ASSIGNMENT REPORT

ON

INTERNATIONAL BUSINESS
(MBA CP 401)

SUBMITTED BY: SUBMITTED TO:

NAME: Jyoti Ranjan Chetty Dr. A Mohan Muralidhar

Roll No.: 17/06/ DBM/15 Lecturer (Marketing), HOD

DBM, CUO

DEPARTMENT OF BUSINESS MANAGEMENT

CENTRAL UNIVERSITY OF ORISSA, KORAPUT

SESSION: 2017-2019
WORLD TRADE ORGANIZATION (WTO)

The Uruguay round of GATT (1986-93) gave birth to World Trade Organization. The members of
GATT singed on an agreement of Uruguay round in April 1994 in Morocco for establishing a new
organization named WTO. It was officially constituted on January 1, 1995 which took the place
of GATT as an effective formal, organization. GATT was an informal organization which
regulated world trade since 1948.

Contrary to the temporary nature of GATT, WTO is a permanent organization which has been
established on the basis of an international treaty approved by participating countries. It achieved
the international status like IMF and IBRD, but it is not an agency of the United Nations
Organization (UNO)

STRUCTURE

The WTO has nearly 153 members accounting for over 97% of world trade. Around 30 others are
negotiating membership. Decisions are made by the entire membership. This is typically by
consensus.A majority vote is also possible but it has never been used in the WTO and was
extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified
in all members’ parliaments.The WTO’s top level decision-making body is the Ministerial
Conferences which meets at least once in every two years. Below this is the General Council
(normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from
members’ capitals) which meets several times a year in the Geneva headquarters. The General
Council also meets as the Trade Policy Review Body and the Disputes Settlement Body.

At the next level, the Goods Council, Services Council and Intellectual Property (TRIPs) Council
report to the General Council. Numerous specialized committees, working groups and working
parties deal with the individual agreements and other areas such as, the environment, development,
membership applications and regional trade agreements.

OBJECTIVES

The important objectives of WTO are:

1. To improve the standard of living of people in the member countries.

2. To ensure full employment and broad increase in effective demand.

3. To enlarge production and trade of goods.

4. To increase the trade of services.

5. To ensure optimum utilization of world resources.

6. To protect the environment.

7. To accept the concept of sustainable development.

FUNCTIONS

The main functions of WTO are discussed below:

1. To implement rules and provisions related to trade policy review mechanism.

2. To provide a platform to member countries to decide future strategies related to trade and tariff.

3. To provide facilities for implementation, administration and operation of multilateral and

bilateral agreements of the world trade.

4. To administer the rules and processes related to dispute settlement.

5. To ensure the optimum use of world resources.

6. To assist international organizations such as, IMF and IBRD for establishing coherence in
Universal Economic Policy determination.

WTO AGREEMENTS

The WTO’s rule and the agreements are the result of negotiations between the members. The
current sets were the outcome to the 1986-93 Uruguay Round negotiations which included a major
revision of the original General Agreement on Tariffs and Trade (GATI).GATT is now the WTO’s
principal rule-book for trade in goods. The Uruguay Round also created new rules for dealing with
trade in services, relevant aspects of intellectual property, dispute settlement and trade policy
reviews.The complete set runs to some 30,000 pages consisting of about 30 agreements and
separate commitments (called schedules) made by individual members in specific areas such as,
lower customs duty rates and services market-opening.Through these agreements, WTO members
operate a non-discriminatory trading system that spells out their rights and their obligations. Each
country receives guarantees that its exports will be treated fairly and consistently in other
countries’ markets. Each country promises to do the same for imports into its own market. The
system also gives developing countries some flexibility in implementing their commitments.

(a) Goods:
It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating lower
customs duty rates and other trade barriers; the text of the General Agreement spelt out important,
rules, particularly non-discriminations since 1995, the updated GATT has become the WTO s
umbrella agreement for trade in goods.It has annexes dealing with specific sectors such as,
agriculture and textiles and with specific issues such as, state trading, product standards, subsidies
and action taken against dumping.

(b) Services:
Banks, insurance firms, telecommunication companies, tour operators, hotel chains and transport
companies looking to do business abroad can now enjoy the same principles of free and fair that
originally only applied to trade in goods.These principles appear in the new General Agreement
on Trade in Services (GATS). WTO members have also made individual commitments under
GATS stating which of their services sectors, they are willing to open for foreign competition and
how open those markets are.

