International Trade Organization


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International Trade Organization

  1. 1. 1 INDEX Name of Organization Page no. International Trade Organization 2 WTO 3 SAARC 5 ASEAN 9 BRICS 14 European Union 17
  2. 2. 2 International Trade Organization The Bretton Woods Conference of 1944 recognized the need for a comparable international institution for trade (the later proposed International Trade Organization, ITO) to complement the International Monetary Fund and the World Bank. Probably because Bretton Woods was attended only by representatives of finance ministries and not by representatives of trade ministries, an agreement covering trade was not negotiated there. In early December 1945, the United States invited its war-time allies to enter into negotiations to conclude a multilateral agreement for the reciprocal reduction of tariffs on trade in goods. In July 1945 the United States Congress had granted President Harry S. Truman the authority to negotiate and conclude such an agreement. At the proposal of the United States, the United Nations Economic and Social Committee adopted a resolution, in February 1946, calling for a conference to draft a charter for an International Trade Organization (ITO). A Preparatory Committee was established in February 1946, and met for the first time in London in October 1946 to work on the charter of an international organization for trade; the work was continued from April to November 1947. At the same time, the negotiations on the General Agreement on Tariffs and Trade (GATT) in Geneva advanced well and by October 1947 an agreement was reached: on October 30, 1947 eight of the twenty-three countries that had negotiated the GATT signed the "Protocol of Provisional Application of the General Agreement on Tariffs and Trade". Those eight countries were the United States, the United Kingdom, Canada, Australia, France, Belgium, the Netherlands, and Luxembourg. In March 1948, the negotiations on the ITO Charter were successfully completed in Havana. The Charter provided for the establishment of the ITO, and set out the basic rules for international trade and other international economic matters. The ITO Charter, however, never entered into force; while repeatedly submitted to the US Congress, it was never approved. The most usual argument against the new organization was that it would be involved into internal economic issues. On December 6, 1950 President Truman announced that he would no longer seek Congressional approval of the ITO Charter. In the absence of an international organization for trade, countries turned, from the early 1950s, to the only existing multilateral international institution for trade, the "GATT 1947" to handle problems concerning their trade relations. Therefore, the GATT would over the years "transform itself" into a de facto international organization. It was contemplated that the GATT would be applied for several years until the ITO came into force. However, since the ITO was never brought into being, the GATT gradually became the focus for international governmental cooperation on trade matters. Seven rounds of negotiations occurred under GATT before the eighth round—the Uruguay Round— concluded in 1994 with the establishment of the World Trade Organization (WTO) as the GATT's replacement. The GATT principles and agreements were adopted by the WTO, which was charged with administering and extending them.
  3. 3. 3 WTO (World trade Organization) What is the WTO and how it formed? The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its core purposes are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and approves in their parliaments. The goal is to help producers of goods and services, exporters and importers to conduct their business. There are a number of ways of looking at the World Trade Organization. It is an organization for trade opening. It is a forum for governments to negotiate trade agreements. It is a place for them to settle trade disputes. It operates a system of trade rules. Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO’s current work comes from the 1986–94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations, under the ‘Doha Development Agenda’ launched in 2001. Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers — for example, to protect consumers or prevent the spread of disease. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives. The system’s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable side effects — because this is important for economic development and well-being. That partly means removing obstacles. It also means ensuring that individuals, companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no sudden changes of policy. In other words, the rules have to be ‘transparent’ and predictable. Trade relations often involve conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, often need interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO agreements.
  4. 4. 4 Functions of WTO The former GATT was not really an organization; it was merely a legal arrangement. On the other hand, the WTO is a new international organization set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following five functions of WTO; 1. The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements. 2. The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. 3. The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. 4. The WTO shall administer Trade Policy Review Mechanism. 5. With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies. Objectives of WTO Important objectives of WTO are mentioned below: 1. To implement the new world trade system as visualized in the Agreement; 2. To promote World Trade in a manner that benefits every country; 3. To ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs; 4. To demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth; 5. To enhance competitiveness among all trading partners so as to benefit consumers and help in global integration; 6. To increase the level of production and productivity with a view to ensuring level of employment in the world; 7. To expand and utilize world resources to the best; 8. To improve the level of living for the global population and speed up economic development of the member nations. Relationship with India Described by WTO chief Pascal Lamy as one of the organization’s "big brothers", India was instrumental in bringing down the Doha round of talks in 2008. It has played an important role of representing as many as 100 developing nations during WTO summits.
