This article is written by Sangeet Kumar Khamari from KIIT School Of Law, Odisha. This article talks about the history and functions of different International Economic Organisations.

Introduction

International organisation

An International organisation is also called an intergovernmental organisation. It is an organisation which is established by a treaty or any other instrument of government by International law and possessing its own international legal policy, such as the United Nations, the WHO, NATO etc.

Meaning of economic organisation

Economic organisation is an act of coordinating the factors of production like land, labour and capital. These organisations perform a very important role in the modern era where production happens on a large scale. The person who leads these types of organisations is called an entrepreneur. The entrepreneur can also be called the captain of the industry. The economic development of these organisations is made possible because of their entrepreneurs. The entrepreneur is also known as the head or the organiser of the organisation.

Types of economic organisation

Sole Proprietorship

The sole proprietorship is one of the oldest forms of business organisations. It is also called a one-man business but is still common in market trade. As the scale of production has increased after the industrial revolution, a narrow scale business still continues to be an important element of the present economic organisation. The risk of production is taken by a single person. These are generally carried on a small scale.

Partnership

It is a type of business which is carried out by two or more people. Sometimes a small business may extend that it goes beyond the control of a single man. For further development more capital may be necessary, since one man cannot provide all of it so the man would take a partner to reduce his burden. Sometimes the one-man business grows into a partnership, but there may also be partnership right from the beginning in case of some firm. A partnership is based on confidence and mutual trust.

The joint-stock company

The joint-stock company is an important form of business organisation. It is an association of shareholders who subscribe to its capitals and which is divided into many numbers of shares. The shares are generally small in value. Thus a great feature of the Joint-stock company is that people would provide the capital in varying amounts and receive shares in the profits in proportion to the amount of money they have invested.

The capital of a joint-stock company is divided into a number of small shares. There are 3 types of share:

1. Preference shares
2. Ordinary shares
3. Deferred shares

Preference shareholders mostly get a fixed rate of dividend and they are paid in full before the ordinary shareholders. The preference shareholders must be paid fully from the capital of the company before others are paid when the company is in loss and may be ruined. Ordinary shareholders get their dividends only after all other claims of the company are made. Deferred shares are usually headed by the promoters. After paying to the shareholders whatever is left of the total profits, they get that; this is the way how promoters get their share of the profits.

Co-operative organisation

It has become an important form of the business organization since the last century. Cooperation has taken many forms. There are consumer’s cooperative, producer’s cooperative, marketing societies and many more. In a consumer’s cooperative society, members cooperate as consumers. They buy goods at wholesale price and sell them at the usual retail prices. The profits of the society are distributed in the form of a dividend on profits. In a producer’s cooperative society some people who are generally workers combine to produce stock and share the profits among themselves. This is the most successful among other forms of cooperation in many countries.

History of WTO (World Trade Organisation)

The World Trade Organisation came into power on 1 January 1995 and has its headquarters in Geneva. In this organisation, there are more than 15 nations who work as a member. The Ministerial Conference which is held every two years makes the extreme decision of the WTO. In December 2011, the Ministerial Conference was expecting to accept Russia as a new member in WTO. The WTO was introduced by the General Agreement on Tariffs and Trade (GATT), which was concluded in 1947. Back then the first idea was to start out a world trade organisation, but that didn’t materialise. In that GATT circumstances, there were eight rounds of trade free talk. Initially, their topics were the reduction of tariffs and the phasing out of quotas, but later other trade barriers were tackled too.

History of IMF and World Bank

The actual Bretton Woods Conference took place in the year 1994, in the month of July after that IMF and World Bank were set up on 27 December 1945. After World War II, about 730 delegates from all the 44 allied nations gathered to determine how to regulate the International Monetary Fund in Mount Washington Hotel which was in Bretton Woods, New Hampshire.

The parties were sure that the approaches embraced to fight the Great Depression during the ’30s and mid ’40s-high currency, cash depreciations, prejudicial exchanging alliances brought about a risky global condition.

History of TRIPS

The TRIPS Agreement is Annex 1C of the Marrakesh Agreement establishing the WTO came into power on 1 January 1995. The TRIPS is a fundamental piece of the WTO Agreement and is binding on each member of the WTO, from the date the WTO agreement becomes effective for that country. TRIPS agreement came about in recognition of the fact that widely differing standards of security and implementation of intellectual property rights, and the non-appearance of a multilateral structure of guideline, rules and discipline to manage the worldwide exchange counterfeit products had become a genuine weight in global exchange relations. This understanding tends to the appropriateness of fundamental GATT standard and people of existing property convention and agreement; the supply of effective enforcement measure, multilateral dispute settlement, and transitional arrangement.

History of GATT

In October 1947, 23 nations at the Palais des Nations in Geneva signed the General Agreement on Tariffs and Trade (GATT). This contract contains tariff permits that are agreed to the basic mutual trade discussion and a collection of rules appropriate to restrict these permits from being exhausted by restrictive trade measures. The first meeting was held in Geneva, Switzerland and included 23 nations; the main objective during this opening conference was on tariffs. The members built up tax permits contacting over the US $ 10 billion of exchange far and wide.

