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International
Trade. International trade is exchange of capital, goods,
and services
across international borders
or territories.In most countries, it represents a significant share of gross domestic product
(GDP). While international trade has been present
throughout much of history (e.g. Silk Road), its economic, social, and
political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational
corporations, and outsourcing are all
having a major impact on the international trade system. Increasing
international trade is crucial to the continuance of globalization. International trade is a major
source of economic revenue for any nation that is considered a world power.
Without international trade, nations would be limited to the goods and services
produced within their own borders.International trade is in principle not different from domestic trade as the motivation and the
behavior of parties involved in a trade does not change fundamentally depending
on whether trade is across a border or not. The main difference is that
international trade is typically more costly than domestic trade. The reason is
that a border typically imposes additional costs such as tariffs, time costs
due to border delays and costs associated with country differences such as
language, the legal system or a different culture.International trade uses a variety of currencies, the most important of which are held
as foreign reserves
by governments and central banks. GATT
(General Agreements on Tariffs and Trade) THE GATT ORGANIZATION: Refers to the international organization headquartered at
Geneva, Switzerland, through which the contracting parties consulted on a
day-to-day basis regarding the application of GATT provisions, and the 1947
General Agreement on Tariffs and Trade that gave birth to it. Because the U.S.
Senate would not ratify the Havana Charter of 1948, which would have created an
International Trade Organization (ITO) as a specialized agency of the United
Nations system similar to the International Monetary Fund and the World Bank,
the GATT organization became the key international institution concerned with
multinational trade negotiations. The Interim Commission of the ITO (ICITO),
which was established to facilitate the creation of the ITO, subsequently
became the GATT Secretariat. By 1993, there were 103 GATT contracting parties,
accounting for approximately 85 percent of world trade, and some 30 additional
countries and dependencies applied GATT provisions on a de facto basis. The
organization provided a framework for negotiations — called "rounds"
— within which contracting parties negotiated to lower tariffs and other
barriers to trade and a consultative mechanism that could be invoked by
governments seeking to protect their trade interests. Over the years the GATT
organization evolved through several rounds of multilateral negotiations. With
the Tokyo and Uruguay Rounds, the focus of trade liberalization shifted from
lowering tariffs to the elimination of nontariff barriers to trade. The Uruguay
Round, which was the most recent round, lasted from 1986 to 1994 and led to the
creation of the World Trade Organization, which, on January 1, 1995,
replaced the GATT organization. Location: Geneva,
Switzerland Functions: A single institutional
framework encompassing the General Agreement on Tariffs and Trade and all the
agreements and legal instruments negotiated in the Uruguay Round. As part of
the agreement reached at the culmination of the Uruguay Round, the GATT
contracting parties agreed to create a new, permanent umbrella organization —
the World Trade Organization — to replace the GATT organization. The WTO
facilitates the implementation and administration of the agreements concluded
during the Uruguay Round. Like the GATT organization that it replaced, the WTO
provides a forum for multilateral trade negotiations, conducts reviews of
member country trade policies, and cooperates with the World Bank and the
International Monetary Fund in an attempt to achieve greater coherence in
global economic policy-making. However, the WTO goes beyond the GATT
organization in several ways, all intended to limit the scope for unilateral
action by members. First, the range of trade issues that the WTO addresses has
been significantly expanded. Second, the WTO has instituted a much stronger
dispute settlement procedure. Third, the WTO provides a sense of permanence
that the GATT organization, which was intended to be only a temporary
institution, did not supply. Finally, under the WTO, member countries are no
longer permitted to accede selectively to some but not all of the multilateral
agreements that constitute the Uruguay Round Agreements, as was the case with
the Tokyo Round Agreements. Instead, nations that join the WTO must agree to be
bound by all the Uruguay Round Agreements (with the exception of four
plurilateral agreements). INTERNATIONAL CHAMBER OF COMMERCE (ICC) ICC (International Chamber of Commerce) is the voice
of world business championing the global economy as a force for economic
growth, job creation and prosperity. Because national economies are now so
closely interwoven, government decisions have far stronger international repercussions
than in the past. ICC – the world's only truly global business organization
responds by being more assertive in expressing business views. ICC activities
cover a broad spectrum, from arbitration and dispute resolution to making the
case for open trade and the market economy system, business self-regulation,
fighting corruption or combating commercial crime. ICC has direct access to
national governments all over the world through its national committees. The
organization's Paris-based international secretariat feeds business views into
intergovernmental organizations on issues that directly affect business
operations. What is ISO ?
The International Organization for Standardization (ISO) is a worldwide
federation of national standards bodies from some 100 countries, one from each
country. ISO is a non-governmental organization established in 1947. The
mission of ISO is to promote the development of standardization and related
activities in the world with a view to facilitating the international exchange
of goods and services, and to developing cooperation in the spheres of
intellectual, scientific, technological and economic activity. ISO's work
results in international agreements which are published as International
Standards. Why is
international standardization needed ?
The existence of non-harmonized standards for similar technologies in
different countries or regions can contribute to so-called "technical
barriers to trade". Export-minded industries have long sensed the need to
agree on world standards to help rationalize the international trading process.
This was the origin of the establishment of ISO. International
standardization is now well-established for very many technologies in such
diverse fields as information processing and communications, textiles,
packaging, distribution of goods, energy production and utilization,
shipbuilding, banking and financial services. It will continue to grow in
importance for all sectors of industrial activity for the foreseeable future. The main
reasons are: Worldwide
progress in trade liberalization An industry-wide standard, internationally
recognized, developed by consensus among trading partners, serves as the
language of trade. Interpenetration
of sectors No
industry in today's world can truly claim to be completely independent of
components, products, rules of application, etc., that have been developed in
other sectors. Worldwide
communications systems The
computer industry offers a good example of technology that needs quickly and
progressively to be standardized at a global level. Developing
countries Development
agencies are increasingly recognizing that a standardization infrastructure is
a basic condition for the success of economic policies aimed at achieving
sustainable development. Creating such an infrastructure in developing
countries is essential for improving productivity, market competitiveness, and
export capability. | |
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