  5. 5. 5 SAARC (South Asian Association for Regional Cooperation) The South Asian Association for Regional Cooperation (SAARC) is an economic and geopolitical cooperation among eight member nations that are primarily located in South Asia continent. Its secretariat is headquartered in Kathmandu, Nepal. The idea of regional political and economical cooperation in South Asia was first coined in 1980 and the first summit held in Dhaka on 8 December in 1985 led to its official establishment by the governments of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. In the intervening years, its successors have grown in size by the accession of new member states. Afghanistan was the first to have been accessed in the physical enlargement of the SAARC in 2007. The SAARC policies aim to promote welfare economics, collective self-reliance among the countries of South Asia, and to acceleratesocio-cultural development in the region. The SAARC has developed a role in external relations around with world. Permanent diplomatic relations have been established with the EU, the UN (as an observer), and other multilateral entities. On annual scheduled basis, the official meetings of leaders of each nation are held; meetings of foreign secretaries, twice annually. The next summit is expected to be held in Kathmandu in first quarter of 2014, but the official dates for the summit is yet to be determined. Formation and History The idea of regional co-operation in South Asia was discussed in at least three conferences: the Asian Relations Conference held in New Delhi on April 1947; the Baguio Conference in the Philippines on May 1950; and the Colombo Powers Conference held in Sri Lanka on April 1954. In the ending years of 1970s, the seven inner South Asian nations that included Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka agreed upon the creation of a trade bloc and to provide a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. Efforts towards establishing the union was first mooted by the President of Bangladesh Ziaur Rahman on 2 May 1980 whilst talking to the media journalist in Dhaka. President Ziaur Rahman addressed official letters to the leaders of the countries of the South Asia, presenting his vision for the future of the region and the compelling arguments for region.[11] During his visit to India in December 1977, President Ziaur Rahman discussed the issue of regional cooperation with the Indian Prime Minister,Morarji Desai. In the inaugural speech to the Colombo Plan Consultative Committee which met in Kathmandu also in 1977, King Birendraof Nepal gave a call for close regional cooperation among South Asian countries in sharing river waters. After the USSR's interventionin Afghanistan, the efforts to established the union was accelerated in 1979 and the resulting rapid deterioration of South Asian security situation. Responding to the President Zia Rehman and King Birendra's convention, the officials of the foreign ministries of the seven countries met for the first time in Colombo in April 1981. The Bangladesh's proposal was promptly endorsed by Nepal, Sri Lanka,Bhutan and the Maldives but India and Pakistan were skeptical
  6. 6. 6 initially. The Indian concern was the proposal’s reference to the security matters in South Asia and feared that President Zia Rehman's proposal for a regional organization might provide an opportunity for new smaller neighbors to renationalized all bilateral issues and to join with each other to gang up against India. Pakistan assumed that it might be an Indian strategy to organize the other South Asian countries against Pakistan and ensure a regional market for Indian products, thereby consolidating and further strengthening India’s economic dominance in the region. However, after a series of quiet diplomatic consultations between South Asian foreign ministers at the UN headquarters in New York from August to September 1980, it was agreed that Bangladesh would prepare the draft of a working paper for discussion among the foreign secretaries of South Asian countries.[18] The foreign secretaries of inner seven countries again delegated a Committee of the Whole inColombo on September 1981, which identified five broad areas for regional cooperation. New areas of co-operation were added in the following years. In 1983, the International conference held by Indian Minister of External Affairs PVN Rao in New Delhi, the foreign ministers of the inner seven countries adopted the Declaration on South Asian Association Regional Cooperation (SAARC) and formally launched the Integrated Programme of Action (IPA) initially in five agreed areas of cooperation namely, Agriculture; Rural Development; Telecommunications; Meteorology; and Health and Population Activities. Officially, the union was established in Dhaka with Kathmandu being union's secretariat-general.