Presentation on AU, EU, APEC, NAFTA, AFTA, SAPTA, LAFTA, ASEAN
Global business
1. GLOBAL BUSINESS
Presented by:-
DEBAPRASAD OJHA
Regd. No- 7050
LOGO
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superseded the Canada – United States Free Trade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. 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 nation's legislative or parliamentary
branch.
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 Mexico's 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. Trade:
The agreement opened the door for open trade,
ending tariffs on various goods and services, and
implementing equality between Canada, USA, and
Mexico. 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 the
implementation of NAFTA, the countries involved have
been able to do the following.
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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. 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. 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.
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. Asia-Pacific Economic
Cooperation (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 world's
population, approximately 54% of the world's gross domestic
product and about 44% of world trade.
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:-
Australia1989
Brunei (Brunei Darussalam)1989 Singapore1989
Canada1989 Philippines1989
Chile1994 Republic of China (ROC)1991
China (People's Republic of China)1991 Russia1998
Hong Kong (Hong Kong, China)1991 Thailand1989
Indonesia1988 United States1989
Japan1989 Vietnam1998
South Korea (Republic of Korea)1989
Mexico1993
Malaysia1989
New Zealand1989
Papua New Guinea1993
Peru1998
13. Asia-Pacific Economic
Cooperation's 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. 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. 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. 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. 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.
19. 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.
20. 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.
21. 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.
22. 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
countries
2. Regional scope agreement, among member countries
3. Partial scope agreements, between two or more countries of
the area.