...Definition of 'World Trade Organization - WTO' An international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible. History : The main building, known as the Centre William Rappard, was constructed on an estate which was gradually formed by the union of a number of plots of land between 1755 and 1893. In 1785, construction began on the Villa Rappard, the house that still stands next to the main WTO building and today houses a Montessori school. In 1921, the Swiss Confederation acquired the estate and offered it to the League of Nations, which designated the site for construction of a headquarters for the International Labour Office. Both bodies had been created in 1919 with the signing of the Treaty of Versailles, which formally ended World War I. In 1923, an architectural competition was launched and the commission to design the ILO headquarters was offered to Swiss architect George Epitaux from Lausanne. His design was based on that of classical Florentine villas, with an interior courtyard, a grand entrance and a sweeping staircase off the main reception area. Construction began in 1923 and the building was in-augurated on June 6, 1926. [pic] The interior of the building was enhanced by donations from many countries, in-cluding murals in tiles and paint depicting various aspects of labour, sculpted wooden doors, elaborate fountains and exotic trees...
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...The international business and trade environment is the backbone of global economy. Trade agreements to buying and selling goods and services internationally give manufacturers in various countries the opportunity to expand beyond the domestic market. Trading across national borders increases sales, creates jobs, balances seasonal fluctuations and provides a variety of products and services. As the global economy continues to strengthen, international trade continues to be in demand. 4.2 OBJECTIVES Increases Sales For some businesses, the drop in the value of the dollar increases business internationally. To capture the international market, businesses have launched Internet marketing campaigns and websites targeted at consumers in specific...
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...Tariff Barriers. Tariffs or import duties are tax imposed on imported goods primarily for the purpose of raising their selling price in the importing nation’s market to reduce competition for domestic producers or stimulate local production. A few smaller nations apply them to raise revenue on both imports and exports. Imposing of tariffs can result in retaliation that is harmful rather than helpful for a country and its well-being: In 1920, American farmers lobbied congress for tariff protection on its agricultural products. Overtime more domestic producers joined with agricultural interests, seeking their own protection from foreign competitors. The resulting legislative proposal increased tariffs for more than 20,000 items across a broad range of industries. In 1929, the Smoot-Hawley Tariff Act established some of the highest levels of tariffs ever imposed by US. That day stock market crashed, falling 12%. Despite protest from 34 foreign countries, the act was signed in 1930. The result was a retaliatory trade war, characterized by tit-for-tat tariffs and protectionism between trading nations. World trade fell from $5.7 billion to $1.9 billion, industrial efficiency and the effects of comparative advantage were sharply reduced, unemployment increased dramatically and the world was pushed into decade-long economic depression. Ad Valorem, Specific and Compound Duties. Import duties are three types; 1) Ad Valorem, 2) Specific, or 3) a combination of two called compound...
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...AND INTERNATIONAL RELATIONS MASTER’S DEGREE in Studi Politici e Internazionali ‘International Economic and Trade Relations’ LM–62 MASTER THESIS in DEVELPOMENT ECONOMICS Foreign Exchange regimes and major currencies Supervisor Student Prof. Paolo Sospiro Parapatakam Praveen Reddy MAT: 62282 ACADEMIC YEAR 2013/2014 Contents Introduction 5 Chapter 1 7 1. History of exchange rate regimes: 7 1.1 Gold Standard System (1880-1914): 7 1.2 Interim instability (1914-1944): 7 1.3 Bretton woods system (1946-1971). 8 Figure1.World Trade (1929-33).............................................................................................9 1.4 Par Value system: 9 2. Classification of Exchange Rate Regimes: 10 2.1 De facto Classification (1998-2009) 11 Diagram1. De Facto Classification of Foreign Exchange Regimes (Nov 1998 – Jan 2009).......12 2.2 Revised De Facto Classification System (2009 January to Present): 15 Table1. Shares of Classifications Using the 1998 and 2009 Systems. 16 2.3 Revised Classification System Definitions: 17 Hard pegs: 17 Soft pegs: 18 Floating arrangements: 19 Residual: 20 2.4 De facto Classification of Exchange Rate Arrangements and Monetary Policy Frameworks-2014 20 Table2. Monetary Policy...
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...UNIT – I INTERNATIONAL BUSINESS – AN OVERVIEW Content Outline Introduction Definition and meaning of international business Scope of international business Special difficulties in international business Benefits of international business Understanding of international business environment Framework for analyzing the international business environment Summary Review Questions INTRODUCTION One of the most dramatic and significant world trends in the past two decades has been the rapid, sustained growth of international business. Markets have become truly global for most goods, many services, and especially for financial instruments of all types. World product trade has expanded by more than 6 percent a year since 1950, which is more than 50 percent faster than growth of output the most dramatic increase in globalization, has occurred in financial markets. In the global forex markets, billions of dollars are transacted each day, of which more than 90 percent represent financial transactions unrelated to trade or investment. Much of this activity takes place in the so-called Euromarkets, markets outside the country whose currency is used. This pervasive growth in market interpenetration makes it increasingly difficult for any country to avoid substantial external impacts on its economy. In particular massive capital flows can push exchange rates away from levels that accurately reflect competitive relationships among nations...
