Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

International Business Environment

504 views

Published on

This slides are for the MBA students or teachers teaching or learning International Business as their subject.

Published in: Education
  • Login to see the comments

International Business Environment

  1. 1. Dr. Noor Firdoos Jahan Professor, R v institute of Management Bangalore 1
  2. 2. 3  Difficulties Operating in Borderless World  Challenges • Economic • Legal-political • Socio-cultural  Multinational Corporations  Foreign Markets - Entrance
  3. 3. 4 Business is becoming a unified, global field Companies that think globally have a competitive edge Domestic markets are saturated for many companies Consumers can no longer tell from which country they are buying
  4. 4. 5 Domestic stage: market potential is limited to the home country production and marketing facilities located at home International stage: exports increase company usually adopts a multi-domestic approach Multinational stage: marketing and production facilities located in many countries more than 1/3 of its sales outside the home country Global (or stateless) stage: making sales and acquiring resources in whatever country offers the best opportunities and lowest cost ownership, control, and top management tend to be dispersed
  5. 5. 6 1. Domestic 2. International 3. Multinational 4. Global Strategic Orientation Stage of Development Cultural Sensitivity Manager Assumptions Domestically Oriented Export- Oriented multi-domestic Multinational Global GlobalInitial foreign involvement Competitive positioning Explosion of international operations Of little importance “One best way” Very important “Many good ways” Somewhat important “The least-cost way” Critically important “Many good ways” SOURCE: Based on Nancy J. Adler, International Dimensions of Organizational Behavior, 4th ed. (Cincinnati, Ohio: South- Western, 2002), 8-9.
  6. 6. 7  Number is increasing  Awareness of national borders decreasing  Rising managers expected to know a 2nd or 3rd language  Corporate Example – Nestle (Swiss) • CEO Peter Brabeck–Letmathe (Austrian) • Half of general managers (non-Swiss) • Strong faith in regional managers who are native to the region
  7. 7. 8  International management is management of business operations conducted in more than one country  Fundamental tasks do not change  Basic management functions • are the same - domestic or international • Greater difficulties and risks when performing on an international scale
  8. 8. 9 Organization Economic •Economic development •Infrastructure •Resource and product markets •Per capita Income •Exchange rates •Economic conditions Legal-Political •Political risk •Government takeovers •Tariffs, quotas, taxes •Terrorism, political instability •Laws, regulationsSociocultural •Socio values, beliefs •Language •Religion (objects, taboos, holidays) •Kinship patterns •Formal education, literary •Time orientation
  9. 9. 10  Economic development  Infrastructure  Resource and product markets  Exchange rates  Inflation  Interest rates  Economic growth
  10. 10. 11 ● Countries categorized as “developing” or “developed” ● Criterion used to classify is per capita income ● Developing countries have low per capita incomes ● LDCs located in Asia, Africa, and South America ● Developed are North America, Europe, & Japan ● Driving global growth in Asia, Eastern Europe, & Latin America
  11. 11. 12 A country’s physical facilities that support economic activities Airports, highways, and railroads Energy-producing facilities Communication facilities
  12. 12. 13 When operating in another country... • Managers must evaluate market demand • To develop plants, resource markets must be available – raw materials and labor Corporate Example – McDonald
  13. 13. 14  Rate at which one country’s currency is exchanged for another country’s  Has become a major concern for companies doing business internationally  Changes in the exchange rate can have major implications for profitability of international operations
  14. 14. 15 Political Risk– due to events or actions by host governments ● Loss of assets ● Loss of earning power ● Loss of managerial control ● Government takeovers ● Acts of violence
  15. 15. 16 Events such as riots, revolutions, or government upheavals that affect the operations of an international company
  16. 16. 17 Government laws and regulations differ from country to country Make doing business a true challenge for international firms Internet has increased impact of foreign laws on U.S. companies – expands potential for doing business on global basis
  17. 17. 18  Culture – shared knowledge, beliefs, values, common modes of behavior, and ways of thinking among members of a society • Intangible • Pervasive • Difficult for outsider to learn  Managers need to understand difference in social values to comprehend local cultures and deal with them effectively
  18. 18. 19  Research = national value systems influence organizational and employee working relationships • Power distance (high = accept inequality) • Uncertainty avoidance (uncomfortable with uncertainty) • Individualism and collectivism (Individualism take care of themselves) • Masculinity/femininity (preference for achievement/assertiveness; femininity for relationship) • Long-term/short-term orientation = 5th dimension Ethical Dilemma: The Problem in Asia
  19. 19. 20