(c) Intellectual Property:

The WTO’s intellectual property agreement amounts to rules for trade and investment in ideas and
creativity. The rules state how copyrights, patents, trademarks, geographical names used to
identify products, industrial designs, integrated circuit layout designs and undisclosed information
such as trade secrets “intellectual property” should be protected when trade is involved.

(d) Dispute Settlement:

The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is
vital for enforcing the rules and therefore, for ensuring that trade flows smoothly.Countries bring
disputes to the WTO if they think their rights under the agreements are being infringed. Judgments
by specially appointed independent experts are based on interpretations of the agreements and
individual countries’ commitments.

The system encourages countries to settle their differences through consultation. Failing that, they
can follow a carefully mapped out, stage-by-stage procedure that includes the possibility of the
ruling by a panel of experts and the chance to appeal the ruling on legal grounds.Confidence in the
system is bourne out by the number of cases brought to the WTO, around 300 cases in eight years
compared to the 300 disputes dealt with during the entire life of GATT (1947-94).

(e) Policy Review:

The Trade Policy Review Mechanism’s purpose is to improve transparency, to create a greater
understanding of the policies that countries are adopting and to assess their impact. Many members
also see the reviews as constructive feedback on their policies.All WTO members must undergo
periodic scrutiny, each review containing reports by the country concerned and the WTO
Secretariat.
South Asian Association for Regional Cooperation (SAARC)
The South Asian Association for Regional Cooperation (SAARC) is an economic and political
organization of eight countries in Southern Asia. In terms of population, its sphere of influence is
the largest of any regional organization: almost 1.5 billion people, the combined population of its
member states. It was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka,
Nepal, Maldives and Bhutan. In April 2007, at the Association’s 14th summit, Afghanistan became
its eighth member.

HISTORY

In the late 1970s, Bangladeshi President Ziaur Rahman proposed the creation of a trade block
consisting of South Asian countries. The idea of regional cooperation in South Asia was again
mooted in May 1980.The foreign secretaries of the seven countries met for the first time in
Colombo in April 1981. The Committee of the Whole, which met in Colombo in August 1981,
identified five broad areas for regional cooperation. New areas of cooperation were added in the
following years.

The objectives of the Association as defined in the Charter are

i. To promote the welfare of the peoples of South Asia and to improve their quality of life;

ii. To accelerate economic growth, social progress and cultural development in the region and to
provide all individuals the opportunity to live in dignity and to realize their full potential;

iii. To promote and strengthen collective self-reliance among the countries of South Asia;

iv. To contribute to mutual trust, understanding and appreciation of one another’s problems;

v. To promote active collaboration and mutual assistance in the economic, social, cultural,
technical and scientific fields;

vi. To strengthen cooperation with other developing countries;

vii. To strengthen cooperation among themselves in international forums on matters of common

interest; and

viii. To cooperate with international and regional organizations with similar aims and purposes.

The Declaration on South Asian Regional Cooperation was adopted by the Foreign Ministers in
1983 in New Delhi. During the meeting, the Ministers also launched the Integrated Programme of
Action (IPA) in nine agreed areas, namely, Agriculture; Rural Development; Telecommunications;
Meteorology; Health and Population Activities; Transport; Postal Services; Science and
Technology; and Sports, Arts and Culture.The South Asian Association for Regional Cooperation
(SAARC) was established when its Charter was formally adopted on 8 December 1985 by the
Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri
Lanka.Afghanistan was added to the regional grouping at the behest of India on November 13,
2005 and became a member on April 3, 2007. With the addition of Afghanistan, the total number
of member states were raised to eight (8). In April 2006, the United States of America and South
Korea made formal requests to be granted observer status.

The European Union has also indicated interest in being given observer status and made a formal
request for the same to the SAARC Council of Ministers meeting in July 2006. On August 2, 2006
the foreign ministers of the SAARC countries agreed in principle to grant observer status to the
US, South Korea and the European Union. On 4 March 2007, Iran requested observer status.
Followed shortly by the entrance of Mauritius.