[21] The first SAARC summit was held in Dhaka on 7–8 December 1985 and hosted by thePresident of Bangladesh Hussain Ershad. The declaration signed by King of Bhutan Jigme Singye, President of Pakistan Zia-ul-Haq, Prime Minister of India Indira Gandhi, King of NepalBirendra Bikram, President of Sri Lanka JR Jayewardene, and President of Maldives Maumoon Gayoom. Functions of the SAARC 1. to collect, compile, document and disseminate data, information, case studies, indigenous knowledge and good practices relating to disaster management particularly from the Member Countries; 2. to analyze information, undertake research and disseminate research findings on disaster management among the Member Countries; 3. to develop educational materials and conduct academic and professional courses on disaster management; 4. to organize training and awareness programmes for various stakeholders on disaster management for the Member Countries; 5. to develop training modules on various aspects on disaster management and conduct programmes of Training for Trainers including simulation exercises; 6. to provide assistance in the formulation of policies, strategies, disaster management framework and any other assistance as may be required by the Member Countries or organizations and institutions nominated by the Member Countries;
  7. 7. 7 7. to undertake, organize, facilitate and participate in workshops, conferences, seminars, lectures etc on various aspects of disaster management in the Member Countries; 8. to undertake publication of journals, research papers and books and establish and maintain online resource centre in furtherance of the aforesaid objects; 9. to collaborate with other SAARC Centers, particularly SMRC, SCZMC and SAARC Forestry Centre to achieve synergies in programmers’ and activities OBJECTIVES OF SAARC 1. Promoting the welfare of the people of South Asia and to improve their quality of life. 2. Accelerating economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential. 3. Promoting and strengthen collective self-reliance among the countries of South Asia. 4. Contributing to mutual trust, understanding and appreciation of one another's problems. 5. Promoting active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields. 6. Strengthening cooperation with other developing countries; 7. Strengthening cooperation among themselves in international forums on matters of common interest. Relationship with India Certain aspects of India's relations within the subcontinent are conducted through the South Asian Association for Regional Cooperation (SAARC). Its members are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Established in 1985, SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics control and anti-terrorism. SAARC has intentionally stressed these "core issues" and avoided more divisive political issues, although political dialogue is often conducted on the margins of SAARC meetings. In 1993, India and its SAARC partners signed an agreement to gradually lower tariffs within the region. Forward movement in SAARC has come to a standstill because of the tension between India and Pakistan, and the SAARC Summit originally scheduled for, but not held in, November 1999 has not been rescheduled. The Fourteenth SAARC Summit was held during 3–4 April 2007 in New Delhi
  8. 8. 8 ASEAN (Association of Southeast Asian Nations) The Association of Southeast Asian Nations (ASEAN) was established on 8 August 1967, with five founding members - Indonesia, Malaysia, the Phlipppines, Singapore and Thailand - signing the ASEAN Declaration (Bangkok Declaration) . Brunei Darussalam joined ASEAN in 1984, followed by Vietnam in 1995, Myanmar and Laos in 1997 and Cambodia in 1999. ASEAN emphasises regional cooperation in three "community pillars" of political and security cooperation, economic integration and sociocultural cooperation. Through the three pillars, ASEAN aims to achieve regional integration by 2015, especially in economic integration. ASEAN now has a Charter, which came into force in December 2008. The Charter provides ASEAN with a legal personality, and also provides for better coordinated and cohesive regional cooperation mechanisms. Under the Charter, ASEAN now has human rights bodies: the ASEAN Intergovernmental Commission on Human Rights and the ASEAN Commission on the Promotion and Protection of the Rights of Women and