  20. 20. 21 • Assertiveness • Future orientation • Uncertainty avoidance • Gender differentiation • Power distance • Societal collectivism • Individual collectivism • Performance orientation • Humane orientation Global Leadership and Organizational Behavior Effectiveness project More comprehensive view of cultural similarities and differences
  21. 21. 22  Other Cultural Characteristics • Language • Religion • Attitudes • Social Organization • Education  Linguistic pluralism – several languages exist  Ethnocentrism – regard own culture superior
  22. 22. 23 Exporting High HighLow Low Ownershipof ForeignOperations Cost to Enter Foreign Operations Licensing Franchising Joint Venture Acquisition Greenfield Venture
  23. 23. 24 Receives >25% total sales revenues from operations outside parent company’s home country • Managed as integrated worldwide business system • Controlled by single management authority • Top managers exercise global perspective
  24. 24. 25 Managers must be sensitive to cultural subtleties  Personal challenges – culture shock  Managing Cross-culturally • Leading • Decision making • Motivating • Controlling Managers must be culturally flexible and easily adapt to new situations
  25. 25. Globalization implies integration of the economy of the country with the rest of the world economy and opening up of the economy for foreign direct investment by liberalizing the rules and regulations and by creating favorable socio-economic and political climate for global business. 26
  26. 26. According to IMF: -”The growing economic interdependence of countries worldwide through increasing volume and variety of cross border transaction in goods and services and of international capital cash flows, and through the more rapid and widespread diffusion of technology.” 27
  27. 27.  Opening and planning to expand business throughout the world.  Erasing the difference between domestic market and foreign market.  Buying and selling goods and services from/to any countries in the world.  Locating the production and other physical facilities on a consideration of the global business dynamics ,irrespective of national consideration. 29
  28. 28.  Basing product development and production planning on the global market consideration.  Global sourcing of factor of production i.e. raw- material, components , machinery, technology, finance etc. are obtained from the best source anywhere in the world.  Global orientation of organizational structure .and management culture 30
  29. 29. Globalization have several benefits ,these are: -  Free flow of capital and increase in the total capital employed.  Free flow of technology.  Increase in industrialization.  Spread of production facilities throughout the globe.  Balanced development of world economies.  Increase in production and consumption.  Commodities at lower price with high quality.  Increase in jobs and income.  Higher Standard of living.  Balanced human development 31
  30. 30. Negative effects of Globalization  Loss of domestic industries  Exploits Human resource  Decline in income  Unemployment  Transfer of natural resources  Lead to commercial and political colonism  Widening gap between rich and poor  Dominance of foreign institutions 32
  31. 31.  Growing global markets in services people can now offer and trade services globally -- from medical advice to software writing to data processing -- that could never really be traded before. W-2, W-4, 1099 bonuses & stock statements Indian accountant US tax payers
  32. 32.  Market economic policies spreading around the world, with greater privatization and liberalization than in earlier decades. ex: BRIC  Widespread adoption of democracy as the choice of political regime.
  33. 33.  Multilateral agreements in trade, taking on such new agendas as environmental and social conditions.  New multilateral agreements – for services, intellectual property , communications – more binding on national governments than any previous agreements.
  34. 34. Main sectors: Main Destinations: China, UAE, UK North America is emerging as a destination. India Inc. Investing Overseas • Auto Components • IT • Beverages • Metals • Cosmetics • Mobile Communications • Energy • Pharmaceuticals • Financial Services • Software • Industrial Goods
  35. 35. Additional economic indicators: • India has a consumer base of 1.14 billion people • India is the 4th largest economy in the world when measured by PPP • India’s has a growing middle class of over 300 million people - 30% of India’s population – and larger than the population of the US • India is the 3rd largest global telecom market. The mobile subscriber base has grown from 0.3 Million in 1996 to over 250 million currently. • India is likely to add over 200 shopping malls by 2010 and 715 malls by 2015 • The number of billionaires in the country were 3 in 1999; 23 in 2006; and are 48 currently.
  36. 36. Buyer Acquisition Price Reliance Industries Flag Telecom, Bermuda US$ 212m Tata Motors Daewoo, Korea US$ 118m Infosys Technologies Expert Information Services, Australia US$ 3.1m Bharat Forge Carl Dan Peddinghaus, Germany N/A Ranbaxy RPG (Aventis) Laboratories, France N/A Wockhardt CP Pharmaceuticals, UK US$ 18m Cadila Health Alpharma SAS, France US$ 5.7m Hindalco Straits Ply, Australia US$ 56.4m Wipro NerveWire Inc, USA US$ 18.5m Aditya Birla Dashiqiao Chem, China US$ 8.5m United Phosphorus Oryzalin Herbicide, USA US$ 21.3m "Toyota Motor has chosen to source from India due to its competitive cost of manufacture, availability of abundant engineering talent, and strong indigenous machine tool."