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...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." 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. One of the principal achievements of UNCTAD has been to conceive and implement the Generalised 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. The creation of UNCTAD in 1964 was based on concerns of developing countries over the international market...
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...[pic]World Trade Organization [pic] The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986–1994). The organization is currently endeavoring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world's population. However, the negotiation has been dogged by "disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain." The WTO has 153 members representing more than 97% of total world trade and 30 observers, most seeking membership...
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...process of integration and interaction among the companies, people, and governments of different nations. It is a process explained by international trade and investment and updates by information technology. There is an amazing irony in globalization and it is that, as the world gets smaller, opportunities for growth and development become wider and better. Nowhere is this more clearly manifest than in the sphere of international trade and business relations where foreign market economies, domestic politics and diverse legal systems are linked to each other to create more advantages for the contracting states. Origin of Globalization The origin of the Globalization is not new one. It has been gone thousands of years, first people, and, then later on the corporations and industries have been selling to and buying from each other in different lands and nation’s at large distances. This origin of globalization can be elaborated by taking an example of Silk Road. The Silk Road is an entity that is connecting the Europe and China during the middle ages. The same, for centuries, industries and people have been investing in enterprises and venture in other countries. If truth be told, there are number of characteristics of the contemporary wave of globalization are parallel to those existing before the occurrence of the First World War in 1914. Brecher et al. try to conceptualize the roots of the alternative globalization movement by giving an account of...
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...Institutions Drivers of Globalization Declining Trade and Investment Barriers The Role of Technological Change The Changing Demographics of the Global Economy The Changing World Output and World Trade Picture The Changing Foreign Direct Investment Picture The Changing Nature of the Multinational Enterprise The Changing World Order The Global Economy of the Twenty-First Century Country Focus: India’s Software Sector Management Focus: China’s Hisense-An Emerging Multinational The Globalization Debate Anti-globalization Protests, Globalization, Jobs, and Income Globalization, Labor Policies, and the Environment Globalization and National Sovereignty Globalization and the World’s Poor Country Focus: Protesting Globalization in France Managing in the Global Marketplace Chapter Summary Critical Thinking and Discussion Questions Closing Case: IKEA—The Global Retailer CLASSROOM DISCUSSION POINT Ask students to describe how international business has affected them in their day so far. Ash them about who made the clothes they’re wearing, what type of food they ate for breakfast or lunch (muesli cereal, sushi, Italian-style coffee), what type of cell phone they have and where it was made, where their car was design and manufactured, where the components for their computer was manufactured, and so on. Many students will be surprised at just how often international business affects their daily lives. Some will...
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...of globalization sees the trans- and multinational companies being the major players guided by the policies and treaties of the oversight international organizations and supported by technology. Given that the focus continues to be cross border trade, integration and investment, in the absence of any communal decision making process with defined criteria, it has been clear that globalization continues to be challenged with respect to ethical decision making for sustainable development. This paper summarizes the role and function of the major globalization oversight organizations and touches on the extent of the power that they wield. It briefly discusses the advantages and disadvantages of globalization and attempts to identify the goals of globalization and given these goals and the identification of the stakeholders and subsequently to evaluate whether or not it is a driver or barrier to ethical decision making and sustainable development. ‘Ethics is more than the right thing to do: it's the smart thing to do.’ Global Institute of Ethics 1.0 Introduction It appears to be no easy feat to get a precise definition for Globalization. The definition can range from that of Nobel prize-winning economist Joseph Stiglitz who defined it as “the closer integration of the countries and peoples of the world which has been brought about by the enormous reduction of costs of transportation and communication, and the breaking down of artificial...
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...UNIT 40 INVESTIGATING INTERNATIONAL BUSINESS BTEC NATIONAL INTRODUCTION. The international nature of business is evident to anyone who, for example, buys an iPod from Apple or insurance from Aviva. Many brand names are recognised throughout the world as organisations increase demand for their products by expanding from a national to an international market. Initially, the nature of the international business environment will be considered by looking at the size and importance of international markets. Governments encourage businesses to trade internationally but protectionism is also common. International business is regulated not just by national governments but also by transnational trading arrangements promoted by trading blocs such as the European Union and global agencies such as the World Trade Organization (WTO). Both large and small businesses trade internationally but doing business internationally is often more complex than doing business in the home market. Consideration will be given to the issues facing a domestic (UK) business when it expands its operations into the international sphere. However, some insights can be made by considering issues faced by overseas businesses as they have expanded their operations by moving into the UK market. Tesco has had very limited success in extending operations into France and Carrefour has had similar problems in establishing operations in the UK. However, they both have had more success in Malaysia and...
