1. Welcome to class of World Marketplace by Dr. Satyendra Singh University of Winnipeg Canada

2. Learning Objectives  Components of United Nations, their general purpose, and their significance to international business  Influence of the political and economic institutions on international businesses  Other resources of the Organization for Economic Cooperation and Development Objectives:

3. International Political Institutions… The United Nations –191 nations  peace and global stability –has many functions related to business –General Assembly each member country has one vote regardless of size, wealth or power

4. International Political Institutions… –Security Council Main policy-setting body of the UN, composed of 15 members including 5 permanent members –Permanent: UK, USA, Russia, France and China –Nonpermanent: Africa/Asia (5), Latin America (2), Western Europe (2), Eastern Europe (1) – to be selected by the general assembly for a 2-yr term. –Economic and Social Council (ECOSOC) UN body concerned with economic and social issues such as trade, development, education, and human rights

5. International Economic Institutions… World Trade Organization (WTO) –A multinational body of 149 members that deals with rules of trade between nations –Outgrowth of General Agreement on Tariffs and Trade (GATT), that functioned to encourage trade liberalization from 1947 to 1995

6. International Economic Institutions… Most favored nation (MFN) clause – Agreement that GATT member-nations would treat all members equally in trade matters Uruguay Round –The last extended conference of GATT negotiations –Disagreement on agricultural policies »India, Brazil…

7. International Economic Institutions… WTO Principles –Trade will be without discrimination –Trade should be freer, with trade barriers negotiated downward –Trade should be predictable –Trade should be more competitive –Trade should be more beneficial for less developed countries, encouraging development and economic reform

8. International Economic Institutions WTO Challenges –Trade-related intellectual property rights (TRIPS) WTO agreement that protects copyrights, trademarks, trade secrets, and other intellectual property matters

9. Organization For Economic Cooperation and Development Organization For Economic Cooperation and Development (OECD) –Group of developed countries dedicated to promoting economic expansion in its member- nations

10. Other Economic Institutions Organization of Petroleum Exporting Countries (OPEC) –Cartel of 11 petroleum exporting countries Middle East (6): Iran, Iraq, Kuwait, Qatar, Saudi Arabia and UAE Africa(3):Algeria, Libya Other (2): Indonesia and Venezuela –The Group of Eight (G8) –Group of government leaders from major industrialized nations that meets regularly to discuss issues of concern UK, USA, France, Germany, Italy, Canada, Japan, Russia (India, China, brazil, South Africa and Mexico) Other non OPEC oil exporting countries: UK, Russia, Mexico, Norway

11. G-8 Countries

12. Economic Integration Free trade area (FTA) –Area in which tariffs among members have been eliminated, but members keep their external tariffs No movement of people and services Customs Union –Collaboration that adds common external tariffs to an FTA Common Market –Customs union that includes mobility of services, people, and capital within the union Complete Economic Integration –Integration on both economic and political levels

13. North American Free Trade Agreement (NAFTA) NAFTA –Established January 1, 1994 – Agreement creating a free trade area among Canada, Mexico, and the United States

14. European Free Trade Agreement (EFTA) EFTA –Founded in 1960 by seven European countries: Austria, Denmark, Norway, Portugal, Sweden, Switzerland, Finland, Iceland, Liechtenstein, and the United Kingdom –Today, a 4-nation non-EU FTA in Europe: Norway, Iceland, Liechtenstein, Switzerland

15. African Trade Agreements… African Trade Agreement –Promote economic growth the continent –Economic Community of West African States (ECOWAS) –Common Market for Eastern and Southern Africa (COMESA) –Southern African Development Community (SADC)

16. African Trade Agreements

17. Mercosur (Mercosul) –Created in 1991 by the Treaty of Asuncion –Economic free trade area in South America modeled on the EU

18. Other Regional Agreements Central American Free Trade Agreement (CAFTA) –FTA among the United States and several Central American nations Andean Community (CAN) –South American five- nation trading bloc ASIA-Pacific Economic Cooperation –Serves as a regional vehicle for promoting open trade and practical economic cooperation

19. Other Regional Agreements

20. The European Union (EU)… European Union –A body of 25 European countries dedicated to economic and political integration –Romania and Bulgaria joined in 2007, to move membership to 27

21. The European Union (EU)

22. Institutions of The EU European Parliament –EU legislative body whose members are popularly elected from member-nations Council of the European Union –Group that is the EU’s primary policy-setting institution European Commission –Institution that runs the EU’s day-to-day operations European Court of Justice (ECJ) –Court that rules on issues related to EU policies

23. European Monetary Union (EMU) European Monetary Union –Group that established use of euro in the 12- country euro zone –The three countries from “old EU” that do not participate are Denmark, Sweden, and the United Kingdom –Slovenia joined in 2007 –The single currency reduces the cost of doing business across EMU country borders