  37. 37. "India has a fantastic pool of software professionals. The world needs to benefit from this.“ Bill Gates, Microsoft Chairman This market (India) is critical to our plans for building a Ford Motor Co. for the 21st century Bill Ford, Chairman and CEO India on its way to becoming IT, manufacturing kingdom of the world The dynamism shown by India in the last 15 years is phenomenal Mr Yasukuni Enoki, Japanese Ambassador to India Paul Wolfowitz, President, World Bank What are people talking about India?
  38. 38. 40 World Trade Organization Created by : Uruguay Round negotiations (1986-94) Membership :153 countries (on 23 July 2008) Budget : 185 million Swiss francs for 2008 2007 Secretariat Staff : 625 Head : Director-General, Pascal Lamy Established: 1 January 1995 Location :- Geneva, Switzerland
  39. 39. 41 INTERNATIONAL TRADIND ENVIRONMENT  WTO (WORLD TRADING ORGANISATION) The creation of WTO on January 1, 1995 marked the biggest reform of international trade. GATT was founded in 1947 with 23 countries including India. The WTO which is based in Geneva has a larger membership than GATT with the present number being 150 including India – a founder member. WTO is a replacement of GATT.
  40. 40.  The formation of the World Trade Organisation (WTO) in 1995 was a watershed development in the sphere of international trade. It was a major advancement in the multilateral trade regime, with the previous regime embodied in the form of a treaty known as the General Agreement on Tariffs and Trade (GATT).  GATT was signed in 1948 and had close to 30 member countries. Its primary objective was to see that impediments to international trade -- mainly in the form of tariffs -- were reduced or removed in order to facilitate the movement of goods across borders. In the course of six to seven rounds of negotiation, it succeeded in getting countries to lower their tariff rates, thus enabling greater movement of goods.  However, over time, the nature and character of global trade started to get very complex. Countries began to realise that GATT did not have all the answers to the questions posed by the increasingly complicated nature of global trade. 42
  41. 41. 43 •This led member countries to launch a new round of negotiations, from 1986-1994, known as the Uruguay Round (UR). •This series of negotiations was much more elaborate and detailed. It not only covered trade in goods but also brought trade in services and intellectual property rights within the ambit of the multilateral trading regime. • Even within trade in goods, a far more thorough set of rules was discussed and negotiated. Further, trade in agricultural goods was brought into the fold of the multilateral trading regime in a major way. In GATT, trade in agricultural goods was, at best, minimal and at the fringes of the discussions.
  42. 42. 44 OBJECTIVES OF WTO The basic objectives of WTO are :  To encourage open, fair and undistorted competition.  To ensure international trade without discrimination.  To create an environment of comparative advantage to expand production and trade. This would ensure optimum utilization of world’s resources.  To resolve disputes between trading countries.  To ensure that the developing countries secure a better share of growth n international trade.  To protect and preserve the environment of the world.  To raise employment opportunities in its member nations.  To raise the standard of living of the people of its member nations.
  43. 43. FUNCTIONS OF WTO  It administers and implements the multinational trade agreements.  It acts as a forum for multilateral trade negotiations.  It resolves trade differences and disputes among member nation through proper forums and conciliation mechanisms.  It monitors the execution of tariffs and non tariff measures as agreed by member nations.  It periodically reviews trade policies of member countries to check whether they conform to WTO guidelines.  It co-operates with other institutions involved in global economic policy making.  It provides advise to member nations when required.
  44. 44.  The WTO has about 150 members, accounting for about 95% of world trade. Around 30 others are negotiating membership.  Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments.  The WTO’s top level decision-making body is the Ministerial Conference which meets at least once every two years. 46
  45. 45. 47 •Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in the Geneva headquarters. 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, membership applications and regional trade agreements.
