As a result of countries building barriers to international trade in the 1930s and 1940s, international trade fell, along with the standard of living in many countries. International trade organizations were, thus, created to encourage international trade and development.
Some of the important trade organizations are:
1.1. International Monetary Fund (IMF)
The main functions of the IMF are:
a. Ensuring the stability of the exchange rate system
b. Overseeing the fixed exchange rate agreements between the countries
c. Ensuring the stability of the international payments system
d. Providing short-term capital to aid the balance of payments deficits to different countries, to prevent the spread of the crisis
In response to the global financial crisis, the IMF has expanded its scope to include monitoring of economies, risk, capital market developments, and financial sector vulnerabilities.
1.2. World Bank
Economic development in developing nations requires a strong governmental system, developed legal and judicial systems, individual and property rights, support of contracts, and financial systems robust enough for all sizes of business, and willingness and ability to fight corruption. The main functions of the World Bank are:
a. Fighting poverty in developing countries
b. Encouraging environmentally sound economic growth
The World Bank has two main subsidiaries:
1.2.1. International Bank for Reconstruction and Development
It is a not-for-profit organization, that:
a. Provides low or no-cost interest loans and grants to the countries with no, few, or bad options.
b. It borrows through bonds issued at AAA rates and passes the cash to the countries in need, through policy-based
1.2.2. International Development Association
It is also a not-for-profit organization, that:
a. Provides low or no-cost interest loans and grants to the countries with no, few, or bad options.
1.3. World Trade Organization (WTO)
The purpose of the World Trade Organization is to provide the legal and institutional foundation for the multinational trading system.
The main functions of WTO are:
a. Regulating cross-border trade relationship globally, which includes reviewing and monitoring the trade policies globally
b. Implementing, administering, and operating individual agreements between countries
c. Settling disputes