The organizations formed to assist the international business

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I N T E R N A T I O N A L B U S I N E S S
INTRODUCTION
Globalization or internationalism has expanded the scope of international
business. It removed the barriers among countries and smoothen the road of international
business. Many international organizations help businesses to work internationally. Our objective
of this study is to know about those organizations. Before going to that part we have to first
know what ‘Globalization’ is and what is ‘International business?
Globalization can be described as a process by which the people of the world are
unified into a single society and functioning together. This process is a combination of economic,
technological, socio-cultural and political forces. Globalization, as a term, is very often used to
refer to economic globalization, which is integration of national economies into the international
economy through trade, foreign direct investment, capital flows, migration, and spread of
technology.
On the other hand international business is a tool of globalization.
International business comprises all commercial transactions (private and
governmental, sales, investments, logistics, and transportation) that take place between two or
more regions, countries and nations beyond their political boundaries. Usually, private
companies undertake such transactions for profit; governments undertake them for profit and for
political reasons. It refers to all those business activities which involve cross border transactions
of goods, services, resources between two or more nations. Transaction of economic resources
include capital, skills, people etc. for international production of physical goods and services
such as finance, banking, insurance, construction etc.
Now a day international business is expanding too fast. It is now included in
higher educational courses. Anyone can take it major for BBA or MBA. Because it’s really a
very important subject to study. The major causes of international business is to expand sales, to
acquire resources, to minimize risks. These basic causes clears why international business was
introduces. There are some other elements have impact on the huge growth of this in recent time.
One of them is technological development in the field of communication. Another important
thing is international trade & business organizations. Whose basic objective is to promote
international business.

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Today our subject matter is Evolutions, Objectives and Trade & Business
performance and role into international trade of the international organizations formed to assist
the international business.
The bellow-listed organizations will be discussed in detail:
 World Bank (WB)
 European Union (EU)
 Free Trade Agreement (FTA)
 Asian Development Bank (ADB)
 World Trade Organization (WTO)
 International Monetary Fund (IMF)
 North American Development Bank (NADB)
 South Asian Free Trade Agreement (SAFTA)
 North American Free Trade Agreement (NAFTA)
 Association of South East Asian Nations (ASEAN)
 United Nations Conference on Trade and Development (UNCTAD)

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World Bank
(WB)
The World Bank is an international financial institution that provides loans to
developing countries for capital programs. The Headquarter of ‘World Bank Group’ is situated
at Washington, D.C. They have more than 10,000 employees in more than 120 offices
worldwide.
The World Bank's official goal is the reduction of poverty. According to its
Articles of Agreement (as amended effective 16 February 1989), all its decisions must be guided
by a commitment to the promotion of foreign investment and international trade and to the
facilitation of capital investment.
The World Bank comprises two institutions:
 International Bank for Reconstruction and Development (IBRD) and
 International Development Association (IDA).
The World Bank should not be confused with the World Bank Group, which
comprises the World Bank,

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1. International Finance Corporation (IFC)
2. Multilateral Investment Guarantee Agency (MIGA)
3. International Centre for Settlement of Investment Disputes (ICSID).
From: Wikipedia, the free encyclopedia
Evolution of World Bank
The World Bank was established at the 1944 Bretton Woods Conference, along
with three other institutions, including the International Monetary Fund (IMF). The World Bank
and the IMF are both based in Washington DC, and work closely with each other.
Although many countries were represented at the Bretton Woods Conference, the
United States and United Kingdom were the most powerful in attendance and dominated the
negotiations.
Traditionally, the World Bank has been headed by a citizen of the United States,
while the IMF has been led by a European citizen.
From Wikipedia, the free encyclopedia
Objectives of World Bank
The World Bank was established to promote long-term foreign investment loans
on reasonable terms. The, purposes of the Bank, as set forth in the 'Articles of Agreement’ are as
follows:
(i) To assist in the reconstruction and development of territories of members by
facilitating the investment of capital for productive purpose including;
(a) The restoration of economies destroyed or disrupted by war;

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(b) The reconversion of productive facilities to peaceful needs; and
(c) The encouragement of the development of productive facilities and resources
in fewer developing countries;
(ii) To promote private investment by means of guarantee or participation in loans and
other investments made by private investors.
(iii) When private capital is not available on reasonable terms, to supplement private
investment by providing on suitable conditions finance for productive purpose out of its own
capital funds raised by it and its other resources.
(iv) To promote the long-range balanced growth of international trade and the
maintenance of equilibrium in balances of payments by encouraging international investment for
the development of the productive resources of members, thereby assisting in raising
productivity, the standard of living, and conditions of labor in their territories.
(v) To arrange the loans made or guaranteed by it in relation to international loans
through other channels so that the more useful and urgent projects, large and small alike, will be
dealt with first.
(vi) To conduct its operations with due regard to the effect of international investment on
business conditions in the territories of members and in the immediate postwar years, to assist in
bringing about a smooth transition from a wartime to peacetime economy.
http://www.preservearticles.com
Trade & Business Performance of World Bank
Financial Products and Services
World Bank provides low-interest loans, interest-free credits, and grants to developing countries.
These support a wide array of investments in such areas as education, health, public
administration, infrastructure, financial and private sector development, agriculture, and
environmental and natural resource management.
Anti-corruption Activities