  46. 46. 48
  47. 47. The WTO is based on nine principles: 1. Transparency 2. MFN treatment 3. National treatment 4. Free trade principle 5. Dismantling trade barriers 6. Rule-based trading system 7. Treatment for LDCs 8. Competition principle 9. Environment protection 49
  48. 48. 50 Rule Based Trading System Treatment For LDCs Competition On BoP Environment Protection Transparency Dismantling Trade Barriers Principles Of WTO MFN Treatment National Treatment Free Trade Principle
  49. 49. 1)Agriculture 2) Sanitary & Phyto Sanitary measures 3) Technical barriers to trade 4) Agreement on Textiles and clothing 5) Anti - Dumping, safeguard and countervailing duties 6) Customer valuation 7) Rules of origin 8) Services 9) Trade - Related Intellectual Property Status (TRIPs) 10) Trade - Related investment Measures (TRIMs) 11) Dispute settlement 12) Labour 13) Transfer of Technology 14) Information and Technology Agreement 51
  50. 50. International peace:- by helping the trade to flow smoothly and dealing with disputes over trade issues Risk reduction:- Confidence to nations to do more and more trade, thereby stimulating economic growth
  51. 51.  Founder member  Ensured more stability and predictability  MFN status and national treatment for its exports  India is expected to snatch most of the business deals that are presently catering the developed nations which includes major service based industries like telecom, financial services, infrastructure services such as transport and power [Source: WTO Secretariat Report]
  52. 52. The WTO has both favourable and non-favourable impact on the Indian economy. FAVOURABLE IMPACT: 1)Increase in export earnings 2) Agricultural exports 3) Textiles and Clothing 4) Foreign Direct Investment 5) Multi-lateral rules and discipline 6)GDP share 7)IT & ITes 8)Telecom 9)Mobile tariffs in India 10)TRIPS in India 11)Sanitary and Phytosanitary Measures and Technical barriers to trade 54
  53. 53.  Increase in export earnings can be viewed from growth in merchandise exports and growth in service exports: • Growth in merchandise exports: The establishment of the WTO has increased the exports of developing countries because of reduction in tariff and non-tariff trade barriers. India’s merchandise exports have increased from 32 billion us $ (1995) to 185 billion u $ (2008-09). • Growth in service exports: The WTO introduced the GATS (general Agreement on Trade in Services) that proved beneficial for countries like India. India’s service exports increased from 5 billion us $ (1995)to 102 billion us $ (2008- 09) (software services accounted) for 45% of India’s service exports) 55
  54. 54. Reduction of trade barriers and domestic subsidies raise the price of agricultural products in international market, India hopes to benefit from this in the form of higher export earnings from agriculture 56
  55. 55. The phasing out of the MFA will largely benefit the textiles sector. It will help the developing countries like India to increase the export of textiles and 57
  56. 56. As per the TRIMs agreement, restrictions on foreign investment have been withdrawn by the member nations of the WTO. • This has benefited developing countries by way of foreign direct investment, euro equities and portfolio investment. In 2008- 09, the net foreign direct investment in India was 35 billion us $. 58
  57. 57. It is expected that fair trade conditions will be created, due to rules and discipline related to practices like anti-dumping, subsidies and countervailing measure, safeguards and dispute settlements. Such conditions will benefit India in its attempt to globalise its economy. 59
  58. 58. 59.2 54.8 46.3 39.2 32.2 24 13.3 16.6 21.6 23.7 27.2 26.7 27.5 28.6 31.1 36.6 40.6 49.3 1950-51 1960-61 1970-71 1980-81 1990-91 2001-02 Primary Secondary Tertiary
  59. 59.  Key contributor to the Services Sector accounting for 5.8% of India’s overall GDP [Source: PWC report for CII]  The increase in availability and reduction in tariffs has prompted many developed nations to go for business with India especially in IT and ITeS industry  Software exports from the Rajiv Gandhi Chandigarh Technology Park rose from Rs.504 crore in 2007-08 to Rs.750 crore last year.
  60. 60.  The WTO Agreement on Basic Telecommunications provided for liberalization of trade  India’s approach was primarily defensive  MFN exemptions: for different accounting rates into Pakistan, Bangladesh, Nepal and Bhutan  1998 – 25% FDI  2001 – 49% FDI  2003 – 74% FDI but mgmt. control with Indian operators
  61. 61. 0.23 0.22 0.19 0.17 0.16 0.11 0.11 0.11 0.09 0.05 0.05 0.04 0.03 0.02 0 0.05 0.1 0.15 0.2 0.25 Belgium Italy UK France Brazil Philippines Taiwan Argentina Malayasia HongKong Thailand Pakistan China India
  62. 62. Seven types • Copyrights • Trademarks • Geographical indications • Industrial designs • Patents • Integrated circuits • Trade secrets
  63. 63. India’s patent policy allowed very little scope for patents in agriculture Protecting some of the geographical indications of interest to India e.g. Basmati rice, Darjeeling tea, Mysore Dosa Exclusive Marketing Rights for the producers of patented drugs and agrochemicals
  64. 64. Protects human, animal and plant life and health including from pests and diseases of food Size, shape, weight and packaging material requirements including labeling and handling safety Peanuts, Marine products, Mushrooms in EU
  65. 65. 1) TRIPs 2) TRIMS 3) GATS 4) TRADE AND NON – TARIFF Barriers 5) LDC exports 68
  66. 66.  Protection of intellectual property rights has been one of the major concerns of the WTO. As a member of the WTO, India has to comply with the TRIPs standards. However, the agreement on TRIPs goes against the Indian patent act, 1970, in the following ways: • Pharmaceutical sector :Under the Indian Patent act, 1970, only process patents are granted to chemicals, drugs and medicines. Thus, a company can legally manufacture once it had the product patent. So Indian pharmaceutical companies could sell good quality products (medicines) at low prices. However under TRIPs agreement, product patents will also be granted that will raise the prices of medicines, thus keeping them out of reach of the poor people, fortunately, most of drugs manufactured in India are off –patents and so will be less affected. • Agriculture : Since the agreement on TRIPs extends to agriculture as well; it will have considerable implications on Indian agriculture. The MNG, with their huge financial resources, may also take over seed production and will eventually control food production. Since a large majority of Indian population depends on agriculture for their livelihood, these developments will have serious consequences. Micro-organisms: Under TRIPs Agreement, patenting has been extended to micro-organisms as well. These mills largely benefit MNCs and not developing countries like India 69
  67. 67. The Agreement on TRIMs also favours developed nations as there are no rules in the agreement to formulate international rules for controlling business practices of foreign investors. Also, complying with the TRIMs agreement will contradict our objective of self –reliant growth based on locally available technology and resources. 70
  68. 68. GATS: The Agreement on GATS will also favour the developed nations more. Thus, the rapidly growing service sector in India will now have to compete with giant foreign firms. Moreover, since foreign firms are allowed to remit their profits, dividends and royalties to their parent company, it will cause foreign exchange burden for India.
