International Organizations

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International Organizations

• International Law
• Reading No. 1
• M.J.MacLennan

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• International business needs knowledge of
  geography, politics, and economics
• must follow changes in global business
  environment
• observers see improved communication,
  transportation and reductions in trade and
  financial barriers change world economy

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• Changes lead to
• wider range of tradeable items
• growth in service industries (telecomm, banking)
• increasing harmonization of financial markets
• increasing number of strategic alliances
• Also signs of disintegration grim forecast for
  world peace

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• What sorts of global change do we see today?
• rise of supra-national organizations, such as the
  European Union (EU) and North American Free Trade
  Agreement (NAFTA) and WTO
• nations must give up some power or sovereignty
• Will nations give up power to gain the advantages
  of a larger community?
• US legislators didnt want to give up power to
  join WTOan outside body making binding decisions
  for Americans

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The United Nations

• founded by 51 countries after WWII
• maintain international peace, security, relations
  between nations, co-operate to solve problems,
  human rights, freedoms
• What recent failure of UN Security Council did
  world witness? (15 members, five permanent)
• China, France, UK, Russia, USA
• just one can block any action proposed by Council
• only UN organization authority to use armed force

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Organizations linked to UN

• UN Conference on Trade Development (UNCTAD)
• promotes trade, especially in developing
  countries
• encourages trade law multilateral agreements
• UN Conference on International Trade Law
  (UNCITRAL)
• its focus is the harmonization of trade law.
  Sponsors conventions affecting intern.bus.

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Bretton Woods Institutions

• Before war ended, Allies tried to prevent
  economic and military catastrophes
• Held meetings in Bretton Woods, New Hampshire
• financial problems faced post-war era
• felt freer trade and creation of trans-national
  bank would help
• Bretton Woods conference found two major
  organizations and one agreement
• International Monetary Fund (IMF), the World
  Bank, and the General Agreement on Tariffs and
  Trade

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International Monetary Fund

• IMF overseas inter.monetary system
• helps members balance payment difficulties
• lends money to developing countries
• voting rights weighed in proportion to each
  countrys Special Drawing Rights (SDRs)
• SDR is a reserve asset created by IMF to repace
  gold and US dollars as the basic monetary unit in
  international monetary system
• IMF headquarters in Washington D.C.

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International Chamber of Commerce

• ICC draws members from worldwide bus community
  links UN, its agencies with private sector
• goal to standardize, harmonize int.bus practices
• provide services for members
• liase with major intergovernmental institutions
• provide a link between countries with different
  economic systems and interests
• http//www.iccwbo.org/

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Three achievements of ICC

• an achievement of ICC -Uniform Customs and
  Practice for Documentary Credits used around the
  world for financing international trade
• adoption of Incoterms set of international
  rules for the interpretation of most commonly
  used trade terms in foreign trade
• established International Court of Arbitrations

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OECD

• Organization for Economic Cooperation and
  Development
• OECD has no direct effect on the international
  business environment
• It is an influential body, however
• Its members have economic and political power
• Western nations established as the OEED (European
  Economic Development) to implement the Marshall
  Plan to aid in the recovery of Europe after WWII

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• Japan was added as a member and Canada and US
  became members after 61
• Has coordinated efforts to help developing
  countries
• Its an economic consultative organization
• publishes economic indicators to help business
  monitor financial trends
• Now has 30 countries

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http//www.oecd.org

• The OECD groups 30 member countries sharing a
  commitment to democratic government and the
  market economy. With active relationships with
  some 70 other countries, NGOs and civil society,
  it has a global reach. Best known for
  its publications and its statistics, its work
  covers economic and social issues from
  macroeconomics, to trade, education, development a
  nd science and innovation.

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• Public International Law law regulating
  relations between nations or nation
  statesestablish treaties, conventions, charters
• Private International Law regulates affairs of
  private persons residing in different countries.
  ICC and UN Commission on Inter.Trade Law have
  influence

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Public International Law

• Public inter.law disputes are heard by the
  International Court of Justice (ICJ) the World
  Court in the Hague, the Netherlands
• Doesnt hear commercial disputes
• Only countries may be parties before court
• Decisions are only binding on the parties the
  state cant be brought before the court unless
  they accept its jurisdiction

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Sources of International Law

• International Court of Justice is only permitted
  to use these sources of law
• International conventions rules expressed by
  contesting states
• International customs general practice accepted
  as law
• The general principles of law recognized by
  civilized nations
• Judicial decisions, teachings from nations

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Private International law

• Involves private parties in international
  transactions
• Also called, conflicts of law which countrys
  laws will govern the transaction?
• Private parties in countries may be governed by
  treaties like the Convention on the International
  Sale of Goods (CISG)
• Predetermines applicable laws and avoids
  conflicts (but treaties are only binding on those
  countries that have agreed to them)

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Some definitions

• Multilateral treaty treaty between more than
  two states
• Bilateral treaty formal binding agreement
  between two states
• Case law law based on judicial decision or
  precedent rather than statutes
• Treaty from the Latin to treat Legally
  binding agreement between two or more states.
• Custom long-standing tradition becomes
  customary law if it is regularly observed and
  recognized by states obliged to follow it, e.g.
  the art of war.revised after most major
  conflicts
• Convention from Latin convenire to come
  together, legal binding agreement between states
  sponsored by an international organization