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Corruption is an international problem that requires international solutions. Much corruption
occurs in international business, including international government procurement, where the
Bank has a special interest. To be successful, efforts to reduce this kind of corruption must deal
with it at its source in capital-exporting countries as well as in developing countries.
European Union
(EU)
The European Union (EU) is a unification of states united to create a political and
economic community throughout Europe. Though the idea of the EU might sound simple at the
outset, the European Union has a rich history and a unique organization, both of which aid in its
current success and its ability to fulfill its mission for the 21st Century.
Evolution of European Union
The precursor to the European Union was established after World War II in the
late 1940s in an effort to unite the countries of Europe and end the period of wars between
neighboring countries. These nations began to officially unite in 1949 with the Council of
Europe. In 1950 the creation of the European Coal and Steel Community expanded the
cooperation. The six nations involved in this initial treaty were Belgium, France, Germany, Italy,
Luxembourg, and the Netherlands. Today these countries are referred to as the "founding
members."
During the 1950s, the Cold War, protests, and divisions between Eastern and
Western Europe showed the need for further European unification. In order to do this, the Treaty

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of Rome was signed on March 25, 1957, thus creating the European Economic Community and
allowing people and products to move throughout Europe. Throughout the decades additional
countries joined the community.
In order to further unify Europe, the Single European Act was signed in 1987 with
the aim of eventually creating a "single market" for trade. Europe was further unified in 1989
with the elimination of the boundary between Eastern and Western Europe - the Berlin Wall.
http://geography.about.com
Objectives of European Union
As in 1949 when it was founded with the creation of the Council of Europe, the
European Union's mission for today is to continue prosperity, freedom, communication and ease
of travel and commerce for its citizens. The EU is able to maintain this mission through the
various treaties making it function, cooperation from member states, and its unique governmental
structure.
The primary objectives of EU are something like these;
1. To promote economic and social progress.
2. To assert the identity of EU in international sense.
3. To introduce European citizenship.
4. To develop a area of freedom, security and justice.
5. To maintain and establish EU law.
University of Washington; http://lib.law.washington.edu
Organizational structure of EU

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Performance of European Union
When putting the European Treaty in place the objectives were not solely
dedicated to Europe, they worked hard on a foreign policy as well, which is worked at on a daily
basis.
Their foreign policy ensures fair trade. They want to eradicate poverty throughout
the world while protecting human rights. They want to develop an international law, a
sustainable environment and a sustainable development between countries while promoting
peace.
This policy has not just been written down on a piece of paper and has lab rats
following the rules. These are thought out to not only promote the well-being of people residing
within Europe, but enable these people to work with other countries whether it’s through trade or
working to improve the quality of life in suffering areas.
If you go on line and search for torn hill or Quibids, chances are you won’t find
anything about the European Unions objectives there, but they do play a part, through these sites
they offer free trade and fair trade throughout the world.
http://www.jidtunisie.net/2012/09/the-major-objectives-of-the-european-union/

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Asian Development Bank
(ADB)
The Asian Development Bank (ADB) is a regional development bank
established on 22 August 1966 to facilitate economic development of countries in Asia. The
bank admits the members of the United Nations Economic and Social Commission for Asia and
the Pacific (UNESCAP, formerly known as the United Nations Economic Commission for Asia
and the Far East) and non-regional developed countries. From 31 members at its establishment,
ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside.
ADB was modeled closely on the World Bank, and has a similar weighted voting system where
votes are distributed in proportion with member's capital subscriptions.
By the end of 2012, both the United States and Japan hold the two largest
proportions of shares each at 12.78%. China holds 5.45%, India holds 5.36%.
http://en.wikipedia.org/wiki/Asian_Development_Bank#Strategy_2020

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Evolution of Asian Development Bank
ADB was originally conceived by some influential Japanese who formulated a
"private plan" for a regional development bank in 1962, which was later endorsed by the
government. The Japanese felt that its interest in Asia was not served by the World Bank and
wanted to establish a bank in which Japan was institutionally advantaged.
Once the ADB was
founded in 1966, Japan took a prominent position in the bank; it received the presidency and
some other crucial "reserve positions" such as the director of the administration department. By
the end of 1972, Japan contributed $173.7 million (22.6% of the total) to the ordinary capital
resources and $122.6 million (59.6% of the total) to the special funds. In contrast, the United
States contributed only $1.25 million for the special fund.
The ADB served Japan's economic interests because its loans went largely
to Indonesia, Thailand, Malaysia, South Korea and the Philippines, the countries with which
Japan had crucial trading ties; these nations accounted for 78.48% of the total ADB loans in
1967-72. Moreover, Japan received tangible benefits, 41.67% of the total procurements in 1967-
76. Japan tied its special funds contributions to its preferred sectors and regions and
procurements of its goods and services, as reflected in its $100 million donation for the
Agricultural Special Fund in April 1968.
Takeshi Watanabe served as the first ADB president from 1966 to 1972.
http://en.wikipedia.org/wiki/Asian_Development_Bank#Strategy_2020
Objectives of Asian Development Bank
The main objectives of ADB are "to foster economic growth and cooperation in
the region of Asia and Far East, and to contribute to the acceleration of the process of economic
development of the developing members in the region, collectively and individually." The Bank
aims at achieving this broad objective through the following functions:
(i) Mobilization and promotion of investment of private and public capital for productive
purposes.

