IMS Exam 2 Module A
NAFTA has a carve-out for
Canadian eggs, sugar, poultry, and dairy
Daily operations of the EU are conducted by the
European Commission.
Any kind of economic integration agreement
brings reduced costs to members.
The United Nations is probably the best known among
international organizations
Economic integration
involves a common market and a high degree of political integration.
Different institutions of the EU
represent different constituencies, such as the people of Europe and the member states.
The WTO is the only international organization designed to establish and help implement
rules of trade among nations.
Informal institutions are composed of sets of
voluntary agreements.
This country has dramatically increased trade with Africa, especially in extraction sectors.
China
All member countries belong to the UN's
General Assembly
The World Bank's two major institutions are the International Development Association and the
International Bank for Reconstruction and Development
NAFTA is an agreement among
Mexico, Canada, and the U.S.
The Treaty of Rome, signed in 1957, established a common market for coal and steel for
West Germany, Belgium, the Netherlands, France, Luxembourg, and Italy.
EU policies
affect global business, even if the EU is not directly involved
The EU began as a common market for
the coal and steel industries
Informal institutions operate like
the mind's software.
The two major developed African economies are
South Africa and Nigeria.
Guanxi is
a Chinese social relationship that combines ideas of social capital and mentoring.
The Doha Development Agenda is
a WTO conference on trade.
An informal cognitive institution is
a collection of shared ideas that define reality, such as a collection of assumptions around a cultural pattern.
The United Nations is
a forum for the promotion of peace and global stability
WTO agreement on TRIPS had led to member agreement to
enforce 20-year patents and 50-year copyrights
Informal institutions are of two types,
normative and cognitive.
IDA's purpose is to loan to
the poorest nations
Most African nations have their main trade relationships
with developed nations, often built on former colonial ties.
The last area to drop tariffs in NAFTA was
corn exports into Mexico
A common markets is a customs union with the addition of
free movement of services, people, and capital among the members.
ASEAN began as a defensive alliance of 10 Asian nations concerned about
the spread of communism in their region.
Institutions are vitally important to international business decision makers because
they provide ways to settle conflicts.
The main difference between a free trade area and a customs union is that in a customs union, there is
a common external tariff.
The major function of the World Bank is to serve as
a nonprofit banking cooperative for its members to meet development needs.
The economic integration of the EU is based on
national willingness to forego sovereignty in some areas.
New institutional theory suggests that institutions provide
the rules of the game, so to speak.
ASEAN (Association of Southeast Asian Nations) initially was formed in 1967
with a political purpose, to mutually assist one another against the growing threat of communism in the region.
Is the WTO's idea of "fair competition" really a code phrase for free trade?
Not really. Trade relationships among nations can be exceedingly complex, and the WTO supports fair competition, which may mean freer trade rather than free trade
The Doha Round's discussions are contentious on several major issues, including
agriculture and intellectual property rights.
The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is
an agreement that property rights should not take precedence over public health.
The Doha Development Agenda is
an extended conference of the WTO initially convened in Doha.
The oldest customs union is
the Southern African Customs Union
New institutional theory divides institutions into
two basic types: formal and informal
NAFTA maintains restrictions on the movement of labor, so it is
within the scope of a free trade area
This type of institution operates through laws and regulations, with coercion as the regulative mechanism.
Formal
Mercosur or Mercosul is
a vital trading bloc in Latin America known as the Common Market of the South.
The UN is a humanitarian organization and
also helpful in providing conditions that support business.
The Chinese concept of guanxi is an example of
an informal, cognitive institution
In a free trade area, members drop internal tariffs. External tariffs
are maintained independently by each member.
IMF quotas are determined by the relative size of a nation in the global economy and
are the nation's "dues" to the IMF
Mark Malloch Brown suggests that
as the world becomes more closely connected, it becomes less governable at the national level.
The UN Millennium Development goals drawn on
business models and business participation to accomplish their goals.
In a free trade area, members drop their tariffs with one another,
but each retains external tariffs.
The EU developed from a post-war (WWII)
coal and steel common market for the two commodities, the European Coal and Steel Community.
When FTA members add shared external tariffs to their agreement, they have formed a
customs union
Most African countries have their main trade relationships with
developed countries, often their former colonial powers.
The first principle of the WTO's five basic principles is trade without
discrimination.
The purpose of the International Financial Corporation (IFC) is to invest in companies and financial institutions in developing countries to build
domestic capital markets
The WTO exists to
establish and help implement rules of trade among nations to increase trade flows.
Informal normative institutions
establish standards and propagate principles (UN, professional organizations).
At the end of World War II, the UN called for the conference that set up the World Bank and the IMF. This conference was
held in Bretton Woods
Economic integration often progresses
in stages, from free trade area to customs union to common market
Formal institutions gain compliance through
laws and regulations that operate with threat of force
The IBRD is a major institution of the World Bank whose function is to loan to
middle-income and creditworthy poor nations
Regional trade agreements such as NAFTA impact the WTO
negatively, because they undercut the nondiscrimination principle of the WTO.
Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as
normative and cognitive.
The IMF initially played a central role in
setting fixed exchange rates among nations' currencies with an established par value based on gold.
Informal institutions work on the principle of
shared norms and values.
The EMU (the European Monetary Union or the Economic and Monetary Union) has established the euro, a currency that is used in
some of the EU member countries.
The EU's impact on international business is
substantial, since EU standards, especially in the areas of ecology and sustainability, impact any firm that wants to do business in the EU.
ASEAN +3 is
the 10 ASEAN nations plus China, Japan, and Korea
The UN's International Court of Justice is also known as
the International Court of Peace.
The common interest of all nations in a workable international exchange rate system transcends their conflicting international interests is the premise of
the International Monetary Fund/IMF
The idea that WTO members treat all members equally is known as
the MFN/most favored nation principle.
In developing economies, informal institutions tend to play a greater role than in developed economies, possibly because
the developing economies have more ambiguity and lack formal institutions by definition, so informal institutions step into the breach.
Strictly speaking, the impact of the EU on the WTO could be said to be negative, because
the favored trade relationships among EU members are not extended to nonmember countries, so the EU undercuts the WTO.
Regional trade agreements have been growing
to compensate for slow progress at the WTO's Doha Round
The benefits of liberalized trade so far have been
uneven for developing and developed economies.