Children. Regional cooperation is coordinated by community councils for each of the three communities (ASEAN Political & Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community). Progress (and challenges) in implementation is reported to the ASEAN Heads of State/Government. The ASEAN leaders meet twice annually, in the country chairing ASEAN. ASEAN chairmanship rotates annually. The Secretary-General of ASEAN facilitates and monitors the implementation of ASEAN agreements and decsions. He submits an annual report to the ASEAN Summit. He is appointed by the ASEAN Summit for a non-renewable term of office of five years, selected from among nationals of the ASEAN Member States based on alphabetical rotation. The Secretary-General of ASEAN for 2008-2012 is Dr Surin Pitsuwan from Thailand. The Secretary-General is assisted in his work by the ASEAN Secretariat (based in Jakarta). The Secretariat's basic function is to provide for "greater efficiency in the coordination of ASEAN organs and for more effective implementation of ASEAN projects and activities". ASEAN has 10 Dialogue Partners (Australia, Canada, China, European Union, India, Japan, Republic of Korea, New Zealand, Russia, United States) , and also has partnerships with the United Nations and several of its respective specialised agencies. ASEAN holds UN observer status since 2006
  9. 9. 9 Basic Functions of ASEAN 1. The ASEAN Secretariat was established on 24 February 1976 by the Foreign Ministers of ASEAN. The Agreement on the Establishment of the ASEAN Secretariat stated that the basic mandate of the ASEAN Secretariat is "to provide for greater efficiency in the coordination of ASEAN organs and for more effective implementation of ASEAN projects and activities". The more detailed functions of the ASEAN Secretariat were embodied in the functions and powers of the Secretary-General. The ASEAN Secretariat was established with the following composition: Secretary-General, three Bureau Directors, a Foreign Trade and Economic Relations Officer, an Administrative Officer, a Public Information Officer and an Assistant to the Secretary-General. 2. Several amendments to the 1976 basic Agreement have been made since then. The 1983 amendment was made to provide for the possibility of expanding the composition of the ASEAN Secretariat staff by adding a clause under Article 4 "and such other officers, as the Standing Committee may deem necessary". 3. In 1985, the tenure of office of the Secretary-General was changed from 2 years to 3 years. 4. In 1989, the posts of Deputy Secretary-General and nine Assistant Directors were created. 5. The Singapore Summit of 1992 agreed on the restructuring of ASEAN institutions. These included a. regularizing the formal and informal summits, b. the dissolution of the five ASEAN economic committees and the establishment of SEOM and AFTA Council, c. the redesignation of the Secretary-General of the ASEAN Secretariat into the Secretary- General of ASEAN with an enlarged mandate to initiate, advise, coordinate and implement ASEAN activities and d. The professionalization of the ASEAN Secretariat staff on the principle of open recruitment. 6. The Manila Protocol of 22 July 1992 implemented the Singapore Summit decision. The tenure of office of the Secretary-General was increased to five years. Changes in the basic functions of the ASEAN Secretariat have been reflected in the functions and powers of the Secretary-General. 7. In 1997, an additional post of Deputy Secretary-General was created. 8. The Sixth ASEAN Summit mandated the review of the overall organizational structure of ASEAN in order to further improve efficiency and effectiveness, taking into account the expansion of ASEAN activities, the enlargement of ASEAN membership, and the current regional situation. As part of this review, the Summit also decided to "review the role, functions and capacity of the ASEAN Secretariat to meet the increasing demands of ASEAN and to support the implementation of the Hanoi Plan of Action". 9. In pursuance of this mandate, the ASEAN Standing Committee established in September 1998 a Special Directors-General Working Group on the Review of the Role and Functions of the ASEAN Secretariat. To assist in the review process, the ASC commissioned Price Water House Coopers in November 1998. The ASEAN Directors-General considered the consultant's Final Report in April 1999. 10. While upholding the basic mandate of the Secretary-General of ASEAN as set out in the 1992 Protocol Amending the Agreement on the Establishment of the ASEAN Secretariat, the ASEAN