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(ii) Utilization of its resources for financing those development projects which contribute
most to the harmonious economic growth of the region as a whole, with special emphasis on the
needs of the smaller or less developed members.
(iii) Coordination of plans and policies of the member countries with a view to achieving
better utilization of their resources, making them economically more complementary, and
expanding their foreign trade.
(iv) Provision of technical assistance to the member countries for the preparation,
financing and execution of development projects.
(v) Cooperation with the United Nations, its various organs, and other international
organizations with the objective of persuading them to make investments in this region.
(vi) Undertaking of such other activities, this may help to achieve its main objectives.
http://www.preservearticles.com/2011092213906/what-are-the-main-objectives-and-functions-of-adb.html
Performance of ADB in International Business
The main function done by ADB are as follows:
 Technical assistance provided to members, so that they can plan & execute development
strategies and projects.
 Assistance to DMCs (Developing Member Countries) to coordinate policies designed for
development.
 Equity investment & loans to member nations.
 Encouragement to member nations to invest in private & public capital for development.
http://www.economywatch.com/international-organizations/asian-development-bank.html
Since 1973, ADB has been a key partner in Bangladesh's struggle for a better future by
contributing to critical economic and governance reforms in the South Asian country.

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As one of Bangladesh's largest sources of financing, ADB has supported projects in the
energy, water supply and sanitation, agriculture and natural resources, education, and transport
sectors.
This country brief summarizes how the partnership between the Government of
Bangladesh and ADB has contributed to the development of the country.
http://www.adb.org/countries/bangladesh/results
Because of this supporting role of ADB Bangladesh, become a developing country from
underdeveloped country. Moreover, this development encourages foreign investment & foreign
trade.
International Monetary Fund
(IMF)
The International Monetary Fund (IMF) is an international organization that
was initiated in 1944 at the Bretton Woods Conference and formally created in 1945 by 29
member countries. The IMF's stated goal was to assist in the reconstruction of the
world's international payment system post–World War II. Countries contribute money to a
pool through a quota system from which countries with payment imbalances can
borrow funds temporarily. Through this activity and others such as surveillance of its
members' economies and the demand for self-correcting policies, the IMF works to
improve the economies of its member countries.
The IMF describes itself as “an organization of 188 countries, working to foster
global monetary cooperation, secure financial stability, facilitate international trade, promote

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high employment and sustainable economic growth, and reduce poverty around the world.” The
organization's stated objectives are to promote international economic cooperation,
international trade, employment, and exchange rate stability, including by making
financial resources available to member countries to meet balance of payments needs. Its
headquarters are in Washington, D.C., United States.
There are 188 members of the IMF include 187 members of the UN & the
Republic of Kosovo. All members of the IMF are also International Bank for
Reconstruction and Development (IBRD) members and vice versa.
Former members are Cuba (which left in 1964) and the Republic of China,
which was ejected from the UN in 1980 after losing the support of then U.S. President
Jimmy Carter and was replaced by the People's Republic of China. However, "Taiwan
Province of China" is still listed in the official IMF indices.
Apart from Cuba, the other UN states that do not belong to the IMF are
Andorra, Liechtenstein, Monaco, Nauru and North Korea.
The former Czechoslovakia was expelled in 1954 for "failing to provide
required data" and was readmitted in 1990, after the Velvet Revolution. Poland withdrew
in 1950—allegedly pressured by the Soviet Union—but returned in 1986.
Evolution of IMF
The International Monetary Fund was originally laid out as a part of the Bretton
Woods system exchange agreement in 1944. During the earlier Great Depression, countries
sharply raised barriers to foreign trade in an attempt to improve their failing economies. This led
to the devaluation of national currencies and a decline in world trade.
This breakdown in international monetary cooperation created a need for
oversight. The representatives of 45 governments met at the Bretton Woods Conference in the
Mount Washington Hotel in the area of Bretton Woods, New Hampshire in the United States, to
discuss framework for post-World War II international economic cooperation. The participating
countries were concerned with the rebuilding of Europe and the global economic system after the
war.

