Transcript Environment of an Organization

Welcome to Training Course
Competing Effectively
in
WTO regime
by
Prizm Institute of Business
Environment of an organization
Internal
Structure
Culture
Resources
External
Task
Societal
Environment of an
Organization
Societal factors




Economic
Technological
Sociocultral
Political - Legal
Economic factors
GNP Trends
Interest Rates
Money Supply
Inflation Rates
Unemployment level
Wage / Price Controls
Devaluation
Energy: availability and Cost
Disposable and Discretionary Income
Technological factors
 Total Federal and provincial spending
on R& D
 Total Industry Spending on R& D
 Focus of Technological efforts
 Patent Protection
 New Products
 New Developments in Technology
transfer from Lab to market place
 Productivity improvements through
automation
Sociocultral factors
Life Style Changes
Career Expectations
Consumer Activism
Rate of family formation
Growth rate of population
Age distribution of population
Regional Shifts in population
Life expectancies
Birth rates
Political - Legal
Antitrust Regulations
Privatization laws
Environment Protection Laws
Telecom regulations
Tax Laws
Special Incentives
Foreign Trade Regulations
Attitudes toward Foreign Companies
Laws on Hiring and Promotion
Stability of government
Uniformity in application of law
International Political Factors
Foreign Trade Regulations
Environment Protection Laws
Role of Donor Agencies
Foreign Trade Regulations
Environment Protection Laws
Tax Laws
Special Incentives
Attitudes toward Foreign
Companies
Laws on Hiring and Promotion
Stability of government
WTO fact Sheet
Founded
HQ
Mission
1995(Replacing GATT)
Geneva, Switzerland
Administration of
Agreements, Resolution of
Trade Disputes
Members
148 States
Budget
100 Million Euros
Secy. General Supachai Panitchpakdi
(Thailand)
WTO: The institution
Objectives
To raise standards of living
To ensure full employment
Growing volume of real
income and effective
demand
WTO: The institution
Objectives
Expanding the production
of and trade in goods &
services
Sustainable development
and environmental
protection
Developing countries
WTO: The institution
Functions
Implementation, administration
and operation of the covered
agreements
Forum for negotiations
Dispute settlement
Review of national trade policies
Coherence in global economic
policy-making
WTO: The institution
Structure
Ministerial Conference
General Council
Dispute Settlement Body
Trade Policy Review Body Council
Council for Trade in Goods
Council for Trade in Services
Council for TRIPs
Committees and other subsidiary
bodies
WTO: The institution
Principles
Trade without discrimination
Most-favored-nation clause (MFN)
National treatment
Transparency
Predictable and growing access to
markets
WTO: The institution
Principles
Trade in goods
Binding of tariffs
Prohibition of quantitative restrictions
Tariff negotiations: progressive reduction in
protection
Emergency import measures: safeguards
Tariff renegotiations: compensation
Trade in services
The General Agreement on Trade in Services (GATS) establishes
a multilateral framework of principles and rules for trade in
services with a view to the expansion of such trade under
conditions of transparency and progressive liberalization, and as
a means to promote the economic growth of all countries and
the development of developing countries. Through general
obligations and principles, the negotiation of specific
commitments, and the commitment to launch further rounds of
negotiations on trade in services, the GATS seeks to achieve
predictable and growing access to markets for services.
Cornerstone of the multilateral
trading system
Trade in goods
Trade in services
Protection of intellectual property
rights
Implications of NTBs, GATS, ATC,
TRIMS, TRIPS
NTBs
Pakistan committed bind about 33% of
its Tariff lines. For a number of
products including leather items tariffs
will be bound at ceiling rate of 22-30%.
