Global business


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Global business

  1. 1. GLOBAL BUSINESS Presented by:- DEBAPRASAD OJHA Regd. No- 7050 LOGO
  2. 2. North American Free Trade Agreement (NAFTA)  The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada.  NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).  Administrative center: Mexico City, Ottawa, and Washington, D.C.
  3. 3. Negotiation and U.S. ratificationFollowing diplomatic negotiations dating back to 1986 among the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The agreement then needed to be ratified by each nations legislative or parliamentary branch.
  4. 4. Provisions: The goal of NAFTA was to eliminate barriers to trade and investment between the US, Canada and Mexico. The implementation of NAFTA on January 1, 1994 brought the immediate elimination of tariffs on more than one-half of Mexicos exports to the U.S. and more than one-third of U.S. exports to Mexico. Within 10 years of the implementation of the agreement, all US-Mexico tariffs would be eliminated except for some U.S. agricultural exports to Mexico that were to be phased out within 15 years. Most U.S.-Canada trade was already duty free. NAFTA also seeks to eliminate non-tariff trade barriers and to protect the intellectual property right of the products.
  5. 5. Trade: The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, USA, andMexico. NAFTA has allowed agricultural goods such as eggs, corn, and meats to be tariff-free. This allowed corporations to trade freely and import and export various goods on a North American scale. Since theimplementation of NAFTA, the countries involved have been able to do the following. LOGO
  6. 6. Exports: At $248.2 billion for Canada and $163.3 billion for Mexico, they were the top two purchasers of US exports in 2010. US goods exports to NAFTA in 2010 were $411.5 billion, up 23.4% ($78 billion) from 2009 and 149% from 1994 and up 190% from 1993. US exports to NAFTA accounted for 32.2% of overall US exports in 2010. The top export categories (2-digit HS) in 2010 were machinery ($63.3 billion), vehicles (parts) ($56.7 billion), electrical machinery ($56.2 billion), mineral fuel and oil ($26.7 billion), and plastic ($22.6 billion). US exports of agricultural products to NAFTA countries totaled $31.4 billion in 2010. Leading categories included red meats, fresh/chilled/frozen ($2.7 billion); coarse grains ($2.2 billion); fresh foods (excluding nuts) ($1.8 billion); and fresh vegetables ($1.7 billion). US exports of private commercial services, excluding military and government, to NAFTA were $63.8 billion in 2009 (the latest data available), down 7% ($4.6 billion) from 2008, but up 125% since 1994.
  7. 7. Imports: At $276.4 billion for Canada and $229.7 billion for Mexico, they were the second and third largest suppliers of goods imports to the United States in 2010. US goods imports from NAFTA totaled $506.1 billion in 2010, up 25.6% ($103 billion), from 2009, up 184% from 1994, and up 235% from 1993. US imports from NAFTA accounted for 26.5% of overall U.S. imports in 2010. The five largest categories in 2010 were mineral fuel and oil (crude oil) ($116.2 billion), vehicles ($86.3 billion), electrical machinery ($61.8 billion), machinery ($51.2 billion), and precious stones (gold) ($13.9 billion). US imports of agricultural products from NAFTA countries totaled $29.8 billion in 2010. Leading categories include fresh vegetables ($4.6 billion); snack foods including chocolate ($4.0 billion); fresh fruit (excluding bananas) ($2.4 billion); live animals ($2.0 billion); and red meats, fresh/chilled/frozen ($2.0 billion). US imports of private commercial services excluding military and government were $35.5 billion in 2009 (latest data available), down 11.2% ($4.5 billion) from 2008 but up 100% since 1994.
  8. 8. Trade balances: The US goods trade deficit with NAFTA was $94.6 billion in 2010, a 36.4% increase ($25 billion) over 2009. The US goods trade deficit with NAFTA accounted for 26.8% of the overall U.S. goods trade deficit in 2010. The US had a services trade surplus of $28.3 billion with NAFTA countries in 2009 (the latest data available).Investment: The US foreign direct investment (FDI) in NAFTA Countries (stock) was $357.7 billion in 2009 (latest data available), up 8.8% from 2008. The US direct investment in NAFTA countries is in nonbank holding companies, and in the manufacturing, finance/insurance, and mining sectors. The foreign direct investment, of Canada and Mexico in the United States (stock) was $237.2 billion in 2009 (the latest data available), up 16.5% from 2008.
  9. 9. Asia-Pacific Economic Cooperation(APEC)
  10. 10.  What is APEC? APEC is an association of economies that share the boundaries of the Pacific Ocean. Under APEC, member economies work together to reduce barriers to trade, ease the exchange of goods, services, resources and technical know-how, and strengthen economic and technical cooperation between and among themselves. These concerted efforts, ultimately, would result in a greatly improved global economy and the forging of stronger ties between the developing and the major economies of the world.When was APEC created? APEC was created in 1989 through the initiative of Australia. Its first Ministerial Meeting was held on November 6-7, 1989 in Canberra, Australia.
