The World Trade Organization. European financial sector. (1.6)

The world trade organization came into being in 1995. The WTO is the successor to the general agreement on tariffs and trade (GATT) established in the wake of the Second World War. So the multilateral trading system that was originally set up under GATT is already 50 years old. The past 50 years have seen an exceptional growth in the world trade. The system was developed through a series of trade negotiations, or rounds.

The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does this by:

· administrating trade agreements

· acting as forum for trade negotiations

· settling trade disputes

· assisting developing countries in trade policy issues, through technical assistance and training programmes

· cooperating with other international organizations.

Nowadays WTO has more than 130 members, accounting for 90% of world trade. Over 30 others, including Russia, are negotiating membership. Decisions are made by the entire membership and typically by consensus. The WTO’s agreements have been ratified in all members’ parliaments.

Another interesting organization is European Union, to be precise its financial sector. Everyone knows that European Union has its single currency – euro. The point of the Economic and Monetary Union is to make business between the EU members easier and to weld the still disparate EU members into the world’s biggest single economy, overtaking the Uneted States. The assumption is that a single currency will intensify competition between financial institutions in different countries and that the consumer will benefit.

 

В 1995 всемирная торговая организация возникла.ВТО - преемник Генерального соглашения по тарифам и торговле (ГАТТ), установленного вслед за Второй мировой войной.Таким образом, система многосторонней торговли, которая была первоначально подстроена под ГАТТ, существует уже 50 лет. Прошлые 50 лет видели исключительный рост в мировой торговле. Система была разработана через серию торговых переговоров или раундов.

Наиважнейшая цель ВТО состоит в том, чтобы помочь торговать гладко, свободно, справедливо и очевидно. Это делает через:

• управление торговыми соглашениями

• действия как форум для торговых переговоров

• урегулирование трудовых конфликтов

• помощь развивающимся странам в проблемах торговой политики, через техническую помощь и программы обучения

• сотрудничество с другими международными организациями.

В наше время у ВТО есть больше чем 130 участников, составляя 90% мировой торговли.Более чем 30 других, включая Россию, договариваются о членстве.Решения приняты всем членством и как правило по общему соглашению.Соглашения ВТО были ратифицированы в парламентах всех участников.

Другая интересная организация - Европейский союз, чтобы быть точной его финансовый сектор.Все знают, что у Европейского союза есть своя единая валюта – евро.Пункт Экономического и Валютного союза должен сделать бизнес между членами ЕС легче и соединить все еще несоизмеримых членов ЕС в самую большую единственную экономику в мире, настигая государства США. Предположение - то, что единая валюта усилит соревнование между финансовыми учреждениями в разных странах и что потребитель извлечет выгоду

FOREX

Financial decisions in Britain are heavily influenced by what happens overseas. The exchange rate of the pound, foreign interest rates, and the view that outside investors take of Britain as a profitable place to park their money all profoundly influence on(?) decisions about saving and investment by British people. It is important, however, to distinguish between the impact on ordinary people and the impact on professional investors who manage trillions (thousands of billions) of pounds to pension funds, life insurance, and bonds on behalf of individuals. If I find the interest rate of my house mortgage has gone up because German interest rates have risen, there is little I can do, at least in the short run. I may be able to counteract the effect on my mortgage by shifting savings in accounts which offer higher interest rates and many British people have become skilled at hunting down the banks which offer the most favourable returns. In the long run, these innumerable individual decisions can and do move markets.

Fund managers can move markets immediately. Their power has grown immensely. Insurance companies, pension funds and other types of collective investment own at least 60 percent of the stock market British fund managers invest heavily overseas. About a quarter of pension fund savings are abroad, a much bigger proportion than for any other major industrial country. It also reflects Britain's continued importance as a trading nation, exporting more goods per head of population than most other countries. Above all, London has survived Britain's relative economic decline (the British have got richer, but not as fast as other countries) and remained the world's most important international financial centre.

The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world.Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).

There are two reasons to buy and sell currencies. About 5 % of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.The other 95% is trading for profit, or speculation.

For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called "the Majors"..Today, more than 85% of all daily transactions involve trading of the Majors.

Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York and investors can respond to currency fluctuations caused by economic, social and political events at the time they occur

Countertrade

Countertrade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money.. There are five main types of countertrade: barter, switch trading, counter purchase, buyback, offset. As primitive populations developed, the principle of labor division evolved. One person was more able to perform some activity than another. Then they changed the results of their skills between each other. Usually in modern world barter is concentrated between Western manufacturing countries and developing third world countries and involves change of highly specialized items- cars, computers, cameras. Such trading entails a high level of risk and requires a thorough understanding of markets in all countries involved.

So, on the one hand barter is a very successful solution to the problem of scarcity of cash to poor countries. On the other hand it is quite a risky kind of trade, that's why a commodities specialist needs to be invited to evaluate the product and help to sell it.