Tariff
GATS
Services Under GATS
Communication
Financial
Construction/ engineering
Health
Tourism / travel
Distribution
Education
Environment
Recreation/ culture/ sporting
Transport
Pakistan commitment under
GATS
Communication
Financial
Construction/ engineering
Health
Tourism / travel
Distribution
ATC
The Agreement on Textile and Clothing (ATC) Seeks to regulate
textile trade worldwide to which Pakistan is a signatory. One of
the principle objectives of Pakistan during the UR was not only to
achieve elimination of Multi Fiber Agreement (MFA) but also to
achieve full integration of textiles and clothing into the GATT in
order to secure greater access to international markets.
According to one study examining the impact of removal NTBs
a12% output and 26% export enhancement could be achieved.
This shows how important it is for Pakistan and other developing
countries to achieve elimination of MFA. However, the results of
UR Agreement on Textile and Clothing were disappointing for
Pakistan as the developed countries were using transitional
safeguard measures to protect their industries on the plea that
surges of imports of specific products were causing serious
damage to their industries.
TRIMs
Under the TRIMs agreement Pakistan is committed
to phase out the deletion programs for
automobiles, electronics, electrical products and
engineering items, which were to be phased out
within five years of entry into force of the
agreement. Despite Pakistan received different
extensions for this particular clause however
instead of extension of seven years demanded by
Pakistan, WTO council for Trade in Goods (CTG)
has granted only a two years extension which
expired on December 31,2003.
TRIPs
In pursuance of its commitments to TRIPs
obligations Pakistan have promulgated five
Laws / Amendments to provide Intellectual
Property Protection under TRIPs. These
ordinances are as follows:
1. Patents Ordinance, 2002
2. Trademark Ordinance, 2001
3. Copyright Amendments Ordinance, 2000
4. Industrial Design Ordinance, 2000
Registration of Layout designs of integrated
circuits ordinance, 2000
WTO Agreements on TBT
& SPS
Pakistan has taken a number of key initiatives aimed at
strengthening technical institutions’ capabilities in
standard setting and compliance. Well over 3000
companies are ISO 9000 certified. As for ISO14000
certifications, Pakistan ranks 56th with only 10
ISO14001certified firms. However, efforts are on in this
regard and the ministry of science and technology setup
Pakistan National Accreditation Council (PNAC) in 1998.
In 1999 under ADB-assisted Trade Export Promotion
and Industry Program (TEPI) project was established.
TEPI launched the accreditation services for ISO 9000/
ISO 14000 bodies and ISO 17025 Laboratory
certification.
Anti-dumping Measures
To deal with such a situation Pakistan need to implement anti
dumping measures to protect domestic industry against
onslaught of unfair competition. Government of Pakistan have
promulgated the following ordinances:
1.
Anti dumping law 2000
2.
Countervailing Duties Ordinance 2001
3.
Safeguard Ordinance 2002
National Tariff Commission (NTC), with the assistance of CBR
has been assigned the task to implement these ordinances in
Pakistan. Pakistan has resorted to anti-dumping measures only
twice in the eight years of WTO regime. The country urgently
needs to build a strong network of ADDs and CVDs to protect
the local industry.
Dispute Settlement
Pakistan and other developing countries
are facing problems of hiring law firms
to advise them and to represent them
in WTO related cases. Exorbitant fees of
these law firms ranging from US$200 to
US$600 per hour restrict us from
seeking relief. This suggests that there
is a strong need to train local lawyers
with WTO expertise
Custom Valuation
After availing the grace period of
5years, the finance act 1999-2000
amended the section 25 of the custom
act 1969 to accommodate the
necessary changes for adoption of
GATT code of valuation based on
transaction value.
Agriculture
It is expected that under UR Agreement,
market forces would result in domestic prices
rising to world prices, which would stimulate
domestic production. Tariffs in developed
countries were reduced by 36% on fruits and
vegetables and 48% for such non-traditional
products as flowers, providing Pakistan
improved export opportunities.
Agriculture
It is expected that under UR Agreement,
market forces would result in domestic prices
rising to world prices, which would stimulate
domestic production. Tariffs in developed
countries were reduced by 36% on fruits and
vegetables and 48% for such non-traditional
products as flowers, providing Pakistan
improved export opportunities.