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There were two views on the role the IMF should assume as a global economic
institution. British economist John Maynard Keynes imagined that the IMF would be a
cooperative fund upon which member states could draw to maintain economic activity and
employment through periodic crises. This view suggested an IMF that helped governments and
to act as the US government had during the New Deal in response to World War II. American
delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that
borrowing states could repay their debts on time. Most of White's plan was incorporated into the
final acts adopted at Bretton Woods.
The International Monetary Fund formally came into existence on 27 December
1945, when the first 29 countries ratified its Articles of Agreement. By the end of 1946 the Fund
had grown to 39 members. On 1 March 1947, the IMF began its financial operations, and on 8
May, France became the first country to borrow from it.
The IMF was one of the key organizations of the international economic system;
its design allowed the system to balance the rebuilding of international capitalism with the
maximization of national economic sovereignty and human welfare, also known assembled. The
IMF's influence in the global economy steadily increased as it accumulated more members. The
increase reflected in particular the attainment of political independence by many African
countries and more recently the 1991 dissolution of the Soviet Union because most countries in
the Soviet sphere of influence did not join the IMF.
The Bretton Woods system prevailed until 1971, when the U.S. government
suspended the convertibility of the US$ (and dollar reserves held by other governments) into
gold. This is known as the Nixon Shock. As of January 2012, the largest borrowers from the fund
in order are Greece, Portugal, Ireland, Romania and Ukraine.
Objective of IMF
The objectives of the international monetary funds are -
1. The main objective of the fund is to promote monetary cooperation among the different
countries of the world.

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2. The funds aim at providing and establishing multilateral payments and trade system in
place of bilateral agreements.
3. It will try to remove all restrictions and controls on foreign exchange imposed by the It
will.
4. It will lend or sell to its member - countries currencies of other countries. This facilitates
foreign exchange transactions among the members.
5. The fund aims at providing short - term monetary help to member countries during
emergency.
6. The fund is also to provide monetary help to member country in order to shorten the
duration and lessen the degree of disequilibrium in their international balance of
payment.
7. Another objective of the fund is to help the member countries invest their long - term
funds in profitable activities.
8. The fund is also to facilitate the expansion and balanced growth of international trade and
to contribute thereby to promotion and maintenance of high levels of employment and
real income of member countries.
http://wiki.answers.com/Q/What_are_the_objectives_of_the_International_Monetary_Fund
Functions of IMF
1. Merchant of Currencies: IMF main function is to purchase and sell the member
countries currencies.
2. Helpful For The Debtor Countries :- If any country is facing adverse balance of
payment and facing the difficulty to get the currency of creditor country, it can get short
term credit from the fund to clear the debt. The IMF allows the debtor country to
purchase foreign currency in exchange for its own currency up to 75% of its quota plus
an addition 25% each year. The maximum limit of the quota is 200% in special
circumstances.
3. Declared of Scarce Currency:- If the demand of any particular country currency
increases and its stock with the fund falls below 75% of its quota, the IMF can declare it
scare. Nevertheless, IMF also tries to increase its supply by these methods.
A. Purchasing: - IMF purchases the scare currency by gold.
B. Borrowing: - IMF borrows from those countries scare currency that has surplus

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amount.
C. Permission: - IMF allows the debtor countries to impose restrictions on the
imports of creditor country.
4. To promote exchange stability: - The main aim of IMF is to promote exchange
stability among the member countries. Therefore, it advises the member countries to
conduct exchange transactions at agreed rates. On the other hand, one country can change
the parity of the currency without the consent of the IMF but it should not be more than
10%. If the changes are on large scale and IMF feels that, according the circumstances of
the country, these are essential then it allows. The country cannot change the exchange
rate if IMF does not allow.
5. Temporary aid for the devalued currency: - When the devaluation policy is
indispensable or any country then IMF provides loan to correct the balance of payment of
that country.
6. To avoid exchange depreciation: - IMF is very useful to avoid the competitive
exchange depreciation that took place before World War 2.
http://studypoints.blogspot.com/2012/08/write-note-on-imf-or-objective-and.html
South Asian Free Trade Area
(SAFTA)
Evolution of SAFTA
In December 1991, the Sixth Summit held in Colombo approved the establishment
of an Inter-Governmental Group (IGG) to formulate an agreement to establish a SAARC
Preferential Trading Arrangement (SAPTA) by 1997. Given the consensus within SAARC, the
Agreement on SAPTA was signed on 11 April 1993 and entered into force on 7 December 1995
well in advance of the date stipulated by the Colombo Summit. The Agreement reflected the
desire of the Member States to promote and sustain mutual trade and economic cooperation
within the SAARC region through the exchange of concessions.
http://saarc-sec.org/areaofcooperation/detail.php?activity_id=4
Objectives of SAFTA

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A. To gradually liberalize the trade among member countries of SAARC.
B. To eliminate trade barriers among SAARC countries and reduce or eliminate tariffs.
C. To promote and sustain mutual trade and economic cooperation among member
countries.
http://www.managementparadise.com/forums/export-import-procedures-notes/201723-objectives-sapta.html
Activities of SAFTA
The main goal of SAFTA is to increase international trade among the member
countries of SAARC. Therefore, it is for the development- of entirely south Asia. The managing
body of SAFTA performs several activities to achieve the goal.
 An Inter Governmental Expert Group (IGEG) on transition to SAFTA comprising experts
from the member countries was set up as an ad-hoc body by the CEC to identify the
necessary steps towards moving into a free trade area.
 The IGEG had met twice and held in depth discussions and agreed on the draft terms of
references for the group and had drawn up a broad framework of action plans for
achieving SAFTA.
 In order to give impetus to intra-SAARC trade under the SAPTA agreement and to
promote economic cooperation in the region, the commerce ministers of SAARC
countries met in New Delhi in Jan 1996. It was since been decided that the commerce
ministers shall meet annually and second meeting was held in Islamabad in April 1998.
http://www.managementparadise.com/forums/export-import-procedures-notes/201723-objectives-sapta.html
 SAARC Trade Fairs
At the Fifth Meeting of Committee on Economic Cooperation (New Delhi, 8-9 April
1995) the delegation of India suggested that in view of the forthcoming tenth anniversary
of establishment of SAARC, holding of SAARC Trade Fairs should be considered at
venues in different Member States during the course of the anniversary year. The
Committee endorsed this suggestion and felt that SAARC Chamber of Commerce and
Industry (SCCI) and/or national Trade Promotion Organizations in the region may be
approached for organizing and coordinating this activity.
The details of dates and venues of the SAARC Trade Fairs held so far are given below
1st
SAARC Trade Fair New Delhi, 9-14 January 1996
2nd
SAARC Trade Fair Colombo, 8-15 September 1998
3rd
SAARC Trade Fair Karachi, 21-26 April 2001

