PowerPoint Presentation

World Trading System & Regional Trade Agreements

Headings We need to Cover are :Tariff and non-tariff trade barriers

International financial system

Exchange Rate

Exchange control

Trends of exchange rate systems

Role of international financial institutions

World Bank ,IMF and ADB

Evolution of GATT and WTO

Regional Groupings : EU,NAFTA,ASEAN and SAARC

World Trading SystemBackground The first world war (1914-1919) had been overshadowed with the great deflation of 1930s. During the end of second world war (1939-1945) emerging nations been gathered at New Hampshire of USA to discuss post war condition.Their main concern then were establishing durable peace ,reconstructing of the areas devastated by the world war 2nd and reviving the war-torn economies.

That gathering later named Bretton Woods conference. That conference established milestones in world economy and peace. As a result to bring peaceUnited Nations Organization been established. To bring prosperity and uniformity in economy sector Concept of World bank,IMF and WTO been felt and later materialized.

Todays Trading system is not country basis, somewhere there is string and threads tied with each nations. IMF confirms exchange rate and helps countries in BOP whereas WTO restricts barriers and promotes borderless economy and World Bank sanctions loan to needy country and carries projects that aims to make human life easier. This is World Trading SYSTEM.

Tariff and Non Tariff Trade Barriers

Trade BarriersWhat are trade barriers?Why country seek to practice trade barriers?World has never been practicing free trading system. Many countries still believe free trade hinders them. Russia had hold its membership from WTO till 2011, but eventually it took membership and been a 156th member in 2012. Trade barriers are embargos and restrictions for business.Country seeks to practice trade barriers for the following reasons :

-To ensure national security and supply

-To correct a balance of payments deficit

-To protect Domestic industries against competition of foreign goods

-To generate government revenue from tariffs on imports.

-To protect national heritage and culture.

Types of Trade BarriersTrade policy instrumentsAd Valerom duty,Specific Tariff, Compound tariff, Countervailing Duty,Anti Dumping dutytariffsNontariffsSubsidies,aids and loans, Customs valuation

Quotes, Border Regulations and standards, Buy local legislation, Specific Permission requirements,administrative delays,reciprocal requirements,restriction on services

Price effectQTY effectPrice effectTariff BarriersAs so far as we come to know Tariff barriers are imposed on the name of protection of domestic business and to raise government revenues.

In other words tariffs are imposed on receiving goods of the countries so that these goods would be expensive and domestic products could battle well.

Various types of Tariff Barriers have been discussed below :

Import duties

When government charges certain money on receiving goods or say importing goods it is known as import duties.

Various types of Import duties are as follows :

Ad Valorem Duty : Here Valorem means on the basis of Value. Certain percentage is charged on the amount of invoice of goods that country has imported. Usually such duties of percentage is fixed.

Specific Duty : This is another form of import duties also known as quantitative duty, in which tariffs are imposed depending upon certain piece, weight and unit. eg: fixed sum charged on per gallon, per ton, per piece

3) Compound Duty : Compound duty is equal to the sum of ad valorem and specific duty. This is combined form. Custom authority calculate amount to be charged on both method and chose whichever amount is high.

4) Countervailing Duty : It is another interesting form of import tariffs which is levied upon those importing goods which already been subsidized by exporting countries. Once a home country has subsidized upon certain goods if these goods have come to host country and if it charged here too considering subsidized again. It is known as countervailing Duty.

5) Anti-dumping duty : In developed countries there may various industrial products which been declared dumped. When these goods come to poor nations, host country imposes certain imports duties upon them. Such duties are known as anti-dumping duty.

These goods often meant to sink in to sea or burnt down. However some usable and good conditioned goods are exported to third world, the prices of such goods are very minimal even below than costs. Host countries have to save their indigenous industries from them so they impose such duties.Non Tariff BarriersWith wider influence of WTO and GATT policies, countries gradually started to wave off tariff barriers and begin to search new means of controlling imports. The importance of Non tariff barriers slightly realized.

Non tariff barriers are all means of favourism to the imported goods other than the import duties.