  10. 10. 10 Standing Committee agreed that the ASEAN Secretariat should function as coordinating Secretariat to help facilitate effective decision-making within and amongst ASEAN bodies. The Secretariat would emphasize more on substantive matter, while its tasks on servicing the various meetings would be precisely defined. 11. The ASEAN Secretariat has now put in place a functional structure. One of the two Deputy Secretaries-General has assumed the role of chief-of-staff who shall be responsible for corporate affairs to ensure efficiency in the internal management of the ASEAN Secretariat. The other Deputy Secretary-General shall serve as chief operations that will support the Secretary-General in operations and policy matters. 12. Corporate affairs shall include the following areas: administration; finance and funding; human resources; public information; information technology; and special projects. The operational bureaus will include the Task Force for Financial Cooperation and Macroeconomic Surveillance; Economic and Functional Cooperation; Trade, Investment and Services; and Programme Coordination and External Relations. 13. The measures aimed at improving internal management of the ASEAN Secretariat include a. the formulation of annual operating plans to provide a framework for determining the Secretariat's priorities and resource allocation decisions; b. strengthening of corporate services, particularly in financial management, it services, and human resources development; c. Considerable increase in professional Locally-Recruited Staff to free senior officers' time from administrative and secretarial tasks, enabling greater focus on strategic and substantive matters. Positions Old Complement New Complement Secretary General 1 1 Deputy Secretary-General 2 2 Director 4 4 Assistant Director & Programme Coordinator 16 14 Senior Officer 15 23 Programme Officer 5 27 Assistant Programme Officer 21 28 TOTAL 64 99
  11. 11. 11 Objectives of ASEAN The ASEAN Declaration states that the aims and purposes of the Association are: (1) to accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian nations, and (2) To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries in the region and adherence to the principles of the United Nations Charter. In 1995, the ASEAN Heads of State and Government re-affirmed that "Cooperative peace and shared prosperity shall be the fundamental goals of ASEAN." Fundamental Principles: The Treaty of Amity and Cooperation (TAC) in Southeast Asia, signed at the First ASEAN Summit on 24 February 1976, declared that in their relations with one another, the High Contracting Parties should be guided by the following fundamental principles:  Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations;  The right of every State to lead its national existence free from external interference, subversion, or coercion;  Non-interference in the internal affairs of one another;  Settlement of differences or disputes by peaceful manner;  Renunciation of the threat or use of force; and  Effective cooperation among themselves. Relationship with India The ASEAN–India Free Trade Area emerged from a mutual interest of both parties to expand their economic ties in the Asia-Pacific region. India's Look East policy was reciprocated by similar interests of many ASEAN countries to expand their interactions westward. After India became a sectoral dialogue partner of ASEAN in 1992, India saw its trade with ASEAN increase relative to its trade with the rest of the world. Between 1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from US$ 2.9 billion in 1993 to US$ 12.1 billion in 2003.[6] Much of India's trade with ASEAN is directed towards Singapore, Malaysia, and Thailand, with whom India holds strong economic relations.
  12. 12. 12 In 2008, the total volume of ASEAN-India trade was US$ 47.5 billion. ASEAN’s export to India was US$ 30.1 billion – a growth of 21.1 per cent in comparison with that of 2007. ASEAN’s imports from India were US$ 17.4 billion – a growth of 40.2 per cent in comparison to that of 2006. As for foreign direct investment (FDI), the inflow from India to ASEAN Member States was US$476.8 million in 2008, accounting for 0.8 per cent of total FDI in the region. Total Indian FDI into ASEAN from 2000 to 2008 was US$ 1.3 billion. The ASEAN-Dialogue Partners trade and investment statistic. Acknowledging this trend and recognizing the economic potential of closer linkages, both sides recognized the opportunities for deepening trade and investment ties, and agreed to negotiate a framework agreement to pave the way for the establishment of an ASEAN–India Free Trade Area (FTA).