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4th
SAARC Trade Fair Kathmandu, 25-29 October 2002
5th
SAARC Trade Fair Dhaka, 27-31 December 2003
6th
SAARC Trade Fair New Delhi, 6-10 January 2005
7th
SAARC Trade Fair Karachi, 16-18 June 2006
8th
SAARC Trade Fair Colombo, 28-31 August 2008
9th
SAARC Trade Fair Thimphu, 11-14 September 2009
10th
SAARC Trade Fair Kathmandu, 15-19 December 2010
11th
SAARC Trade Fair Dhaka, 30 March - 1 April 2012
12th
SAARC Trade Fair Maldives, 2013
http://saarc-sec.org/areaofcooperation/detail.php?activity_id=40
It is definite that these trade fairs had been increased international trade & business
within this territory and we wish this would continue in future also.
Roles into international trade:
The basic principles and the roles into international trade of SAFTA are as under;
1. Overall reciprocity and mutuality of advantages so as to benefit equitably all
Contracting States, taking into account their respective level of economic
and industrial development, the pattern of their external trade, and trade and
tariff policies and systems;
2. Negotiation of tariff reform step by step, improved and extended in
successive stages through periodic reviews;
3. Recognition of the special needs of the Least Developed Contracting States
and agreement on concrete preferential measures in their favour;
4. Inclusion of all products, manufactures and commodities in their raw, semi-
processed and processed forms.
5. The purpose of SAFTA is to encourage and elevate common contract among
the countries such as medium and long term contracts. Contracts involving
trade operated by states, supply and import assurance in respect of specific
products etc. It involves agreement on tariff concession like national duties
concession and non-tariff concession.

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6. The objective of the agreement is to promote competition in the area and to
provide equitable benefits to the countries involved. It aims to benefit the
people of the country by bringing transparency and integrity among the
nations. SAFTA was also formed in order to increase the level of trade and
economic cooperation among the SAARC nations by reducing the tariff and
barriers and also to provide special preference to the Least Developed
Countries (LDCs) among the SAARC nations.
7. Trade Liberalization Programme:
According to the Trade Liberalization Programme Contracting countries must
follow the following tariff reduction schedule. There should be a fall to 20% tariff
from the existing tariff by the Non Least Developing Countries and 30% reduction
from the existing tariff by the Least Developing Countries. But trade liberalization
scheme is not be applied for the sensitive list because this list is to be negotiated
among the contracting countries and then to be traded. Sensitive list will involve
common agreement among the contracting countries favoring the least developed
contracting countries. SAFTA Ministerial Council (SMC) will be participating to
review the sensitive list in every four years with view of reducing the list.
Role of SAFTA into bangladeshi international trade:
A sensitive list is a list with every country which does not include tariff
concession. Bangladesh has 1,233 products on the sensitive list for the Least
Developing countries and 1,241 for the non-Least developing countries under the
SAFTA. Bangladesh will reduce the sensitive list by 246 items for the least
developed countries (LDCs) and 248 for the non-LDCs.[4]
India has 25 items on the
sensitive list for the LDCs and 695 for the non-LDCs. Dr Manmohan Singh, the
Indian Prime Minister, announced in September in Dhaka that he will reduce the
Sensitive List by 46. Bhutan has 150 items for both the LDCs and non-LDCs and
has no plan of shortening its list. Nepal has 1,257 for the LDCs and 1,295 for the
non-LDCs. Nepal has reduced its list by 259 from its previous list of 1295. Now its
1036, said joint secretary at Ministry of Commerce and Supplies.
[5]
The Maldives has 681 for all seven SAFTA nations. Pakistan had 1,169 in its
sensitive list but has cut its sensitive list by 20% to 936.[6]
Sri Lanka has 1,042
and Afghanistan has 1,072 items on the negative list.