Free Trade Agreement:

Over the years, the SAARC members have expressed their unwillingness on signing a free trade
agreement. Though India has several trade pacts with Maldives, Nepal, Bhutan and Sri Lanka,
similar trade agreements with Pakistan and Bangladesh have been stalled due to political and
economic concerns on both sides. India has been constructing a barrier across its borders with
Bangladesh and Pakistan.In 1993, SAARC countries signed an agreement to gradually lower
tariffs within the region, in Dhaka. Eleven years later, at the 12th SAARC Summit at Islamabad,
SAARC countries devised the South Asia Free Trade Agreement which created a framework for
the establishment of a free trade area covering 1.4 billion people. This agreement went into force
on January 1, 2006. Under this agreement, SAARC members will bring their duties down to 20
per cent by 2007.

Areas of Co-operation:
At the inception of the Association, the Integrated Programme of Action (IPA) consisting of a
number of Technical Committees (TCs) was identified as the core areas of cooperation. Over the
period of years, the numbers of TCs were changed as per the requirement.

The current areas of cooperation under the reconstituted Regional Integrated Programme
of Action which is pursued through the Technical Committees cover:
1. Agriculture and Rural Development;

2. Health and Population Activities;

3. Women, Youth and Children;

4. Environment and Forestry;

5. Science and Technology and Meteorology;

6. Human Resources Development; and

7. Transport.

Recently, high level Working Groups have also been established to strengthen cooperation in the
areas of Information and Communications Technology, Biotechnology, Intellectual Property
Rights, Tourism and Energy. Given the emphasis laid down at successive Summits on the need to
expand the areas of cooperation and strengthen the regional cooperation, a number of other areas
have been included in the SAARC agenda. Several Ministerial level meetings have taken place to
give due emphasis in various fields. The details of work programme under each agreed areas of
cooperation can be viewed by clicking the respective links.

Economic Co-operation:
The acceleration of economic growth is a Charter objective of SAARC. Cooperation in the core
economic areas among SAARC Member Countries was initiated following the Study on Trade,
Manufactures and Services (TMS), which was completed in June 1991.

Currently, the following important processes of SAARC are promoting cooperation in the
field of Trade, Economy and Finance and related areas:
i. Committee on Economic Cooperation: Overall Coordination of cooperation in economic areas;

ii. South Asian Free Trade Area (SAFTA) Committee of Experts and SAFTA Ministerial Council:
Administration and implementation of SAFTA;

iii. Finance Ministers Mechanism: Cooperation in the field of Finance and related areas;

iv. Standing Group on Standards and SAARC Standards Coordination Board: Cooperation in the
field of harmonization of Standards;

v. Group on Customs Cooperation is dealing with issues related to harmonization of Customs rules
and procedures.

United Nations Conference on Trade and Development (UNCTAD)

Established in 1964, the United Nations Conference on Trade and Development (UNCTAD) aims
at the development-friendly integration of developing countries into the world economy.
UNCTAD is the focal point within the United Nations for the integrated treatment of trade and
development and the inter related issues in the areas of finance, technology, investment and
sustainable development. At present 193 countries are members in UNCTAD.

The organization works to fulfill this mandate by carrying out three key functions:
i. It functions as a forum for inter-governmental deliberations, supported by discussions with
experts and exchanges of experience, aimed at consensus building.

ii. It undertakes research, policy analysis and data collection for the debates of government
representatives and experts.

iii. It provides technical assistance tailored to the specific requirements of developing countries,
with special attention to the needs of the least developed countries and of economies in transition.
When appropriate, UNCTAD cooperates with other organizations and donor countries in the
delivery of technical assistance.

UNCTAD, in co-operation with other organizations and donor countries, provides technical
assistance tailored to the needs of the developing countries, with special attention being paid to the
needs of the least developed countries and countries with economy in transition.In performing its
functions, the secretariat works together with member Governments and interacts with
organizations of the United Nations system and regional commissions, as well as with
governmental institutions, non-governmental organizations, the private sector, including trade and
industry associations, research institutes and universities worldwide.