For ex., Coburn Tool Corporation supplies tools to Brazil. Because of sudden rise of US dollar and the following crisis Brazil had lack of foreign exchange. Coburn company received a unique offer from Brazil company receive the Brazilian shoes in exchange of 400000$ in assorted gears.

Антипассат означает обменивать товары или услуги, за которые платят, полностью или часть, с другими товарами или услугами, а не с деньгами.Есть пять главных типов антипассата.Как примитивное население развивается, принцип разделения труда развивается.Один человек больше мог выполнить некоторую деятельность, чем другой.Тогда они меняли результаты своих навыков друг между другом.Обычно в современном мире бартер сконцентрирован между Западными производственными странами и развивающий страны третьего мира и вовлекает изменение узкоспециализированных товаров - автомобили, компьютеры, камеры.Такая торговля влечет за собой высокий уровень риска и требует полного понимания рынков во всех вовлеченных странах.

Так, с одной стороны бартер - очень успешное решение проблемы дефицита наличных денег в бедные страны.С другой стороны, это - вполне опасный вид торговли, именно поэтому специалист по предметам потребления должен быть приглашен оценить продукт и помочь продать его.

Types of businesses

The basic economic institution in different economic systems is the business. There are 3 basic forms of running business. The first one is a sole proprietorship. There is a lot of advantages of sole proprietorships, such as they are easy to organize, decisions can be made quickly, owners receive all profits. However, a sole proprietor sometimes encounters some problems. One person has limited resources to start and operate a business. Because capital is lacking, most sole proprietorships begin small and fail. A sole proprietor also must deal with the problem of limited liability. If the business fails, the owner, must pay the debts. Still another problem occurs because of the limited life of the business. If the owner of a sole proprietorship dies, an entirely new enterprise must be started.

A partnership is association of two or more people in order to run a business. Partnerships are easy to organize, decisions can be made quickly, profits are shared with only a few people, and the owners are responsible for success or failure of the business. Liability is still unlimited. Partnership have limited life.

The last form of running business is a corporation, in which investors are only liable for the amount of capital they have invested. Corporations may make legal contracts, hire and fire workers, set prices, and be sued, fined and taxed. A business must obtain a charter of incorporation from a state legislature to be legally recognized as corporation.

The stockholders elect a board of directors. The board of directors hires individuals to manage the day-to-day operation of the corporation. If the corporation makes a profit, shareholders may receive a dividend - a share of the profit paid on the stock.

Corporations have some advantages.

First, a corporation has limited liability. Second, corporations have the ability to raise very large amounts of money. Corporations can raise money by selling bonds, as well as stocks. A bond is a certificate that promises to pay the holder of a bond a certain amount of money on a certain date. Shares of stock are certificates representing ownership in the corporation. The rate of return on stocks changes; the rate of return on a bond is set when the bond is sold. Third, a corporation has an unlimited life. The fourth advantage of corporation is. the easy of ownership transfer.

Corporations have disadvantages as well as advantages.

First, complex forms must be filed with the state or federal government. Second, a corporation's profits are subject to double taxation. Third, in corporations with many owners or stockholders the individual share of profits in the form of dividends is comparatively small. Fourth, a corporation's owners do not directly control the business.

11.Private Company: The structure of the authorised capital. Risk of a take-over. (Harper & Grant Ltd. overcomes the risk of a take-over and ensures the favourable redistribution of the share capital). (L of B, U13,17)

A private company can be formed by two or more people. They sign a Memorandum of Association, stating the number of shares they agree to take, and their signature is followed by a signature of anyone else, who will also take shares in the company. In a private company there cannot be more than 50 members, or shareholders. Each share carries a vote at the shareholders’ meeting. The authorised capital consists of market value of all the shares issued. If any person owns 51 per cent of the shares he would have a controlling interest, & would be in a good position to take over the firm. Person owning a large proportion of the shares could ask to join the Board.

H&G is a private company and its authorized capital originally was 5000 pounds, but a company has grown and each 1 share is now worth about 100 pounds. Harper & Grant’s business was ok until the death of Ambrose Harper, which upset the balance of power in the company. Wentworths, a large & successful firm, owing 10% of H&G shares, had an opportunity of buying some of the shares belonging to Ambrose. If Wentworths succeeded they would be in a good position to take over H&G, making it a fully owned subsidiary.

Hector Grant & Peter’s mother owned 20 % of the capital each and after Ambrose Harper’s death 50% of the capital came to form a trust (40%) and the last 10% went to his sister Caroline. Caroline had got a very generous offer to her shares from the Wentworths, but she couldn’t sell her shares without offering them first to the other shareholders.

Hector Grant was personally jealous of Alfred Wentworth and didn’t want him to own the controlling interest. So he raised a personal short-term loan so that to postpone the possibility of a take-over by buying 250 shares (5%) in the company.