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North American Free Trade Agreement
(NAFTA)
NAFTA is short for the North American Free Trade Agreement. NAFTA covers
Canada, the U.S. and Mexico making it the world’s largest free trade area (in terms of GDP).
NAFTA was launched 20 years ago to reduce trading costs, increase business investment, and
help North America is more competitive in the global marketplace. All tariffs between the three
countries were eliminated in January 2008. Between 1993-2009, trade tripled from $297 billion
to $1.6 trillion.
ource: USTR, NAFTA

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Evolution of NAFTA
The impetus for NAFTA actually began with President Ronald Reagan, who
campaigned on a North American common market. In 1984, Congress passed the Trade and
Tariff Act. This is important because it gave the President "fast-track" authority to negotiate free
trade agreements, while only allowing Congress the ability to approve or disapprove, not change
negotiating points. Canadian Prime Minister Mulroney agreed with Reagan to begin negotiations
for the Canada-U.S. Free Trade Agreement, which was signed in 1988, went into effect in 1989
and is now suspended due to NAFTA.
Source: NaFina, NAFTA Timeline
Meanwhile, Mexican President Salinas and President Bush began negotiations for
a liberalized trade between the two countries. Prior to NAFTA, Mexican tariffs on U.S. imports
were 250% higher than U.S. tariffs on Mexican imports. In 1991, Canada requested a trilateral
agreement, which then led to NAFTA. In 1993, concerns about liberalization of labor and
environmental regulations led to the adoption of two addendums to NAFTA.
Source: Infoplease.com, NAFTA
Objectives of NAFTA
Signed by the United States, Mexico, and Canada in 1992, the North American
Free Trade Agreement (NAFTA) went into effect at the beginning of 1994. The main objective
of this international accord was to establish and promote free trade in North America. Once
enforced, NAFTA removed tariffs on most goods imported and exported between the three
countries involved in the agreement. NAFTA also called for the gradual removal (spread over 15
years) of the potential barriers to cross-border commerce and business investment.
Article 102 of the NAFTA agreement outlines its purpose:
• Grant the signatories Most Favored Nation status.
• Eliminate barriers to trade and facilitate the cross-border movement of goods and
services.
• Promote conditions of fair competition.
• Increase investment opportunities.
• Provide protection and enforcement of intellectual property rights.
• Create procedures for the resolution of trade disputes.
• Establish a framework for further trilateral, regional and multilateral cooperation to
expand NAFTA's benefits.
Source: NAFTA Secretariat, "NAFTA FAQ"
Performance of NAFTA
Trade relations among Canada, Mexico, and the United States have broadened
substantially since NAFTA's implementation, though experts disagree over the extent to which
this expansion is a direct result of the deal. According to data from the office of the U.S. Trade

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Representative (USTR), the United States' chief negotiator in foreign trade and a major booster
of NAFTA and other free trade accords, the overall value of intra-North American trade
has more than tripled (PDF) since the agreement's inception. The USTR adds that regional
business investment in the United States rose 117 percent between 1993 and 2007, as compared
to a 45 percent rise in the fourteen years prior. Trade with NAFTA partners now accounts for
more than 80 percent of Canadian and Mexican trade, and more than a third of U.S. trade.
http://www.cfr.org/world/naftas-economic-impact/p15790#p4
• NAFTA facilitate the larger North American market access.
• NAFTE disclosed new export and investment opportunities.
• NAFTA eliminated tariffs; Canadian and U.S. tariffs were eliminated on January 1, 1998;
Mexico will be duty free by the year 2008 for North American made products.
• NAFTA created strong "rules of origin" for North American made products.
• NAFTA established effective procedures to resolve trade disputes.
• NAFTA established compatible standards of goods between the three countries.
• NAFTA facilitate of cross-border movement of goods and services.
http://www.library.unt.edu/gpo/oca/nafta.htm
NAFTA has eliminated trade barriers, increased investment opportunities, and
established procedures for resolution of trade disputes. Most important, it has increased the
competitiveness of the three countries involved on the global marketplace. This has become
especially important with the launch of the European Union and the China and other emerging
market countries. In 2007, the EU replaced the U.S. as the world's largest economy
http://useconomy.about.com/od/tradepolicy/p/NAFTA_History.htm
Free Trade Agreement
(FTA)
A free-trade area is a trade bloc whose member countries have signed a free-trade
agreement (FTA), which eliminates tariffs, import quotas, and preferences on most (if not all)
goods and services traded between them. If people were also free to move between the countries,
in addition to FTA, it would also be considered an open border. It can be considered the second
stage of economic integration. Countries choose this kind of economic integration if their

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economic structures are complementary. If their economic structures are competitive, it is likely
there will be no incentive for a FTA, or only selected areas of goods and services will be covered
to fulfill the economic interests between the two signatories of FTA.

