Legal Environment for Global Organizations - Essay Example

Global organizations like WTO, IMF, World Bank, UN, and WHO which must not be treated as 'insignificant actors' in the global arena due mainly to the functions they are embodied with. An understanding of the link between global organizations and global governance would push one to see this importance. As the world turns into a globalized competitive market in which nations interact according to the principles of economic liberalism, a requirement for more order is ensued. The importance of understanding the legal environment for global organizations is seen in their roles as instrument, arena, and actor in the global interaction (Archer, 2001).

An example of this is the WTO, which was established by sovereign states whose power limits independent action by international organizations. Global organizations are actually used as instruments in order for states to use their ends, particularly on the areas of trade liberalism which profits first world states primarily. They serve as means for the policies of individual governments as well as instruments for diplomacy among states. The United Nations is seen to function as an instrument of US diplomacy which undertakes policies according in the global sphere.

It is the rule of unanimity which is apparently carried out by global organizations, in which certain states are able to influence other states over certain decisions. As arenas within which actions take place, global organizations provide meeting places in which member states can discuss certain matters diplomatically. The term itself - arena - signifies neutrality even for nations in disagreement. Hence, international organizations serve not only as mere forums for these activities, but also as a diplomatic reinforcement for their policies (Hoffman, 1970 in Archer, 2001: 74).

Even the third world states are given their own venues for discussing international economic events, through the UN Conference on Trade and Development (UNCTAD) as well as the Group of 77 (G77) participated in by states in Southern continents of non-aligned countries (Archer, 2001). Legal environment is a necessity for global organizations since it gives them the venue and the power to govern the world politically and economically, surged by the very nations that represent them. The World Bank for example, is represented by first world nations particularly by the United States, whose legal policies govern the financial activities of poorer nations that have incurred financial debts with them.

DISCUSS other legal influences which can affect business in a specified country. CONSIDER other cultural, religious, and political influences - how might these influence the business environment Legal influences which can affect business in a specified country include the policies on trade liberalization and non-tariffication which can affect the level of balance of trade and the domestic sales of goods. With a liberal importation allowed by the policies of WTO, which almost defeat the level of exports in a certain country, a probability of trade deficit is imminently seen, which may cause fiscal crisis for that particular country (Pereira, et al., 1993: 6).

Non-tariffication of goods for importation, which is also embodied in the WTO, causes bankruptcy of the sale of domestic products, which have higher prices than the imported ones. In countries in which colonial mentality