BUS 203: BUSINESS ENVIRONMENT

Section: 03

Fall 2013
Oct 20, 2013

L10

Economic and Trade Aspects of Eid-ul-Adha

Estimated 3,500,000 cows and 5,000,000 goats were
sacrificed this year
4 million cows imported from India during this season
10 million annually

60% of the total hide export from this day

Tk. 32,000 crores (syndicated traders estimate)
Syndicated traders, smugglers and snatchers
Bigger, cheaper notion of value and sacrifice

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Revisit grade distribution

Todays topic roles of WTO and IMF

Todays topic
Roles of WTO, IMF and similar IOs
1.
2.

Justin Paul, 2008. Business Environment, pp. 283-299.

Ian Worthington and Chris Britton. 2008. The Business Environment,
pp. 126-231

What is Todays topic?

GATT and WTO

Comparative advantage in international trade all countries benefits
To ensure stability orderly and transparent international trade, leading
trading nations entered into the General Agreement on Tariffs and Trade
(GATT) in 1947-48
Fundamental principles of GATT was:
I.
II.

Most Favored Nation (MFN)

National Treatment

Until 1994, the main concerns of GATT rounds were to check dumping
and unethical practices
In Uruguay Round Agreement (1986-1994), it was considered to increase
the coverage of GATT to legal provisions and establishment of an
institution like World Trade Organization (WTO)

GATT and WTO

WTO
Formed in 1995 with GATT with the objective to help producers of good and
services, exporters and importers conduct their businesses internationally.
The only global organization that deals with the rules of trade between
nations.
The arguments for WTO:

WTO
Formed in 1995 with GATT with the objective to help producers of good and
services, exporters and importers conduct their businesses internationally.
The only IO that deals with the rules of trade between nations.
The arguments for WTO:
1. Disputes are settled officially
2. WTO rules are consumer friendly
3. Free trade cuts the costs of many goods
4. WTO provides more choice of products
The arguments against WTO:
1. WTO dictates the terms
2. Free trade at any cost attitude
3. Small producers find it difficult to compete
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Other Intl. Economic Institutions and Orgs.

IMF: The International Monetary Fund (IMF) is an international organization
of 188 countries that works to ensure the stability of the international
monetary and financial system. It was established in 1945.
Facilitating the expansion and balanced growth of international trade
Promoting exchange stability, and
Providing the opportunity for the orderly correction of countries balance of
payments problems

Organisation for Economic Co-operation and Development (OECD) is an

international economic organisation of 34 countries founded in 1961 to
stimulate economic progress and world trade.
It is a forum of countries committed to democracy and the market economy,
providing a platform to compare policy experiences, seek answers to common
problems, identify good practices and co-ordinate domestic and international
policies of its members.

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Other Intl. Economic Institutions and Orgs.

European Bank for Reconstruction and Development (EBRD)
Established in 1991
Works with private companies, member countries, IMF, OECD and the likes

The World Bank (IBRD)

Established in 1945
Agency of the UN to encourage economic growth

The European Investment Bank (EIB)

Established in 1958
Under the Treaty of Rome

International Finance Corporation (IFC)

South Asian Free Trade Area (SAFTA)

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