International Trade and policies
Different countries have diverse governments, policies, currencies, monetary systems and many diverse products. This is certainly one motive why international trade is extremely complex. In today’s fast growing market and the development of international trade amongst nations has initiated many policies to be enacted and a need for international organizations. International trade policies entails the joint arrangements between nations (“International trade policy”, 2008). These policies command the terms of trade between the nations involved. As an example, one such strategy is the free trade policy. This policy eliminates trade barriers for product imports and exports. The purpose of this paper is take a detailed look on the promotion of policy and how these policy came alive through the development of different international organizations.
Bretton Woods Agreement
According to Wiggin (2006), “the result of this international meeting, the Bretton Woods Agreement, had the original purpose of rebuilding after World War II through a series of currency stabilization programs and infrastructure loans to war-ravaged nations” (para. 3). The Bretton Woods Agreement was a milestone coordination for monetary and exchange rate administration which was established in 1944. This agreement between allied nations and their individuals in charge called for a fixed exchange rate and funding from international reserves or a global central bank (Pugel, 2012). The Bretton Woods Agreement was established at the United Nations Monetary and Financial Conference which took place in held in Bretton Woods, New Hampshire, from July 1 to July 22, 1944 (“Bretton Woods Agreement,” n.d.).
The principal results of th...
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middle of paper ... ... The Web. 9 Apr. 2014. The 'Standard' of the 'Standard'.
The United States free trade agenda includes policies that seek to eliminate all restrictions and quotas on trade. The advantages of free trade can be seen through domestic markets and the growth of the world economy. T...
Few governments will argue that the exchange of goods and services across international borders is a bad thing. However, the degree to which an international trading system is open may come into contest with a state’s ability to protect its interests. Free trade is often portrayed in a good light, with focus placed on the material benefits. Theoretically, free trade enables a distribution of resources across state lines. A country’s workforce may become more productive as it specializes in products that it has a comparative advantage. Free trade minimizes the chance that a market will have a surplus of one product and not enough of another. Arguably, comparative specialization leads to efficiency and growth.
The July 1944 United Nations Financial and Monetary Conference, known as the Bretton Woods Conference, who created the International Monetary Fund (IMF) and the forerunner of the World Bank, the International Bank for Reconstruction and Development (IBRD). The “Bretton Woods system” was bolstered in 1947 with the addition of the General Agreements on Tariffs and Trade (GATT), forerunner of the World Trade
The electronic version of the. Retrieved April 21, 2003, from http://www.ericfacility.net/databases/ERIC. McKey, Al. (1985) The 'Standard' of the 'Standard'.
The end of the World War II marked the beginning of a new era for the world economy. The Bretton Woods System refers to an agreement made at an international conference between 44 nations in 1944 at Bretton Woods, New Hampshire, United States of America (hereby U.S.) on the 22nd of July 1944. It was aimed at maintaining stability in the monetary system in the post World War II period. “In an effort to free international trade and fund postwar reconstruction the member states agreed to fix their exchange rates by tying their currencies to the U.S. dollar.” The fundamental of this system was liberalizing trade policy and promoting free trade. The U.S. dollar was linked to gold as a show of its dependability in the eyes of the rest of the world, $35 equaled 1 ounce of gold. They followed an adjustable fixed exchange rate (1% band). It set up the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which is a part of the World Bank today. Member nations monetary contributions to the setting up of these institutes determined their number of votes as well as their economic prowess
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The theme of this essay outlines two things. One, the key elements of Bretton woods system and second, the characterisation of Bretton woods system by Ruggie as ‘embedded liberalism’, and how far he succeeds in it. The Bretton woods system is widely referred to the international monetary regime, which prevailed from the end of the World War 2 until the early 1970s. After the end of the World War 2, the need of international monetary framework to boost trade and economic; growth and stability, was important. Taking its name from the site of the 1944 conference, attended by all forty-four allied nations; the Bretton Woods system consisted of four key elements. First, to make a system in which each member nation has to fix or peg his currency exchange rate against the gold or U.S. dollar, as the key currency. Secondly, the free exchange of currencies between countries at the established and fixed exchange rate; plus or minus a one-percent margin. Thirdly, to create an institutional forum, so-called International Monetary Fund (IMF), for the international co-operation on money matters: to set up, stabilize, and watch over exchange rates. Fourth, to remove all the existing exchange controls limiting (protectionism) policies by the members, on the use of its currency for international trade. In practice the first scheme, as well as its later development and final demise, were directly dependent on the preferences and policies of its most powerful member, the United States. According to John Gerard Ruggie, 1982, this Bretton woods system of monetary co-operation represented the type of liberalism which characterise “domestic social economic stability along with a liberal trading order.” He referred this system as ‘embed...
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Free trade is a form of economic policy which allows countries to import and export goods among each other with no government interference. In recent years there has been a general consensus in economist’s stance on free trade. They view free trade as an asset. Free trade allows for an abundance of goods with increased varieties and increased availability. The products become cheaper for consumers and no one company monopolizes an industry. The system of free trade has been highly controversial. While free trade benefits consumers it has the potential to hurt manufacturers and businesses thus creating a debate between supporters of free trade and those with antagonistic positions.
Firstly, what should be noted here is that international trade has been providing different benefits for firms as they may expand in different new markets and raise productivity by adopting different approaches. Given that nowadays marketplace is more dynamic and characterized by an interdependent economy, the volume of international trade has grown substantially in recent years, reducing the barriers to international trade. However, after experiencing the economic crisis that took its toll in 2008 many countries adopted a different approach in terms of trade barriers by introducing higher tariffs in order to protect domestic firms from foreign competition (Hill). Secondly, in order to better understand the implications of the political arguments for trade it is essential to highlight the main instruments of trade policy (See appendix 1).
The Web. 21 Apr. 2014. The 'Standard' of the 'Standard'. Hamilton, Jill, ed., pp. 113-117.