  13. 13. 13 BRICS (Brazil, Russia, India, China and South Africa) BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. The grouping was originally known as "BRIC" before the inclusion of South Africa in 2010. The BRICS members are all developing or newly industrialized countries, but they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs; all five are G-20 members. As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of US$16.039 trillion,[1] and an estimated US$4 trillion in combined foreign reserves.[4] Presently, South Africa holds the chair of the BRICS group, having hosted the group's fifth summit in 2013. The BRICS have received both praise and criticism from numerous quarters. History The foreign ministers of the initial four BRIC states (Brazil, Russia, India, and China) met in New York City in September 2006, beginning a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia, on 16 May 2008. First BRIC summit The BRIC grouping's first formal summit, also held in Yekaterinburg, commenced on 16 June 2009, with Luiz Inácio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of Brazil, Russia, India and China, all attending. The summit's focus was on means of improving the global economic situation and reforming financial institutions, and discussed how the four countries could better co-operate in the future. There was further discussion of ways that developing countries, such as the BRIC members, could become more involved in global affairs. In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diversified, stable and predictable".Although the statement that was released did not directly criticise the perceived "dominance" of the US dollar – something that Russia had criticised in the past – it did spark a fall in the value of the dollar against other major currencies. Entry of South Africa In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal admission began in August of that year. South Africa officially became a member nation on 24 December 2010, after being formally invited by the BRIC countries to join the group. The group was renamed BRICS – with the "S" standing for South Africa – to reflect the group's expanded membership. In April 2011, the President of South Africa, Jacob Zuma, attended the 2011 BRICS summit in Sanya, China, as a full member.
  14. 14. 14 Role of BRICS With this study, researchers from Südwind Institute (project lead) and Ecologic Institute inform the European Parliament about how the five emerging economies known collectively as the BRICS (Brazil, Russia, India, China and South Africa) are emerging as development assistance donors and potential partners in the developing world. The authors discuss how South-South cooperation is becoming more significant and what challenges it poses to the EU's ODA agenda. Finally, the study provides a series of recommendations for European policy makers. The BRICS are the world's leading emerging economies. Especially in the last decade, they have been characterized by rapid economic growth and industrialization. Their role in world affairs is thus changing from that of developing countries who are recipients of aid to (again) significant donors of funds. This poses new challenges to the EU’s ODA agenda and has led the EU to re-focus its relationship with these potential partner countries. This study explores these challenges and provides recommendations to the EU on how to address them. Although the BRICS have not reached the level of industrialization that characterizes traditional donors and are still plagued by persistent inequality and poverty, the BRICS have started to disburse significant investment and foreign assistance funds to other developing countries. South Africa, for example, has become the leading economy in Africa, and as such, is expected to lead peace and security efforts, promote regional economic integration and fund development projects. Similarly, Brazil and India are beginning to exert influence on their less developed neighbors and China is becoming a major source of foreign direct investment in the developing world. These changes are giving rise to so called "South- South cooperation," which is not only modifying the relationship between developing countries but also that between developing and industrialized countries. Thus, the objective of this study is to inform the European Parliament about how the BRICS are emerging as development assistance donors and potential partners. The authors provide an overview of how development aid has evolved over the past decade, how financing from the BRICS impacts development cooperation, and how development policies differ among the BRICS. The authors also discuss how these changes pose new challenges to the EU's ODA agenda. Finally, the study provides a series of recommendations for European policy makers. The authors' main conclusion is that eye-to-eye dialogue and trilateral cooperation are the best means of addressing BRICS as new stakeholders in 21st century development politics.
  15. 15. 15 Objectives of BRICS India’s national agenda is aimed at achieving inclusive economic growth for its people as well as the people of the continent. This objective is strongly complemented by the exponential and accelerator growth potential which BRICS engagement has delivered to the country and its neighbours. The potential for growing trade and investment, as well as intra-Indian trade and investment, must be further maximized. India will utilize its chairpersonship of BRICS in 2013 to vigorously pursue support for these goals. The BRICS Trade Exchange aims to leverage India’s membership of BRICS to achieve the following objectives: 1. To promote trade and investment between India and the BRICS nations 2. To enhance industrialization through developing key industries and sectors 3. To promote job creation through supporting sustainable opportunities and developing commercial potential 4. To develop India’s role as a platform for partnership and investment across the continent 5. To drive cooperation on economic opportunities in infrastructure development 6. To enhance cooperation on skills development 7. To identify projects to be financed by the new development bank Relationship with India Recently, India’s Prime Minister, Dr. Manmohan Singh, was in Brazil to attend both the second Summit of BRIC and IBSA Summit, held in 2010. For India, these two groups are extremely important, considering that both aim to collectively boost bargaining power and clout on global issues, and also strengthen economic and political ties among the member-countries on the lines of South-South co- operation. In fact, India took the initiative to call for improving the importance of BRIC and IBSA as groups.Dr. Manmohan Singh called for closer co-operation in the fields of energy and food security, as well as tapping into the potential of other sectors such as trade and investment, science and technology, and infrastructure. He added that pooling together each other’s experiences could lead to more inclusive growth. "We are four large countries with abundant resources, large populations and diverse societies. We aspire for rapid growth for ourselves and for an external environment that is conducive to our development goals”.