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...Chapter 1 An Overview of International Business International business – business transactions between parties from more than one country. The global economy – an economy in which national borders are irrelevant The global manager – The early era of international business – Basic Forms of Global Business Activities Exporting and Importing Exporting – the selling of products made in one’s own country for use or resale in other countries. Importing – the buying of products made in other countries for use or resale in one’s own country. Merchandise exports and imports (visible trade) – such as clothing, computers, and raw materials. Service exports and imports (invisible trade) – such as banking, travel, and accounting activities. International Investments Foreign direct investments (FDI) – investments made for the purpose of actively controlling property, assets, or companies located in host countries. Foreign portfolio investments (FPI) – purchases of foreign financial assets (stocks, bonds, and certificates of deposit) for a purpose other than control. Home country – the country in which the parent company’s headquarters is located. Host country – any other country in which the company operates. Other Forms of International Business Activity International licensing – a contractual arrangement in which a firm in one country licenses the use of its intellectual property (patents, trademarks, brand names, copyrights, or trade secrets) to a firm in a second...
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...Europe and the rest of the world. Bretton Woods institutions were created in 1944 during the United Nations Monetary and Financial Conference at the Mount Washington Hotel (The Bretton Woods Committee, n.d.). The Bretton Woods institutions created an international basis for exchanging one currency for another. It also led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, now known as the World Bank (Stephey, 2008) and the General Agreement on Tariffs and Trade (GATT)—the precursor to the World Trade Organization (WTO). In addition to establishing the World Bank, the Committee chose the U.S. dollar as the pillar of international monetary exchange. The meeting provided the world post World War II currency stability which was desperately needed. The Bretton Woods system itself may have collapsed in 1971, when President Richard Nixon severed the link between the dollar and gold — a decision made to prevent a run on Fort Knox, which contained only a third of the gold bullion necessary to cover the amount of dollars in foreign hands. By 1973, most major world economies had allowed their currencies to float freely against the dollar. It was a rocky transition, characterized by plummeting stock prices, skyrocketing oil prices, bank failures and inflation (Stephey, 2008). However you spin it, Bretton Woods established the United States as the leader and the leader of the new post Second World War economic order. Times...
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...The optimal currency area theory 5 2.1.2 Theory of international trade settlement currency 5 2.1.3 Financial deepening theory 6 2.2 RMB internationalization related definitions 7 2.2.1 The definition of RMB internationalization 7 2.2.2 The basic development policy of RMB internationalization and path 7 2.2.3 The overview of RMB internationalization process 9 3 The main historical experience of currency internationalization 12 3.1 Internationalization of the dollar 12 3.2 The internationalization of EURO 13 3.3 The yen internationalization 14 3.4 Summary of this chapter 15 4 The free trade area construction to promote the internationalization of the RMB 16 4.1 International comparison of free trade area 16 4.1.1 The EU 16 4.1.2 The china-Asian free trade area 16 4.2 The relationship between Free trade and the internationalization of RMB 18 4.2.1 The policies and their interpretation of Shanghai free trade area 18 4.2.2 Marketization of RMB exchange rate 20 4.2.3 The RMB interest rate marketization 21 4.2.4 RMB offshore market 22 4.3 The crisis and the risk of free trade zone 23 4.3.1 Risk of RMB business 23 4.3.2 Financial liberalization should be Shanghai free trade zone boundary 24 4.3.3 Risk control and benefit gambling is two limit of free trade area 25 5 Conclusion 26 References List 27 ABSTRACT In contemporary society, all countries in the world to establish a free trade area as an effective way of promoting...
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...Chapter 3: Wild World: Competing in the Global Economy Key Terms Absolute advantage | Balance of payments | Balance of trade | Ethnocentrism | Euro | Exchange rate | Exporting | Foreign direct investment | Fair trade | Devaluation | Comparative advantage | Free trade | Importing | Joint venture | Licensing | Protectionism | Multinational corporation | Dumping | Embargo | Economies of scale | Embargo | Quota | Stereotyping | Strategic alliance | Tariff | Trade deficit | Trade surplus | Trading blocs | | | Case Study Whirlpool Summary Nations trade to obtain raw materials and goods that are either unavailable in their own country or too expensive to produce. Trade increases a country’s total output, and offers greater variety and lower prices to consumers. Nations restrict international trade to help their own economies and to protect their domestic companies from competition with foreign rivals. They do this by imposing taxes, surcharges, tariffs, quotas, embargoes, and sanctions on the goods of foreign companies. Groups of nations form trading blocs to protect their own trade interests (EU, ASEAN, NAFTA, and Mercosur). International business activities can include importing, exporting, licensing, franchising, strategic alliances, joint ventures, and foreign direct investment (FDI). Outline I. Fundamentals of International Trade Companies in different countries compete for customers with companies in other countries in our global marketplace...
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