ASSOCIATION OF SOUTH EAST ASIAN NATIONS

ESTABLISHMENT The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up what is today the ten Member States of ASEAN. AIMS AND PURPOSES As set out in the ASEAN Declaration, the aims and purposes of ASEAN are: 1. To accelerate the economic growth, social progress and cultural development in the region through joint endeavours in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations 2. To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter; 3. To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields; 4. To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres; 5. To collaborate more effectively for the greater utilisation of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples; 6. To promote Southeast Asian studies; and 7. To maintain close and beneficial cooperation with existing international and regional organisations with similar aims and purposes, and explore all avenues for even closer cooperation among themselves. FUNDAMENTAL PRINCIPLES In their relations with one another, the ASEAN Member States have adopted the following fundamental principles, as contained in the Treaty of Amity and Cooperation in Southeast Asia (TAC)of 1976: 1. Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations; 2. The right of every State to lead its national existence free from external interference, subversion or coercion 3. Non-interference in the internal affairs of one another;

4. Settlement of differences or disputes by peaceful manner; 5. Renunciation of the threat or use of force 6. Effective cooperation among themselves. ASEAN COMMUNITY The ASEAN Vision 2020, adopted by the ASEAN Leaders on the 30th Anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert of Southeast Asian nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development and in a community of caring societies. At the 9th ASEAN Summit in 2003, the ASEAN Leaders resolved that an ASEAN Community shall be established. At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong commitment to accelerate the establishment of an ASEAN Community by 2015 and signed the Cebu Declaration on the Acceleration of the Establishment of an ASEAN Community by 2015.

The Founding of ASEAN

On 8 August 1967, five leaders - the Foreign Ministers of Indonesia, Malaysia, the Philippines, Singapore and Thailand - sat down together in the main hall of the Department of Foreign Affairs building in Bangkok, Thailand and signed a document. By virtue of that document, the Association of Southeast Asian Nations (ASEAN) was born. The five Foreign Ministers who signed it - Adam Malik of Indonesia, Narciso R. Ramos of the Philippines, Tun Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and Thanat Khoman of Thailand - would subsequently be hailed as the Founding Fathers of probably the most successful intergovernmental organization in the developing world today. And the document that they signed would be known as the ASEAN Declaration. It was a short, simply-worded document containing just five articles. It declared the establishment of an Association for Regional Cooperation among the Countries of Southeast Asia to be known as the Association of Southeast Asian Nations (ASEAN) and spelled out the aims and purposes of that Association. These aims and purposes were about cooperation in the economic, social, cultural, technical, educational and other fields, and in the promotion of regional peace and stability through abiding respect for justice and the rule of law and adherence to the principles of the United Nations Charter. It stipulated that the Association would be open for participation by all States in the Southeast Asian region subscribing to its aims, principles and purposes. The original ASEAN logo presented five brown sheaves of rice stalks, one for each founding member. Beneath the sheaves is the legend "ASEAN" in blue. These are set on a field of yellow encircled by a blue border. Brown stands for strength and stability, yellow for prosperity and blue for the spirit of cordiality in which ASEAN affairs are conducted. When ASEAN celebrated its 30th Anniversary in 1997, the sheaves on the logo had increased to ten - representing all ten countries of Southeast Asia and reflecting the colors of the flags of all of them. In a very real sense, ASEAN and Southeast Asia would then be one and the same, just as the Founding Fathers had envisioned.

ASEAN Motto
The motto of ASEAN is "One Vision, One Identity, One Community".

ASEAN Day
8th August is observed as ASEAN Day.

