Regional Blocks - International Business

Regional BlocksInternational Business

Prepared By

Manu Melwin Joy

Assistant ProfessorIlahia School of Management Studies

Kerala, India.

Phone – 9744551114Mail – manu_melwinjoy@yahoo.com

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ASEANAssociation of Southeast Asian Nations

Introduction

• The Association ofSoutheast Asian Nations, orASEAN, was established on8 August 1967 in Bangkok,Thailand, with the signingof the ASEANDeclaration (BangkokDeclaration) by theFounding Fathers ofASEAN, namely Indonesia,Malaysia, Philippines,Singapore and Thailand.

Introduction

AIMS AND PURPOSES• To accelerate the economic growth, social

progress and cultural development in theregion through joint endeavours in the spiritof equality and partnership in order tostrengthen the foundation for a prosperousand peaceful community of Southeast AsianNations.

• To promote regional peace and stabilitythrough abiding respect for justice and therule of law in the relationship amongcountries of the region and adherence to theprinciples of the United Nations Charter.

• To promote active collaboration and mutualassistance on matters of common interest inthe economic, social, cultural, technical,scientific and administrative fields.

• To provide assistance to each other in theform of training and research facilities in theeducational, professional, technical andadministrative spheres.

AIMS AND PURPOSES

• To collaborate more effectively for thegreater utilisation of their agricultureand industries, the expansion of theirtrade, including the study of theproblems of international commoditytrade, the improvement of theirtransportation and communicationsfacilities and the raising of the livingstandards of their peoples;

• To promote Southeast Asian studies.• To maintain close and beneficial

cooperation with existing internationaland regional organisations with similaraims and purposes, and explore allavenues for even closer cooperationamong themselves.

FUNDAMENTAL PRINCIPLES

• Mutual respect for the independence,sovereignty, equality, territorialintegrity, and national identity of allnations.

• The right of every State to lead itsnational existence free from externalinterference, subversion or coercion.

• Non-interference in the internal affairsof one another

• Settlement of differences or disputes bypeaceful manner.

• Renunciation of the threat or use offorce.

• Effective cooperation amongthemselves.

EUEuropean Union

Introduction

• The EU is a unique

economic and political

partnership between 28

European countries that

together cover much of

the continent.

Introduction

• The EU was created in theaftermath of the SecondWorld War. The first stepswere to foster economiccooperation: the ideabeing that countries whotrade with one anotherbecome economicallyinterdependent and somore likely to avoidconflict.

Introduction

• The result was the EuropeanEconomic Community (EEC),created in 1958, and initiallyincreasing economiccooperation between sixcountries: Belgium, Germany,France, Italy, Luxembourgand the Netherlands. Sincethen, a huge single markethas been created andcontinues to develop towardsits full potential.

EU Institutions

Functions• The overall function of the

European Union is to create andimplement laws and regulationsthat integrate the memberstates of the EU. The countriesof the EU are supposed to haveuniform laws and policiesconcerning a variety of things(like immigration, labor, weightsand measures -- all sorts ofthings). The function of the EUgovernment is to decide howthis integration should be doneand to carry it out.

Functions

• For example, 16 members of theEU use the Euro as theirCurrency. One of the functions ofa part of the EU government wasto devise the currency -- to decidewhat it would be called, what itwould look like, etc. Another partof the EU government tries to getcountries using the Euro to enactfiscal policies that will keep theEuro stable. They try, in otherwords, to prevent fiascos likewhat happened in Greece thispast year and they try to remedythem if they happen.

South Asian Association for Regional Cooperation

Introduction

• The South Asian Association forRegional Cooperation (SAARC) isan economic and geopoliticalunion of eight membernations that are primarily locatedin South asia contingent. Itssecretariat is headquartered inKathmandu, Nepal.

Introduction

• The idea of regionalpolitical and economiccooperation in southasia was first coined in1980 and the first summitheld in Dhaka on 8December in 1985 led toits official establishmentby the governments ofBangladesh, Bhutan, India,Maldives, Nepal, Pakistanand Srilanka.

Objectives• To promote the welfare of the people

of South Asia and to improve theirquality of life.

• To accelerate economic growth, socialprogress and cultural development inthe region and to provide allindividuals the opportunity to live indignity and to realise their fullpotential.

• To promote and strengthen selectiveself-reliance among the countries ofSouth Asia.

• To contribute to mutual trust,understanding and appreciation of oneanother's problems.

Objectives

• To promote active collaborationand mutual assistance in theeconomic, social, cultural,technical and scientific fields.