  69. 69. Reduction of trade and non-tariff barriers has adversely affected the exports of various developing nations. Various Indian products have been hit by. Non- tariff barriers. These include textiles, marine products, floriculture, pharmaceuticals, basmati rice, carpets, leather goods etc.
  70. 70.  Many member nations have agreed to provide duty – free and quota – free market access to all products originating from least developed countries.  India will have to now bear the adverse effect of competing with cheap LDC exports internationally.  Moreover, LDC exports will also come to the Indian market and thus compete with domestically produced goods
  71. 71. Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors. Integration also called regional trading block.
  72. 72. There are about five additive levels of economic integration impacting the global landscape:  Free trade. Tariffs (a tax imposed on imported goods) between member countries are abolished or significantly reduced. Each member country keeps its own tariffs in regard to third countries. The general goal is to develop economies of scale and comparative advantages, which promotes economic efficiency.  Custom union. Sets common external tariffs among member countries, implying that the same tariffs are applied to third countries. Custom unions are particularly useful to level the competitiveness playing field and address the problem of re- exports (using preferential tariffs in one country to enter another country).
  73. 73.  Common market. Factors of production, such a labor and capital, are free to move within member countries, expanding scale economies and comparative advantages. Thus, a worker in a member country is able to move and work in another member country.  Economic union. Monetary and fiscal policies between member countries are harmonized, which implies a level of political integration. A further step concerns a monetary union where a common currency is used, such as with the European Union (Euro).  Political union. Represents the potentially most advanced form of integration with a common government and were the sovereignty of member country is significantly reduced. Only found within nation states, such as federations where there is a central government and regions having a level of autonomy.
  74. 74. The pros of creating regional agreements include the following:  Trade creation. These agreements create more opportunities for countries to trade with one another by removing the barriers to trade and investment. Due to a reduction or removal of tariffs, cooperation results in cheaper prices for consumers in the bloc countries. Studies indicate that regional economic integration significantly contributes to the relatively high growth rates in the less-developed countries.  Employment opportunities. By removing restrictions on labor movement, economic integration can help expand job opportunities.  Consensus and cooperation. Member nations may find it easier to agree with smaller numbers of countries. Regional understanding and similarities may also facilitate closer political cooperation.
  75. 75. The cons involved in creating regional agreements include the following:  Trade diversion. The flip side to trade creation is trade diversion. Member countries may trade more with each other than with nonmember nations. This may mean increased trade with a less efficient or more expensive producer because it is in a member country. In this sense, weaker companies can be protected inadvertently with the bloc agreement acting as a trade barrier. In essence, regional agreements have formed new trade barriers with countries outside of the trading bloc.  Employment shifts and reductions. Countries may move production to cheaper labor markets in member countries. Similarly, workers may move to gain access to better jobs and wages. Sudden shifts in employment can tax the resources of member countries.  Loss of national sovereignty. With each new round of discussions and agreements within a regional bloc, nations may find that they have to give up more of their political and economic rights. In the opening case study, you learned how the economic crisis in Greece is threatening not only the EU in general but also the rights of Greece and other member nations to determine their own domestic economic policies.
  76. 76. 81 TRADING Blocks Trading bloc is a voluntary grouping of countries of a specific region for common benefits. It indicates regional economic integration of countries for mutual benefits. Generally countries close to each other geographically form trading Blocks. This kind of regional economic integration has intensified over the year. European union, NAFTA, OPEC, ASEAN, SAARC etc. are some of the prominent trading Blocks.
