Answer to Question 1
A country failing to live up to the agreement may have a complaint filed against it. If a WTO panel finds the country in violation of the rules, the panel will likely ask the country to eliminate the trade barrier. If the country refuses, the WTO will allow the complaining country to impose trade barriers on the offending country equal to the damage caused by the trade barrier. The offending country is not allowed to counterretaliate by imposing new trade barriers against the complainant.
Answer to Question 2
The international monetary system establishes the rules by which countries value and exchange their currencies. It also provides a mechanism for correcting imbalances between a country's international payments and its receipts. The international monetary system's accounting system records international transactions and supplies information about the health of national economies. The balance of payments (BOP) accounting system records international transactions and supplies vital information about the health of a national economy and likely changes in its fiscal and monetary policies. BOP statistics can be used to detect signs of trouble that could eventually lead to governmental trade restrictions, higher interest rates, accelerated inflation, reduced aggregate demand, and general changes in the cost of doing business in any given country.
