Unit 7-International & Regional Environment

7/27/2019 Unit 7-International & Regional Environment

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International & Regional

EnvironmentPresented By:

Sujaya Thapa

KVC, IV-Sem


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Concept of Liberalization

Liberalization is a liberty to establishany kind of economic activity at anytime any where in the country without

anticipating any kind of so calledprivate or public restrictions.

In general, liberalization (orliberalisation) refers to a relaxation of

previous government restrictions,usually in areas of social or economicpolicy.


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Concept of PRIVATIZATION

Privatization is the process oftransferring ownership of a business,

enterprise, agency, public service or

public property from the public sector(a government) to the private sector,

either to a business that operate for a

profit or to a non-profit organization.


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CONCPT OF GLOBALIZATION

Globalization is a free movement of goods,services, people, capital & informationacross national boundaries.

A) Economic view: economicinterdependence between countriescovering increased trade, technology,labor & capital flows.

B) Political view: integration of a globalcommunity in terms of ideas, norms &values.

C) Business view: strategy of crossingnational boundaries through globalized


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Effects of Globalization

Positive Effects Negative Effects

1. Maximizes productivity 1. Displacement of local industries

2. Develops living standard 2. Threats to social & cultural value

3. Transfer of capital & technology 3. Economic exploitation

4. Increase in employment 4. Deterioration of national

sovereignty

5. Elimination of trade barriers 5. Unequal distribution of income

6. Promotes international co-

operation

6. Initiates monopoly power

7. Supports industrialization 7. Increases competition


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CONCEPT OF WORLD TRADE

ORGANIZATION (WTO) WTO is an international body dealing

with the rules of trade betweennations.

WTO was previously known asGeneral Agreement on Tariffs & Trade(GATT).

Nepal applied in year 1989 for

membership of GATT. It has started functioning from January

1st, 1995.

On April 23, 2004 Nepal got itsth


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Impacts of WTO in Nepal

Benefits to Nepal

Nepal got the Most Favored Nation

(MFN) status from all the member

countries. Nepal will have assured market access &

transit rights.

Enhancing transparency & reduce

uncertainty.

Getting opportunity in multilateral trade

negotiations.


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Contd

Challenges to Nepal

Domestic industry will face excessive

competition

Cost of negotiation & transaction could behigh

Following rules & regulations imposed by

WTO might be too big

With liberalization in hand, Nepal should

meet the international standards


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Bilateral Trade Agreement

Bilateral trade or clearing trade istrade exclusively between two states,particularly, barter trade based on

bilateral deals between governments,and without using hard currency forpayment.

It is an agreements or trade and

investment between the home countryand the foreign country by reducing oreliminating tariffs, import quotas, exportr and other trade barriers.


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Impacts of Bilateral Trade

Agreement It promotes friendly relationship among

countries.

It will be easier to negotiate, and give those

two nations favored trading status betweeneach other.

It reduces trade and investment barriers and

protect against the introduction of new

barriers. Support international trading system & the

WTO.

It facilitate to global economic developmentsand to romote re ional inte ration


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Regional Agreement in Trade

SAPTA

SAFTA

BIMSTEC


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SAPTA

It is an agreement where tariffs & nontariff barriers existing in intra-regional

trade to be reduced or removed.

SAARC Preferential TradingAgreement (SAPTA) was established

in 1995.

First meeting of Commerce Ministersof SAARC countries held in Delhi in

January, 1995.


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Objectives of SAPTA

Promoting cooperation for the benefitof their citizens.

Bringing awareness regarding

expansion of trade. Strengthening intra-regional economic

cooperation.

Providing greater opportunity ofemployment & high living standards.


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SAFTA

It only provides the free movement ofgoods in region through elimination oftariffs, includes border charges, fees etc.

South Asian Free Trade Area (SAFTA)agreement was signed at SAARCsummit held at Islamabad on 6 January,2004 during 12th SAARC summit.

Non-Least Developed Countries (India,Pakistan, Sri-Lanka required to reducetariff to 0.5% by 2013, Sri-Lanka by 2014& LDCs (Nepal, Bangladesh, Bhutan) by

2016.


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Objectives of SAFTA

Eliminate barriers in trade & facilitatecross border movement.

Promoting conditions of fair

competition. Establish a framework for further

regional cooperation to expand mutual

benefits.


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Instruments of SAFTA

Trade Liberalization Program Non-LDCs will reduce their trade barriers.

Rules of Origin

Negotiation should be on step by stepprocess

Institutional Arrangements SAFTA Ministerial Council (SMC) consist of

Ministers of Commerce are decision makingbodies.

Consultation & Dispute settlementprocedure


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BIMSTEC

It provides the free movement of goodsand services in region through eliminationof tariffs, includes border charges, fees etc.

On June 6th,1997, a new sub-regional

group was formed as Bangladesh, India,Myanmar, Sri-Lanka and ThailandEconomic Co-operation (BIMSTEC).

Nepal & Bhutan got its membership in

2004. First summit held on July 31, 2004 &

agreed to name the group as The Bay ofBengal Initiative for Multi- Sectoral

Technical & Economic Co-operation.


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Objectives of BIMSTEC

To create an enabling environment forrapid economic growth.

To provide assistance in the form of

training & research facilities. To cooperate in projects that dealt with

higher productivity.


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THANK YOU!!!

Documents

Unit 7-International & Regional Environment