1bo 1

Masters Of Commerce
(M.Com) 1st Year
Assignments
Course Code: IBO-01
Course Title:-International Business Environment
Assignment Code:-IBO-01-TMA/2016-17
Coverage: All Blocks
AUTHOR:- M.R UMAIR WANI
S C H O O L O F M A N A G E M E N T
S T U D I E S
I N D R A G A N D H I N A T I O N A L O P E N
U N I V E R S I T Y
M A I D A N G A R H I , N E W D E L H I - 1 1 0
0 6 8
2 0 1 6 - 2 0 1 7

1 IBO-O1 (INTERNATIONAL Business Environment) SOLOVED TUTOR MARKED ASSIGNMENT)
 Do You Think That Study Of International Business Environment Is Relevant For The Manager .Give Your Arguments And
Explain The Economic And Financial Environment Of International Business:-International Managers Face Intense And Constant
Challenges That Require Training And Understanding Of The Foreign Environment. Managing A Business In A Foreign Country
Requires Managers To Deal With A Large Variety Of Cultural And Environmental Differences. As A Result, International
Managers Must Continually Monitor The Political, Legal, Sociocultural, Economic, And Technological Environments
Relevance of International Business To Managers
An Assessment Of The Operating Environment Of Business Firms Is The Core. The Students, Managers And Entrepreneurs Need
To Study Business Environment For The Following Reasons:
 Understanding The Nature Of Environment: An Analysis Of Environment Enables Business Firms To Understand That Today's
Environment Is Turbulent, Complex And Dynamic, And Hence They Cannot Afford To Remain Passive To The Fast-Paced
Changes Taking Place. And At The Same Time The Organization Must Learn To Live With Chaos In Order To Cope With The
Radical Changes.
 Environment Influences Different Industries Differently: And Within One Industry Different Firms Differently As It Is Multi-
Faceted. Therefore, The Environment Has To Be Understood In A Proper Perspective.
 To Understand Customers In A Context: What Distinguishes The Strategic Concept Of Marketing From The 'New' Concept Of
Marketing Which Appeared In 1960 Is The Emphasis On Environment. "Knowing Everything There Is To Know About The
Customer Is Not Enough.
To Succeed, Marketers Must Know The Customer In A Context Including The Competition, Government Policy And Regulation,
And The Broader Economic, Social, And Political Macro Forces That Shape The Evolution Of Markets.
 Different Markets, Different Strategies: In Terms Of Market, For Domestic As Well As International, The Different Strategies Are
Required Only Because Of Differences In Business Environments. If There Are No Differences Then The Same Strategies Would
Have Worked For Both.
 To Identify What Is Critical In Environment: Business Environments Can Be Of Different Kinds - Internal And External,
Domestic, National And Global, And So On. The Entrepreneurs Will Have To Identify For Themselves As To What Is Critical For
Them And Focus Upon The Same.
 The Root Cause Of Most Business Problems Is The Self-Reference Criterion:(SRC) In Making Decisions, I.E., An Unconscious
Reference To One's Own Cultural Values, Experiences And Knowledge As The Basis For Decisions. Many Firms Have Burnt Their
Fingers Because Of It - Like Colgate-Palmolive And Apple Computers. Proctor & Gamble Lost Heavily When It Entered Japanese
Market With American Products, American Managers, And American Practices.
 An Analysis Of Business Environment Tells The Entrepreneurs Of Opportunities And Threats (Through External Environment),
And Strengths And Weaknesses (Through Internal Environmental Analysis), A Precursor To Designing Right Kind Of Strategies.
 Organizations Have A Choice In How They Manage Their Relationships With The Environment. They May Be Reactive, When
They Just Sit Back And Wait For The Environment To Change, And React To Changes As They Happen.
They Constantly Engage Themselves Into Fire-Fighting Immediate Problems. Or They Can Identify And Foresee Changes In The
Environment, And Plan Their Responses Before The Changes Happen.
They Are Known As Proactive - Planning For The Future. And Some Of The Organizations Go Even Beyond And Manage The
Environment In Their Own Interests - At Different Times Since 1900, Ford, IBM, Sony, Mcdonalds And Microsoft Have Done It.
 Bretton Woods Systems:-The Bretton Woods System Was The First System Used To Control The Value Of Money Between
Different Countries. It Meant That Each Country Had To Have A Monetary Policy That Kept The Exchange Rate Of Its Currency
Within A Fixed Value—Plus Or Minus One Percent—In Terms Of Gold.
