Regional and global business environment (part 2)
Yvonne Harvey, Contributor

It is always good to be with you all. This week we will continue to look at the institutions that affect the Caribbean, as a whole, and Jamaica in particular. Remember that you should try to know these institutions and their objectives, roles and functions.

ORGANISATION OF AMERICAN STATES (OAS)

Member countries are North America, Central America, South America and the Caribbean. This institution was established in 1948 and has its headquarters in Washington. Its main objectives are:

• Fostering good relations among member states
• Settling disputes when they arise
• Assisting with maintenance of the cultural heritage of member states
• Assisting with obtaining and monitoring aids programmes
• Providing training through scholarship programmes.

The World Trade Organization (WTO)

The World Trade Organization (WTO) is the only global international organisation dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters and importers conduct their business.

The WTO is an important selective, mainly private, international organisation designed by its founders to supervise and liberalise international trade. The organisation officially commenced on January 1, 1995, under the Marrakesh Agreement, succeeding the 1947 General Agreement on Tariffs and Trade (GATT).

The WTO deals with regulation of trade between participating countries; it provides a framework for negotiating and formalising 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 (1986-1994).

The organisation is currently endeavouring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world's population. However, the negotiation has been dogged by disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain.

The WTO has 153 members, representing more than 95 per cent of total world trade and 30 observers, most seeking membership. The WTO is governed by a ministerial conference, meeting every two years; a general council, which implements the conference's policy decisions and is responsible for day-to-day administration; and a director general who is appointed by the ministerial conference. The WTO's headquarters is at the Centre William Rappard, Geneva, Switzerland.

The Organization of Petroleum Exporting Countries (OPEC)

The Organization of the Petroleum Exporting Countries (OPEC; pronounced /o?.p?k/, oh-pek) is a cartel of 12 countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The cartel has maintained its headquarters in Vienna since 1965 and hosts regular meetings among the oil ministers of its member countries. Indonesia withdrew its membership in OPEC in 2008 after it became a net importer of oil, but stated it would likely return if it became a net exporter again.

According to its statutes, one of the principal goals is the determination of the best means for safeguarding the cartel's interests, individually and collectively. It also pursues ways and means of ensuring the stabilisation of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations; giving due regard at all times to the interests of the producing nations and to the necessity of securing a steady income to the producing countries; an efficient and regular supply of petroleum to consuming nations, and a fair return on their capital to those investing in the petroleum industry.

OPEC's influence on the market has been widely criticised. Several members of OPEC alarmed the world and triggered high inflation across both the developing and developed world when they used oil embargoes in the 1973 oil crisis. OPEC's ability to control the price of oil has diminished somewhat since then, due to the subsequent discovery and development of large oil reserves in the Gulf of Mexico and the North Sea, the opening up of Russia, and market modernisation. OPEC nations still account for two-thirds of the world's oil reserves and, as of April 2009, 33.3 per cent of the world's oil production, affording them considerable control over the global market. The next largest group of producers, members of the OECD and the Post-Soviet states produced only 23.8 per cent and 14.8 per cent, respectively, of the world's total oil production. As early as 2003, concerns that OPEC members had little excess pumping capacity sparked speculation that their influence on crude oil prices would begin to slip.

That's it for today. I hope you found the information on these institutions interesting. It would be good if you could go through the lesson again and highlight the main points. At the end of next week's lesson I will give you a question on this area to practise.

Bye for now.

Yvonne Harvey teaches at Glenmuir High School. Send questions and comments to kerry-ann.hepburn@gleanerjm.com