PRESENTATION ON The role of International Organizations

By Priyanki Borah( BAM10013) Anshuman Saikia(bam10014) Priyaman Chaudhury(BAM10015) Shobika Maheswari(BAM10016)

INTRODUCTION
Business has been significantly impacted by proliferation of regional economic integration schemes and agreement. This has resulted in the rise of the cross regional agreements and the rise of interlinked agreements. The international trading environment encompasses important factors such as trade strategies, trade barriers, trade agreement, multinational trade negotiation etc.

CANALISATION
Canalisation means establishment of state monopoly in foreign trade. In other words, an item that is canalised can be imported or exported as the case may be, only by the designated state trading agencies. State trading agencies may also trade in products which are not canalised, in addition to the canalised items.
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Objectives of Canalisation
To help to reduce the difficulties experienced in expanding trade with centrally planned countries. To help maintain quantitative regulations of import and some equilibrium in the price of commodities. To provide developmental finance for organised production and boost exports of small scale sector. To check unhealthy competition and undercutting of prices in international market. To ensure adequate and regular supplies at reasonable and stable prices of essential commodities to meet local demands.
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TRADE BLOCS
--An economic integration scheme which is conceived as a building block of economic development of the member countries. -- It , however, may sometimes become a stumbling block for firms located outside the bloc.

MOTIVATIONS IN THE FORMATION OF TRADING BLOCS

1. To obtain economic benefits from achieving a more efficient production structure by exploiting economies of scale 2. To pursue non economic objectives such as strengthening political ties and managing migration flows 3. To ensure increased security of market access for smaller countries by forming regional trading blocs with larger countries
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CONTD
4. To promote regional infant industries which cannot be viable without a protected regional market. 5. To prevent further damage to their trading strength due to further trade diversion from third countries.

ECONOMIC INTEGRATION
The term economic integration is commonly used to refer to the type of arrangement that removes artificial trade barriers, like tariffs and quantitative restrictions between the integrating economies.

 FORMS OF ECONOMIC INTEGRATION

EUROPEAN UNION(EU)
--EU is, by far, the most advanced case of economic integration --It was earlier known as EEC, which was formed on January 1st ,1958 by virtue of treaty of Rome and it consisted of six nations --The EEC was expanded in 1973 and by 1st January,1986 the membership increased to 15 --With effect from May 1, 2004, total membership of EU increased to 25
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CONTD
--It established a common market with a single currency and member states agree to abide by common laws, guaranteeing the freedom of movement of people, goods, services and capital --What began as a purely economic union has evolved into an organization spanning all areas, from development aid to environmental policy

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EU MEMBERS

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EU & INDIA
1. Replacement of different policy and regulatory environments and reduction in transaction costs 2. Expansion of market 3. Harmonization of tariff structures will lead to the reduction in the average weighted tariff to the benefit of the exporters 4. 4. The enlarged EU may also spur joint ventures with Indian companies looking forward to set up manufacturing bases in the low cost accession countries (ACs)
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WTO/GATT
General Agreement on Tariff and Trade was established in 1948 as a result of the international desire to liberalise trade. With effect from January, 1995, the GATT was transformed into WTO as a more powerful body with enlarged function than GATT.

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DIFFERENCE BETWEEN GATT AND WTO

GATT WTO

GATT was adhoc and provisional.

GATT had contracting parties

WTO and its agreements are permanent.

WTO has members

GATT system allowed existing domestic WTO doesnot permit this legislation to continue even if it violated a GATT agreement

GATT was less powerful, dispute settlement system was slow and less effective, its ruling could be easily blocked

WTO is more powerful than GATT , dispute settlement mechanism is faster and more effcient , very difficult to block the rulings
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WTO
WTO was set up as a permanent body which is designed to play the role of a watch dog in the spheres of trade in goods, services, foreign investment, intellectual property right etc.

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FUNCTIONS OF WTO
Administering the WTO trade agreements. Providing the forum for negotiation among its members concerning their multilateral trade relations in matters dealt with under the agreements Administering the mechanism for settling trade disputes between the member countries.
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Contd
Monitoring national trade policies. Providing technical assistance and training for developing countries. Co-operating with other international organisations to achieve greater coherence in global economic policy making.