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Association of Southeast Asian Nations
(ASEAN)
The Association of Southeast Asian Nations is a geo-political and economic
organization of ten countries located in Southeast Asia, which was formed on 8 August 1967
by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Since then, membership has
expanded to include Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Its aims include
accelerating economic growth, social progress, and cultural development among its members,
protection of regional peace and stability, and opportunities for member countries to discuss
differences peacefully.
ASEAN covers a land area of 4.46 million km², which is 3% of the total land area
of Earth, and has a population of approximately 600 million people, which is 8.8% of the world's
population. The sea area of ASEAN is about three times larger than its land counterpart. In 2011,
its combined nominal GDP had grown to more than US$ 2 trillion. If ASEAN were a single
entity, it would rank as the eighth largest economy in the world.
Evolution of ASEAN
ASEAN was preceded by an organization called the Association of Southeast Asia,
commonly called ASA, an alliance consisting of the Philippines, Malaysia and Thailand that was
formed in 1961. The bloc itself, however, was established on 8th
August 1967, when foreign
ministers of five countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – met
at the Thai Department of Foreign Affairs building in Bangkok and signed the ASEAN
Declaration, more commonly known as the Bangkok Declaration. The five foreign ministers
Adam Malik of Indonesia, Narciso Ramos of the Philippines, Abdul Razak of Malaysia, S.
Rajaratnam of Singapore, and Thanat Khoman of Thailand are considered the organization’s
Founding Fathers.
The motivations for the birth of ASEAN were so that its members’ governing
elite could concentrate on nation building, the common fear of communism, reduced faith in or
mistrust of external powers in the 1960s, and a desire for economic development.
http://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations#Free-trade_agreements_with_other_countries

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Objectives of ASEAN
o
o The objectives of the Asian Free Trade Agreement, whether strictly within
ASEAN or including other Asian nations, begin with the idea of strengthening and augmenting
trade investment and cooperation among the members. It hopes to streamline the investment
process within the community while providing guidelines to clarify these investment programs.
It wishes to investigate possible new areas of cooperation, facilitate economic integration and
bridge the gap in development levels among member nations.
The objectives of this Agreement according to Article-one of the organization are as follows:
a. progressively liberalize and facilitate trade in goods among the Parties through, inter
alia, progressive elimination of tariff and non-tariff barriers in substantially all trade in
goods among the Parties;
b. progressively liberalize trade in services among the Parties, with substantial sectored
coverage;
c. facilitate, promote and enhance investment opportunities among the Parties through
further development of favorable investment environments;
d. establish a co-operative framework for strengthening, diversifying and enhancing trade,
investment and economic links among the Parties; and
e. Provide special and differential treatment to ASEAN Member States, especially to the
newer ASEAN Member States, to facilitate their more effective economic integration.
Performance of ASEAN in International Trade
1. Trade in Goods - Most ASEAN countries are major exporters of such products as
agriculture and fisheries products, electronic products, textiles, leatherwear and computer parts.
The major objective for concluding FTA is to expand more market access for their products with
export potential.
2. Trade in Services - All ASEAN countries except Singapore are not able to compete
with advance economies in supplying services in most sectors from financial, transportation,
telecommunication, education, public health and other service sectors which require advanced
technology and large amounts of capital.
3. Investment - Every ASEAN country has adopted her own national strategy and policy
to attract foreign direct investment (FDI) which is expected to contribute to national economic
and social development.

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World Trade Organization
(WTO)
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.
Location: Geneva, Switzerland
Established: 1 January 1995
Created by: Uruguay Round negotiations (1986-94)
Membership: 159 countries on 2 March 2013
Secretariat staff: 640
Head: Pascal Lamy (Director-General)
The World Trade Organization is the only global international organization
dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated
and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is
to help producers of goods and services, exporters, and importers conduct their business.
Evolution of WTO
On 1 January 1995, the WTO replaced GATT, which had been in existence since
1947, as the organization overseeing the multilateral trading system. The governments that had
signed GATT were officially known as “GATT contracting parties”. Upon signing the new WTO
agreements (which include the updated GATT, known as GATT 1994), they officially became
known as “WTO members”.
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 World Trade Organization is currently the host to new negotiations, under
the ‘Doha Development Agenda’ launched in 2001.

27 | P a g e
Objectives of WTO
1. Having all protection take the form of tariffs;
2. Holding multilateral negotiation at which those tariffs are lowered and bound;
3. Ensuring that these agreements are implemented by requiring that any increase in a
bound tariff must be compensated by the reduction of another;
4. Providing a mechanism by which signatories can settle disputes.
5. Forum for trade negotiations
6. Monitoring national trade policies
7. Technical assistance and training for developing countries
8. Cooperation with other international organizations
Organizational Structure of WTO:

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Role of WTO in International Trade
The role of WTO in international trade is as stipulated in the Agreement establishing
it (Article III of the Agreement establishing WTO) and includes:
1. Facilitating the implementation, administration and operation and furthering the
objectives of the agreement establishing it & other Multilateral Trade Agreements and providing
the framework for the implementation, administration and operation of the Plurality Trade
Agreements.
2. Providing the forum for negotiations among its members concerning their
multilateral trade relations in matters dealt with under the agreements in the Annexes to the
Agreement setting it up and for the results of such negotiations as may be decided by the
Ministerial Conference.