Overview of the Main Activities:

(a) Trade and Commodities:

i. Commodity Diversification and Development:

Promotes the diversification of production and trade structures. Helps Governments to formulate
and implement diversification policies and encourages enterprises to adapt their business strategies
and become more competitive in the world market.

ii. Competition and Consumer Policies:

Provides analysis and capacity building in competition and consumer protection laws and policies
in developing countries. Publishes regular updates of a Model Law on Competition.

iii. Trade Negotiations and Commercial Diplomacy:

Assists developing countries in all aspects of their trade negotiations.

iv. Trade Analysis and Information System (TRAINS):

Comprehensive computer-based information system on trade control measures that uses Uncial’s
database. The CD-ROM version includes 119 countries.

v. Trade and Environment:

Assesses the trade and development impact of environmental requirements and relevant
multilateral agreements and provides capacity-building activities to help developing countries
participate in and derive benefits from international negotiations on these matters.

(b) Investment and Enterprise Development:

i. International Investment and Technology Arrangements:

Helps developing countries to participate more actively in international investment rule making at
the bilateral, regional and multilateral levels. These arrangements include the organization of
capacity-building seminars and regional symposium and the preparation of a series of issues
papers.

ii. Investment Policy Reviews:

Intended to familiarize Governments and the private sector with the investment environment and
policies of a given country. Reviews have been carried out in a number of countries, including
Ecuador, Egypt, Ethiopia, Mauritius, Peru, Uganda and Uzbekistan.

iii. Investment Guides and Capacity Building for the LDCs:

Some of the countries involved are Bangladesh, Ethiopia, Mali, Mozambique and Uganda.

iv. Empretec:
Promotes entrepreneurship and the development of small and medium- sized enterprises. Empretec
programmes have been initiated in 27 countries, assisting more than 70,000 entrepreneurs through
local market-driven business support centres.

(c) Macroeconomic Policies, Debt and Development Financing:

i. Policy Analysis and Research:

On issues concerning global economic interdependence, the international monetary and financial
system and macroeconomic and development policy challenges.

ii. Technical and Advisory Support:

To the G24 group of developing countries (the Intergovernmental Group of 24) in the World Bank
and the International Monetary Fund; advisory services to developing countries for debt
rescheduling negotiations under the Paris Club.

iii. DMFAS Programme:

Computer-based debt management and financial analysis system (DMFAS) specially designed to
help countries manage their external debt. Started in 1982 and now installed in 62 countries.
(d) Technology and Logistics:

i. ASYCUDA Programme:
Integrated customs system that speeds up customs clearance procedures and helps Governments
to reform and modernize their customs procedures and management. Installed in over 80 countries,
ASYCUDA has become the internationally accepted standard for customs automation.

ii. ACIS Programme:

Computerized cargo tracking system installed in 20 developing countries of Africa and Asia.

iii. E-Tourism Initiative:

Linking sustainable tourism and Information and communication technologies (ICTs) for
development, UNCTAD has developed this Initiative to help developing countries’ destinations to
become more autonomous by taking charge of their own tourism promotion by using ICT tools.

iv. Technology:
Services the United Nations (UN) Commission on Science and Technology for Development and
administers the Science and Technology for Development Network, carries out case studies on
best practices in transfer of technology; undertakes Science, Technology and Innovation Policy
Reviews for interested countries, as well as capacity-building activities.

v. Train for Trade Programme:

Builds training networks and organizes training in all areas of international trade to enable
developing countries to increase their competitiveness. Currently developing distance learning
programmes focusing on the Less Developed Countries (LDCs).

UNCTAD Conferences:
The highest decision-making body of UNCTAD is the quadrennial conference, at which member
States make assessments of current trade and development issues, discuss policy options and
formulate global policy responses. The conference also sets the organization’s mandate and work
priorities.

i. The conference is a subsidiary organ of the United Nations General Assembly.

ii. The conferences serve an important political function: they allow intergovernmental consensus
building regarding the state of the world economy and development policies and they play a key
role in identifying the role of the United Nations and UNCTAD in addressing economic
development problems.
North American Free Trade Agreement (NAFTA)
On August 12, 1992, a trilateral agreement between United States of American (USA), Canada
and Mexico took place which declared North American region as Free Trade Area. This
Agreement is known as NAFTA. USA played the dominant role in this established.

NAFTA was constituted mainly to meet the challenges of European Economic Community (EEC)
and Japanese economic policies. Before NAFTA, free trade was already taking place between USA
and Canada but this free grade facility was now extended to Mexico. The main objective of
NAFTA is to utilize economic resource of North American region for developing the area in a
better way.
NAFTA has generated economic growth and rising standards of living for the people of all three
member countries since 1994. By strengthening the rules and procedures governing trade and
investment throughout the continent, NAFTA has proved to be a solid foundation for building
Canada’s future prosperity.

