Bài giảng International Business - Chapter four: International Institutions from an International Business Perspective

International Institutions from an International Business PerspectiveMcGraw-Hill/IrwinInternational Business, 11/eCopyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.chapter fourLearning ObjectivesDescribe the influence the mainly political international institutions have on international businesses and their relevance to international businessIdentify the major organs of the United Nations, their general purpose, and their significance to international businessDiscuss the World Trade Organization and its predecessor, GATTAppreciate the resources of the Organisation for Economic Cooperation and Development3Learning ObjectivesDescribe the major purpose and effectiveness of OPECIdentify economic integration agreements and the effectiveness of the major onesDiscuss the impact of the EU and its future challenges4Figure 4.1 International Institutions by purpose5International Political InstitutionsThe United Nations International organization of 191 member-nations dedicated to the promotion of peace and global stability; has many functions related to businessGeneral Assembly Deliberative body of the UN made up of all member-nations, each with one vote regardless of size, wealth, or power6International Political InstitutionsSecurity Council Main policy-setting body of the UN, composed of 15 members including 5 permanent membersEconomic and Social Council (ECOSOC)UN body concerned with economic and social issues such as trade, development, education, and human rights7International Political InstitutionsInternational Court of Justice (ICJ)UN body that renders legal decisions involving disputes between national governmentsSecretariat The staff of the UN, headed by the secretary-general8Figure 4.2 Millennium Development Goals Chart of Progress9Figure 4.2 Millennium Development Goals Chart of Progress10Cooperative Military and Security AgreementsNorth Atlantic Treaty Organization (NATO) Security alliance of 26 North American and European nations (Map 4.3)Collective Security Treaty Organization (CSTO) Security alliance of six members of the Commonwealth of Independent States (former Union of Soviet Socialist Republics)11Cooperative Military and Security AgreementsAssociation of Southeast Asian Nations (ASEAN) Ten-member body formed to promote peace and cooperation in Southeast Asia (Map 4.4)12Map 4.3 & 4.4NATO MapMap of ASEAN Members13International Economic InstitutionsWorld Trade Organization (WTO) A multinational body of 149 members that deals with rules of trade between nationsOutgrowth of General Agreement on Tariffs and Trade (GATT), that functioned to encourage trade liberalization from 1947 to 199514International Economic InstitutionsMost favored nation (MFN) clause Agreement that GATT member-nations would treat all members equally in trade mattersUruguay Round The last extended conference of GATT negotiations (table 4.1)15Table 4.1 Gatt Rounds16International Economic InstitutionsWTO Principles Trade will be without discriminationTrade should be freer, with trade barriers negotiated downwardTrade should be predictableTrade should be more competitiveTrade should be more beneficial for less developed countries, encouraging development and economic reform17International Economic InstitutionsWTO Challenges Trade-related intellectual property rights (TRIPS) WTO agreement that protects copyrights, trademarks, trade secrets, and other intellectual property matters18Organisation For Economic Cooperation and DevelopmentOrganisation For Economic Cooperation and Development (OECD)Group of developed countries dedicated to promoting economic expansion in its member-nations (Table 4.2)19Table 4.2 OECD Member Countries20Other Economic InstitutionsOrganization of Petroleum Exporting Countries Cartel of 11 petroleum exporting countries (Table 4.3)The Group of Eight (G8) Group of government leaders from major industrialized nations that meets regularly to discuss issues of concern (Figure 4.5)21Table 4.3 World Petroleum Products Consumption by Region, 1960-2004 22Figure 4.5 The G8 Members (www.undp.org) IntegrationFree trade area (FTA) Area in which tariffs among members have been eliminated, but members keep their external tariffsCustoms Union Collaboration that adds common external tariffs to an FTACommon Market Customs union that includes mobility of services, people, and capital within the union24North American Free Trade Agreement (NAFTA)NAFTA Established January 1, 1994 Agreement creating a free trade area among Canada, Mexico, and the United States25European Free Trade Agreement (EFTA)EFTA Founded in 1960 by seven European countries:Austria, Denmark, Norway, Portugal, Sweden, Switzerland, Finland, Iceland, Liechtenstein, and the United KingdomToday, a 4-nation non-EU FTA in Europe: Norway, Iceland, Liechtenstein, Switzerland26African Trade AgreementsAfrican Trade Agreement (Figure 4.7) – Promote economic growth the continentEconomic Community of West African States (ECOWAS)Common Market for Eastern and Southern Africa (COMESA)Southern African Development Community (SADC)27Figure 4.7 African Trade Agreements28Mercosur (Mercosul)Mercosur (Mercosul) Created in 1991 by the Treaty of AsuncionEconomic free trade area in South America modeled on the EU (Figure 4.8)29Figure 4.8 Regional Trade Agreements in Central America and South America30Other Regional AgreementsCentral American Free Trade Agreement (CAFTA) FTA among the United States and several Central American nations (Figure 4.8)Andean Community (CAN) South American five-nation trading blocASIA-Pacific Economic Cooperation Serves as a regional vehicle for promoting open trade and practical economic cooperation 31The European Union (EU)European Union A body of 25 European countries dedicated to economic and political integration (Figure 4.9)Romania and Bulgaria join in 2007, to move membership to 2732Figure 4.9 European Union: Member-Nations and Candidate Nations33Institutions of The EUEuropean Parliament EU legislative body whose members are popularly elected from member-nationsCouncil of the European Union Group that is the EU’s primary policy-setting institutionEuropean Commission Institution that runs the EU’s day-to-day operationsEuropean Court of Justice (ECJ) Court that rules on issues related to EU policies34European Monetary Union (EMU)European Monetary Union Group that established use of euro in the 12-country euro zoneThe three countries from “old EU” that do not participate are Denmark, Sweden, and the United KingdomSlovenia joins in 2007The single currency reduces the cost of doing business across EMU country borders35