Agriculture
The reduction on subsidies and resulting price
increase would mean that total expenses of
Pakistan for wheat, in wheat deficit years, will
rise. Substantial reduction in tariffs and farm
subsidies would mean greater access to
Pakistani agriculture products. Pakistan will
be able to export excess sugar, wheat,
tobacco, fruits and vegetables and dairy
products. Pakistani cotton would fetch better
prices for our farmers.
Role of Exporters in tackling non
tariff barriers
Design and plan production and
packaging methods especially for
the export market.
The manufacturing techniques
must be carefully selected so as to
ensure the resulting products do
not cause any harm to human,
animal and plant life or health.
Role of Exporters in tackling non
tariff barriers
Study the laws and regulations of the
importing countries and their likely impact on
the exports
Must keep oneself updated on the notices
and notifications made by importing countries
under the agreement on Application of
Sanitary and PhytoSanitary measures and the
Agreement on Technical Barriers to Trade.
Role of Exporters in tackling non
tariff barriers
Maintain an effective interaction with
the counterpart associations etc in the
importing countries. Any difficulties due
to economic al limitations must be
adequately brought forward to the
notice of the government as WTO
envisage special and differential
treatment to the developing countries.
Role of Exporters in tackling non
tariff barriers
The platform of association can be
effectively used to raise the problems in
front of the government and to provide
necessary information to government
for raising the issues in WTO.
Impact of reduction of tariffs and NTBs by
developed countries
Developed countries committed to
40% reduction in the average tariff on
industrial products from 6.2% to 3.8%.
While these cuts will improve access,
their impact has been small because
tariffs on manufactures in industrial
countries were already low (except
apparel). Pakistan exports to OECD will
face average rates of 6.9%.
Impact of reduction of tariffs and NTBs by
developed countries
Textile and clothing products, which accounts
for 57% of our exports to OECD received
below average, tariff reduction of 22%,
meaning that developed countries will reduce
tariffs from 14.6% to 11.3%. Export of
leather products and travel goods are also
important to Pakistan but this again received
below average 18% tariffs reduction.
Impact of reduction of tariffs and NTBs by
developed countries
After the complete phase out of quota
restriction it is feared that developed
countries would resort to use of NonTariff-Barriers like imposing
requirement of environment and labor
standards and use of child labor etc to
protect their own interests.
Challenges of WTO
Rapid and radical development in
Science and Technology, in particular in
the fields of telecommunication,
computing and information sciences
Globalization of business, including
increased global competition and the
emergence of regional and global
customers and resources.
Challenges of WTO
Shifting industry boundaries and
competitive structures including
mergers and acquisitions of
unprecedented magnitude and strategic
alliances within and across traditional
industry groups
Changing demographics, together with
changing popular values, expectations
and behaviors
Challenges of WTO
Increased scrutiny of business
decisions by government and public,
with greater focus on ethical
dimensions of these decisions.
Increased deregulation, privatization
and cooperation between business and
government.
Challenges of WTO
Changes in business practices for
example downsizing, outsourcing
and reengineering.
Changes in the social/ business
contract between companies and
their employees, customers and
other stake holders
Improving competitiveness
Improving value chain
Improving value chain
Creating new market space
Creating New Value Curve
Companies can create new market
space by creating a new value curve for
their customers. Value curve is a
graphic depiction of the way a company
configures its offering to the customers.
