Contribution of the UN system to commercial order and openness

International markets require global rules of the road. This is virtually a truism in the business world, which must deal with the complications of operating across borders and in distant regions on an everyday basis. Not as widely appreciated is the extent of the soft infrastructure-- as UN Secretary-General Kofi Annan terms it -- that is already in place to facilitate the international exchange of goods, money and information.

• When ships sail freely across the seas and through international straits, they are protected by rules legitimized in UN conferences.
• Commercial airlines have the right to fly across borders, and to land in case of emergency, due to agreements negotiated by the International Civil Aviation Organization, part of the UN system.
• The World Health Organization sets criteria for pharmaceutical quality and standardizes the names for drugs.
• Universal Postal Union protocols prevent loses and allow the mail to move across borders.
• International Telecommunication Union allotment of frequencies keep the air waves from becoming hopelessly clogged, and thus avoids interference among radio transmissions.
• Data collected and re-distributed from member states by the World Meterological Organization makes possible worldwide and country-specific weather forecasts.
• The UN Sales Convention and the UN Convention on the Carriage of Goods by Sea help to establish rights and obligations for buyers and sellers in international commercial transactions.

In short, without these and other public goods generated by the UN system, it would truly be a jungle out there for firms from developing, industrialized and transition countries alike that cared to venture beyond their own national borders. Within the UN system, there are 28 different organizations. Virtually all of these bodies contribute in one way or another to the maintenance of commercial order and openness.

The establishment of states' jurisdictional rights clarify which nation is the legitimate political authority on land, on the sea and in the air. This makes it possible to invest in oil exploration and drilling, for example, or to send ships and planes across oceans and continents.

Without the negotiation and enforcement of firms intellectual property rights in foreign countries, provided by the World Intellectual Property Organization in conjunction with the World Trade Organization, establishment of foreign subsidiaries and even export of high-tech products would become a very risky business and trade marks and patents would not be respected.

A crucial but little known area of standardization for any market is agreement on the definition of economic terminology, as well as on measurement standards for economic concepts. Virtually all UN regulatory bodies contribute in some way to standardizing the terminology of global commerce. Standardization of technologies and procedures in international commerce, carried out by the International Maritime Organization, the International Civil Aviation Organization, the International telecommunications Union and the Universal Postal Union, assures connectivity in the global movement of goods and information.

Before the United Nations got in the business of setting international laws governing commercial transactions, such standardization was promoted by a number of international organizations. Now the UN Commission on International Trade Law is the most important body in the field, and acceptance of common rules such as those entailed in the 1980 UN Sales Convention facilitates trade and reduces transactions costs.

Firms are not likely to undertake international commercial ventures without accords to prevent damages to carriers, goods, and information in transit between countries. A great deal of the activity of the International Maritime Organization, the International Civil Aviation Organization, International Telecommunications Union and the Universal Postal Union focus on this area.
When accidents do occur in the course of international transit, it is important that firms can count on compensation for financial losses. A central issue addressed by the UN Commission on International Trade Law is liability and compensation for damages to goods. The International Maritime Organization and the International Civil Aviation Organization deal with the same question in regard to shipping and air transport.

The gathering and analysis of economic information assists states and firms in developing policies, including on issues such as international regulatory accords. Most UN bodies are active as gatherers and analysers of information, and in some cases they are viewed as the most reliable source of global data.

In addition to the above-stated normative and standard-setting functions, the United Nations is becoming involved in frontline areas of new and urgent international interest.

One of these concerns inadvertent transborder damages for if regulations are imposed nationally -- rather than internationally -- competitive disadvantages could result These damages can range from national and international industrial activities that lead to ozone depletion, pollution or climate change to the transmission of diseases by international travellers.

Another international problem recently addressed by the UN system is international money laundering by criminal organizations or individual. Money laundering places a greater tax burden on legitimate businesses, promotes corruption, distorts competition and artificially inflates national currency exchange rates.

A plan by the World Intellectual Property Organization to bring order to the high-stakes realm of Internet domain names, and hopefully provide more of a level playing field in cyberspace for developing countries, has recently been presented to the Internet community. The guidelines aimed at the practice of cybersquatting are part of an effort by WIPO to bring the international copyright into the digital era.

In summary, it is not practical for rules for commercial conduct to be negotiated on an ad hoc basis. In our present world of close to 200 states, it is important to win universal, or virtually universal, support for standards of economic as well as political behaviour. International regimes require legitimacy, and the consent and willing participation of the international community is obtained most reliably via the United Nations.