The world trade organization. European financial sector.

Thе World Trade Organization came into being in 1995. The WTO is the successor to the General Agreement on Tariffs and Trade (GATT). GATT and the WTO have helped to create a strong and prosperous trading system.

The main purpose of WTO is to help trade flow freely, fairly, and predictably. It does by:

Administering trade agreements

Acting as a forum for trade negotiations

Settling trade disputes

Assisting developing countries in trade policy issues, through technical assistance and training programmes.

Cooperating with other international organizations

The WTO has more than 130 members, accounting for 90% of world trade. Over 30 others are negotiating membership. Decisions are made by the entire membership and by consensus.

The WTO’s agreements have been ratifies in all member’s parliaments. The WTO’s top level decision-making Body is the Ministerial Conference which meets at least once every two years. The General council also meets as the Trade Policy Review Body and the Dispute Settlement Body. At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council. Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development and so on.

Europe has a well-developed financial sector. Many European cities are financial centres with the City of London being the largest. The European financial sector is helped by the introduction of the euro as common currency. This has made it easier for European households and firms to invest in companies and deposit money on banks in other European countries. Exchange rate fluctuations are now non-existent in the Eurozone.

Forex.

The Foreign Exchange Market, where people buy and sell foreign currency, also known as the "Forex", is the largest financial market in the world.

Currencies are traded in pairs, for example Euro/US Dollar or US Dollar/Japanese Yen.

About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign into their domestic currency. The other 95% is trading for profit, or speculation.

For speculators, the best trading opportunities are with the most commonly traded currencies, called "the Majors". Today, more than 85% of all daily transactions involve trading of the Majors, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.

Forex trading begins each day in Sydney, and moves around the globe. It's a 24-hour market, and investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

The Forex market is considered an over the counter (OTC) or interbank market, because transactions are conducted between two counterparts over the telephone or via an electronic network.

Countertrade

Countertrade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in counter trade for accounting purposes.

Countertrade also occurs when countries have not sufficient hard currency, or when other types of market trade are impossible.

In any real economy, bartering occurs all the time, even if it is not the main means to purchase goods and services. The volume of countertrade is growing. A large part of countertrade has involved sales of military equipment.

More than 80 countries nowadays regularly use or require countertrade exchanges. Officials of the General Agreement on Tariffs and Trade (GATT) organization claimed that countertrade accounts for around 5% of the world trade, but some researches even consider it to be closer to 30%.

Date: 2015-12-11; view: 1421