main aim was to create a free trade zone in North America.
  • 68.
    68 FUNCTIONS OF NAFTA 1.Promotes Free Trade • Eliminated tariffs (import taxes) and trade barriers among the US, Canada, and Mexico. • Made it easier and cheaper to buy and sell goods across borders. 2. Encourages Investment • Allowed businesses to invest freely in other member countries. • Increased cross-border investments in industries like manufacturing and agriculture. 3. Boosts Economic Growth • Created more trade opportunities, leading to increased production and employment. • Helped all three countries expand their economies through trade.
  • 69.
    69 4. Protects IntellectualProperty • Set rules to protect copyrights, trademarks, and patents across all three countries. 5. Ensures Fair Competition • Created a level playing field for businesses. • Prevented unfair trade practices like dumping and heavy subsidies. 6. Dispute Resolution • Established a structured system to handle trade disputes among member countries. • Avoided trade wars and political conflicts. 7. Improves Labor & Environmental Standards • Although limited at first, NAFTA included some rules on labor rights and environmental protection.
  • 70.
    70 OBJECTIVES OF NAFTA: 1.Eliminate trade barriers (like tariffs and quotas) among member countries. 2. Promote fair competition in the free trade area. 3. Increase investment opportunities across the three countries. 4. Protect intellectual property rights. 5. Create a framework for resolving trade disputes. Criticism of NAFTA: • Some U.S. jobs shifted to Mexico due to lower wages. • Environmental concerns in industrial zones. • Farmers in Mexico faced competition from U.S. agricultural imports.
  • 71.
    71 Update: • In 2020,NAFTA was replaced by a new agreement: • USMCA – United States–Mexico–Canada Agreement. • Also called NAFTA 2.0. • It updated rules on digital trade, labor, and environmental policies.
  • 72.
    72 CONCLUSION Topic Details Full FormNorth American Free Trade Agreement Members USA, Canada, Mexico Started January 1, 1994 Main Aim Free trade and economic cooperation Replaced by USMCA (in 2020) Key Impact Boosted trade, some job shifts, reforms
  • 73.
    73 INDIA AND ITSTRADING PARTNERS Introduction: • India is one of the largest economies in the world and plays an active role in global trade. • It trades goods and services with many countries across Asia, Europe, North America, Africa, and Oceania. • India's trade includes both exports and imports.
  • 74.
    74 Quiz: India’s ExportPartners 1. What does India mainly export to other countries? A) Oil B) Agricultural products and textiles C) Cars only D) Water 2. Which country is India’s largest export partner as of 2024? A) China B) USA C) Russia D) Nepal 3. Which country in the Middle East is one of India’s top export destinations? A) Iran B) Iraq C) UAE D) Turkey
  • 75.
    75 1. What doesIndia mainly export to other countries? A) Oil B) Agricultural products and textiles C) Cars only D) Water Answer: B) Agricultural products and textiles 2. Which country is India’s largest export partner as of 2024? A) China B) USA C) Russia D) Nepal Answer: B) USA 3. Which country in the Middle East is one of India’s top export destinations? A) Iran B) Iraq C) UAE D) Turkey Answer: C) UAE
  • 76.
    76 4. India exportssoftware services mostly to which country? A) Bangladesh B) USA C) Nepal D) Sri Lanka 5. Which European country is among India's top export partners? A) Netherlands B) Portugal C) Greece D) Austria 6. Which country is India’s neighbor and also a key export destination? A) Pakistan B) Sri Lanka C) Bangladesh D) Bhutan
  • 77.
    77 4. India exportssoftware services mostly to which country? A) Bangladesh B) USA C) Nepal D) Sri Lanka Answer: B) USA 5. Which European country is among India's top export partners? A) Netherlands B) Portugal C) Greece D) Austria Answer: A) Netherlands 6. Which country is India’s neighbor and also a key export destination? • A) Pakistan B) Sri Lanka C) Bangladesh D) Bhutan Answer: C) Bangladesh
  • 78.