Canada’s merchandise trade with its NAFTA partners has increased 122% since 1993 reaching
$598.7 billion in 2005. Canadian merchandise exports to the United States grew at a compounded
annual rate of 6% between 1994 and 2005. With regard to Mexico, bilateral trade in 2005 reached
$18 billion, a 296% increase from pre-NAFTA levels (1993). But NAFTA partners account 84.7%
of Canada’s total merchandise exports.

Trade in services has also increased under NAFTA..Canada’s trade in services with the United
States and Mexico grew at an average annual compounded rate of 5.4% to reach $82.7 billion in
2004, up from $46.4 billion in 1994, our trade in services with the United States reached $81.2
billion in 2005, up from $42.3 billion in 1993.

Two-way trade in services between Canada and Mexico has grown at an annual compounded rate
of 9%, to reach over $1.6 billion in 2004. Approximately 57% of Canada’s services exports go to
our NAFTA partners.

NAFTA has also had positive impact on investment. Since 1994, the annual stock of foreign direct
investment in Canada has averaged $279.1 billion. IN 2005, total Foreign Direct Investment (FDI)
in Canada reached $415.6 billion, of which more than 64% came from our NAFTA partners.

FDI in Canada from the United States increased to $266.5 billion in 2005. Canadian direct
investment nits NAFTA partners also grew, reaching $213.7 billion in the United Stated and $3.14
billion in Mexico.

In turn, the enhanced economic activity and production in the region have contributed to the
creation of more and better paying jobs for Canadians. Close to 3.1 million net new jobs have been
created in Canada since 1994, representing an increase of 126.6% over pre-NAFTA employment
levels.

For Canadians, it is important that trade and investment liberalization proceed hand in hand with
efforts to protect the environment and improve working conditions. Under NAFTA, our three
countries have been able to introduce the successful approach of parallel environmental and labour
cooperation agreements.

The economic collaboration promoted by NAFTA has spurred better environment performance
across the region. Through the North American Agreement on Environmental Co-operation, the
three partners agreed to promote the effective enforcement of environmental laws. Through the
North American Agreement on Labour Cooperation, the three partners agreed to work together to
protect, enhance and basic worker’ rights.

Canada and its NAFTA partners will continue to work together to reduce the costs of trading within
the region and to and improve the competitiveness of North America.

NAFTA called for immediately eliminating duties on the majority of tariffs between products
traded among the United States, Canada and Mexico and gradually phasing out other tariffs, over
a 15- year period. Restrictions were to be removed from many; categories, including motor
vehicles and automotive parts, computer, textiles and agriculture.

The treaty also protected intellectual property rights (patents, copyrights and trademarks) and
outlined the removal of investment restrictions among the three countries. The agreement is
trilateral in nature (that is, the stipulations apply equally to all three countries) in all areas except
agriculture, in which stipulation, tariff reduction phase-out periods and protection of selected
industries, were negotiated bilaterally. Provisions regarding worker and environmental protection
were added later as a result of supplemental agreements signed in 1993.

This agreement was an expansion of the earlier Canada-US Free Trade Agreement of 1988. Unlike
the European Union. NAFTA does not create a set of supranational governmental bodies, nor does
it create a body of law United. NAFTA is a treaty under international law.

European Union (EU): History, Members, Aims

The European Union (EU) is supranational and intergovernmental union of 27 states in Europe. It
was established in 1992 by the Treaty on European Union (The Maastricht Treaty) and is the de
facto successor to the six-member European Economic Community founded in 1957. Since then
new accessions have raised its number of member states and competencies have expanded. The
EU is the current stage of a continuing open-ended process of European integration.The EU is one
of the largest economic and political entities in the world, with 494 million peoples and a combined
nominal Gross Domestic Product (GDP) of £11.6 ($14.5) trillion in 2006. The Union is the single
market with a common trade policy, a Common Agriculture/Fisheries Policy and a Regional Policy
to assist underdeveloped regions.It introduced a single currency, the euro, adopted by 13 member
states. The EU imitated a limited Common Foreign and Security Policy and a limited Police and
Judicial Co-operation in Criminal Matters.Important EU institutions and bodies include the
European Commission, the Council of the European Union, the European Council, the European
Central Bank, the European Court of Justice and the European Parliament.Citizens of EU member
states are also EU citizens they directly elect the European Parliament, once every five years. They
can live, travel, work and invest in other members states (with some restrictions on new member
states). Passport control and customs checks at most internal borders were abolished by the
Schengen Agreement.

