International Business: January 2012

Monday, 23 January 2012

Location:Geneva, Switzerland
Established:1 January 1995
Created by: Uruguay Round negotiations (1986-94)
Membership: 153 countries on 23 July 2008
Budget: 196 million Swiss francs for 2011
Secretariat staff: 640
Head: Pascal Lamy (Director-General)

Functions:
• Administering WTO trade agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring national trade policies
• Technical assistance and training for developing countries
• Cooperation with other international organizations

The result is assurance. Consumers and producers know that they can enjoy secure supplies and greater choice of the finished products, components, raw materials and services that they use. Producers and exporters know that foreign markets will remain open to them.

The result is also a more prosperous, peaceful and accountable economic world. Virtually all decisions in the WTO are taken by consensus among all member countries and they are ratified by members' parliaments. Trade friction is channelled into the WTO's dispute settlement process where the focus is on interpreting agreements and commitments, and how to ensure that countries' trade policies conform with them. That way, the risk of disputes spilling over into political or military conflict is reduced.

By lowering trade barriers, the WTO’s system also breaks down other barriers between peoples and nations.

At the heart of the system — known as the multilateral trading system — are the WTO’s agreements, negotiated and signed by a large majority of the world’s trading nations, and ratified in their parliaments. These agreements are the legal ground-rules for international commerce. Essentially, they are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybody’s benefit.

The agreements were negotiated and signed by governments. But their purpose is to help producers of goods and services, exporters, and importers conduct their business.

The goal is to improve the welfare of the peoples of the member countries

The basic structure of the WTO agreements: how the six main areas fit together — the umbrella WTO Agreement, goods, services, intellectual property, disputes and trade policy reviews.
Umbrella	AGREEMENT ESTABLISHING WTO
	Goods	Services	Intellectual property
Basic principles	GATT	GATS	TRIPS
Additional details	Other goods agreements and annexes	Services annexes
Market access commitments	Countries’ schedules of commitments	Countries’ schedules of commitments(and MFN exemptions)
Dispute settlement	DISPUTE SETTLEMENT
Transparency	TRADE POLICY REVIEWS

Source: http://www.wto.org/index.htm

Incoterms Rules

Group E - Departure
Inco Term
Explanation
EXW Ex Works (.... named place)
Where the Seller delivers when he places the goods at the disposal of the buyer at the seller's premises or another named place (i.e. works, factory, warehouse etc) not cleared for export and not loaded on any collecting vehicle.

Group F - Main carriage unpaid
Inco Term
Explanation
FCA Free Carrier (... named place)
Where the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. It should be noted that the chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at the seller's premises, the seller is responsible for loading. If delivery occurs at any other place, the seller is not responsible for unloading.
FAS Free Alongside Ship (... named port of shipment)
Where the seller delivers when the goods are placed alongside the vessel at the named port of shipment. This means the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
FOB Free On Board (... named port of shipment)
Where the seller delivers when the goods pass the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

Group C - Main Carriage Paid
Inco Term
Explanation
CFR Cost and Freight (... named port of destination)
Where the seller delivers when the goods pass the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination BUT the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery, are transferred from the seller to the buyer.
CIF Cost, Insurance and Freight (... named port of destination)
Has the same delivery terms and risk as CFR except the seller also has to procure marine insurance against the buyer's risk of loss of or damage to the goods during the carriage.
CPT Carriage Paid To (... named place of destination)
Where the seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any other costs occurring after the goods have been so delivered.
CIP Carriage and Insurance Paid to (... named place of destination)
Has the same delivery terms and risk as CPT except the seller also has to procure insurance against the buyer's risk of loss of or damage to the goods during the carriage.

Group D - Arrival
Inco Term
Explanation
DAF Delivered At Frontier (... named place)
Where the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport not unloaded, cleared for export, but not cleared for import at the named point and place at the frontier, but before the customs border of the adjoining country.
DES Delivered Ex Ship (... named port of destination)
Where the seller delivers when the goods are placed at the disposal of the buyer on board the ship not clear for import at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to the named port of destination before discharging.
DES Delivered Ex Ship (... named port of destination)
Where the seller delivers when the goods are placed at the disposal of the buyer not clear for import on the quay (wharf) at the named port of destination. The seller has to bear costs and risks involved in bringing the goods to the named port of destination and discharging the goods on the quay (wharf). This term requires the buyer to clear the goods for import and to pay for all formalities, duties, taxes and other charges upon import.
DDU Delivered Duty Unpaid (... named place of destination)
Where the seller delivers the goods to the buyer, not cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller has to bear the costs and risks involved in bringing the goods thereto, other than, where applicable, any "duty" for import in the country of destination.
DDP Delivered Duty Paid (... named place of destination)
Where the seller delivers the goods to the buyer, cleared for import, and not unloaded from any arriving means of transport at the named place of destination. The seller ahs to bear all the costs and risks involved in bringing the goods thereto including, where applicable, any "duty" for import in the country of destination.