On the basis of nature, these are of two types :

NTBs that affect Price (Subsidies, aids and loans, customs valuation)

NTBs that affect quantity-(Import quotas, buy local legislation, border regulations and standards, specific permission requirements and exchange controls, administration delays, Reciprocal requirements, restrictions on services)

Subsidies : Subsidies can be defined as governments monetary or non monetary assistance to home industries to cope over losses or make them more competitive in overseas markets.

Monetary forms of subsidies are given as cash assistance where as non- monetary forms of subsidies are counselling services,coaching,informing about developments,sponsoring trade exhibitions abroad, and establishing foreign contacts,assisting in signing MOU between foreign partners and so on.

In Nepal, TEPC (trade and export promotion center) provides non monetary subsidies to aspiring business houses.

b. Aids and Loans : Governments of developed countries also make arrangements to create environment for their business interests. They give aids and loans to poor nations, as to win several bigger contracts such as in mining,roads,dams,bridges etc.

c. Customs valuation : This is the act of saving home industries from manipulation in invoice. Under this custom officials doesnt recognize invoice value of goods, rather they use other methods of calculation. They often declare price on their self knowledge, this act favors home industries.

4) Import Quotas : This is another form NTBs which affects quantity . This form of NTBs is most notorious and merciless. Here country can stop flow of goods to be imported allowing only certain number. By this card , countries can pamper their small and big industries however this reduces competition and increase in price is potential.

5) Buy local Legislation : This is popular form of NTB, earlier time many countries have adopted this strategy. Under this a bill is passed to make law that restricts use of foreign goods. This saves local industries as their sale of product is at least secured by governments.

6) Border Regulations and standards : It includes various issues. The importing nations practices several rules on border to create NTB.Various quarantine check posts are in action in border to see over animals imports, they seek various eco related certificates for sensitive goods, they may also ban products that they confirm been produced using child labor. They do same on the ground of Human rights. These procedures are mostly in practice.7)Specific Permission Requirements and exchange controls :

After import business houses obtain license to conduct importing business their next requirement usually is exchange control.Here governments designs specific policies to control over importing goods.Government may discourage importing business house by allowing certain amount of Foreign reserves. By this means of plot governments delays imports and discourages trends.This is how domestic industries are saved.

8) Administration Delays : These are government pretends. Knowingly unknowingly they delay in paper work or else for imported goods.Government might not develop infrastrure, they may increase carrying costs of imported goods and many other maneuvers.

9) Restriction on service : Countries can earn well handsome money if they sell services to importing goods such as transportation, consulting and banking but government usually doesnt carry out these businesses to prosper its own service sectors. Government do mainly this to save jobs. Govt usually differs its accounting procedures so that outsourcing would be discouraged.

International Financial System

International Financial SystemFor businessman and his transactions it is easy to do business in the country. There is a system and he has to deal with only one currency. Once his business goes to abroad, he may have problems dealing with two or more currencies.

He has to put consistent eyes on exchange rates of the currencies he is doing businesses.

MNCs and their IB manager need to understand the dynamics of foreign exchange, if they are meant to survive. Importing exporting managers even need this knowledge. The exchange rate of currencies get change on eye blink.

Companies operating in host countries need to know the financial system to finance their operations and maintenance of their inventories. The whole around of financial system that includes cross country exchange system and rates,exchange control and its subsystem, central and commercial banking subsystem is intl financial system.Foreign Exchange : Foreign exchange is a payment Mechanism for international transactions. When transactions are affected between two countries having different currency systems payments are made through an agreed foreign currency.Payments for foreign transactions involve foreign exchange because :

There is no common money acceptable to all countriesAlmost all countries depend on foreign transactions as none of them are self sufficientGlobalizations has enlarged social, economic and political relationships between nations.

Foreign exchange Rate : Foreign exchange rate is the nominal price of one nations money in terms of another or it is the price to be paid in local currency for a unit of foreign currency. For example ,it is the number of Nepalese rupees we pay to buy each US dollar or say we pay RS 88 to buy one $.The Nepal Rastra Banks Exchange rateNotice appears in the governments official Broadsheet national dailies and other media.