  16. 16. 16 European Union The European Union (EU) is an economic and political union of 28 member states that are located primarily in Europe. The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states. Institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, the European Central Bank, the Court of Auditors, and the European Parliament. The European Parliament is elected every five years by EU citizens. The EU's de facto capital is Brussels. The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by the Inner Six countries in 1951 and 1958, respectively. In the intervening years the community and its successors have grown in size by the accession of new member states and in power by the addition of policy areas to its remit. The Maastricht Treaty established the European Union under its current name in 1993. The latest major amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009. The EU has developed a single market through a standardized system of laws that apply in all member states. Within the Schengen Area (which includes 22 EU and 4 non-EU states) passport controls have been abolished.[17] EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries, and regional development. The euro zone, a monetary union, was established in 1999 and came into full force in 2002. It is currently composed of 18 member states. Through the Common Foreign and Security Policy the EU has developed a role in external relations and defense. Permanent diplomatic missions have been established around the world. The EU is represented at the United Nations, the WTO, the G8, and the G-20. With a combined population of over 500 million inhabitants, or 7.3% of the world population, the EU in 2012 generated a nominal gross domestic product (GDP) of 16.584 trillion US dollars, constituting approximately 23% of global nominal GDP and 20% when measured in terms of purchasing power parity, which is the largest nominal GDP and GDP PPP in the world.[24] The EU was the recipient of the2012 Nobel Peace Prize. Objective of European Union. The European Union (EU) is a political community constituted as an international organization whose aim is to promote integration and a common government of the European people and countries. According to the Article 3 of the European Union Treaty, Union’s aim is to promote peace, its values and the well-being of its peoples. It is based on the values of freedom, democracy, equality, law
  17. 17. 17 enforcement and respect for human rights and dignity. The Union’s mission: 1. Establishing an area of freedom, security and justice without internal borders. 2. Developing an internal market where competition is free, within the framework of a social economy market whose aim is full employment. 3. Creating a sustainable development with an economic growth capable of fulfilling the well-being needs of our society in the short, medium and, especially, long term. 4. Promoting scientific and technical progress. 5. Fighting against social exclusion and discrimination. Promoting social justice and protection, equality between women and men, solidarity between generations and, protection of children’s rights. 6. Promoting economical, social and territorial cohesion and solidarity among Member States. Also, the European Union aims to respect its cultural richness and linguistic diversity (23 official languages) and, to ensure the conservation and development of European cultural heritage Relationship with India The EU is India's largest trading partner, accounting for 20% of Indian trade. However India accounts for only 1.8% of the EU's trade and attracts only 0.3% of European Foreign Direct Investment, although still provides India's largest source of investment. During 2005 EU-India trade grew by 20.3%. Trade between the two has more than doubled from €25.6 billion (US$36.7 billion) in 2000 to 55.6 billion Euros in 2007, with further expansion to be seen. "We have agreed to achieve an annual bilateral trade turnover of €100 billion within the next five years," Singh told reporters. A joint statement issued at the end of the summit said the EU and India would work to reach an agreement on climate change by the end of 2009. According to a report in 2010, India, at that time, was the eighth largest trading partner of the European Union, behind China and Russia. There was controversy in 2006 when the Indian Mittal Steel Company sought to take-over the Luxembourg based steel company, Arcelor. The approach met with opposition from France and Luxembourg but was passed by the Commission who stated that they were judging it on competition grounds only.