• To strengthen co-operation withother developing countries.

• To strengthen co-operation amongthemselves in international forumson matters of common interest.

• To co-operate with internationaland regional organisations withsimilar aims and purposes.

• To maintain peace in the region.

Members

Apex and Recognized Bodies

• SAARC has six Apex Bodies namely,

– SCCI - SAARC Chamber of Commerce & Industry

– SAARCLAW - South Asian Association For Regional Cooperation In Law

– SAFA - South Asian Federation of Accountants

– SAF - South Asia Foundation

– SAIEVAC - South Asia Initiative to End Violence Against Children

– FOSWAL - Foundation of SAARC Writers and Literature.

SAARC summits

Organization of the Petroleum Exporting Countries

Introduction

• OPEC (Organization of thePetroleum ExportingCountries) is an oil cartelwhose mission is tocoordinate the policies of theoil-producing countries. Thegoal is to secure a steadyincome to the member statesand to secure supply of oil tothe consumers.

History

• OPEC was formed at a time whenthe international oil market waslargely separate from centrallyplanned economies, and wasdominated by multinationalcompanies. OPEC's ‘PolicyStatement' states that there is aright of all countries to exercisesovereignty over their naturalresources. Because OPEC is anorganisation of countries (not oilcompanies), individual membershave sovereign immunity for theiractions, meaning that OPEC is notregarded as being subject to"Antitrust" or Competition Law inthe normal way.

Growth

• In the 1970s, OPEC beganto gain influence andsteeply raised oil pricesduring the 1973 oil crisis inresponse to US aid to Israelduring the Yom KippurWar. It lasted until March1974. OPEC added to itsgoals the selling of oil forsocio-economic growth ofthe poorer membernations, and membershipgrew to 13 by 1975.

Growth

• In the 1980s, the price of oil wasallowed to rise before the adverseeffects of higher prices causeddemand and price to fall. TheOPEC nations, which depended onrevenue from oil sales,experienced severe economichardship from the lower demandfor oil and consequently cutproduction in order to boost theprice of oil. During this time,environmental issues began toemerge on the internationalenergy agenda. Lower demand foroil saw the price of oil fall back to1986 levels by 1998–99.

Growth• In the 2000s, a combination of

factors pushed up oil priceseven as supply remained high.Prices rose to then record-highlevels in mid-2008 before fallingin response to the 2007financial crisis . OPEC's summitsin Caracas and Riyadh in 2000and 2007 had guiding themes ofstable energy markets,sustainable oil production, andenvironmental sustainability.

Objectives

• OPEC's objective is to co-ordinate and unifypetroleum policies amongMember Countries, in orderto secure fair and stableprices for petroleumproducers; an efficient,economic and regular supplyof petroleum to consumingnations; and a fair return oncapital to those investing inthe industry.

North American Free Trade Agreement

History

• In 1994, the North AmericanFree Trade Agreement(NAFTA), a state-of-the-artmarket-opening agreement,came into force. Since then,NAFTA has systematicallyeliminated most tariff andnon-tariff barriers to trade andinvestment between Canada,the United States, and Mexico.

Chronology of Events

• June 10, 1990: Canada, the U.S.,and Mexico agree to pursue afree trade agreement

• February 5, 1991: NAFTAnegotiations begin.

• December 17, 1992: NAFTA issigned by leaders from Canada,the U.S., and Mexico.

• August 1993: Additional sideagreements on labor and theenvironment are negotiated.

• January 1, 1994: NAFTA entersinto force

History

• Negotiations toward a freetrade agreement betweenthe United States andCanada began in 1985.Sixteen months later, thetwo nations came togetherand agreed to the Canada-U.S. Free Trade Agreement(FTA). It was a historicagreement that placedCanada and the UnitedStates at the forefront oftrade liberalization.

Key elements of the Agreement• Key elements of the Agreement

included the elimination of tariffsand the reduction of many non-tariff barriers to trade. The FTAwas also among the first tradeagreements to address trade inservices. It also included a disputesettlement mechanism for thefair and expeditious resolution oftrade disagreements, andestablished a ground-breakingsystem for the binational reviewof trade remedy determinations,thereby providing an alternativeto domestic judicial review.

Example

• In practical terms, Canadaand the United States agreedto remove bilateral bordermeasures on traded goods,which included the removalof tariffs on goods such asmeat products, fruits andvegetables, beverages,processed foods, liveanimals, wine, clothing andtextiles, fuels, electricalgoods and machinery.