Exchange Control : Exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.

Common foreign exchange controls include:

Banning the use of foreign currency within the countryBanning locals from possessing foreign currencyRestricting currency exchange to government-approved exchangersFixed exchange ratesRestrictions on the amount of currency that may be imported or exported

Objectives of Exchange control

-To improve BOP-To control on unessential Imports-To import essential Products-To control the capital outflow-To maintain exchange rate

Trends of Exchange Rate SystemBriton had adopted policy of currency control on the basis of gold standards which lasted till 1970s but later it realized failed. Then, Floating foreign exchange rate system been introduced and many countries have adopted.However some of country are practicing their way of exchange rate system.In summary the trend of exchange rate system has suffered from very centralized system to being liberalized floating and controlled floating system. These have been discussed briefly.

Centralized and controlled Exchange rate systemUnder this government plays major role in foreign exchange. Exchange rate is not fixed by the means of demand and supply of currency.

2) Fixed Exchange rate systemThis is another form of exchange rate system in which government fix the forex rate by the means of participating in the market. The aim of this forex rate is to save economy and support the countries development plans. Eg: NRB has fixed the indian currencys value as 1=1.6.

3) Pegged forex rate system

When countrys currency exchange rate tied up to another foreign currencies value because of their weaker money value, this is known as pegged forex rate system.E.g. : Nepal and Bhutan have been pegged to Indian rupees. So that change in $ doesnt impact direct to Nepalese currency.

Such as most of the countries have been pegged to US $.

4) Floating Exchange rate system

When there is free market economy, exchange rate been determined by market forces demand and supply where government intervention is none.This forex system is known as Floating exchange rate system.If there is government intervention then it becomes dirty Floating forex system or Managed Floating system.

http://www.imf.orgThe International Monetary FundThe international Monetary fund had been conceived During Bretton woods Conference in 1944 and it had started its operations from 1947.IMF,has headquarters in Washington D.C. and till date it has 184 members country. Currently IMF has been running by lady Chritine Lagarde from France after Dominique Staruss Kahn has resigned amidst through scandals.

IMF had been created not to repeat Depression that of like 1930s. The 29 member countries of UN, signed Articles of Agreement in 1945 and it became specialised body.IMF has seen European Managing director since its inception .It is the central Institution of the International monetary system .The IMF helps promote the world economic growth and raising the standard of living.

What IMF does for its MembersAdvices on Policies and Global overlookingTechnical Assistance and TrainingLending in Hard CurrencyStrengthening IM and Financial system

IMF organizations

Board of Governors Executive BoardInternational Monetary and Financial Committee(BOG + WBDevelopment Committee(BOG + WB)Managing director is the chairman of 24 executive DirectorsObjectives of IMF-Promotes cooperation and Global Business

-Creates stability in exchange and discourages Competitive exchange

-Helps to build multilateral system of payments, avoids restrictions, demolishes unparalleled system

-Fosters International trade and creates Employment opportunity

-Grants temporary financial assistance to member countries to maintain BOP

-Maintains orderly exchange rate systemThe IMFs five largest shareholders the United States,Japan,German,France, and the U.K along with China,Russia, and Saudi Arabia.IMF Quota

At the time of country receives membership from IMF, It has to deposit some wealth , on behalf of what country receives loan facility.This is called IMF quota, according to richness of country the wealth to be deposited get vary.This IMF quota also holds voting power and amount to be received , this is called Special drawing rights(SDRs) .

Regarding the major countries Voting powers or holding in the total quota,USA holds the highest of 17.08 %, Japan 6.13% and our country has 0.04 %.

Role of IMF in Financial SyStem

The IMF aims to prevent crises in the system by encouraging countries to adopt sound economic policies. It also assists in policy preparation to its members by evoking them to adopt polices that garners economic credibility and strength. It reduces their uncertainity to economic and financial crises. Whenever country faces balance of payments problems, IMF quota would be great in help.

