International Business Strategies

The main elements of the international monetary system are the International Monetary Fund (IMF) and the World Bank. The IMF attempts to maintain structure within the international monetary system while the World Bank promotes economic development throughout the globe. Both of these institutions are critical to the effective functioning of the international monetary system, which is predicated on the orderly fluctuation of currencies. The current era of currency trading began essentially at the end of World War II with a conference held in Bretton Woods, New Hampshire in 1944. The goal of the meeting was to determine how the international monetary system should operate following the war, and representatives of the allies were present, although the United States and the United Kingdom dominated the discussions (Klein 6A).

Those present at Bretton Woods agreed that stable exchange rates were desirable, but that there should be flexibility in order to permit adjustments since floating or fluctuating exchange rates had previously been unsatisfactory. The conferees also agreed that the government controls of trade, exchange, production and other factors which had developed during the Depression were discriminatory and inefficient, and harmful to the expansion of world trade and investment.

At the end of the Bretton Woods meeting, the International Monetary Fund (IMF) was established; its articles went into effect at the end of 1945. This agreement was the basis of interna

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to harmful effects on participants' trade relations with third countries not included in the integrated group. However, Article 24 of the General Agreement on Tariffs and Trade (GATT) sets forth specific criteria which must be met in order for integration agreements to be compatible with GATT (Pomfret 1435). In this way, countries which are signatories to GATT must abide by Article 24 which prevents (or tries to prevent) integration from harming third countries. Examples of Integration There are many examples of regional economic integration, but four examples can serve to illustrate the ways in which economic integration has been practiced. The European Community (EC) has succeeded in reducing tariffs and customs regulations among most of its members, and is seeking to establish a single currency for the region, although this latter idea is running into difficulty. The North American Free Trade Agreement (NAFTA), only recently ratified, eliminated many trade restrictions among Canada, the United States and Mexico, but has led to criticism from Latin America that the northern agreement will harm South American economies ("Rich North," 15). The Association of Southeast Asian Nations (ASEAN) is an example of small regional e

Category: Business - I