New Value Curve
Reduce
What factors should be reduced well below the industry standards
Eliminate
Create
What factors should be
eliminated that the industry
has taken for granted
New Value
Curve
What factors should be
created that the industry has
never offered
What factors should be raised well beyond the industry standards
Raise
Creating new market space
Companies can systematically peruse value
innovation by looking across the conventionally
defined boundaries of competition:
Across Substitute Industries
Across Strategic Group
Across buyer Group
Across Complimentary product and service
Offerings
Across the functional Emotional Orientation of an
Industry
Across Time
Reconfiguring Product-Service Ratio
Product Service Continuum
Pure tangible Good
The offer consists primarily of a tangible good
such as soap. No services accompany the offering
A tangible good with accompanying
service
The offer consists of a tangible good
accompanied by one or more services to
enhance its customer appeal. In this case the
tangible product dominates while the service;
although important but very small part of the
offering
Reconfiguring Product-Service Ratio
Product Service Continuum
A hybrid
The offer comprises equal proportion of
a physical good and a service. The
physical product and intangible service
accompanying the offer are of equal
importance. The service forms an
essential part of the offering.
Reconfiguring Product-Service Ratio
Product Service Continuum
A major service with accompanying
minor goods and services
The offer consists of a major service along
with additional services and/or supporting
goods. In this case the service dominates
while the physical product plays a supporting
role.
A pure Service
The offer consists of a service with no
physical product supporting the offer.
Building Customer Relationships
Developing Buyer Utility Maps
Six Stages of Buyer experience Cycle
Purchase
The Six Utility Levels
Customer productivity
Simplicity
Convenience
Risk
Fun and Image
Environmental friendliness
Delivery
Use
Supplements Maintenance
Disposal
Building Customer Relationships
Buyer Experience Cycle
Uncovering the buyer Experience Cycle
Purchase
Delivery
Use
Supplements
Maintenance
Disposal
Building Customer Relationships
The Price Corridor of The Mass
Three Product Types
Same
Form
High
Price
Different
Form
Same Function
Different Form
And Function
Same Objective
High Degree of
Legal and Resources
Upper Level
Pricing
Middle Level
Pricing
Low
Lower Level
Pricing
Some Degree of
Legal & Resource
Protection
Low Degree of
Legal Resource
Protection
Finding competitive advantage
through SA 8000
The SA8000 includes:
A standard that covers all widely accepted
international labor rights
Factory level management system requirement for
ongoing compliances and improvements
Independent expert verification of compliance. This is
achieved through certification of facilities by auditing
bodies accredited by SAN
Involvement by all stakeholders: Participation by all
key sectors, including workers and trade unions and
socially responsible investors.
Harnessing consumer and investor concern.
Finding competitive advantage
through SA 8000
Standard elements
Child Labor
No worker under the age of 15 years;
minimum lowered to 14 years for countries
operating under the ILO Convention 138
developing- country exception; remediation of
any child to be found working
Forced Labor
No forced labor, including prison or debt
bondage labor; no lodging of deposits or
identity papers by employers or outside
Finding competitive advantage
through SA 8000
Health and safety
Provide a safe and healthy work
environment; take steps to prevent injuries;
regular health and safety worker training;
system to detect threats to health and safety;
access to bathrooms and potable water.
Freedom of association and right of
collective bargaining
Respect the right to form and join trade
unions and bargain collectively; where law
prohibits these freedoms, facilitate parallel
means of association and bargaining.
Finding competitive advantage
through SA 8000
Discrimination
No discrimination based on race, caste,
origin, religion, disability, gender, sexual
orientation, union or political affiliation, or
age; no sexual harassment.
Discipline
No corporal punishment, mental or physical
coercion orVerbal abuse.
Finding competitive advantage
through SA 8000
Working hours
Comply with the applicable laws, but in any
event, no more than 48 hours per week with
at least one day off for every seven day
period; voluntary overtime paid at a premium
rate and not to exceed 12 hours per week on
a regular basis; overtime may be mandatory
if part of a collective bargaining agreement.
Finding competitive advantage
through SA 8000
Compensation
Wages paid for a standard workweek must
meet the legal and industry standards and be
sufficient to meet the basic need of workers
and their families; no disciplinary deductions.
Management Systems
Facilities seeking to gain and maintain
certification must go beyond simple
compliance to integrate the standard into
their management systems and practices.
THANK YOU