  77. 77. 82 OBJECTIVES OF TRADING Blocks  To remove trade restriction among participating nations.  To improve political, social and cultural relations among member nations through improved trade ties.  To promote growth of the region as a whole through co- operation of member countries.  To encourage open transfer of resources i.e. raw material, labour & capital between nations.  To establish a collective bargaining force against non- members.  To levy common tariffs and other barriers against non- members.  To provide assistance to member countries with special reference to international trade.  To promote economic growth of the region through mass production and marketing of goods.
  78. 78. 83 IMPORTANT TRADING Blocks NAFTA OPEC SAARC ASEAN EU SAFTA MERCOSUR
  79. 79.  THERE ARE TWO VIEWS :  1)ANALYST LIKE PREEG ARGUE THAT TRADE BLOCS ARE DESIRABLE BECAUSE THEY COMPLIMENT GLOBAL TRADE.  2)OTHER ANALYST ARGUE THAT TRADE BLOCS ARE NOT DESIRABLE BECAUSE THEY ARE THREAT TO FREE TRADE AND NEED TO PROTECTIONISM
  80. 80. TRADE BLOCS COMPLIMENT GLOBAL TRADE THEY PROTECT INTRA REGIONAL TRADE FORM OUTSIDE FORCES. THEY ESTABLISH REGIONAL SECURITY.
  81. 81.  IMPORT QUOTAS(LIMITING THE AMOUNT OF IMPORTS INTO THE COUNTRY SO THAT DOMESTIC CONSUMERS BUY PRODUCTS MADE BY THEIR COUNTRIES IN THEIR REGION).  CUSTOM DELAYS (ESTABLISHING BUREAUCRATIC FORMALITIES THAT SLOW DOWN TRADE FROM THE OTHER REGION)  SUBSIDIES BARRIER (GIVING HEAVY SUBSIDIES TO PROTECT REGIONAL TRADE )  VOLUNTRY BOYCOTTS AND TECHNICAL BARRIERS.
  82. 82.  History: • The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960.  Functions: • The OPEC MCs coordinate their oil production policies in order to help stabilise the oil market and to help oil producers achieve a reasonable rate of return on their investments. This policy is also designed to ensure that oil consumers continue to receive stable supplies of oil.
  83. 83. OPEC FUND: The OPEC Fund for International Development is a multilateral development finance institution. It was established in January 1976, by the member countries of the Organization of the Petroleum Exporting Countries.
  84. 84.  The Secretariat carries out the executive functions of the Organization in accordance with the provisions of the OPEC Statute and under the direction of the Board of Governors  Members: Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, Venezuela.
  85. 85.  IT’S A PERMANENT ORGANIZATION ESTABLISHED IN 1960 AT THE BAGHDAD CONFERENCE BY IRAN IRAQ, KUWAIT, SAUDI ARABIA, AND VENEZUELA.  IT WAS LATER JOINED 8 OTHER MEMBERS.  ITS HEAD QUARTER IS IN VIENNA.  ITS OBJECTIVE IS TO COORDINATE AND UNIFY PETROLEUM POLICIES AMONGS THE MEMBER COUNTRIES  TO SECURE FAIR AND STABLE PRICES FOR PETROLEUM PRODUCERS.  PROPER PRICE AND REGULAR SUPPLY OF PETROLEUM FOR CONSUMING NATIONS.
  86. 86.  ESTABLISHED IN 1967 .  5 FOUNDING MEMBERS : INDONESIA , MALAYASIA, PHILLIPINES, SINGAPORE AND THILAND.  LATER ON JOINED BY BRUNEI, MYANMAR,VIETNAM ETC.  ASEAN FREE TRADE AREA (AFTA) .  ASEAN BEYOND TRADE HAS POLITICAL ROLE AS VISIBLE BY THE FORMATION OF ASEAN REGIONAL FORUM OF WHICH CHINA, INDIA AND USA ARE MEMBERS.  ASEAN AS A TRADING BLOC HAS BEEN A HUGE SUCCESS LEADING TO PROSPERITY AND ELIMINATION OF POVERTY IN THE MEMBER COUNTRY
  87. 87. SAARC
  88. 88.  The South Asian Association for Regional Cooperation (SAARC) was established when its Charter was formally adopted on December 8, 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.  SAARC provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. It aims to accelerate the process of economic and social development in Member States.
  89. 89.  Agriculture and Rural Development;  Health and Population Activities;  Women, Youth and Children;  Environment and Forestry;  Science and Technology and Meteorology;  Human Resources Development; and  Transport.  Recently, high level Working Groups have also been established to strengthen cooperation in the areas of Information and Communications Technology, Biotechnology, Intellectual Property Rights, Tourism, and Energy.