History:
The EU has evolved from a western European trade body into the supranational and
intergovernmental body. After the Second World War, an impetus grew in western European for
institutional forms of cooperation (through social, political and economic integration) between
states, driven by the determination to rebuild European and eliminate the possibility of another
war between Germany and France. Eastern European, on the other hand, was largely within the
soviet sphere of influence and only in the 1990s did was the EU see central and eastern European
states as potential members

European Economic Community (EEC):

A prominent policy goal of the European Union is the development and maintenance of an
effective single market. Significant efforts have been made to create harmonized standards claimed
by their proponents to bring economic benefits through creating larger, more efficient
markets.Since the Treaty of Rome, policies have implemented free trade of goods and services
among member states and continue to do so. This policy goal was further extended to three of the
four European Free Trade Association (EFTA) states by the European Economic Area,
(EEA).Common EU competition law restricts anticompetitive activities of companies (through
antitrust law and merger control) and member states (through the State Aids regime). The EU
promotes free movement of capital between member states (and other EEA states). The members
have a common system of indirect taxation, the Value Added Tax (VAT), as well as common
customs duties and excises on various products.From 2007-13 new member states expect
investments financed with EU Structural Funds and Cohesion Funds, (new motorway near Poznan,
Poland) they have a Common Agriculture Policy (with the Common Fisheries Policy) and the
structural and cohesion funds, which improve infrastructure and assist disadvantaged regions.
Together they are known as the cohesion polices.The EU also has funds for emergency financial
aid, for instance after natural disaster. The funding extends to programmes in candidate countries
and other East European countries, as well as aid to many developing countries, through
programmes. The EU also funds research and technological development, thorough four-year
Framework Programmes for Research and Technological Development.
Members of EEC:
The six states that founded the EEC and the other two Communities were known as the “inner six”
(the “outer seven” were those countries who formed the European Free Trade Association). The
six were France, West Germany, Italy and the three Benelux countries: Belgium, the Netherlands
and Luxembourg.The first enlargement was in 1973, with the accession of Denmark, Ireland and
the United Kingdom. Greece, Spain and Portugal joined throughout in the 1980s. Following the
creation of the EU in 1993, it has enlarged to include a further fifteen countries by 2007.

Aims and Achievements of EEC:

The main aim of the EEC, as stated in its preamble, was to “preserve peace and liberty and to lay
the foundations of an ever closer union among the peoples of Europe”. Calling for balanced
economic growth, this was to be accomplished through, (1) the establishment of a customs union
with a common external tariff (2) common policies for agriculture, transport and trade (3)
enlargement of the EEC to the rest of Europe.For the customs union, the treaty provided for a 10
% reduction in custom duties and up to 20 % of global import quotas. Progress on the customs
union proceeded much faster than the twelve years planned, however France faced some setbacks
due to their war with Algeria.

Euro Currency:
Euro currency was created by the Economics and Monetary Union (EMU). It was established on
1 January 1999 and based on the Maastricht treaty from 1992. 12 countries are members of the
Euro area also known as the Euroland. Every other member of the EU can join this group provided
that certain conditions (regulating the level of inflation and the condition of public money etc.) are
fulfilled.But not all the EU have introduced the Euro-currency, some haven’t met the requirements
(Sweden isn’t member of the EMU and Greece has met the requirement in 2000 and since then it
has been a member of the Euro-land) and other decided that maybe they introduce Euro sometime
later (UK and Denmark). Countries which jointed the EU in 2004 aren’t in the Euro area.

What did they Need Euro for?