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3. Administering the understanding on rules and procedures governing the settlement
of disputes or the dispute settlement understanding, this is Annex 2 to the agreement setting it up.
4. Administering the Trade Policy Review Mechanism in Annex 3 of the agreement
setting it up.
5. Cooperating with the International Monetary Fund and the International Bank for
reconstruction and development with a view to achieving greater coherence in global economic
policymaking.
UNCTAD
Introduction:
The United Nations Conference on Trade and Development (UNCTAD) was established in
1964 as a permanent intergovernmental body.
UNCTAD is the principal organ of the United Nations General Assembly dealing with trade,
investment, and development issues. The organization's goals are to: "maximize the trade,
investment and development opportunities of developing countries and assist them in their
efforts to integrate into the world economy on an equitable basis
Evaluation:

30 | P a g e
The creation of UNCTAD in 1964 was based on concerns of developing countries over the
international market, multi-national corporations, and great disparity between developed nations
and developing nations. The United Nations Conference on Trade and Development was
established to provide a forum where the developing countries could discuss the problems
relating to their economic development. The organisation grew from the view that existing
institutions like GATT (now replaced by the World Trade Organization, WTO), the International
Monetary Fund (IMF), and World Bank were not properly organized to handle the particular
problems of developing countries. Later, in the 1970s and 1980s, UNCTAD was closely
associated with the idea of a New International Economic Order (NIEO).
The first UNCTAD conference took place in Geneva in 1964, the second in New Delhi in 1968,
the third in Santiago in 1972, fourth in Nairobi in 1976, the fifth in Manila in 1979, the sixth in
Belgrade in 1983, the seventh in Geneva in 1987, the eighth in Cartagena in 1992 and the ninth
at Johannesburg (South Africa) in 1996.
Currently, UNCTAD has 194 member states and is headquartered in Geneva, Switzerland.
UNCTAD has 400 staff members and an bi-annual (2010–2011) regular budget of $138 million
in core expenditures and $72 million in extra-budgetary technical assistance funds. It is a
member of the United Nations Development Group.[2]
There are non-governmental organizations
participating in the activities of UNCTAD
Functions:
The main Functions of the UNCTAD are:
(i) To promote international trade between developed and developing countries with a view to
accelerate economic development.
(ii) To formulate principles and policies on international trade and related problems of economic
development.
(iii) To make proposals for putting its principles and policies into effect, (iv) To negotiate trade
agreements.
(iv) To review and facilitate the coordination of activities of the other U.N. institutions in the
field of international trade.
(v) To function as a centre for a harmonious trade and related documents in development policies
of governments.
Objectives:
The primary objective of UNCTAD is to formulate policies relating to all aspects of
development including trade, aid, transport, finance and technology. The conference ordinarily
meets once in four years; the permanent secretariat is in Geneva.

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One of the principal achievements of UNCTAD has been to conceive and implement the
Generalized System of Preferences (GSP). It was argued in UNCTAD that to promote exports of
manufactured goods from developing countries, it would be necessary to offer special tariff
concessions to such exports. Accepting this argument, the developed countries formulated the
GSP scheme under which manufacturers' exports and some agricultural goods from the
developing countries enter duty-free or at reduced rates in the developed countries. Since imports
of such items from other developed countries are subject to the normal rates of duties, imports of
the same items from developing countries would enjoy a competitive advantage.
Role of UNCTAD in international trade:
• Biotrade Initiative
• Climate Change
• Commodities
• Commodities - Global Commodities Forum 2013
• Commodities - Sustainability Claims Portal
• Commodities Market Information (InfoComm)
• Competition Law and Policy
• Creative Economy Programme
• Dispute Settlement in International Trade, Investment and Intellectual Property
• Gender and Development
• Generalized System of Preferences
• Services, Trade and Development
• Trade Analysis
• Trade Negotiations and Commercial Diplomacy
• Trade, Environment and Development
North American Development Bank
(NADB)
The North American Development Bank (NADB) is a bi national financial
institution capitalized and governed equally by the Federal Governments of the United States of

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America and Mexico for the purpose of financing environmental projects certified by the Border
Environment Cooperation Commission (BECC).
The two institutions work together with communities and project sponsors in both
countries to develop and finance infrastructure necessary for a clean and healthy environment for
border residents. Established in 1994 with headquarters in San Antonio, Texas, its mission is to
serve as a bi national partner and catalyst in communities along the U.S.-Mexico border in order
to enhance the affordability, financing, long-term development and effective operation of
infrastructure that promotes a clean, healthy environment for the citizens of the region.
The NADB provides financial assistance to public and private entities involved in
developing environmental infrastructure projects in the border region. Potable water
supply, wastewater treatment and municipal solid waste management form the core sectors of the
Bank’s activities and are its primary focus. However, assistance can also be provided in other
areas—such as air quality, clean energy and hazardous waste—where sponsors are able to
demonstrate tangible health and/or environmental benefits for residents living in the area.
Created as interdependent institutions, NADB and BECC work as a team to
develop integrated, sustainable and fiscally responsible projects with broad community support
in a framework of close cooperation and coordination between Mexico and the United States.
Within this partnership, BECC verifies the technical feasibility and environmental integrity of
the projects seeking financing from the NADB, as well as ensures community support for the
project. Consequently, every project must pass through a public participation and certification
process performed by the BECC.
In its efforts to help border communities develop and finance affordable, self-
sustaining environmental infrastructure projects with broad community support, NADB works
with local governments and municipal utilities to increase their financing options by helping
them implement sound financial and business practices that provide a basis for well-managed
debt financing. As part of this strategy, NADB promotes a comprehensive, long-term approach
to infrastructure planning and project finance, offering both loan and grant programs to address
different needs.

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