  90. 90.  The President of the Islamic Republic of Afghanistan, His Excellency Mr. Hamid Karzai; the Chief Adviser of the Government of the People’s Republic of Bangladesh, His Excellency Dr. Fakhruddin Ahmed; the Prime Minister of the Kingdom of Bhutan, His Excellency Lyonpo Khandu Wangchuk; the Prime Minister of the Republic of India, His Excellency Dr. Manmohan Singh; the President of the Republic of Maldives, His Excellency Mr. Maumoon Abdul Gayoom; the Prime Minister of Nepal, Rt. Hon’ble Mr. Girija Prasad Koirala; the Prime Minister of the Islamic Republic of Pakistan, His Excellency Mr. Shaukat Aziz; and the President of the Democratic Socialist Republic of Sri Lanka, His Excellency Mr. Mahinda Rajapaksa, met at the Fourteenth Summit meeting of the South Asian Association for Regional Cooperation (SAARC) held in New Delhi, India on April 3-4, 2007.
  91. 91. The Heads of State or Government welcomed the entry of the Islamic Republic of Afghanistan into SAARC. This was a historic moment as Afghanistan assumed its rightful place as a valued member of the SAARC fraternity
  92. 92.  The SAARC Secretariat was established in Kathmandu on 16 January 1987. Its role is to coordinate and monitor the implementation of SAARC activities, service the meetings of the Association and serve as the channel of communication between SAARC and other international organisations. The Secretariat has also been increasingly utilised as the venue for SAARC meetings.  The Secretariat comprises the Secretary General, seven Directors and the General Services Staff. The details of its officials and working divisions responsible for areas of work can be viewed under respective links.
  93. 93.  1.SAARC Agricultural Information Centre (SAIC), Dhaka  2.SAARC Meteorological Research Centre (SMRC), Dhaka  3.SAARC Tuberculosis Centre (STC), Kathmandu  4.SAARC Documentation Centre (SDC), New Delhi  5.SAARC Human Resources Development Centre (SHRDC), Islamabad  6.SAARC Coastal Zone Management Centre, Maldives  7.SAARC Information Centre, Nepal  8.SAARC Energy Centre, Pakistan  9.SAARC Disaster Management Centre, India
  94. 94.  BORN IN 1985  7 MEMBERS COUNTRIES :BANGLADESH, BHUTAN, INDIA,MALDIVES,NEPAL,PAKISTAN AND SRI LANKA  IT HAS 1.3 BILLION INHABITANTS  REPRESENTS 22% OF THE WORLD POPULATION BUT ONLY 1.9% OF THE WORLD GNP.  SAARC HAS BEEN A SHEER FAILURE.  THE TOTAL EXTERNAL TRADE OF THE REGION – 0.8% OF WORLD EXPORTS AND 1.3% OF WORLD IMPORTS  THE REASON BEING POLITICAL DISPUTE BETWEEN MEMBER COUNTRIES
  95. 95. STILL SOME PROGRESS HAS BEEN ACHIEVED SAPTA (SOUTH ASIAN PREFERENTIALTRADING AGREEMENT) HAS COME INTO FORCE IN 1995 CONSENSUS ON SAFTA(SOUTH ASIAN FREE TRADE AREA)HAS BEEN REACHED
  96. 96.  The council of ministers have signed the SAARC preferential trading arrangement agreement on April 11, 1993. Objectives:-  To gradually liberalize the trade among members of SAARC  To eliminate trade barriers among SAARC countries & reduce or eliminate tariffs  To promote and sustain mutual trade & economic cooperation among member countries
  97. 97.  The North American Free Trade Area is the trade bloc in North America created by the North American Free Trade Agreement (NAFTA) and its two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the The North American Agreement on Labor Cooperation (NAALC), whose members are Canada, Mexico and the United States. It came into effect on 1 January 1994.
  98. 98.  The agreement was initially pursued by conservative governments in the United States and Canada supportive of free trade, led by Canadian Prime Minister Brian Mulroney, U.S. President George H. W. Bush, and the Mexican President Carlos Salinas de Gortari.  The three-nation NAFTA was signed on 17 December 1992, pending its ratification by the legislatures of the three countries.  There was considerable opposition in all three countries, but in the United States it was able to secure passage after Bill Clinton made its passage a major legislative initiative in 1993.
  99. 99. The NAFTA Secretariat, comprised of a Canadian Section, a Mexican Section and a United States Section, is responsible for the administration of the dispute settlement provisions of the North American Free Trade Agreement (NAFTA).
