What is 'Supranational'?

A supranational organization is an international group or union in which the power and influence of member states transcend national boundaries or interests to share in decision making and vote on issues concerning the collective body.

The European Union and the World Trade Organization are both supranational entities. In the EU, each member votes on policy that will affect each member nation. The benefits of this construct are the synergies derived from social and economic policies, and a stronger presence on the international stage.

BREAKING DOWN 'Supranational'

For an organization to be supranational, it must operate in multiple countries. While applicable to multinational corporations, the term is more often used in the context of government entities because they often have regulatory responsibilities within their standard operations. These responsibilities can include the creation of international treaties and standards for international trade.

Although a supranational organization may be highly involved in setting business standards and regulations, it does not necessarily have enforcement authority, which remains with the individual governments with participating businesses. While the focus of most supranational organizations is to ease trade between member nations, the entity may also have political implications or requirements. For example, it may require that all member nations participate in certain political activities, such as public elections for leadership.

Areas of Concern

In addition to basic trade, supranational organizations may be involved in other activities designed to promote international standards. This can include activities related to food production, such as agriculture and fisheries, and those concerning the environment or energy production. Supranational organizations may also be involved in education and forms of foreign aid or assistance to countries. Certain organizations are involved in areas with significant political impact on the member nations, including arms, the acceptable treatment of prisoners of war, nuclear power and other nuclear-development capabilities.

The United Nations

The United Nations is a well-known supranational organization. The UN and its subsidiaries are created by groups of member nations and are designed to ease and standardize certain activities across international borders.

The Olympics

An example of supranational organizations that are less involved in the regulation of international activities are the Summer and Winter Olympics, which are controlled by their associated committees. These organizations create the standards for events included in the competition, including the scoring standards. The committee that selects the host city for the Summer and Winter Olympics is made up of international members.

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