UN: Political & Economic Influence

• The UN was created as a political entity dedicated to promoting peace, international security, and cooperation.
• Economic and social cooperation have become vital for successful peace-building.
• The UN affects international business through political influence, treaties, and the activities of specialized agencies like the World Bank (WB), International Labour Organization (ILO), and International Monetary Fund (IMF).

General Assembly

• All 193 UN member countries participate in the General Assembly.
• Each country has one vote, regardless of size.
• The General Assembly serves as a global forum for discussing world issues.
• It holds yearly sessions from September to December in New York, with emergency sessions possible.
• The General Assembly can issue resolutions, which are advisory but not legally binding.
• The UN Security Council is the only body that can enforce rules.
• The General Assembly lacks its own army or police force to enforce its resolutions.
• Resolutions from the General Assembly exert moral pressure but are not legally enforceable.

Economic and Social Council (ECOSOC)

• ECOSOC is the UN’s central body for addressing global economic, social, and environmental issues.
• It coordinates policies, funds projects, and advises countries on poverty reduction, human rights, and sustainable development.
• ECOSOC consists of 54 countries elected by the UN General Assembly to serve three-year terms.
• Seats are allocated to ensure regional balance among Africa, Asia, and Latin America.
• ECOSOC coordinates policies with NGOs, businesses, and UN agencies like the WHO and UNICEF.
• Its focus areas include poverty, health, education, climate, gender equality, and human rights.
• ECOSOC holds an annual High-Level Political Forum (HLPF) to assess progress on UN goals like the Sustainable Development Goals (SDGs).
• It lacks enforcement power and can only advise countries on actions.
• Progress is often slow due to disagreements between rich and poor nations on solutions like climate funding.

Security Council (UNSC)

• The Security Council is the UN's most powerful body, responsible for global peace and security.
• It can authorize military actions, impose sanctions, and enforce international law.
• The Security Council has 15 members, including 5 permanent members (P5) and 10 elected members serving two-year terms.
• The permanent members are the USA, Russia, China, France, and the UK, each holding veto power.
• Resolutions require 9/15 votes to pass but can be blocked by a P5 veto.
• The Security Council can send peacekeeping troops, order economic sanctions, and approve military force.
• The veto power is often abused, with P5 members blocking actions.
• There are accusations of selective justice, with focus on weaker states while ignoring allies of the P5.

UN Organs

• General Assembly (GA): with 193 member states, makes non-binding decisions and appoints members to other bodies.
• Economic and Social Council (ECOSOC): with 53 members, coordinates social and economic issues through non-binding recommendations.
• Security Council: with 15 members (5 permanent), enforces peace through binding decisions, subject to veto by permanent members.
• Secretariat: led by the Secretary General, provides support to UN organs and missions.
• International Criminal Court (ICC): with 15 judges, settles disputes and provides advisory opinions, but faces enforcement challenges due to defections.

UN Specialized Agencies and Partnerships

• The UN uses projects and subsidiary bodies to support mandates under Articles 22, 29, and 68 of the UN Charter.
• Specialized agencies are autonomous but partner with the UN, mainly through ECOSOC, as per Article 57.
• Examples of specialized agencies include the Food and Agriculture Organization (FAO), International Atomic Energy Agency, International Criminal Court, International Fund for Agricultural Development, and International Labour Organization.
• Partnerships are formed through separate agreements
• The WTO is created under separate agreements.

International Monetary Fund (IMF)

• The IMF is a global financial institution created in 1944.
• Its main goal is to stabilize the world economy.
• It acts as a "financial doctor" for countries facing economic difficulties.
• The IMF has 190 member countries.
• Its headquarters are in Washington, D.C., USA.
• The IMF aims to prevent financial crises, promote international trade, and reduce poverty worldwide.
• It lends money to countries in need but imposes strict rules such as austerity measures and reforms.
• IMF loans often lead to job cuts and higher food prices, which negatively affect poor citizens.
• The US and EU have dominant voting power, which enables control by richer countries.

Special Drawing Rights (SDRs)

• SDRs are a "super-currency" created by the IMF to enhance global financial stability.
• SDRs serve as a safety net for countries during crises and act like a global emergency fund.
• SDR value is based on a basket of five currencies: USD (41.7%), EUR (29.5%), CNY (10.9%), JPY (7.4%), and GBP (7.4%).
• The IMF issues SDRs to member countries based on their IMF quotas.
• SDRs can be exchanged for hard currency to pay debts, stabilize exchange rates, or fund imports.
• The IMF creates SDRs during global crises.
• SDRs are distributed based on IMF quotas.
• Countries can trade SDRs for currencies like USD.
• Interest is earned on SDR holdings.

World Bank (WB)

• The World Bank aims to reduce poverty globally as its primary goal (SDG #1).
• It provides loans and policy advice to developing countries.
• The World Bank promotes foreign direct investment in developing countries.

IMF vs World Bank

Barriers to Trade

• Tariffs: Taxes imposed on imported or exported goods by a country or union.
• Quotas: Limits on the quantity of specific goods imported into a country or union.
• Measures Equivalent to Quotas: Trade restrictions that act like quotas without setting fixed limits.
• Customs: Administrative costs associated with border crossings.
• Regulations: Laws, technical standards, and social norms affecting trade.
• Currency: Costs from having different currencies and needing exchange.
• State Aid: Subsidies and other forms of government support that can distort trade.

Trade Liberalization and Law

• Economic cooperation: Reduces trade barriers, promotes specialization, and enhances peace and security through interdependence.
• Sovereignty and collective action present challenges to economic cooperation.

WTO

• The WTO is a partnership that minimizes barriers to trade through negotiation, standard setting, and dispute resolution.
• Decision-making occurs by consensus, with equal voting power.
• In limited cases, decisions are based on voting (supermajority applies).
• Most Favoured Nation: Goods and services from the MFN country receive treatment no less advantageous than that given to any other country.
• National Treatment: Goods and services from the national treatment country should be treated the same as domestic ones.
• Eliminating customs and diverse currencies.
• Cut tariffs and quotas.
• Rules of Origin are in conjunction with regulation and policy: addressing safety, IP, employment, and environmental concerns.

Barriers to Trade vs. Economic Cooperation

Modes of Economic Cooperation