Asia-Pacific Economic Cooperation (APEC)

Overview
The Asia-Pacific Economic Cooperation (APEC) forum was established in 1989. Its primary purpose is to facilitate economic growth and prosperity in the region, with the vision of creating a seamless regional economy. APEC pursues these objectives through trade and investment liberalization, business facilitation, and economic and technical cooperation. APEC aims to strengthen regional economic integration by removing impediments to trade and investment at the border, enhancing supply chain connectivity "ac ross the border" and improving the business environment "behind the border". It endeavours to improve the operating environment for business by reducing the cost of cross-border trade, improving access to trade information and simplifying regulatory and administrative processes. APEC also assists member economies build the institutional capacity to implement and take advantage of the benefits of trade and investment reform. APEC supports the multilateral trade negotiations underway in the WTO, and complements the goals of the G-20 Framework for Strong, Sustainable and Balanced Growth in the Asia-Pacific Region. Private sector engagement is central to APEC's success. The APEC Business Advisory Council (ABAC), established in 1995, represents the interests of business in APEC. ABAC is composed of up to three members from each of the 21 member economies, with business representatives appointed by APEC Leaders. The annual APEC CEO Summit and regular Industry Dialogues also provide opportunities for regional business leaders to interact with APEC and address key issues affecting business in the region.

Members
APEC has 21 members - referred to as 'member economies' - which account for more than a third of the world's population (2.6 billion people), approximately 60% of world GDP (US$19 254 billion) and about 47% of world trade. It also proudly represents the most economically dynamic region in the world, having generated nearly 70% of global economic growth in its first 10 years. APEC's 21 Member Economies are: Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam.

History
APEC was established in 1989 to further enhance economic growth and prosperity for the region and to strengthen the Asia-Pacific community. APEC's Theme for 2004 was 'One Community, Our Future. This central theme was further developed by a series of sub -themes to guide APEC's working groups:

A commitment to development through trade Sharing benefits through better practices Skills for the coming challenges Opportunities for entrepreneurial growth Growth and stability: key for APEC integration Commitment to sustainable growth Experiencing our diversity

For 2005, the Republic of Korea, the APEC host economy for the year, selected the theme 'Toward One Community: Meet the Challenge, Make the Change' to guide discussions throughout the year. Subthemes are:

Review the Commitment to the Bogor Goals Ensure Transparent and Secure Business Environment Build Bridge Over Differences.

Member Economies APEC has 21 members. The word 'economies' is used to describe APEC members because the APEC cooperative process is predominantly concerned with trade and economic issues, with members engaging with one another as economic entities.
APEC Members Date of Joining

Australia Brunei Darussalam Canada Chile People's Republic of China Hong Kong, China Indonesia Japan Republic of Korea Malaysia Mexico New Zealand Papua New Guinea Peru The Philippines Russia Singapore Chinese Taipei

6-7 Nov 1989 6-7 Nov 1989 6-7 Nov 1989 11-12 Nov 1994 12-14 Nov 1991 12-14 Nov 1991 6-7 Nov 1989 6-7 Nov 1989 6-7 Nov 1989 6-7 Nov 1989 17-19 Nov 1993 6-7 Nov 1989 17-19 Nov 1993 14-15 Nov 1998 6-7 Nov 1989 14-15 Nov 1998 6-7 Nov 1989 12-14 Nov 1991

Thailand The United States Viet Nam EUROPEAN FREE TRADE ASSOCIATION (EFTA)