Role of IMF in Nepal IMF has been assisting Nepal in reforms programme, Enhanced Structural Adjustment Facility.Nepal has 71300 thousand quota among which 91.9% been used.

Nepal has taken several monetary assistance from IMF since it took membership in september 6, 1961.Nepal still holding talks with IMF to get Extended Credit Facility (ECF)Nepal already has received Rapid Credit Facilty of SDR 28.52 million as a loan.

Remember 1SDR= $1.45186 as of JULY 31, 2005

World Bank

President: Robert Zoellick Current Jim Yong Kim

The World Bank System is Composed of five organizations

1)IBRD( International Bank for Reconstruction and Development

2)IFC(International Finance Corporation

3)IDA(International Development Association

4)MIGA (Multilateral Investment Guarantee Agency

5)ICSID (International Centre for settlement of investment disputes

Introduction

Nepal became a world bank member on September 6, 1961 the same date when it took membership from IMF as well. Its relationships with the world Bank is limited those with IDA and IFC.

TheWorld Bankis aninternational financial institutionthat providesloans todeveloping countriesforcapital programs.The World Bank's official goal is thereduction of poverty. According to the World Bank's Articles of Agreement , all of its decisions must be guided by a commitment to promoteforeign investment,international trade, and facilitatecapitalinvestment.The World Bank differs from theWorld Bank Group, in that the World Bank comprises only two institutions: theInternational Bank for Reconstruction and Development(IBRD) and theInternational Development Association(IDA), whereas the latter incorporates these two in addition to three more:International Finance Corporation(IFC),Multilateral Investment Guarantee Agency(MIGA), andInternational Centre for Settlement of Investment Disputes(ICSID).

TheInternational Finance Corporation(IFC) is aninternational financial institutionwhich offersinvestment, advisory, andasset management services to encourageprivate sector developmentindeveloping countries.

The IFC is a member of theWorld Bank Groupand is headquartered in Washington, D.C.,United States. It was established in 1956 as the private sector arm of the World Bank Group to advanceeconomic developmentby investing in strictly for-profit and commercial projects whichreduce povertyand promote development.The IFC's stated aim is to create opportunities for people to escape poverty and achieve better living standards by mobilizing financial resources for private enterprise, promoting accessible and competitive markets, supporting businesses and other private sector entities, and creating jobs and delivering necessary services to those who are poverty-stricken or otherwise vulnerable

The IFC is owned and governed by its member countries, but has its own executive leadership and staff which conduct its normal business operations. It is acorporationwhoseshareholdersare member governments which providepaid-in capitaland which have the right to vote on its mattersIFCs Investment in Nepal

Joined Date Jan 7th 1974/75Nepal been provided loan assistence of $3.1 million For Hotel Soaltee Ltd.And Rs 10 million for Nepal oriend Magnesites ltd.

-Nepals Bhote Koshi Power co. PVT LTD been granted $3 million loan and syndication $24 million.

-In 1998, IFC has approved $4 million for Jomsom Mountain Resort PVT. LTD.- Rural Microfinance Development Centre got NRS 58 million loan facility .

International Development Association IDATheInternational Development Association(IDA) is aninternational financial institutionwhich offers concessionalloansandgrantsto the world's poorestdeveloping countries. (country which has PCI below than $600)The IDA is a member of theWorld Bank Groupand is headquartered inWashington, D.C.,United States. It was established in 1960 to complement the existingInternational Bank for Reconstruction and Developmentby lending to developing countries which suffer from the lowestgross national income, from troubledcreditworthiness, or from the lowestper capita income. Together, the International Development Association and International Bank for Reconstruction and Development are collectively known as theWorld Bank, as they follow the same executive leadership and operate with the same staff

The IDA has issued a total $238 billion USD in loans and grants since its launch in 1960. IDAs Investment/Role in Nepal

-Date of Joined March 3rd, 1968-Nepal received US $ 1.70 million loan in 1970 for telecom projects.-Nepal has been utilizing investments in transporattion,transit,irrigation,drinking water and sewerage,electricity,rural and forest development,tourism,cottage industry.