The second series of the meeting started in April 1949 and was held in Annecy, France. Again taxes were the essential point. Thirteen nations were present at the subsequent meeting and they completed an extra 5000 expense licenses decreasing taxes. In September 1950, the third series of GATT meeting happened in Torquay, England. This time, 38 nations were included and around 9000 tariff permits were passed.

Japan got associated with the GATT in 1956 at the fourth meeting alongside 25 different nations. The gathering was in Geneva, Switzerland, and again the committee diminished overall taxes, this time by the US $ 2.5 billion.

Functions and Structure of WTO

Functions

The WTO’s primary objective is to help trade flow smoothly and freely, it does this by:

• Administrating trade agreement.
• Acting as a forum for trade discussions.
• Setting exchange debates.
• Investigating national exchange arrangements.
• Building the exchange limit of creating economies. 
• Helping out other International associations or organizations.

Structure

The WTO has 164 members, depicting 98% of world exchange. A sum of 22 nations is exchanging participation. The whole enrollment settles on the choice. This is commonly agreed. A majority vote is additionally conceivable however it has never been utilized in the WTO and was remarkable under the WTO’s forerunner, the GATT. The WTO’s understanding has been endorsed in all members parliaments.

Functions of IMF and World Bank

The IMF’s rule

International Monetary cooperation is being advanced by the IMF and it likewise gives strategic guidance and limit improvement backing to assist the nations with building and keeping up solid economies. It additionally makes advances and causes nations to structure approach projects to tackle equalization of instalments issues when adequate financing on reasonable terms can’t be utilised to meet net universal instalments. The loans of IMF are short and medium-term and basically established by the pool of portion commitments that its individuals give. The staff of IMF are principally business analysts with full involvement with macro-economic and money related approaches.

The World Bank’s rule

The World Bank advances future economic development and destitution decrease by giving specialized and backing to help nations change certain divisions or apply uncommon ventures like-building schools and health centres, giving water and power, battling malady, and ensuring the earth.

World Bank assistance is generally long term and is funded both by member country contributions and through bond issuance. World Bank staff are often specialists on particular issues, sectors, or techniques.

Functions of TRIPS

Article 7 and Article 8 of the TRIPS’ Agreement provides specific recognition for policy goals that are fundamental to International intellectual property protection. They admit the board’s public interest agenda behind the TRIPS’ Agreement. While Article 7 and Article 8 have adopted the power at a policy level through the Doha Ministerial Declaration and the Declaration on TRIPS and public health, their use within the World Intellectual Property Organisation (WIPO) development agenda and the Anti- Counterfeiting Trade Agreement (ACTA) has resulted in both.

An improved status within the expanded policy arena and an improved legal significance were clear in discussions on enforcement. By exceeding treaty and forum boundaries, these provisions not only influence explanatory practice, but they also encourage a convergence of policy objectives that promotes greater bonds within the International system and link intellectual system and link intellectual property with other areas of socio-economic importance.

Functions of GATT

GATT being the General Agreement on Trade and Tariffs has many functions and objectives to achieve. The functions have their own significance and measures as well.

• The primary function of GATT is to provide equal opportunities to all the countries in terms of trade in the International market. Thus the concept of the most favoured nation was also included in it so that trading could be carried on the rule of non-separation and correspondence.
• Secondly, its function is to increase the effective demand for real income growth goods.
• Thirdly, to minimise the tariffs and other restrictions on trade. Various tariff measures had been taken by GATT. It had encouraged negotiations for reduction of the tariff. Therefore the partaking nations consented to cut tax on thousands of mechanical products. Thus it provided reciprocal and mutually advantageous outcome. Various non-tariff measures were also included in order to promote international trade.
• Fourthly, its function is to provide a peaceful solution to disputes relating to the International trade. Thus the contracting parties resolved disputes by holding talks on bilateral basis and failure in which the dispute would be referred to the panel of an independent expert, thus it also ensured a better living standard and lastly to strengthen and clarify rules for agricultural trade.

Conclusion

International organizations have already been stated as intergovernmental organisations that help us in encouraging the development and improvement of the economy. One man business and a business which is being carried out by two or more people that is a partnership both start with the same objective of economic prosperity and development. Joint stock companies and cooperative organisations also play an important role in it.

WHO, IMF and World Bank being the basic institutions under International Economic Organisations also contribute largely to maintain a balance between rich and poor. TRIPS and GATT provide specific recognition for policy goals that are fundamental for the development of Intellectual Property Rights. The primary function of GATT is to provide equal opportunities in terms of trade in the International market.

However, with everything taken into account, the following establishment namely, IMF, WTO, World Bank, TRIPS and GATT are trying their level best to meet the required demand of the society. The main objective is to bring the development and developing nations at par and to provide equal opportunities to all of them.

Reference

• https://hubpages.com/education/Meaning-and-Types-of-Economic-Organization
• https://www.imf.org/en/About/Factsheets/Sheets/2016/07/27/15/31/IMF-World-Bank
• https://www.researchgate.net/publication/255728228_Articles_7_and_8_of_the_TRIPS_  Agreement_A_Force_for_Convergence_within_the_International_IP_System
• https://www.researchgate.net/publication/228165780_The_Objectives_and_Principles_   of_the_TRIPs_Agreement
• https://www.legalbites.in/world-trade-organisation-structure-functions/
• https://treaties.un.org/doc/Publication/UNTS/Volume%201867/volume-1867-I-31874-English.pdf

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join: