lesson 3 mm prof rajeev kumar

8/8/2019 Lesson 3 Mm Prof Rajeev Kumar

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WTO

World Trade Organizationis the only international

organization dealing with

the global rules of tradebetween nations.

Its main function is to ensurethat trade flows as

smoothly, predictably and

freely as possible


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The WTO

Location: Geneva, SwitzerlandEstablished: 1 January 1995

Created by: Uruguay Round negotiations

(1986-94)Membership: 153 countries (on 23 July

2008)

Budget: 189 million Swiss francs for 2009Secretariat staff: 625

Head: Director-General, Pascal Lamy


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ASSURANCE:

The result is assurance: Consumersand producers know that they canenjoy secure

supplies and greater choice of the

finished products, components, rawmaterials and

services that they use. Producers andexporters know that foreign markets

will remain

open to them.


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The result is also a more

prosperous, peaceful and

accountable economic world.

Decisionsin the WTO are typically taken by

consensus among all member

countries and they are

ratified by members parliaments.


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At the heart of the system known as the multilateral trading

system are the WTOs

agreements, negotiated and

signed by a large majority of the

worlds trading nations, andratified in their parliaments.


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These agreements are the legal

ground-rules for internationalcommerce. Essentially, they are

contracts, guaranteeing member

countries important trade

rights. They also bind governments to

keep their trade policies within

agreed limits to

everybodys benefit.


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The World Trade Organization came

into being in 1995. One of the

youngest of the

international organizations, the WTOis the successor to the General

Agreement on Tariffs

and Trade (GATT) established in thewake of the Second World War


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The system was developed through a

series of trade negotiations, or

rounds, held under

GATT. The first rounds dealt mainly

with tariff reductions but later

negotiations included

other areas such as anti-dumping and

non-tariff measures. The last round the 1986-94

Uruguay Round led to the WTOs

creation.


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In 2000, new talks started onagriculture and services. These have

now been incorporated

into a broader work programme, theDoha Development Agenda (DDA),

launched at the

fourth WTO Ministerial Conference inDoha, Qatar, in November 2001.


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The agenda adds negotiations and other

work on non-agricultural tariffs, trade and

environment, WTO rules such as anti-

dumping and subsidies, investment,

competition

policy, trade facilitation, transparency in

government procurement, intellectual

property,

and a range of issues raised by developing

countries as difficulties they face in

implementing the present WTO

agreements.


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How can you ensure that trade is

as fair as possible, and as free as is

practical? By

negotiating rules and abiding by

them.


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The WTOs rules the agreements

are the result of negotiationsbetween the members.

The current set were the outcome

of the 1986-94 Uruguay Round

negotiations which

included a major revision of theoriginal General Agreement on

Tariffs and Trade (GATT).


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The complete set runs to some

30,000 pages consisting of about

30 agreements and separate

commitments (calledschedules) made by individual

members in specific areas such as

lower customs duty rates

and services market-opening.


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Through these agreements, WTO

members operate a non-

discriminatory trading system

that spells out their rights and

their obligations.


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Each country receives guarantees that

its

exports will be treated fairly and

consistently in other countries

markets. Each promises todo the same for imports into its own

market. The system also gives

developing countriessome flexibility in implementing their

commitments.


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SERVICES

Banks, insurance firms,telecommunications companies, tour

operators, hotel chains and

transport companies looking to do

business abroad can now enjoy the

same principles offreer and fairer trade that originally

only applied to trade in goods.


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INTELLECTUAL PROPERTY

The WTOs Intellectual Property Agreement

amounts to rules for trade and investment in

ideas and creativity. The rules state how

copyrights, patents, trademarks, geographicalnames used to identify products, industrial

designs, integrated circuit layout-designs and

undisclosed information such as trade secrets

intellectual property should be protected

when trade is involved.


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DISPUTE SETTLEMENT

The WTOs procedure for resolving

trade quarrels under the Dispute

Settlement

Understanding is vital for enforcingthe rules and therefore for ensuring

that trade flows

smoothly. Countries bring disputes tothe WTO if they think their rights

under the

agreements are being infringed.


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The system encourages countries to

settle their differences throughconsultation. Failing

that, they can follow a carefully

mapped out, stage-by-stageprocedure that includes the

possibility of a ruling by a panel of

experts, and the chance to appeal the

ruling on legal

grounds.


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TRADE POLICY REVIEW

The Trade Policy Review

Mechanisms purpose is to

improve transparency, to create agreater understanding of the

policies that countries are

adopting, and to assess their

impact.


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DEVELOPING COUNTRIES

DEVELOPMENT AND TRADE

Over three-quarters of WTO

members are developing or least

developed countries.


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All WTO agreements contain special

provision for

them, including longer time periods toimplement agreements and

commitments, measures to increase their

trading opportunities,provisions requiring all WTO members to

safeguard their trade

interests, and support to help them buildthe infrastructure for WTO

work, handle disputes, and implement

technical standards.


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The 2001 Ministerial Conferencein Doha set out tasks, including

negotiations, for a wide range of

issues concerning developing

countries. Some people call the

new negotiations the DohaDevelopment Round.


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A WTO Committee on Trade and

Development, assisted by a Sub-

Committee on Least-Developed

Countries, looks at developing

countries special needs.


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Its responsibility includesimplementation of

the agreements, technical

cooperation, and the increased

participation of developing

countries in the global tradingsystem.


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TECHNICAL ASSISTANCE AND

TRAININGThe WTO organizes hundreds of

technical cooperation missions to

developing countries annually. It

holds on average three trade

policycourses each year in Geneva for

government officials.


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The WTO has set up reference

centres in over 100 trade

ministries and regionalorganizations in capitals of

developing and least-developed

countries.


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THE ORGANIZATION

FUNCTIONS

The WTOs overriding objective isto help trade flow smoothly,

freely, fairly and

predictably.


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It does this by:

?Administering trade agreements

? Acting as a forum for trade

negotiations

? Settling trade disputes


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Reviewing national trade

Assisting developing countriesin trade policy

issues, through technical

assistance and

training programmes

Cooperating with otherinternational organizations

policies


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STRUCTURE

The WTO has 153 members,

accounting for over 97% of worldtrade. Around 30

others are negotiating

membership.


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Decisions are made by the entire

membership. This is typically byconsensus. A majority

vote is also possible but it has

never been used in the WTO, and

was extremely rare under

the WTOs predecessor, theGeneral Agreement on Tariffs and

Trade (GATT).


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The WTOs top level decision-

making body is the MinisterialConference which meets at

least once every two years.


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Below this is the General Council

(normally ambassadors and heads

of delegation in

Geneva, but sometimes officialssent from members capitals)

which meets several times ayear in the Geneva headquarters.


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SECRETARIAT

The WTO Secretariat, based in

Geneva, has around 625 staff andis headed by a director general.

It does not have branch offices

outside Geneva.


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Global Business Environment

the 1990s saw air travel increase

by 7%per annum.

Europe, North America and Asiawere the biggest markets. but the

terrorists attacks in the US in

September 2001 rocked the

industry.


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Global airline industry suffered

losses of 10 billion ponds in 2001after the attacks mainly because of

the concern over the issue of safty

in air travel.


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Globalization Is a Three

Dimensional Concept:

a phenomenona philosophy

and

a process


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Global Business Environment & its

Components:GBE can be defined as the

environment in different sovereign

countries , with factors exogenous

to the home environment of the

organization, influencing decisionmaking on resource use and

capabilities.


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Social Environments:companies operating

internationally must understand

the social environment of the host

country they are operating

in(working in a foreign cultureetc.)


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Emphasis On The Individual RatherThan The Group:

most western societies emphasize

individual performance while many

Asian countries like Japan , China

an d India emphasize group/teamperformance.


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Japanese organizations depend

highly on the employees

socialization into the companiesculture.

Lifetime employment is the usual

practice in such societies.


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Religion and International

Business:

Islam believes in social justice.

Islam prohibits giving or receiving

interest on money.


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Values , Attitudes and International

Business:

for eg ., in India Hindus regard thecow as sacred. Therefore Mc

Donald's sells lamb instead of beef

hamburgers in India


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Customs and Manners and

International Business:

in the US orange juice isconsidered a breakfast drink but in

France , it has to be marketed as a

refreshing drink.


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Language:companies should be careful when

translating advertising and other

communication messages eg.. Ford

motors FIERA TRUCK did not sell

well in Spain because it meantugly old woman in Spanish.


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Political environment:

foreign companies face political

constraints like tax programs,pollution laws, pricing policies etc

aiming at protecting the

consumers and the local industry .


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Economic Environment:the economic environment in the

host country relates to all the

factors that contribute to a

companys attractiveness for

foreign business like volume oftrade and FDI.

lesson 3 mm prof rajeev kumar

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