The International Monetary Fund (IMF) Was Created To Fight Against Temporary Imbalances Of Payments. The Bretton Woods
System Was The First Monetary Order That Organized Monetary Relations Among Independent Nation-States.

It Set Out The Rules For Commercial And Financial Relations Among The World's Major Industrial States.
Plans To Rebuild The International Economic System After The End Of World War II Started Before The War Ended. 730
Delegates From All 44 Allies Of World War II Came To Bretton Woods, New Hampshire For The United Nations Monetary And
Financial Conference. The Delegates Discussed And Then Signed The Bretton Woods Agreements During The First Three Weeks
Of July 1944.
The Planners At Bretton Woods Set Up A System Of Rules, Institutions, And Procedures To Regulate The International Monetary
System. They Started The International Bank For Reconstruction And Development (IBRD) (Now One Of Five Institutions In The
World Bank Group) And The International Monetary Fund (IMF). These Organizations Became Active In 1946 After Enough
Countries Had Ratified The Agreement.
Until The Early 1970s, The Bretton Woods System Worked. It Controlled Conflict And Achieved The Common Goals Of The
Leading States That Had Created It, Especially The United States. But In 1971, In The Face Of Increasing Strain, The United States
Decided Not To Allow The Conversion Of Dollars To Gold And The System Collapsed.
 Describe The Financial Assistance Provided By International Monetary Fund:- The International Monetary Fund (IMF) Is An
International Organization That Provides Financial Assistance And Advice To Member Countries. This Article Will Discuss The
Main Functions Of The Organization, Which Has Become An Enduring Institution Integral To The Creation Of Financial Markets
Worldwide And To The Growth Of Developing Countries.
The IMF Provides Various Types Of Loans To Member Governments. Concessional Loans Are Granted To Low-Income Countries
At A Concessional Interest Rate Through The Poverty Reduction And Growth Facility (PRGF) While Non-Concessional Loans Are
Provided With A Market-Based Interest Rate Through Five Mechanisms: The Stand-By Arrangements (SBA); Extended Fund
Facility (EFF); Supplemental Reserve Facility (SRF); Contingent Credit Lines (CCL); And The Compensatory Financing Facility
(CCF).
Members Facing A Balance Of Payments Problem Can Immediately Withdraw Up To 25 Per Cent Of Its Quota In Gold Or
Convertible Currency. If This Is Insufficient, A Member Country May Borrow Up To Three Times Its Paid-In Quota.
Two Frequently Used Mechanisms For IMF Loans Are The Standby Arrangements And The Extended Fund Facility. Under The
Standby Arrangements, Member Countries Are Allowed To Borrow Over A Period Of One To Two Years To Support
Macroeconomic Stabilization Programmes And Repayments Are Made Within Three To Five Years. Under The Extended Fund
Facility, Countries Borrow For A Period Of Three To Four Years And Repayments Are Not Due Until Five To Ten Years Down The
Line.
Member Countries Can Also Avail Themselves Of The Fund’s Short-Term Financing Facilities. The Supplemental Reserve Facility
Provides Very Short-Term Financing On A Large Scale To Emerging Market Economies Experiencing Sudden Loss Of Market
Confidence As A Result Of Massive Outflows Of Capital While The Contingent Credit Lines Finances National Economic Policies
Aimed At Averting An Economic Crisis Precipitated By Crisis Elsewhere In The World. Both Types Of Financing Require
Repayment Within One To Two Years And Carry A Surcharge. The Compensatory And Contingency Financing Fund Provides
Loans To Countries Experiencing Shortfalls In Export Earnings Due To Unforeseen Circumstances, Such As Natural Disasters
Affecting Crop Yields. Repayments Are Made In Three And Quarter To Five Years
 Distinguish Between:

 GATT AND WTO:-The World Trade Organization (WTO) Is More Powerful Than General Agreement On Tariffs And
Trade(GATT)With Enlarged Functions In Dealing With World Economic Affairs. Hence, The WTO Cannot Be Simply Regarded As
The Extension Of GATT. It Completely Replaces GATT By Sporting A Totally Different Outlook.
The Following Are The Principal Differences Between The GATT And WTO.
GATT WTO
1. The GATT Was A Set Of Rules. It Has No Institutional
Foundation And Is Just A Multilateral Agreement. It
Functioned Only With A Small Associate Secretariat.