    78 INDIA'S MAJOR EXPORTPARTNERS: THESE ARE COUNTRIES TO WHICH INDIA SELLS GOODS. Country Major Goods Exported USA Gems & jewellery, pharmaceuticals, IT services UAE Petroleum products, textiles, food items China Organic chemicals, cotton, ores Bangladesh Cotton, machinery, vehicles Netherlands Petroleum products, machinery UK Textiles, garments, pharma, machinery Germany Auto parts, chemicals, electronic equipment
  • 79.
    79 INDIA’S MAJOR IMPORTPARTNERS 1. Which country is India’s largest import partner? A) Japan B) China C) USA D) South Africa 2. India imports the highest amount of — from China. A) Oil B) Electronics and machines C) Grains D) Diamonds 3. Which Gulf country is a major source of crude oil for India? A) UAE B) Saudi Arabia C) Qatar D) Iran
  • 80.
    80 1. Which countryis India’s largest import partner? A) Japan B) China C) USA D) South Africa Answer: B) China 2. India imports the highest amount of — from China. A) Oil B) Electronics and machines C) Grains D) Diamonds Answer: B) Electronics and machines 3. Which Gulf country is a major source of crude oil for India? A) UAE B) Saudi Arabia C) Qatar D) Iran
  • 81.
    81 4. Which ofthe following is a major product India imports from the USA? A) Rice B) Technology and Aircraft C) Mangoes D) Rubber 5. India is a big importer of crude oil from — A) Sri Lanka B) Canada C) Iraq D) Thailand 6. India imports pulses mainly from — A) Australia B) Germany C) Indonesia D) Mexico
  • 82.
    82 4. Which ofthe following is a major product India imports from the USA? A) Rice B) Technology and Aircraft C) Mangoes D) Rubber Answer: B) Technology and Aircraft 5. India is a big importer of crude oil from — A) Sri Lanka B) Canada C) Iraq D) Thailand Answer: C) Iraq 6. India imports pulses mainly from — A) Australia B) Germany C) Indonesia D) Mexico Answer: A) Australia
  • 83.
    83 INDIA'S MAJOR IMPORTPARTNERS: THESE ARE COUNTRIES FROM WHICH INDIA BUYS GOODS. Country Major Goods Imported China Electronics, machinery, chemicals, fertilizers UAE Crude oil, gold, petroleum USA Aircraft, machinery, medical instruments Saudi Arabia Crude oil, fertilizers Iraq Crude oil Indonesia Palm oil, coal, minerals Russia Crude oil, fertilizers, defense equipment
  • 84.
    84 Major Goods IndiaExports:  Gems and Jewellry  Petroleum Products  Pharmaceuticals  Engineering Goods  Textiles and Clothing Major Goods India Imports:  Crude Oil  Gold and Precious Metals  Electronics  Industrial Machinery  Fertilizers
  • 85.
    85 Recent Trade Highlights(2024–2025):  USA is the top destination for Indian exports.  China is the largest source of Indian imports.  Trade with Russia has increased mainly for oil.  New Trade Agreements signed with Australia and UAE. Why Trading Partners are Important for India:  Boosts national income  Creates employment  Brings in better technology and resources  Improves diplomatic and international relations Click icon to add picture
  • 86.
    86 WTO IN PRESENTTIMES 1. Active Role in Global Trade: WTO continues to manage and monitor international trade rules among 160+ member countries. 2. Dispute Resolution: Helps countries settle trade disputes fairly using its Dispute Settlement Body (DSB). 3. Focus on Developing Nations: WTO supports developing countries (like India) with technical assistance and special trade benefits. 4. Promoting Digital Trade: WTO is discussing new rules for e-commerce, digital goods, and online services. 5. Trade and Sustainability: WTO is now focusing more on green trade — promoting sustainable and eco-friendly trading practices.
  • 87.
    87 6. COVID-19 Impact:WTO played a role during the pandemic by promoting fair access to medical goods, vaccines, and encouraging open borders. 7. Modern Challenges: •Trade tensions (e.g., US–China) •Rise in protectionism (countries putting up trade barriers) •Need to reform WTO rules to match current global trade needs 8. WTO Reforms in Talks: Members are discussing how to improve transparency, dispute settlement, and make it more efficient. 9. Support for Least Developed Countries (LDCs): WTO gives special support to low-income countries to help them grow through trade.