-IDA has provided a soft loan of US $ 23.5 million to Nepal for the construction of dry ports(Biratnagar).

-IDA has so far provided finance for more than 70 projects in Nepal, mostly in agriculture/irrigation(42%),forestry education and health(16%) and transport(13%).

IDA has concentrated its major attention on Poverty alleviation Programme in Nepal.

3. International Bank for Reconstruction and DevelopmentIBRD is one of the very first WB group, which too was conceived duringBritton woods conference.The idea was clear, IBRD been thought to work as a bank who would facilitate soft loans to war torn countries for their reconstruction and development activities. IBRD aims to reach to those devastated countries which been largely affected due to either heavily involved into war or say been crippled into war.

Nepal is not a true member of IBRD or say Nepal seek soft loans which easily available from IDA while IBRD gives hard loans with high interest and rigid payment system. IBRD deals with economically sound countries only.4. Multilateral Investment Guarantee Agency (MIGA)This is one of the major World bank group which helps to foster foreign direct investment in countries.

There always a risk for companies to put money into business. In the case of international business many MNCs are so careful while investing in cross border nations. Here in this case MIGS helps these companies to invest in new countries. MIGA enables and assures companies for their guarantee in prosperity. MIGA works directly with the government and presses them to issue business friendly laws and acts which garners FDI.

MIGA also provides technical assistance and advisory services to help countries strengthen the capacity of investment promotion intermediaries and distribute information on investment and capital related opportunities.

International Centre for settlement of investment disputes (ICSID)

This supreme body is accountable for settlement of investment disputes.Investors of whole over world felt the need of one body which will look after investment disputes or say business related any misunderstandings. Thats why this ICSID came into existence.ICSID assists to foster FDI by granting international amenities for conciliation and arbitration of investment disputes, thereby making an environment where both home country investors and host country investors would be benefited.

Asian DevelopmentBankwww.adb.orgADB is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia. The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific. From 31 members at its establishment, ADB now has 67 members - of which 48 are from within Asia and the Pacific and 19 outside. ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with member's capital subscriptions. At present, both the United States and Japan hold 552,210 shares, the largest proportion of shares at 12.756% each. China holds 228,000 shares (6.429%), India holds 224,010 shares (6.317%), the 2nd and 3rd largest proportion of shares respectivelyNepal holds 5202 shares, i.e.,0.15% of the total. The ADB lending to Nepal started from the year 1969. Nepal is the 27th largest shareholder among regional members and the 35th largest among the overall members.IntroductionObjectives of ADB

-Eradicating Poverty-Encouraging Economic prosperity-Assisting in HR development-Empowering Women-Promoting stable Natural sector and developing agriculture arena.ADBs Role in Nepal-Nepal has received total cumulative lending of $2.63 billion-ADBs nine focus areas are Agriculture,Education,Water supply,transport,information and communication,finance,energy,public private sector mgmt,climate change, Social protection

ADB looks after governments various projects and scrutinizes and invests in suitable projects and aware government of poverty level and presses government to work in favor of them and works in specialized areas.

General Agreements on tariff and TradeDuring Bretton Woods conference, countries made agreement to establish an supreme body which will overlook global trade. They decided to establish ITO(International trade organization). But this organization never came into existence and countries signed GATT general agreements on Tariff and trade on behalf of ITO.Later GATT been heavily criticized and it is touted as Rich mens club.Countries felt need to introduce another supreme body and talks had been held in 1994 in Marrakesh of Morocco that decided to establish WTO as an organization to systematise the global trade through promotion of rule based Multilateral trading system.

This way the conceived idea of ITO been changed into GATT agreements and later it emerged as WTO (world trade organization.

Difference Between GATT and WTO-GATT was an agreement signed between countries whereas WTO is an organization which has permanent status.

-GATTs scope bounded within trade in goods only whereas WTO deals with all type of goods.

-Because GATT was an agreement members are only contracting parties but WTO has full fledged members.

-GATT was implemented on the basis of commitment hence ad hoc but WTO is complete body which has legal basis.