In the beginning of 1999 member countries of EMU have lost the right to release their national
currency giving this right to the European Central Bank. But why they gave this right, one of the
most important privileges of sovereign countries, you may ask. The answer is simple and not
clarifying anything because of political reasons.European countries wanted to establish a new
federation structure which would ensure peace and provide good economic conditions. The most
important thing was to establish such, connections between Germany and other countries that no
more was could outbreak.Economic reasons were also very important in the creation of the Euro
area. Since 1993 all EU countries function as a uniform market where services and products and
man-power flow freely.
What Influences The Euro Exchange Rate?
Only the European Systems of Central Bank (ESCB), which works similarly as German central
bank, the Bundes bank. Bundes bank is known for excellent ant-inflation policies can release Euro
currency. ESCB is divided into central unit (European Central Bank (ECB) which was created on
1 June 1998) and national central banks.The main ECB’s task is take care of monetary politics and
national banks realize these politics in member countries. The aim of the aforementioned politics
is to maintain price stability that means keeping the inflation level below 2%. EMU’s central bank
can support economical growth as long as it doesn’t collide with its anti-inflation ESCB’s politics
has to be the same in the whole Euro-land.These politics could lead to a rise of unemployment
level and escalate social conflicts. In this case the creators of Maastricht treaty have added in this
treaty a few points assuring that countries’ politics and economical situation would not influence
bank’s decisions

Association of South East Asian Nations (ASEAN 1967)

In 1967, the ASEAN (The Association of South East Asian Nations) was organised by Indonesia,
Malaysia, Philippines, Singapore and Thailand. In 1984 Brunei, in 1995 Vietnam, in July 1997
Laos and Myanmar (Burma), and in 1999 Cambodia joined the ASEAN. India, Japan and China
are dialogue partners and regional partners of ASEAN. India now wants to join this regional
functional organisation as a full member.

(A) Objectives
ASEAN is a non-military and non-security economic and cultural regional association of the South
East Asian member states.

Its main objectives are:

(i) to accelerate economic growth, cultural development and social progress in the region,
(ii) to promote regional peace and stability,

(iii) to promote active collaboration and mutual assistance on matters of common interests in
various fields,

(iv) to promote mutual cooperation and assistance in providing training and research facilities to
their people;

(v) to promote South East Asian studies;

(vi) to collaborate in the development of agriculture, trade and industries; and

(vii) to maintain close and beneficial cooperation with existing international and regional
organisations with similar aims and purposes.

(B) Organisational Structure:

The organisational structure of the ASEAN consists of the Ministerial Conference, the Standing
Committee, the Secretariat and a number of permanent and ad-hoc committees. The Ministerial
Conference consists of the Foreign Ministers of the member states. The Conference holds periodic
consultations with regard to various matters of mutual interests.The Standing Committee meets as
and when required and between the meeting of the conference, it holds consultations among
members. It consists of the Foreign Minister of the host country where the meeting is held and the
ambassadors of other member countries.

The meetings are held in all the countries by rotation. In 1976, a secretariat was added to its
organisation. Its headquarters are at Jakarta which looks after the administrative affairs of the
ASEAN. Further, the ASEAN has nine permanent and eight ad- hoc committees.The ASEAN has
been playing a very useful role in promoting cooperation and in securing collaboration among the
member states. It is fast developing into a distinct regional entity in international relations. It
provides a good example of economic and social cooperation among the countries of South East
Asia.The establishment of SAARC (The South Asian Association for Regional Cooperation),
involving India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives stands definitely
influenced by the ASEAN. Recently, the members of the ASEAN have undertaken several
important and helpful steps for invigorating its working. Its machinery has been refined and it is
now fast developing into a functional regional organisation which merits attention as a model of
regional cooperation for development.On August 8, 1997 the ASEAN completed thirty years of
its existence as a regional association for promoting socio-economic cooperation for development
of its members. It is trying to emerge as a strong and integrated regional association. It has enabled
its members to attain an economic growth rate of around 7 to 8 per cent. It is now trying to
strengthen the infrastructure for undertaking a concerted programme for development in the South
East Asia and Indo-China regions. It is trying hard to take and maintain a lead in this era of
increasing competition and globalisation.ASEAN is currently acting as an important, active and
useful agency of regional cooperation for development among the member countries. Human
Resources, infrastructure and information technology are the three areas in which the ASEAN
countries are now trying to increase their cooperation. Now ASEAN members have been trying to
develop increasing cooperation at all levels for fighting trans-national crimes like piracy, terrorism,
illegal migration, drug trafficking, cyber crimes and others.