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WTO AND INDIA

By being a part of WTO India enjoys the most favoured nation (MFN) status. WTO has resulted in easy entry into bilateral negotiation with each and every one of the trading partners of India. Take advantage of the opportunities created through WTO Indias market share in worlds export improved significantly.

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CONTD
WTO has significantly reduced the tariff and non-tariff barriers to trade. The liberalization of trade and investment has been resulting in economic growth, efficiency of resource utilisation, improvement in quality and productivity etc. WTO has a system which helps developing countries like India to settle their trade disputes.
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SAARC
Driven towards integration by the pressure of economic interest of the region, seven South Asian countries- Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lankaformed the South Asian Association for Regional Cooperation (SAARC) in 1985.

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OBJECTIVES
To promote the welfare of the people of South Asia and to improve their standard of living. To promote and strengthen collective selfreliance among the countries of South Asia. To promote active collaboration and mutual assistance in the economic, cultural, social and scientific fields. To cooperate with international and regional organisation with similar aims and purposes.
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SAARC And INDIA

SAARC has resulted in the improvement of bilateral relationship between India and Pakistan. India has also improved its relationship with the rest of South Asia and thereby expanded its range of trade. In terms of trade, commerce, investments etc. India is a source of potential investments and technology and a major market for products from all other SAARC members.
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SOUTH ASIAN FREE TRADE AREA (SAFTA)

--It came into effect from July 1, 2006 --Earlier it was known as SAARC Preferential Trading Agreement (SAPTA) --Member states consist of India, Pakistan, Bangladesh, Sri Lanka, Bhutan and Maldives

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BASIC PRINCIPLES OF SAFTA

Step-by-step negotiations and extensions of preferential trade arrangement in stages Inclusion of all type of products-raw, semiprocessed and processed Special and favourable treatment to Least Developed Countries (LDCs)

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SAFTA AND INDIA

It has strengthen Indias international trade relations It has strengthen the Indias trade liberalization program. It has promoted trade through free trade agreement with its member countries. Preparation and establishment of industrial and agricultural projects Training facilities and support to export marketing
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UNCTAD (The United Conference on Trade And Development)

UNCTAD was created in 1964. It aims at promoting trade and economic development of developing countries. The members meet every 4 years to set priority and guidelines for the organisation and provide an opportunity to debate key economic and development issue.
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AIMS OF UNCTAD
It aims at the development-friendly integration of developing countries into the world economy. It is the focal point within the UN for the integrated treatment of trade and development and the interrelated issues in the area of finance, technology etc. It is a forum for intergovernmental discussions and deliberations aimed at consensus building. It provides technical assistance to the developing countries in corporation with other organisation.
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FUNCTIONS OF UNCTAD
To promote international trade with a view to accelerate economic development. To formulate principles and policies on international trade and its related problems. To negotiate multinational trade agreement. To make proposals for putting its principles and policies to effect

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UNTCAD AND INDIA

UNCTADs technical cooperation programmes in trade efficiency, trade points, debt management programmes etc. is extremely useful in the developing countries like India. It has promoted the growth of Indias international trade.

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NORTH AMERICAN FREE TRADE AGREEMENT(NAFTA)

--It is a very important free trade area made up of developed and developing countries -- NAFTA, signed between US and Canada in 1988, was enlarged by the inclusion of Mexico in 1994, making North America a giant free trade area --NAFTA seeks to eliminate all tariffs on products moving among the three countries and end other barriers to services and investment capital within North America
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NAFTA
It covers the following areas1. Market access- Tariff and non-tariff barriers, rules of origin, governmental procurement 2. Trade rules- safeguards, subsidies , health and safety standards 3. Services- provides for the same safeguards for trade in services that exist for trade in goods 4. Intellectual property- All three countries pledge to provide efficient protection and enforcement of IPR while ensuring that the measures dont themselves become barriers to trade
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CONTD.
5.Dispute settlement Provides a dispute settlement process that will be followed instead of countries taking unilateral action against an offending party --A very significant feature of NAFTA is that , while most free trade agreements have provisions only for trade liberisation, it includes labour standards and environmental standards
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ASSOCIATION OF SOUTH EAST ASIAN NATIONS (ASEAN)