1. WTO Is A Powerful Body With Enlarged Functions. WTO
Functions With Its Own Secretariat.
2. GATT Was Adhoc And Provisional. Only After Forty
Years, Various Governments Chose To Treat It As A
Permanent Commitment.
2. WTO Commitments Are Full And Permanent.
3. GATT Was Applied To Trade In Merchandise Goods. 3. Wtos Covers Trade In Services As Well As Trade Related
Aspects Of Intellectual Property Rights (Trips).
4. GATT Was Selective In Nature, It Was A Multilateral
Instrument And In 1980s Many New Agreements Of A
Plurilateral Nature Were Added.
4. WTO Involves Commitments For The Entire Membership
By Remaining Multilateral In Nature.
5. GATT Was Less Powerful And Its Dispute Settlement Was
Slow And Less Efficient. Its Rulings Could Be Easily Blocked.
5. WTO Is More Powerful Than GATT. The WTO Dispute
Settlement Is Faster And Effective And Thus Much Less
Susceptible To Blockages Than GATT.
6. GATT Had Contracting Parties. 6. WTO Has Members.
7. Existing Domestic Legislation Are Allowed To Continue
By The GATT System Even If It Violates The Agreement.
7. WTO Does Not Permit This.
 Unlawful Agreement And Illegal Agreement:-As Defined Under Secs,23 And 24,An Agreement Is Unlawful And Void If Its Object
Or Consideration Is Unlawful Or Both Are Unlawful. Where As, Illegal Agreement On The Other Hand, Is An Unlawful
Agreement Whose Object Or Consideration Is Criminal In Nature Or Immoral In Character Or Both Involve Criminality Or
Immorality.
In Lllegal Agreement The Object Or Consideration Of An Agreement Is Unlawful If (A)It Is Forbidden By Law,(B)It Defeats The
Provisions Of Any Law, (C) It Is Fraudulent) It Implies Or Involves Injury To The Person Or Property Of Another And E)The Court
Regards It As Immoral Or Opposed To Public Policy. On The Other Hand, An Illegal Agreement Is Void Ab Initio And Not
Enforceable By Law If The Main Agreement Is Illegal, Its Collateral Agreement Is Also Tainted With Illegality. For Example If (A)
Agrees To Pay Rs.5000/- To(B) If (B) Assaults (C) Which Is A Crime .Here Both The Object And The Consideration Are Not Only
Unlawful But Additionally Illegal, Hence The Agreement Is Not Only Void Ab Initio But Unlawful Including Illegal, If The Money
Promised To Be Paid For Commission Of The Crime Is Barrowed By (A) From (D) Which Is A Subsidiary Or Collateral Transaction
The Same Is Also Illegal And Void. It Should Be Remembered That All Illegal Agreements Are Unlawful And Void, But All Unlawful
And Void Agreements Are Not Necessarily Illegal

 CURRENT ACCOUNT AND CAPITAL ACCOUNT OF BALANCE OF PAYMENTS:-The Current Account Records Exports And Imports
Of Goods And Services As Well As Unilateral Transfers Whereas The Capital Account Records Transactions Of Purchase And Sale
Of Foreign Assets And Liabilities During A Particular Year. The Current Account Considers Goods And Services Currently Being
Produced. The Credit And Debit Of Foreign Exchange Due To These Transactions Are Also Recorded In The Balance Of Current
Account. The Capital Account Is Concerned With Payments Of Debts And Claims, Regardless Of The Time Period. The Balance Of
Capital Account Includes All Items Reflecting Changes In Stocks.
The Balance Of Payments Contains Two Accounts: Current And Capital. The Current Account Deals With Short-Term
Transactions Known As Actual Transactions, As They Have A Real Impact On Income, Output And Employment Levels Of A
Country Through The Movement Of Goods And Services In The Economy. It Is Comprised Of Visible Trade (Export And Import Of
Goods), Invisible Trade (Export And Import Of Services), Unilateral Transfers And Investment Income (Income From Factors Such
As Land Or Foreign Shares). The Resulting Balance Of The Current Account Is Approximated As The Sum Total Of Balance Of
Trade.
The Capital Account Is A Record Of The Inflows And Outflows Of Capital That Directly Affect A Country’s Foreign Assets And
Liabilities. It Is Concerned With All International Trade Transactions Between Citizens Of A Given Country And Citizens In Other
Countries. The Components Of The Capital Account Include Foreign Investment And Loans, Banking Capital And Other Forms Of
Capital, As Well As Monetary Movements Or Changes In Foreign Exchange Reserve. The Capital Account Flow Reflects Factors
Such As Commercial Borrowings, Banking, Investments, Loans And Capital.