  100. 100.  The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to: • a) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties; • b) promote conditions of fair competition in the free trade area; • c) increase substantially investment opportunities in the territories of the Parties; • d) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;
  101. 101. • e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and • f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.  2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.
  102. 102.  The Parties affirm their existing rights and obligations with respect to each other under the General Agreement on Tariffs and Trade and other agreements to which such Parties are party.  In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
  103. 103.  BORN IN JANUARY 1994.  MEMBER NATIONS:US,CANADAAND MEXICO.  it’s the WORLD LARGEST FREE TRADE AREA.  UNDER NAFTA, ALL NON TARIFF BARRIERS TO AGRICULTURE WERE ELIMINATED.  MANY TARRIFFS ARE BEING ELIMINATED OVER A PEROID OF 5-15 YRS.
  104. 104.  TWO WAY TRADE BETWEEN US & MEXICO HAS INCREASED BY MORE THAN 55%.($11.6 BILLION).  TWO WAY TRADE BETWEEN US &CANADA INCREASED MORE THAN 50%(16.3 BILLION.)  HUGE BENEFITS HAVE ACCRUED TO THE NAFTA MEMBER COUNTRIES.  NAFTA HAS BEEN A ROARING SUCCESSS.
  105. 105.  IT IS A FAMILY OF DEMOCRATRIC EUROPEAN COUNTRIES.  COMMITED TO WORKING TOGETHER FOR PEACE AND PROSPERITY.  ITS HISTORICAL ROOTSLIE IN THE SECOND WORLD WAR.  IDEA OF EUROPEAN INTEGRATION WAS CONCEIVED TO PREVENT SUCH KILLING AND DESTRUCTION FROM EVER HAPPENING AGAIN.
  106. 106. Member states of the EU: • Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom
  107. 107.  The euro is the currency of 13 European Union countries: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Slovenia and Finland.  Euro banknotes and coins have been in circulation since 1 January 2002 and are now a part of daily life for 315 million Europeans living in the euro area
  108. 108. The Eurosystem, which consist of the European Central Bank (ECB) and the national central banks of the 13 countries belonging to the euro area, has the exclusive right to issue euro banknotes. All decisions on the designs, the denominations, etc. of the euro banknotes are taken by the ECB.
  109. 109.  The Eurosystem is in charge of defining and implementing the monetary policy of the euro area. Its primary objective in this respect is to maintain price stability in the euro area. It furthermore conducts foreign-exchange operations (consistent with the exchange-rate policy defined by the Council), holds and manages the official foreign reserves of the euro-area Member States and promotes the smooth operation of payment systems
  110. 110. 19 September 1950: European Payments Union (EPU) 18 April 1951: European Coal and Steel Community established 25 March 1957: Treaty of Rome 29 December 1958: European Monetary Agreement
  111. 111.  EUROPEAN PARLIAMENT.(ELECTED BY PEOPLES OF MEMBER STATES)  COUNCIL OF EUROPEAN UNION(REPRESENTING THE GOVERNMENTS OF MEMBER STATES).  EUROPEAN COMMISION(DRIVING FORCE AND THE EXECUTIVE BODY).  COURT OF JUSTICE.  COURT OF AUDITORS.
  112. 112.  THE RULE OF LAW IS FUNDAMENTAL TO THE EUROPERAN UNION.ALL EU DECISIONS ARE BASED ON TREATIES.,WHICH ARE AGREED BY ALL EU CONTRIES.  EU CONSISTED OF JUST 6 COUNTRIES: BELGIUM,GERMANY,FRANCE,ITALY,LUXEMBOURG & NETHERLANDS.  FURTHER ADDITIONS HAVE BEEN REAPEATEDLY TAKEN PLACE.  LAST INCREASE TOOK PLACE IN 2004,WITH 10 NEW COUNTRIES JOINING IN.
  113. 113.  IT HAS ENSURE FREEDOM,SECURITY & JUSTICE.  JOB CREATION.  REGIONAL DEVELOPMENT & ENVIRONMENTAL PROTECTION.  IT HAS HELPED RAISED LIVING STANDARDS,BUILT A SINGLE EUROPE WIDE MARKET.  LAUNCHED THE SINGLE EUROPEAN CURRENCY- THE EURO.  IT HAS STRENGTHNED EUROPES VOICE IN THE WORLD.
  114. 114.  Established in 1991 by Brazil, Argentina, Paraguay, Uruguay.  These four members generate 70% GNP of South America.  By 1996, MERCOSUR had abolished tariffs on goods accounting for 90% of the trade between its members countries, with remaining tariffs to be abolished by 2000.  MERCOSUR & EU Signed a cooperation agreement to pave the way for a free trade accord in 2001.
  115. 115. Thank You

×