6-7 Nov 1989 6-7 Nov 1989 14-15 Nov 1998

The European Free Trade Association (EFTA) was established in 1960 by the Stockholm Convention (EFTA Convention). The original signatories were Denmark, Great Britain, Norway, Austria, Portugal, Sweden and Switzerland. Later, Iceland (1970), Finland (1986) and Liechtenstein (1991) joined. Denmark, Great Britain, Austria, Portugal, Sweden and Finland are no longer members of EFTA as they have since joined the European Union (EU). EFTA's current membership consists of Iceland, Liechtenstein, Norway and Switzerland. The Stockholm Convention establishes a free trade area for the movement of goods among the EFTA States under the terms of Article XXIV of the General Agreement on Tariffs and Trade (GATT). Contractual relations between the EFTA States were for a long time limited to trade in industrial products. The Convention was later supplemented by an economic integration agreement for the services sector according to Article V of the General Agreement on Trade in Services (GATS). On 21 June 2001 in Vaduz, the EFTA member States Iceland, Liechtenstein, Norway and Switzerland signed an agreement on the revision of the EFTA Convention. The sectorial agreements between Switzerland and the EU from 1999 ("Bilaterals I") served as a point of reference for the revision of the EFTA Convention. As a result, the EFTA founding provisions of 1960 were completely revised. The revised EFTA Convention establishes legal relations between Switzerland and the other EFTA States comparable to those contained in the seven bilateral agreements concluded between Switzerland and the EU in 1999. New provisions include, for example, the free movement of persons between Switzerland and the other EFTA States (with specific arrangements for the movement of persons between Switzerland and Liechtenstein). The Vaduz Agreement also added provisions regarding trade in services, movement of capital and protection of intellectual property. The Agreement amending the EFTA Convention came into force on 1 June 2002, at the same time as the seven sectorial agreements between Switzerland and the EU, signed in 1999. The EFTA Convention has been regularly amended since then, in particular in order to take into account the development in the bilateral relations between Switzerland and the EU (amendment of the bilateral sectorial agreements of 1999, conclusion of new agreements). The objective is to ensure, wherever possible, the parallel development of contractual relations among EFTA States and between EFTA States and the EU (bilateral agreements between Switzerland and the EU, EFTA Convention, European Economic Area).

The Role of World Trade Organization (WTO)

The World Trade Organization or WTO was formed in the year 1995. The main goal of WTO is to help the trading industry to become smooth, fair, free and predictable. It was organized to become the administrator of multilateral trade and business agreements between its member nations. It supports all occurring negotiations for latest agreements for trade. WTO also tries to resolve trade disputes between member nations. Multi-lateral agreements are always made between several countries in the past. Because of this, such agreements become very difficult to negotiate but are so powerful and influential once all the parties agree and sign the multi-lateral agreement. WTO acts as the administrator. If there are unfair trade practices or dumping and there is complain filed, the staff of WTO are expected to investigate and check if there are violations based on the multi-lateral agreements. If the offending country is found guilty of violations, sanctions are levied. To become a member of WTO is very important. It only means that a member country automatically becomes part of the "Most Favored Nations." Having the status of being one of the "Most Favored Nation" gives access to discounted tariffs and lesser trade barriers, excessive regulations and import quotas that are all the privileges of WTO's members. These privileges pave way to bigger market for the members' products which results to more sales, more jobs and better economic growth. More than 75% of the members are ranked as developing countries. Through their membership with WTO, they can easily penetrate the market of developed countries at lower tariffs. At the same time, developing countries are also lessening tariffs in their import market. By doing this practice, developing countries are using the chance to develop their corporations and industries into more mature and sophisticated kind until they become competitive to the market of developed countries. Four Steps to Become a WTO Member 1. The interested country should submit an application to become a member. A committee of any member country can review this application. 2. The interested country then makes negotiations on bilateral agreements on trade with any country it prefers. The content of these agreements will apply automatically to all members of WTO.

3. The review committee of WTO creates a draft of the terms and conditions of membership which takes account of the necessary changes in its current trade policies. 4. Two-thirds of the member nations should vote that the interested country can become a part of WTO. After the voting, the new member must ratify the membership agreement. If a country is not yet a member of WTO, they can opt to become the "observers" where they must apply for membership within five years of being an observer. The highest decision-making committee of the WTO is known as the Ministerial Conference which meets biennially. All the members of WTO attend this conference. The last Ministerial Conference was held in Geneva from November 30 to December 2, 2009.

Functions of WTO
The former GATT was not really an organization; it was merely a legal arrangement. On the other hand, the WTO is a new international organization set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following five functions of WTO; (i) The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements. (ii) The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. (iii) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. (iv) The WTO shall administer Trade Policy Review Mechanism. (v) With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies. Objectives of WTO Important objectives of WTO are mentioned below: (i) To implement the new world trade system as visualized in the Agreement; (ii) To promote World Trade in a manner that benefits every country;

(iii) To ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs; (iv) To demolish all hurdles to an open world trading system and usher in international economic renaissance because the world trade is an effective instrument to foster economic growth; (v) To enhance competitiveness among all trading partners so as to benefit consumers and help in global integration; (vi) To increase the level of production and productivity with a view to ensuring level of employment in the world; (vii) To expand and utilize world resources to the best; (viii) To improve the level of living for the global population and speed up economic development of the member nations.