In Economic Terms, The Current Account Deals With Receipt And Payment In Cash As Well As Non-Capital Items, And The
Capital Account Reflects Sources And Utilization Of Capital. The Sum Of The Current Account And Capital Account As Reflected
In The Balance Of Payments Will Always Be Zero; Any Surplus Or Deficit In The Current Account Is Matched And Cancelled Out
By An Equal Surplus Or Deficit In The Capital Account.
 Utilitarianism And Formalism:-Advocates Of Utilitarianism Believe That All Actions Must Seek To Produce The Greatest Good For
The Greatest Number Of People, According To The Stanford Encyclopedia Of Philosophy. This Applies Even If An Act Harms An
Innocent Person. For Example, If A Surgeon Has The Chance To Save Three Lives By Harvesting The Organs Of A Healthy Person,
Utilitarian Theory Suggests That Harming The Healthy Person Is Acceptable To Save A Greater Number Of Lives.
By Contrast, Deontology Focuses On The Moral Aspects Of Any Action, Not Its Consequences. This Philosophy Believes That Some
Acts Are Always Wrong, Regardless Of The Consequences. Deontologists Find Lying To Be Unacceptable, For Example, Even When
Someone Lies In Order To Bring About A Desirable Result. Both Of These Systems Have Weaknesses. For Instance, Critics Charge
That Utilitarianism Justifies Enslaving A Small Group Of People In Order To Help A Larger Group. Critics Of Deontology Point
Out That Its Rigidity Does Not Allow For Exceptional Cases Where A Morally Dubious Action Avoids Causing Harm To Others.
The Primary Difference Between Deontology And Utilitarianism, Two Competing Systems Of Ethics, Is That The Former System Is
Concerned With Whether An Act Is Intrinsically Right Or Wrong, While The Latter System Believes That Only The Consequences
Of An Act Are Important. Deontology Deals With Intentions And Motives. Utilitarianism Focuses Only On Results
 Comment On The Following:-
 Quantitative Restrictions Do Not Have The Effect Of Imposing Absolute Limits On The Goods Traded:- There Are Different
Barriers To Foreign Trade The Two Of The Most Importance Are Given Bellow:-

 Tariff And Non-Tariff:-Tariff Is A Tax On Imports, Which Is Collected By The Federal Government And Which Raises The Price Of
The Good To The Consumer. Also Known As Duties Or Import Duties, Tariffs Usually Aim First To Limit Imports And Second To
Raise Revenue. The Effect Of Tariffs And Quotas Is The Same: To Limit Imports And Protect Domestic Producers From Foreign
Competition. A Tariff Raises The Price Of The Foreign Good Beyond The Market Equilibrium Price, Which Decreases The Demand
For And, Eventually, The Supply Of The Foreign Good. A Quota Limits The Supply To A Certain Quantity, Which Raises The Price
Beyond The Market Equilibrium Level And Thus Decreases Demand. Tariffs Come In Different Forms, Mostly Depending On The
Motivation, Or Rather The Stated Motivation. (The Actual Motivation Is Always To Limit Imports.) For Instance, A Tariff May Be
Levied In Order To Bring The Price Of The Imported Good Up To The Level Of The Domestically Produced Gouda Retaliatory
Tariff Is One That Is Levied In Response To A Tariff Levied By A Trading Partner. In The Eyes Of An Economist, Retaliatory Tariffs
Make No Sense Because They Just Start Tariff Wars In Which No One—Least Of All The Consumer—Wins.
 Nontariff Barriers Include Quotas, Regulations Regarding Product Content Or Quality, And Other Conditions That Hinder
Imports. One Of The Most Commonly Used Nontariff Barriers Are Product Standards, Which May Aim To Serve As “Barriers To
Trade.” For Instance, When The United States Prohibits The Importation Of Unpasteurized Cheese From France, Is It Protecting The
Health Of The American Consumer Or Protecting The Revenue Of The American Cheese Producer? Other Nontariff Barriers
Include Packing And Shipping Regulations, Harbor And Airport Permits, And Onerous Customs Procedures, All Of Which Can
Have Either Legitimate Or Purely Anti-Import Agendas, Or Both.
