International Economic and Trade Organizations
There are many international organizations functioning all over the world. They differ in their spheres of interest and size however all of them have their influence on international business relations. Trade organizations are voluntary associations between countries, formed with the purpose of liberalizing or opening trade between those countries. The member nations in trade organizations may, for example, agree to allow each other’s products into their markets, without those products being subject to tariffs or other trade barriers. This is done with the intention of providing economic benefit to all countries involved. The most known international trade organization is the World Trade Organization.
The World Trade Organization (WTO)
The World Trade Organization (WTO) is an international organization designed by its founders to supervise and liberalize international trade.
The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does this by:
– Administering trade agreements;
– Acting as a forum for trade negotiations;
– Settling trade disputes;
– Reviewing national trade policies;
– Assisting developing countries in trade policy issues, through technical assistance and training programmes;
– Cooperating with other international organizations.
The WTO has more than 130 members, accounting for over 90% of world trade. Over 30 others are negotiating membership. Decisions are made by the entire membership. This is typically by consensus. The WTO’s top level decision-making body is the Ministerial Conference which meets at least once every two years. Below this is the General Council.
The WTO’s rules — the agreements — are the result of negotiations between the members. 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 promises to do the same for imparts into its own market. The system also gives developing countries some flexibility in implementing their commitments.
The WTO has as member nations, most of the countries in the world, including all of North America and South America, most of sub-Saharan Africa, Southeast Asia, the south Pacific, Australia, and Europe. This represents more than 95% of total world trade. The purpose of the WTO is to supervise and liberalize international trade. It is headquartered in Geneva, Switzerland, and is governed by a Ministerial Conference which meets every two years. Essentially, the WTO serves as a place for member governments to go, to sort out trade problems they may be facing with each other, with a primary emphasis on negotiation. It also operates a system of trade rules which its member nations agree to abide by.
The Organization of Petroleum Exporting Countries (OPEC)
The Organization of Petroleum Exporting Countries (OPEC) was created by the oil-exporting countries realizing that if they were united they could bargain more effectively with the large oil companies. Of the 13 OPEC member-countries, most are in the Middle East, however, there are also large oil-exporting countries such as Mexico, Norway, and United Kingdom that are not members of the OPEC.
Organization for the Economic Cooperation and Development (OECD)
All the world’s developed countries are the members of the Organization for the Economic Cooperation and Development (OECD). The OECD publishes extensive research on a wide variety of international business and economic subjects. The governments also seek answers to common problems and work to coordinate domestic and international policies.
North American Free Trade Agreement (NAFTA)
Another of the more well-known trade organizations is the North American Free Trade Agreement (NAFTA). NAFTA is a trade agreement between the United States, Canada, and Mexico. The agreements were signed on 8 December 1993. Both the positive and negative effects of NAFTA have been studied and quantified by economists. Some argue in favour of NAFTA, saying that Mexico has seen its poverty rates fall, and real income levels rise. Others argue that business owners and the rich in all three countries have benefited, but Mexican farmers have been negatively impacted by falling food prices, and some U.S. workers in manufacturing and assembly have lost their jobs.
Japan External Trade Organization (JETRO)
This is a government-related organization which was founded in 1958 to promote trade between Japan and the rest of the world. JETRO’s focus for the 21st century has been shifted from promoting Japanese exports, to encouraging foreign investment in Japan, to help Japanese firms to reach their maximum export potential worldwide.