--It was formed in 1967 by the Bangkok declaration by Indonesia, Malaysia, Philippines, Singapore and Thailand --By 1999, Brunei, Vietnam, Cambodia, Myanmar, Lao joined ASEAN -- Endowed with natural resource. Primarily, natural rubber, palm oil, tin ,sugar, coffee, timber, petroleum, nickel, bauxite, tungsten and coal
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CONTD
--ASEAN Free Trade Area (AFTA) was created in 1992 -- AFTA reduced intra-regional tariffs by 5% --Agenda of AFTA includes Preferential liberalization of services and investment Harmonization of tariff nomenclature Intellectual property cooperation Harmonization of product standards
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ASEAN AND INDIA

India has established trade and investment linkages with a number of countries in Asia. ASEAN has resulted in the improvement of trade integration of India in respect to merchandise trade. ASEAN has also extended the scope of commercial services and financial integration of India which in turn has contributed to the strengthening of Indias market-based economic integration. It has also improved Indias competitiveness and economic robustness.
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G8
--Group of Eight (G8) is a forum for the governments of eight of the world's largest economies -- France, Germany, Italy, Japan, the United Kingdom, the United States, Canada and Russia -- The G8 nations comprise 42.5% of global GDP -- Does not have a permanent secretariat, or offices for its members
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CONTD.
-- The group's activities include year-round conferences and policy research, culminating with an annual summit meeting attended by the heads of government of the member states --Talks on the framework conditions for the global economy and climate protection -- Discussions on various issues like economy, growth and responsibility

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INTELLECTUAL PROPERTY RIGHTS (IPR)

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IPR
Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works, discoveries and inventions, and words, phrases, symbols, and designs. This is known as IPR

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OBJECTIVES OF IPR
Encourage and reward creative work Protection to technological innovation Fair competition Consumer protection
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BENEFITS OF IPR
Encourages and safeguard intellectual and artistic creations. Spread of new ideas and technologies. Investment in R&D efforts Consumers get large range of products. Boosts economic development

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LIMITATIONS OF IPR
Encourages monopolies Cost enhancement

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Common types of IPR

Copyrights Trademarks Patents Industrial design rights Trade secrets

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Copyrights
Copyright is a legal term describing the economic rights given to creators of literary and artistic works, including the right to reproduce the work, to make copies and to perform or display the work publicly. Copyright protects arrangements of facts, but it does not cover newly collected facts as such. Moreover, copyright doesnot protect new ideas and processes; they may be protected if at all, by patents.
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Trademarks
Trademarks are commercial source indicators or distinctive signs used by an individual, business organization or other legal entity that identify certain goods or services produced or provided by a specific person or enterprise. A trademark is typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements
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Patents
Patents are the set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention. It gives the inventor the right to exclude others from imitating, manufacturing, using or selling the invention for commercial use during the specified period.
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IPR & ITS IMPACT ON INDIA

-- Agreement of Trade Related Intellectual Property Rights - better known as TRIP -- India is a signatory, an integral part of WTO and it has an enormous impact on Indian business and trade partnerships -- Acts:-Indian Patents Act , Trademarks Act, Copyright Act, Designs Registration Act -- In Patents Acts there are areas where substantive or procedural amendments could be considered for complying with the TRIPs
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-- Business methods/models or computer programme comprising only of mathematical or scientific principles are not patentable under the present Act -- Copyright protects the coded expressions of software, while patent protection can protect the qualifying features of the software such as its sequence, structure and organization or its functional elements

CONTND..

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--How Indian companies can avoid falling into trap over misuse of Trademarks and Patents? It is advantageous to register with the appropriate Trademarks Office and to attain certificate of registration To avoid disputes with employees, the Companies need to get skilled advice before entering into any agreement with the employees Adopt internal policies and regulations or guidelines on employee inventions- Such policies and regulations should contain provisions on the categories of inventions which fall within the field of the employers business
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BENEFITS OF IPR IN TERMS OF INDIA

-- Stronger IPR protection encourages investment, both foreign and domestic -- Gives boost to R & D in countries like India where intellectual capital is expected to grow -- It protects indigenous property and traditional knowledge -- Maximize benefits by promoting access to technology and preventing anticompetitive abuses, tackling piracy and still meeting TRIPs minimum standards
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IPR AND ITS IMPACT ON SME

