UNCTAD`s work on trade negotiations and trade diplomacy helps candidate countries: from time to time, you will hear about the so-called “fast track” trade laws, in which Congress would give the president the power to negotiate trade agreements. This law has not been passed and remains controversial. We think the design reflects the goal. That is why we are discussing the objective of a trade agreement as an instrument to create the stage for our discussion on design.b that is, we are first trying to catalogue the “problems” that a trade agreement can “solve” in the various formal models of trade agreements, where problems create inefficiencies, the solutions of which can then lead to an increase in the common surplus, which allows for a mutually beneficial trade agreement. With the problems identified and the significant inefficiencies, we will be better able to assess whether the trade agreement is well designed according to these formal models to enable member governments to make reciprocal profits. The world has achieved almost more free trade in the next round, known as the Doha Round Trade Agreement. If successful, Doha would have reduced tariffs for all WTO members overall. As a general rule, the benefits and obligations of trade agreements apply only to signatories. A natural question at this stage is whether there is really a coherent logic for the development of trade agreements. Are the characteristics of these agreements considered sufficiently “useful” and deliberate to support the view that they can be analyzed wisely from an economic point of view? We argue in this chapter that the answer is yes.c In order to develop this argument, we present formal models regarding the essential purpose and design of the GATT/WTO, and we will also write down the impact of these models on legal and historical writings relating to the purpose and design of trade agreements.
The IMF`s mandate is to monitor the international monetary and financial system and monitor the economic and financial policies of its 188 member countries. This activity is called “surveillance” and facilitates international cooperation. Since the decline of the Bretton Woods fixed exchange rate system in the early 1970s, surveillance has grown significantly through procedural changes, not new commitments. The Responsibilities of the Fund have changed from those of the guardian to those of the members` policy. The Fund generally analyses the adequacy of each member country`s economic and financial policies for orderly economic growth and assesses the consequences of this policy for other countries and for the global economy.