IMPACT OF WTO ON INDIA

World Trade Organization: India is one of the (out of 104) founder members of the WTO. The GATT was not an organization but it was only a legal agreement. On the other hand WTO is designed to play the role of watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights etc.There was much heated discussion and arguments for and against regarding India becoming a member of the WTO .India was one of the 76 Governments that became members of the WTO on the first day of the formation of WTO. Thus, India was one of the founder members of the WTO.

BENEFITS TO INDIA

The GATT secretariat estimated that largest increase in the level of merchandise trade in goods (in general, it would be US $ 745 billion .by the end of 2005) will be in the areas of clothing (60 per cent), agriculture, forestry and fishery products (20 per cent) and processed food and beverages (19 per cent). India's competitive advantage lies in these fields. Hence, it is logical to believe that India will obtain large gains in these sectors. India's textile and clothing exports will increase due to the phasing out of Multi-fibre An'angement (MFA) by 2005 . 1. The reduction in agricultural subsidies and barriers to export of agricultural products, agricultural exports from India will increase . 2. The multilateral rules and disciplines relating to anti-dumping, subsidies and countervailing measures, safeguards and disputes settlement machinery will ensure greater security and predictability of international trade. This would be favourable environment for India's international business . 3. India along with other developing countries has the market access to a number of advanced countries due to the imposition of the clauses concerning to trade without discrimination.

DISADVANTAGE TO INDIA

. 1. Trade Related Intellectual Property Rights (TRIPs) : Protection of intellectual property rights (patents, copyrights, trademarks etc.) has been made stringent. It is argued that the TRIPs agreement goes against the Indian Patents Act, 1970. Only process patents can be granted in food, chemicals and medicines under the Indian Patents Act. TRIPs agreement provides for granting product patents also. Under TRIPs patents can be granted to methods of agriculture and horticulture, bio-technological process including living organism like plants and animals. The duration of patents under TRIPs is 20 years. 2. Introduction of product patents in India will lead to hike in drug prices by the MNCs who have the product patent. This will hit the poor people who will not have the generic option open. 3. Patenting has also been extended to a large area of micro-organisms. . 4. Application of TRIMs agreement undermines any plan or strategy of self-reliant growth based on local technology and resources. 5. Services : Service sector like insurance, banking, telecommunications, transportation is backward in India compared to that of developed countries. Therefore, inclusion of trade in services is detrimental to the interest of India. Liberalization of service sector would be under tremendous pressure.

Impact of WTO on International Business:

The WTO is an organization that intends to supervise and liberalize international trade. The global business environment is very significantly influenced by the WTO principles and agreements. They also affect the domestic trade.

Positive impact of WTO on international business:

The WTO is the only body making global trade rules with binding effects on its members. It is not only an institution, but also a set of agreements. The WTO regime is known as the rules based multi lateral trading system. The Positive impact of WTO on international trade is as stipulated in the agreement establishing it and includes: Facilitating the implementation, administration, and operation, and furthering the objectives of the agreement establishing it and other Multi Lateral Agreements and providing the framework for the implementation, administration, and operation of the plurality trade agreements. 2. Administering the trade policy review Mechanism in annex3 of the agreement setting it up.
1.

Providing the forum for the negotiations among its members concerning their multi lateral relations in matters dealt with under the agreements in the Annexes to the agreement setting it up and for the results of such negotiations as maybe decided by the ministerial conference.
3.

Negative impact of WTO on international business:

The world commission on the Social Dimensions of Globalization, stressing the need for a higher objective for the WTO, emphasized that: Certain principles other than just fair market access must also be respected in order to make the global trading system fully fair to all. Such principle is that trade liberalization should not be enthroned as an end in itself. It is but a means for achieving ultimate objectives such as high sustainable growth.