Intergovernmental Organizations: World Trade Organizations and International Monetary Fund

International Organizations
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International Organizations
Introduction
Intergovernmental organizations (IGOs) are among the most important hallmarks of globalization as they facilitate cross-border interactions among different countries to help realize mutual global objectives. One of the aspects of globalization in which the IGOs have had a significant impact is international trade. International trade has been on the rise in recent years, primarily due to globalization and the trade treaties signed among different countries to promote trade by removing barriers to international trade. Multinational companies and NGOs are at the forefront of international trade.
The three main perspectives of international trade include the Liberals, mercantilists, and structuralists, who have different views and opinions regarding how trade should be conducted on the international scene. For liberalists, international trade should be conducted using the ideas of thinkers such as the ideas of Smith and Ricardo. They give various conditions within which the trade can flourish in the international arena. In Ricardo's theory of comparative advantage, he provided liberal ideas about how trade can flourish between countries using their strengths and weakness in terms of their production of goods and services. According to both Ricardo and Smith, global trade should not be based on who can produce the most of any given product since this can be disadvantageous for businesses due to the limitations of scarce resources. This limitation means that no particular country can produce as much as it wants of all goods and services; opportunity cost must therefore be considered. Absolute advantage cannot, therefore, be relied on as a policy for international trade. On the other hand, comparative advantage is the best policy because it allows countries to produce whatever they can produce efficiently and then get the other products from other countries or businesses that also have a comparative advantage in producing such products and services.
International organizations such as the World Trade Organization (WTO) and the International Monetary Fund (IMF) have been at the forefront of policy development in the area of international trade while also offering support to governments to help them build their competitive advantages by enhancing their local industries. This report focuses on the World Trade Organization (WTO) and the International Monetary Fund (IMF) as the two major organizations involved in fostering good governance, development, and effective policies in international trade. The report analyzes and compares the two organizations in terms of their decision-making processes, enforcement, and accountability.
Defining the Criteria
This report will use three main perimeters of decision-making, enforcement, and accountability to effectively compare the two intergovernmental organizations by highlighting their strengths and weaknesses.
Decision Making
The decision-making process in intergovernmental organizations is important because such decisions have far-reaching implications on the member states and their populations. It is also worth noting that the member states in the intergovernmental organizations have different national interests, capabilities, and resources. Therefore, intergovernmental organizations must consider all these factors when making their decisions for the decisions to be perceived as fair and acceptable across the Board. Therefore, understanding how the organizations make their decisions can help determine the strengths and weaknesses of the organization.
Enforcement
The other important criterion for evaluating intergovernmental organizations is enforcement. This examines the extent to which the organizations encourage member states to comply with their decisions and judgments. The decisions of the intergovernmental entities may be futile if the member states do not adopt them and implement them. Enforcement is a significant challenge for IGOs because it is extremely difficult for a country to adopt a particular decision it may not be happy with. As such, enforcement mostly relies on the fact that the member state will be motivated to adopt the decisions in order to protect their reputation in the international community. Nevertheless, the enforcement mechanisms put in place are useful in determining the extent to which the IGOs control their members and drive them together to realize their common international goals.
Accountability
The other important criterion for evaluating IGOs is accountability. Accountability is crucial in helping the organizations gain legitimacy while also assuring the member states that the organizations are on the right path in terms of their ethical obligations. The processes and mechanisms that the IGOs put in place to foster accountability demonstrate the organizations’ commitment values of transparency and good governance as well as understanding their obligations to their stakeholders.
The World Trade Organization
The World Trade Organization (WTO) was founded in 1995 as a key pillar of the international trade system. It was established through the Marrakesh Agreement of 1994 and officially began operations on January 1, 1995. The WTO replaced the General Agreement on Tariffs and Trade (GATT), which had been established in 1948. The WTO regulates and facilitates international trade among countries. With 164 members, the WTO is the international economic organization in the world. As such, the WTO represents more than 96% of international trade. The main role of the WTO is to provide a framework for negotiating trade agreements among different countries with the goal of reducing and eliminating barriers to trade such as tariffs, quotas, and other restrictions. The organization also administers independent dispute resolution to enforce trade agreements among members and resolve disagreements.
Decision Making Process
Decisions in the WTO are made through a voting process as each member has a single vote. Nonetheless, most decisions are arrived at through consensus or a supermajority in a democratic voting process. As such, each member of the WTOS is involved in the decision-making process on matters before the organization. The highest decision-making organ in the WTO is the Ministerial Conference, which comprises all WTO members. The Ministerial Conference meets twice a year to deliberate on various matters to do with multilateral trade. The other important decision-making body in the WTO is the General Council, which makes day-to-day decisions in managing the organization.
The consensus mechanisms of decision-making in the WTO imply that each member has a voice on matters before the organization. Therefore, no member state should be victimized for its decision or prevented from making its decision. All members are guided by principles of democracy and diplomacy such that every member state has equal representation and is involved in the decision-making process. Therefore, each member has an equal platform to defend its self-interests at the WTO meetings. One of the processes that demonstrated the decision-making process of the WTO is the decision on the Trade Facilitation Agreement of 2013. The agreement hoped to boost international trade among member states by more than one trillion annually. While the agreement was arrived at in 2013, the discussions took 15 years to arrive at a consensus among the members.
Consensus is a good method of decision-making because it allows members to express themselves, give their views, and listen to opposing views before making the final decision. However, this method has its downside. For example, a consensus approach can be time-consuming as each member state will have to be convinced and persuade on a given matter. The Trade Facilitation Agreement of 2013 is a good example of this problem as it took 15 years for the organization to finally make the determination.
The WTO has also been accused of promoting the 'Washington Consensus, which gives prominence to the views of powerful, developed countries. As such, the powerful nations can easily influence the outcomes of the decisions in the WTO. This was also demonstrated in the 2017 Buenos Aires Ministerial Conference that culminated in a deadlock. The US was accused of trying to assert its views on developing nations. This demonstrates the power imbalance among the member countries.
Enforcement
Enforcement is an important part of the operation of the organization. Its decisions are meaningless if the members cannot adopt them. Like any other agreement between partners or members of an organization such as the WTO, there has to be an obligation to adopt its decisions. The WTO has The Dispute Settlement System, which is the body tasked with enforcing the WTO’s organizations. Disputes among member states are deliberated upon within The Dispute Settlement System through negotiations based on the bureaucratic politics model. Each member has an equal opportunity to raise any objections or disputes resulting from the decisions of the WTO; for example, an aggrieved nation can raise the matter before the Dispute Settlement System to activate the resolution process. The dispute resolution mechanism is also ital. In the WTO because it helps to ensure that the decisions of the organization are implemented smoothly by all parties without any country feeling victimized.
During the dispute resolution process, a panel of experts sits and listens to both parties in the disagreement before the DSS makes the judgment, the party that may not like the decision has the opportunity to appeal at the Appellate Body, where all members of the WTO can have a say on the matter. Practically, in most instances, many disputes are always resolved before they get to the panel stage. Failure to comply with the...