-- With the advent of "Knowledge Era" India is witnessing an opportunity -- IPR means a level playing field for all without any unfair protectionism or barriers of any kind -- No more copying or reverse engineering of other company's research products -- Protecting the indigenous industries -- It will impact SMEs in three ways and the sheer survival of SMEs will depend on Tripod of (1) Cost (2) Quality and (3) Delivery
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IPR AND ITS IMPACT ON SME

The Challenges for SMEs

1. Achieve Cost Efficiency

2. Produce quality comparable to the best 3. Efficient delivery of the "goods & services"; to the consumer. 4. Become world class, this does not necessarily mean world scale
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IPR AND ITS IMPACT ON SME

--SME should find their "niche" through Innovation, which could be in any of the areas like Creating new products or services. Re-engineering products or services. New processes to improve productivity. Developing new marketing techniques to expand sales. New forms of management systems and techniques to improve operational efficiency
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IPR AND DRUG & PHARMACEUTICALS

--TRIPS requires that member countries of the WTO in respect of drugs and agrochemical, must introduce Exclusive Marketing Rights (EMR) for such products if the following criteria are satisfied 1. A patent application covering the new drug or agrochemical should have been filed in any of the WTO member countries after 1 January 1995; 2. A patent on the product should have been obtained in any of the member countries (which provides for product patents in drugs
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IPR AND DRUG & PHARMACEUTICALS

4. A patent application covering the product should have been filed after 1 January 1995 in the country where the EMR is sought; 5. The applicant should apply seeking an EMR by making use of the prescribed form and paying requisite fee. --Apart from manufacturing of drugs ,the product patent regime will help the pharmaceutical industry to tap outsourcing of clinical research
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IPR AND DRUG & PHARMACEUTICALS

-- By participating in the international system of IPR protection, India has unlocked vast opportunities in both export and outsourcing in the area of R&D based clinical research -- The patent ordinance also provides adequate safeguards to protect the interest of the domestic industry and the citizens from any increase in prices of drugs

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IPR AND AGRICULTURE &BIOTECHNOLOGY

-- IPR can be used to protect goods or services produced in the agricultural & biotech sector -- They are patents, plant breeders rights, trademarks, geographical indications and trade secrets -- It is possible to include lay-out designs for chips that are designed to perform certain functions related to agriculture -- Patents are probably the most important IPR today for agricultural goods as they provide the strongest protection for patentable plants and animals and biotechnological processes for their production
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IPR AND AGRICULTURE &BIOTECHNOLOGY

--In the field of biotechnology more than others, that proprietary rights over knowledge is getting increasingly important --Commercial marks more often used in agriculture than industry are geographical indications, including appellations of origin -- Darjeeling for tea from this district in India -- Basmati for rice from India -- sui generis protection-protection measures for traditional agricultural practices and the traditional knowledge of farmers and local communities
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TRADE RELATED INVESTMENT MEASURES(TRIMs)

TRIMs refers to certain condition or restrictions imposed by a govt in respect of foreign investment in the country. The agreement on TRIMS provides that no contracting party shall apply any TRIM which is inconsistent with the WTO Articles.

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INCONSISTENT TRIMs
Local content requirement i.e a certain amount of local inputs to be used in product. Trade balancing requirement i.e imports shall not exceed a certain proportion of export. Trade and foreign exchange balancing requirement. Domestic sales requirement i.e a company shall sell a certain proportion of its output locally.
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GATS
The General Agreement on Trade in Services (GATS) is a treaty of the WTO that entered into force in January 1995 as a result of the Uruguay Round negotiations. The treaty was created to extend the multilateral trading system to service sector

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GATS covers 4 modes of international delivery of services Cross border supply (trans border data flows, transportation service) Commercial presence(provision of services abroad through FDI) Consumption abroad (tourism) Movement of personnel (entry and temporary stay of foreign consultants)

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CONCLUSION
International trading environment has profoundly influenced the growth and pattern of international trade which accounts a major part of international business. The developing countries must be able to take a more active part in trade negotiations, with the help of these international trade organizations through technical assistance and support from the developed countries.
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