-Under GATT disputes handling procedures were rigid and lengthy but WTO has faster,automatic,rule based, very effective.

WTO

WTO membersEU and WTO membersObserversFormationJanuary 1, 1995HeadquartersCentre William Rappard, Geneva, SwitzerlandMembership157 member statesOfficiallanguagesEnglish, French, SpanishDirector-GeneralPascal LamyBudget196 million Swiss francs (approx. 209 million USD) in 2011.Staff640Websitewto.org

All Green coloured countries are WTO membersIntroduction The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade(GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994).

Nepal is the 147th member , and Cambodia the 148th. Nepal has the Privilege of being the first LDC to have entered WTO through the Accession Process under Article 12.

Regional Groupings :

What is Regional Groupings?

Are regional groupings and Economic regional groupings same?

Regional Groupings implies the association and belongingness of two or more than two countries to seek common goal in business prospective.

Regional groupings generally covers more than economic sectors where as economic regional groupings focuses on Economic activities between countries.

Important Regional Groupings in the World

EU = European Union(27 countries)EFTA=European Free Trade Association(Iceland,Liechtenstein,Norway,Switzerland)NAFTA=North American Free Trade Association(USA,Canada,Mexico)ANCOM=Andean Common Market(Bolivia,Colombia,Equador,peru,Venezuela)CACM=Central American Common Market(CostaRica,El salvador,Guatemala,Honduras,NicaraguwaBA=Bankok Agreement(Bangladesh,India,Laos,S.korea,Sri LankaGCC=Gulf Cooperation Council=Baharain,Kuwait,Oman,Qatar,Saudi,UAEACM=Arab Common Market(Egypt,Iraq,Jordan,Lebanon,Libya,Mauritania,Syria)ASEAN=Association of South east asian NationsSAARC=South Asian Association of Regional CooperationBIMSTEC=(Bay of Bengal initiative for multi sectoral Technical and Economic Cooperation) BD,India,Mynmar,Sri Lanka,Thailand,Nepal,Bhutan,

12.APEC=Asia Pacific Economic Cooperation (21 countries lying on the rim of pacific ocean touching Asia,America,Australia)

EUROPEAN UNION

total 4,324,782km2(7th1,669,807sqmi-Water(%)3.08Population-2012estimate503,492,041(3rd)-Density116.2/km2300.9/sqmiGDP(PPP)2011estimate-Total$15.821 trillion[6](1st)-Per capita$31,607[6](15th)GDP (nominal)2011estimate-Total$17.577 trillion(1st)-Per capita$35,116(14th)Gini(2010)30.4[8](medium)HDI(2011)0.856(veryhigh)(14th)CurrencyEuro () (EUR)Used in the 17 countries of the eurozone and by the EU's institutions. The other member states and territories use other currencies.Time zone(UTC+0 to +2)-Summer(DST)(UTC+1 to +3)Internet TLD.eu[

EUROPEAN UNION

The European Union (EU) is an economic and political union of 27 member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community(ECSC) and the European Economic Community (EEC), formed by six countriesin 1951 and 1958 respectively. The Maastricht Treaty established the European Union under its current name in 1993.The latest amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009.] Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. The European Parliament is elected every five years by EU citizens.The EU has developed a single market through a standardized system of laws which apply in all member states. Within the Schengen Area(which includes 22 EU and 4 non-EU states) passport controls have been abolished. EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries and regional development. A monetary union, the eurozone, was established in 1999 and The EU is represented at the United Nations, the WTO, the G8 and the G-20.With a combined population of over 500million inhabitants,[or 7.3% of the world population,the EU, in 2011, generated a nominal gross domestic product(GDP) of 17.6 trillion US dollars.

NAFTANorth Atlantic Free Trade Area

The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade blocin North America. The agreement came into force on January 1, 1994. It superseded the Canada United States Free Trade Agreement between the U.S. and Canada. In terms of combined GDP of its members, as of 2010 the trade bloc is the largest in the world.NAFTA has two supplements: the North American Agreement on Environmental Cooperation(NAAEC) and the North American Agreement on Labor Cooperation (NAALC).