 New Technologies Do Not Lead To Economies In The Use Of Raw Materials: Introduction Of New Technologies Has Led To
Economics In The Use Of Raw Materials. It Is No Longer Required To Use As Much Raw Material As In The Past To Manufacture
One Unit Of The Finished Products. This Means That Increased Production Of A Number Of Manufactured Items Has Not Resulted
In A Proportionate Growth In Demand For New Raw Materials Which Are Use As Inputs In The Manufacturing Process. It Is Not
Only That New Technologies Have Led To Economies In The Use Of Raw Materials But They Have Also Resulted In Some Cases, In
The Complete Elimination Of Raw Materials. For Example, Developments Towards Bulk Handling Of Food Grains And Marketing
Of Food Grains In Consumer Packs Have Led To The Complete Elimination Of Jute Bags For Packing And Storing At Intermediate
Stages.
Cell Phones Are Perhaps, A Very Good Example Of A Technological Development Resulting In Total Elimination Of The Need For
Raw Materials Such As Copper Required To Be Used For Installation Of Land Line Telephone Instruments And Also Of Drastic
Reduction Of Raw Material Input Required To Manufacture One Unit Of The Product
 Quasi Contracts Do Not Represent Certain Relations Resembling Those Created By Contracts:-Quasi Contracts Covered Under
Secs 68-72 Of The Indian Contract Act, Represent Certain Relation Resembling Those Created By Contracts. Contracts Are
Agreements Which Create Legal Obligations. Sometimes Legal Obligation Are Created By Law Without Agreements. These Are
Enforceable By Law As If There Is A Contract,(Quasi Means As IF). Strictly Speaking, Quasi Contract Is Not A Contract At All.
Although It Is Enforced Like A Contract Only On Equitable Grounds At This Contract Is Based On Equity. Equity And Justice Do
Not Permit A Person To Be Unjustly Enriched At The Cost Of Another. So The Benefit Received Must Be Returned As The Quasi
Contract Is Based On The Principles Of Restitution. For Example, A) If You Find A Gold Ring Liying On The Floor Belonging To
Sombady,You Have A Quasi Contractual Obligation To Return The Gold Ring To The True Owner(Sec 71),B)If You Pay Some
Money To B By Mistake Which Is Due To Be Paid To C,B Has A Quasi Contractual Obligation To Refund The Money To You (Sec-
72).Sections 68-72 Contain Five Different Examples Of Quasi Contractual Obligations Which May Be Seen For More Insinght
Into The Quasi Contract.
 Grey Marketing Arises When Goods Are Imported And Sold Through Distribution Channels Authorized By The Manufacturer:-

Gray Marketing Has Generated Much Interest In Recent Years And Has Become The Latest Management Buzz In Town.
Gray Markets Arise When A Manufacturer’s Products Are Sold Outside Of Its Unauthorized Channels, For Instance When Goods
Designated For A Foreign Market Are Resold Domestically. This Paper Considers Goods Originally Sold In A Foreign Market And
Then Reimported Domestically Through Channels Unauthorized By The Trademark Owner. Gray Markets Can Arise When
Transaction And Search Costs Are Low Enough To Allow Products To “Leak” From One Market Segment Back Into Another.
Examples Of Industries With Active Gray Markets Include Pharmaceuticals, Automobiles, And Electronics. This Paper
Highlights What Is Gray Marketing & Its Role In Foreign Countries And How Gray Marketing Creates The Values For
The Producer And Channel Of Distributor In An Efficient Manner.
IDDLEMEN AND CHANNELS OF DISTRIBUTION
Foreign Middlemen Representing Importers And Operating With In Foreign Countries Are, In General, Are Less Aggressve
And Perform Fewer Marketing Services Than Their Counterparts Selling Domestically Produced Products. The Foreign
Marketing Situation, However, Usually Argues APJEM Arth Prabhand: A Journal Of Economics And Management Against
Bypassing These Middlemen. A Deceptive Practice Employed By Some Middlemen Is Called Export Diversion Or Gray Marketing.
When A Distributor Buys A Product Made In One Country And Distribute It Ina Second Country, But Instead Diverts The
Product To A Third Country, Gray Marketing Is Occurring.
