Rutgers Model United Nations 2 - IDIA
Rutgers Model United Nations 3 (FTAs) and Preferential Trade Agreements (PTAs). 7 FTAs typically are multilateral, legally binding agreements between cooperating nations or blocs of nations that possess geographical, political, or economic similarities. The purpose of FTAs is to reduce the trade barriers between nations to increase the total volume of traded goods beneficial to both nations. For example, a country can lower a tariff on the import of coffee from a neighboring nation in return for an equally lucrative "duty-free" export of rice to the same nation. PTAs are similar to FTAs in that they benefit both parties by reducing various trade barriers, but differ in that PTAs are usually bilateral as opposed to multilateral FTAs. In essence, PTAs are the first step to integrating an economy in the world market; they eventually hope to become regional and global FTAs. PTAs and FTAs are not without drawbacks, however, as by creating more trade within a certain region they sometimes divert trade from other, less preferred, regions. 8 Another trade liberalization strategy is the revision of AD legislation. Dumping, which is the practice of selling a product at an unfairly low price to drive out competition, has been scrutinized by the WTO in the past years. Nations that fear that their own industries will be overwhelmed by cheaper foreign products enforce AD laws that limit the import of goods or charge customs duties on the exported product. It is considered to be one of the most common methods of NTBT usage, and directly impacts the emerging markets of LDCs in detrimental ways. With the aforementioned methods in mind, the World Trade Organization proposed the creation of the Enhanced Integrated Framework (EIF) in 2005. The EIF is an international multidonor collaboration that focuses on helping forty-seven LDCs with "supply-side constraints to trade". 9 This EIF seeks to tackle each LDC's specific needs on an individual basis with the eventual goal of creating a globally integrated and self-sustaining economy 7 Foster, Neil, and Robert Stehrer. "How Does Trade Respond to Preferential Trade Agreements?" WTO. Web. 22 Feb. 2012. . 8 "Making Globalization Work for the LDCs." 9 July 2007. Web. 23 Feb. 2012. . 9 “Enhanced Integrated Framework." Enhanced Integrated Framework. Web. 22 Feb. 2012. .
Rutgers Model United Nations 4 that can support the influx in population. Regardless of the means, trade liberalization is of paramount importance to LDCs as it not only creates jobs for unskilled laborers, effectively promoting them to a working middle class; but also establishes regional trade networks which encourage information exchange and infrastructural development. 10 Chronology July 1944: Implemetation of The Bretton Woods System The framework for the entire global financial system as we know it today was drafted and ratified at a conference in Bretton Woods, New Hampshire, United States from 1 July to 22 July 1944. Although the Second World War was still raging in Europe, the conference was attended by all forty-four allied nations along with neutral Argentina. One of the main purposes of the conference was to establish an international basis for exchanging one currency for another. Prior to the Second World War all international currencies, including the United States Dollar (USD), held a specific value in gold. 11 In other words, the stronger the economy of a nation was, the more gold you could buy with one unit of that currency. Following the establishment of the Bretton Woods system, each nation's currency was assigned a specific value in USD, which allowed for a balanced currency exchange rate and increased stability in the global economy. 12 The USD was the currency of choice because, at the time, the United States was least affected by the turmoil of the Second World War and possessed the largest gold reserves. These gold reserves were the United States (US) government's insurance policy that guaranteed an appropriate weight in gold for every single USD issued by the US Federal Reserve. Perhaps the most significant motive for the conference was the common sentiment of the 10 De Rato, Rodrigo. "Problems and Issues in the Global Economy: A Call for Action." Spain, San Telmo, Seville.22 Nov. 2005. Speech. 11 Cohen, Benjamin J. "Benjamin J. Cohen, Bretton Woods System." Department of Political Science. University of California, Santa Barbara. Web. 27 Feb. 2012. . 12 Stephey, M.J. "Bretton Woods System." Time Business. Time, 21 Oct. 2008. Web. 28 Feb. 2012. .