Global Commerce: Definitions, Economic Systems, and Key Organizations

International Trade and Globalization

International Trade is the exchange of goods and services between residents of different countries throughout the world. One of its primary forms is goods trade, involving imports and exports.

Defining Globalization

According to Stiglitz (in his 2001 work on the malaise of globalization), "Globalization is the closer integration of countries and peoples of the world, produced by the enormous reduction of costs of transportation and communication, and the dismantling of artificial barriers to flows of goods, services, capital, knowledge, and people across borders."

Benefits of Export Activity

Export activity drives the entire value chain. A greater demand for products and related services stimulates technological innovation, leading to increased production, which in turn generates:

• New jobs and better wages and salaries.
• Increased profits, dividends, and interest.
• Higher tax revenue.
• More consumption, savings, and investments.

Socio-Economic Systems

A comparison of major socio-economic systems:

Socialist System

• Concept: Objective.
• Means of Production: Owned by the state.
• Ideology: Evolutionary.

Capitalist System

• Concept: Subjective.
• Means of Production: Are private.
• Ideology: Religious (as stated in the original text).

Key International Trade Organizations

World Trade Organization (WTO)

Established on January 1, 1953, in Geneva, the WTO is composed of 151 countries. Director: Pascal Lamy.

WTO Objective

The WTO deals with the norms governing trade between countries in the world, or almost everyone.

WTO Functions

• Administer trade agreements.
• Promote commercial business forums.
• Monitor national trade policies.
• Resolve trade disputes.
• Provide technical assistance and training to developing countries.
• Extend cooperation to other international organizations.

WTO Principles

• Non-discrimination.
• Freer markets.
• More competitive markets.
• Greatest benefit to developing countries.

World Customs Organization (WCO)

Established in 1952, the WCO has 160 member countries and is headquartered in Brussels, Belgium. Secretary General: Michel Danet.

Its mission is to improve the effectiveness and efficiency of customs on issues such as revenue collection, trade facilitation, trade statistics, and protection to society.

WCO Objective

To examine technical aspects in order to promote practical ways of achieving the highest degree of harmony and uniformity in customs systems, and to consider any issue related to customs cooperation.

United Nations Conference on Trade and Development (UNCTAD)

Established in 1964, UNCTAD is the principal organ of the UN General Assembly for matters related to trade, investment, and development. It has 191 member states and its headquarters is in Geneva, Switzerland.

UNCTAD Objective

To maximize trade opportunities for investment and development of developing countries, as well as provide assistance in their efforts to integrate into the global economy.

International Chamber of Commerce (ICC)

Established in 1919, the ICC brings together companies and businesses through chambers of commerce in their respective countries. Headquartered in Paris, it promotes global trade based on free and fair competition and the harmonization of trade practices.