  11. 11. Asia-Pacific EconomicCooperation (APEC)  Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific Rim countries (formally Member Economies) that seeks to promote free trade and economic cooperation throughout the Asia-Pacific region. It was established in 1989 in response to the growing interdependence of Asia-Pacific economies and the advent of regional trade blocs in other parts of the world.  APEC works to raise living standards and education levels through sustainable economic growth and to foster a sense of community and an appreciation of shared interests among Asia- Pacific countries.  Members account for approximately 40% of the worlds population, approximately 54% of the worlds gross domestic product and about 44% of world trade.
  12. 12. Member Economies: APEC currently has 21 members, including most countries with a coastline on the Pacific Ocean. However, the criterion for membership is that the member is a separate economy, rather than a state. These are:-Australia1989Brunei (Brunei Darussalam)1989 Singapore1989Canada1989 Philippines1989Chile1994 Republic of China (ROC)1991China (Peoples Republic of China)1991 Russia1998Hong Kong (Hong Kong, China)1991 Thailand1989Indonesia1988 United States1989Japan1989 Vietnam1998South Korea (Republic of Korea)1989Mexico1993Malaysia1989New Zealand1989Papua New Guinea1993Peru1998
  13. 13. Asia-Pacific EconomicCooperations Three Pillars- To meet the Bogor Goals, APEC carries out work in three main areas:  1. Trade and Investment Liberalization  2. Business Facilitation  3. Economic and Technical Cooperation APEC and Trade Liberalization:  According to the organization itself, when APEC was established in 1989 average trade barriers in the region stood at 16.9 percent, but had been reduced to 5.5% in 2004.
  14. 14. What are the goals of APEC? to sustain the growth and development of the region for the common good of its people thus contributing to the growth of world economy; to enhance the gains of both regional and world economy by encouraging the flow of goods, services, capital and technology; to develop and strengthen the open multilateral trading system in the interest of Asia-Pacific member economies and all other economies; and to reduce barriers to trade in goods and services, and minimize hindrance to investment among its participants in a manner consistent with GATT/WTO principles, where applicable, and without detriment to other economies.
  15. 15. ADVANTAGES OF APEC: foster economic, political, and financial relationships with other Asian countries - allows a forum to discuss issues ( free flow of labor among Asian countries, trade facilitation, China-Philippines-Vietnam- Indonesia conflict on the Spratly Islands) - allows Asian countries to dialogue with economic power houses such as Japan and USA.
  16. 16. APEC Business Advisory Council: The APEC Business Advisory Council (ABAC) was created by the APEC Economic Leaders in November 1995 with the aim of providing advice to the APEC Economic Leaders on ways to achieve the Bogor Goals and other specific business sector priorities, and to provide the business perspective on specific areas of cooperation. ABAC provides an annual report to APEC Economic Leaders containing recommendations to improve the business and investment environment in the Asia- Pacific region, and outlining business views about priority regional issues. ABAC is also the only non- governmental organization that is on the official agenda of the APEC Economic Leader’s Meeting.
  17. 17. Annual APEC Economic Leaders Meetings: Since its formation in 1989, APEC has held annual meetings with representatives from all member economies. The first four annual meetings were attended by ministerial-level officials. Beginning in 1993, the annual meetings are named APEC Economic Leaders Meetings and are attended by the heads of government from all member economies except Taiwan, which is represented by a ministerial-level official. The annual Leaders Meetings are not called summits.Meeting developments: In 1997, the APEC meeting was held in Vancouver. Controversy arose after officers of the Royal Canadian Mounted Police used pepper spray against protesters. The protesters objected to the presence of autocratic leaders such as Indonesian president Suharto.
  18. 18. Latin American Integration Association(LAIA)  The Asociación Latinoamericana de Integración (the Latin American Integration Association; known as ALADI or, occasionally, by the English acronym LAIA) is a Latin American trade integration association, based in Montevideo. Its main objective is the establishment of a common market, in pursuit of the economic and social development of the region. Signed on August 12, 1980, the Montevideo Treaty is an international legal framework that establishes and governs the Latin American Integration Association. It sets the following general guidelines regarding trade relations between signatory countries: pluralism, convergence, flexibility, differential treatment and multiplicity.
  19. 19. Continue… The Latin American Free Trade Association (LAFTA) was created in the 1960 Treaty of Montevideo by Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay. The signatories hoped to create a common market in Latin America and offered tariff rebates among member nations. LAFTA came into effect on January 2, 1962. The LAFTA agreement had important limitations: it only refers to goods, not to services, and it does not include a coordination of policies.
  20. 20. Entry: Any Latin-American country can join the 1980 Montevideo Treaty. Cuba was the last to accede, becoming a full member on August 26, 1999. In addition, ALADI is also open to all Latin American countries through agreements with other countries and integration areas of the continent, as well as to other developing countries or their respective integration areas outside Latin America. ALADI is now the largest Latin- American group of integration. It is responsible for regulations on foreign trade which includes regulations on technical measures, sanitary regulations, environment protection measures, quality control measures, automatic licensing measures, price control measures, monopolistic measures, as well as other measures.
  21. 21. Methods: The ALADI promotes the creation of an area of economic preferences in the region, aiming at a Latin American common market, through three mechanisms:1. Regional tariff preference granted to products originating in the member countries, based on the tariffs in force for third countries2. Regional scope agreement, among member countries3. Partial scope agreements, between two or more countries of the area.