CONCLUSION
The Gray Market, While Not Illegal Like The Black Market, Involves The Sale Of Goods Through Means Other Than
What Was Intended Or Approved By The Original Maker Of A Product. A Private Person Or Business Purchases The Good
At Retail, Wholesale, Or A Discounted Price, And Attempts To Resell It Legally At A Higher Price. The List Of Things That Can Be
Sold On The Gray Market Is Endless, But Popular Items Include Electronics, Photographic Equipment, Cigarettes, Dvds And
Wine. Authorized Agents And Sellers Are Most Often Financially Affected By The Gray Market, Because They Lose
Business To Unauthorized Sellers. Local Laws Can Help Or Hurt The Gray Market. In Some Cases, Food Is Difficult To Resell
Because Local Laws Dictate Packaging, So What Is Legal In One State Or Country May Not Be In Another. In An Effort To
Curb The Resale Of Dvds And DVD Players, DVD Region Codes Are Written Onto The Disc For The Specific Geographical
Area It Is Supposed To Be Sold In. Only The DVD Players Intended For Sale In That Area Can Play These Dvds. Low
Tariffs
 WRITE SHORT NOTES ON THE FOLLOWING:-
Modem Theory Of Trade:-The Modern Theory Of International Trade Is An Extension Of The General Equilibrium Theory Of
Value. This Theory Has Been Put Forward By Bertil Ohlin, A Swedish Economist, And It Has Replaced The Traditional Comparative
Cost Theory. Just As Individuals Specialize In Economic Activity In Which They Have Comparative Advantages, Similarly
Countries Specialize In The Production Of Certain Commodities In Which They Have Comparative Advantage On The Basis Of
Factor Endowments. Just As Differences In Individual Capabilities Are The Cause Of Exchange Between Individuals, Similarly
Differences In Factor Prices Is The Cause Of International Trade. Bertil Ohlin Thus Extends The Analysis Which Is Applicable To A
Single Market To The Determination Of Values Internationally I.E. Exchange Between Different Countries. Thus, Ohlin Observes
“International Trade Is But A Special Case Of Inter-Local Or Inter-Regional Trade.” Hence, According To Ohlin, There Is No Need
To Have Separate Theory Of International Trade. He Says That The Same Fundamental Principle Holds Good Of All Trade,
Whether It Is Internal Trade Or International Trade. The Classical Theory Of Comparative Cost Is Based On The Assumption Of
Comparative Immobility Of The Factors Of Production As Between Different Countries. But Ohlin Points Out That This Immobility
Is To Be Found Even In Different Regions Of The Same Country. According To Ohlin, The Immediate Cause Of International Trade
Is The Difference In Commodity Prices Which In Turn Is Due To The Differences In Factor Prices. Goods Are Purchased Because It

Cheaper To Buy Them From Outside The Country. The Establishment Of The Rate Of Exchange Between The Two Countries
Facilitates The Comparison Between The Commodity Prices Prevailing In The Two Countries. Thus, In Ohlin’s Opinion There Are
No Fundamental Differences but Only Quantitative Differences between Inter-Regional and International Trade. Ohlin’s Theory
Represents a Departure from the Classical Theory and Marks a Great Improvement on It.
Multilateral Agreement On Investment:-In May 1995, The OECD Began Negotiations On A Multilateral Agreement On
Investment (MAI). The US, Eager To Avoid Interference From Poor Countries, Considered The OECD Council A "Safe" Body Since
Only Rich Countries Are Members Of The Organization. Secret Negotiations Took Place From 1995 Until 1997 When An OECD
Source Leaked A Copy Of The Draft Agreement To A Canadian Citizen Group. The Leak Revealed That The MAI Sought To
Establish A New Body Of Universal Investment Laws That Would Guarantee Corporations Unconditional Rights To Buy, Sell And
Do Financial Operations All Over The World, Without Any Regard For National Laws And Citizens' Rights. The Draft Gave
Corporations A Right To Sue Governments If National Health, Labor Or Environment Legislation Threatened Their Interests.
However, The Negotiations Failed In 1998 When First France, And Then Other Countries, Successively Withdrew After Pressure
From A Global Movement Of Ngos, Citizens Groups And Governments Of Poor Countries. MAI Opponents Saw The Agreement As
A Threat To National sovereignty And Democracy And Argued That It Would Lead To A "Race To The Bottom" In Environmental
And Labor Standards. The Failure Of The MAI Negotiations Proved A Success For The Global Movement Against The MAI.