AdministrativecenterMexico City, Ottawa, and Washington, D.C.LanguagesEnglishSpanishFrenchMembershipCanadaMexicoUnited StatesEstablishment-FormationDecember 22, 1995Area-Total21,850km2(1st)8,410sqmi-Water(%)7.4Population-2010estimate457,282(3rd)-Density25.1/km2(195th)54.3/sqmiGDP(PPP)2010 (IMF)estimate-Total$1,617.989 billion(1st)-Per capita$39,625(4th)GDP (nominal)2010 (IMF)estimate-Total$17,271.000 billion(1st)-Per capita$37,769(21st)HDI(2011)0.868[1](veryhigh

Introduction

SAARC(south asian association for regional cooperation)Comprises eight countries of south asia Afghanistan,Bangladesh,Bhutan,India,Maldives,Nepal,Pakistan and Sri Lanka. It was established on 8 December,1985. Afghanistan joined SAARC in April 2007.

Saarc Provides a platform for the people of south asia to work together in a Spirit of friendship,trust and understanding. It aims to promote their welfare And to improve their quality of life.

Objectives of SAARC-Promote Welfare and improve quality of life of people of this region-Accelerate economic growth,social,progress and cultural development in theRegion-Promote and strengthen collective self reliance-Contribute to mutual trust,understanding-Promote active collaboration and mutual assistance in the economic,social, cultural,technical and scientific fields.SAARC in BriefHeadquartersKathmandu, NepalOfficial languagesEnglishDemonymSouth AsianMembership8 Members[show][show]AfghanistanBangladeshBhutanIndiaMaldivesNepalPakistanSri Lanka9 Observers[show][show]AustraliaChinaEuropean UnionIranJapan

GovernmentOrganization-ChairmanMohammed Waheed Hassan Manik-Secretary GeneralAhmed SaleemEstablishmentDecember 8, 1985Area-Total5,130,746km2(7th1,980,992sqmiPopulation-2009estimate1,600,000,000-Density304.9/km2789.7/sqmiGDP(PPP)2009estimate-TotalUS$ 4,382,700 million(3rd1)-Per capitaUS$ 2,779CurrencySee footnote 2Time zone(UTC+4 to +6)Websitewww.saarc-sec.orgIf considered as a single entity.AfghanistanBangladeshBhutanIndiaMaldivesNepalPakistanSri Lanka

ASEAN

AssociationOf SouthEast AsianNationsAssociation of south east asian nations was formed in 1967. It has ten members as follows: Brunei,Cambodia,Indonesia,Laos,Malaysia,Myanmar,Philipines,Singapore,Thailand,VietnamObjectives of Asean-To expand econommic,social,cultural administrative and technical cooperation.-To accelerate economic progress and stability of the region-To strengthen regional peace and securityAsean has a preferntial trading arrangement system. But the system covers only about 5% of ASEAN trade. In 1992 ASEAN free trade area (AFTA) was established. A common effective preferential tariff has come in force. Intra- ASEAN trade and investment has increased.ASEAN covers a land area of 4.46million km, which is 3% of the total land area of Earth, and has a population of approximately 600 million people, which is 8.8% of the world's population. The sea area of ASEAN is about three times larger than its land counterpart. In 2010, its combined nominal GDP had grown to US$1.8trillion. If ASEAN were a single entity, it would rank as the ninth largest economy in the world, behind the United States, China, Japan, Germany, France, Brazil, the United Kingdom, and Italy.ASEAN

-Secretary-GeneralSurin Pitsuwan-ASEAN Summit PresidencyCambodia Establishment-Bangkok Declaration8 August 1967-Charter16 December 2008Area-Total4,479,210.5km22,778,124.7sqmiPopulation-2010estimate601 million-Density135/km2216/sqmiGDP(PPP)2010estimate-TotalUS$ 3.084trillion-Per capitaUS$ 5,131GDP (nominal)2010estimate-TotalUS$ 1.800trillion-Per capitaUS$ 2,995HDI(2011)0.625[