However, Rich Governments Continue To Push For Similar Investment Provisions In Regional Trade Agreements And The World
Trade Organization (WTO). At The WTO Ministerial In Cancun In September 2003, The Richer WTO Members Tried To
Introduce A Multilateral Investment Agreement (MIA) Through The "Singapore" Issues. These Efforts Failed Again, However, As A
Group Of More Than Twenty Poor Countries United In Demanding A Fairer Trade Deal. This Page Follows The MAI And Other
Related Initiatives On International Investment.
 Role Of International Chamber Of Commerce:-ICC's Administered Dispute Resolution Services Help Solve Difficulties In
International Business. ICC Arbitration Is A Private Procedure That Leads To A Binding And Enforceable Decision.
The International Chamber Of Commerce Is The Largest, Most Representative Business Organization In The World.
ICC Has Three Main Activities: Rule Setting, Dispute Resolution, And Policy Advocacy. Because Its Member Companies And
Associations Are Themselves Engaged In International Business, ICC Has Unrivaled Authority In Making Rules That Govern The
Conduct Of Business Across Borders. Although These Rules Are Voluntary, They Are Observed In Countless Thousands Of
Transactions Every Day And Have Become Part Of International Trade. Commerce Steers ICC Arbitration And Has Received Over
21,000 Cases Since Its Inception In 1923.
Over The Past Decade, The Court's Workload Has Considerably Expanded. The Court's Membership Has Also Grown And Now
Covers 85 Countries And Territories. With Representatives In North America, Latin And Central America, Africa And The Middle
East And Asia, The ICC Court Has Significantly Increased Its Training Activities On All Continents And In All Major Languages
Used In International Trade.ICC Dispute Resolution Services Exist In Many Forms:
Arbitration Is A Flexible And Efficient Dispute Resolution Procedure Leading To Binding And Final Decisions Subject To
Enforcement Worldwide.
Mediation Is A Flexible Technique, Conducted Privately And Confidentially, In Which A Neutral Facilitator Helps Parties To Seek A
Negotiated Settlement Of Their Dispute. Dispute Boards Are Independent Bodies Designed To Help Resolve Disagreements Arising

During The Course Of A Contract. Expertise Is A Way Of Finding The Right Person To Make An Independent Assessment On Any
Subject Relevant To Business Operations.DOCDEX Provides Expert Decisions To Resolve Disputes Related To Documentary
Credits, Collections And Demand Guarantees, Incorporating ICC Banking Rules
Code Of Ethics For International Marketing:-Substantial Part Of International Trade Is Carried Out By Mnc”S That Are Under
Conflicting Perssures Of Their Stakeholders. Some Of The Notable Pressures On Them Are Listed Below.
Pressure To Meet Demands From Consumers Differing In Their Lifestyles And Environmental Factors On A Firm To Meet Their
Differing Expectations From The Same Product And Or Services. Pressure To Meet The Expectation Of Stakeholders About Rate Of
Return On Investment, Requiring Them To Be Prudent Investors And To Effectively Handle Various Risks Of Their Activities.
Pressure To Do Effective Financial Management Including Tax Planing, Pressure To Complete Effectively In Markets.
A Review Of Various Pressures On Major Players In International Trade Shows The Need To Clearly Lay Down Guidelines, In The
Form Of Code Of Ethics, For Their Employees, Such Code Of Ethics Should Lay Down For Operating In Various Markets,
Particularly Focusing On Markets Where Unethical Behaviour Is More Common. Oecd. International Chambers Of Commerce,
International Labour Organisation And Un Committee On Transnational Corporations. Are Some Of The Agencies/Organisation
Who Laid Down These Ethics. These Code Of Ethics Are Related To The Mnc”S And Their Stakeholders Such As Host Government,
The Public, Consumers And Employees.
Following Are The Set Of Ethics Of The Companies Active In International Trade Should Ensure The Following:
1) Need To Respect Laws And Regulations Of The Host Countries And Not To Do Anything To Compromise With The Health And
Safety Of Consumers. Us Laws On Product Liability, A Big Litigation Issue, Is An Extreme Case That Affects The Development
Of New Products, Especially Pharmaceuticals, Such Legislation Makes Firm Reluctant To Export To Usa Due To The
Prohibitive Cost Of Litigation.
2) Firms Should Not Exploit The Weakness In Legislation In The Host Countries Such As Selling Products In Those Markets That
Are Banned Elsewhere.
3) Firms Can Be Proactive And Assist The Government In Preventing Marketing Of Unsafe Products. The Close Relationship
Developed By A Firm With A Local Government Should Not Be Misused For Gaining Competitive Advantage

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