The world trade Organization
The World Trade Organisation (WTO) is today seen as one of the pillars of international trade and financial systems of the world alongside the World Bank and the International Monetary Fund, despite being only sixteen years old. With what began as the succession to the previous guidelines and rules set out by the General Agreement on Tariffs and Trade back in 1948, it is now seen as the ‘main unifying force of world trade today’ a key player in both the conduct of trade relations and global governance. (Herman, 1999) Today, as the world’s economy and its nations continue to change and grow together with the global business environment itself, the WTO has faced new challenges and perhaps its biggest challenges to date which question the relevance and future of the WTO. The essay will address such concepts through the analysis of the WTO’s main role, the importance and successes of the WTO to date, the challenges it currently faces and a look towards its potential relevance in the future of world trade. The discussion will be aided through the use of published data, literature, online sources and journals. (WTO, Trading into the future 2011)
Beginning with only 23 members, the WTO currently stands at 153 members representing a total of 97% of all world trade although this is set to increase following Russia’s accession into the WTO. This statistic details the importance of the WTO as the only international body that deals with the rules of trade between nations. (Hamilton, Webster 2009) The WTO was created as the previous system the General Agreement on Tariffs and Trade (GATT), needed an institutional and stronger framework to allow them to drive forward policies and advice. The WTO’s overriding principle is to help free trade, through the removal of obstacles and the creation of trade rules that are then known and acknowledged by the world’s individuals, companies and governments. The present main rules and principles that currently embody the organisation are the non-discrimination of markets, reciprocity, transparency and offering special assistance towards developing countries. (Ahearn, 2010)
The Essay on International Trade Wto Gatt Agreements
To export these goods you have to have an organization which deals with the rules of trade between nations. Such an international organization is the World Trade Organization (WTO). The goal is to help producers of goods and services, exporters, and importers conduct their business. Result: - is assurance- Consumers and producers know they can enjoy secure supplies and greater choice of the ...
The WTO pursues its objectives through operating as a forum, which encourage negotiations between members to administer trade agreements. Negotiations are run according to dispute settlements. Other goals of the WTO include the review of national trade policies and offering assistance with the cooperation of other international organisations through assistance and training. Principles are then incorporated into the system following negotiations and debates with its members, known as rounds, with the bulk of current principles emerging from the Uruguay round between 1986 and 1994.
To date there have been many successes of the system with which the WTO can account for since its creation. The primary success has been the growth in world trade through the WTO’s removal of trade barriers and globalisation, giving an 120% increase in trade according to (Subramania, Wei 2007).
Dispute settlement is another strength of the organisation where the WTO is able to handle three times the number of disputes in comparison to the previous system, the GATT thus reducing the time it takes for laws and guidelines to be implemented into practice. (Lash, 2000)
The WTO additionally aimed to promote trade liberalization, at a time where the economy was going through increased protectionism through non-tariff barriers. Trade Liberalization which the WTO promotes has proven advantageous to its markets through reduced costs of living, increased economic growth and the creation of new jobs by opening up countries access to each other’s markets. (WTO 2011) The GATT/WTO systems can be seen to have successfully reduced tariffs from 40% in 1947, to 4% by 1999 on industrial products resulting in a steady increase in global trade. The successful liberalizations of the textiles, agriculture and telecommunication markets have led to cheaper finished products and in turn a lower cost of living, seen since the liberalization of the latter, the price of telephone calls has dropped by 4% in developing countries since the 1990s. (WTO, Trading into the future 2011) Another reflection on the success which the WTO has achieved is by countries’ desire to fit the systems regulations before any disputes arise, recognising as an important system which with they should comply. (Dadush, 2009)
The Essay on Free Trade Uae Negotiations Agreement
The UAE Free Trade Agreement negotiation council held a meeting yesterday in Abu Dhabi to discuss preparations for the first round of negotiations with the United States to be held next week. The meeting with the council's sub-teams was co-chaired by Dr Mohammad Khalfan Bin Kharbash, UAE Minister of State for Finance and Industry, and Shaikha Lubna Al Qasim i, Minister of Economy and Planning.' ...
The Doha Development Agenda DDA commenced in 2001, which is aimed at helping the world’s poorest countries particularly its farmers by setting a new subsidy and import level tariff. Following yearly talks, negotiations continued to fail where a consensus amongst its members was never fully reached predominantly on the major issues of food, energy and the environment. In 2008, by that time already seven years following the original discussions of the Doha round, delegates once again failed to come to a joint consensus on the rounds proposals. (Feenstra,2011) After the talks, both Pascal Lamy the director of the WTO, and Norway’s foreign minister Jonas Gahr Stoere, commented on a new world order that had emerged. The latter said negotiations failed as ‘all of the world’s countries are present and defend their rights’ with Lamy highlighting his point that the emerging markets of India, China and Brazil now want to ‘leave their mark on world trade’. (Davies, 2011) This reinforced previous criticisms by some that the WTO is no longer the successful ‘negotiating forum’ it once was with regard to its number of members currently standing at 153, an increase of 30 since the previous Uruguay round. The diversity between the large numbers of members will pose a challenge for future decision-making where a consensus needs to be reached. Marking 10 years since the round first commenced, questions continue to be asked as to whether governments of both developing and developed countries can realistically agree on proposals when they both share contrasting issues, needs and priorities. (Rugman, 2006) Although the continued unsuccessful negotiations of the Doha round may not result in the categorical end of the WTO, it will impact the government’s perceptions of the organisation and its relevance in today’s ever changing economy the longer the lack of progress continues.
The Term Paper on Development Of The Countries Of The World Community Is Characterized
Development of the countries of the world community is characterized by the constant expansion of their mutual economic communications. This process has led to the creation of the international economy, the many-sided and complex phenomenon expressing the maximum stage of development of a social production and functioning as system formation at the international level. The countries participating ...
The biggest challenge that poses a risk to the future of the WTO is the changing landscape of the global economy to date, where it is no longer run by the bipolar global regime of the US and EU that it once was, and instead as a multipolar regime that now includes the developing nations. The key powers have changed not least since the rapid rise in WTO members and more recently the accession of the rapidly rising China in 2001. As previously mentioned this new economic order first emerged during the Doha round negotiations. This can be seen particularly in the talks of July 2009 in which the BRIC members, China and India’s new dominance was enough to halt talks. Previously during the GATT, and earlier in the WTO particularly the Uruguay round, there were no constraints from other parties that faced the then key members the US and EU. The homogeneous characteristics of the two members, western world ideals, interests and economic size eased negotiations were more tariffs were able to be passed. In the four years previous to 2000, the US was seen to be the main proponent of the system, bringing in 40 cases and seeing the majority of them being passed. (Lash, 2000)
Such ease with negotiations to reach a consensus seems impossible with today’s economic powers differing views between contrasting nations. The challenge that the changes of power bring to the WTO is the future success it will have as a negotiating forums, encouraging discussions between parties in order to reach an agreement. Communication problems in negotiations will arise because of the vast differences between economic development and the size of their economies. The growing importance of the BRIC countries on future world trade cannot be ignored, and instead must be accounted for in decision making so that successful agreements can be made. The BRICS growing impact on decisions will see future gridlocks increase in which neither parties can agree something we have already seen during the Doha round in which the WTO will have to adapt and prepare for. (Polaski, 2006) The lack of negotiations that curse the Doha round continues to raise questions amongst critics over the systems growing membership whilst still maintaining a single consensus undertaking as one of its principles. (Ahearn, 2010) The Warwick commission report (Hoekman, 2008) suggested to overcome the problem presented in the Doha round, consensus decision making should be replaced with a ‘Critical-Mass’ approach. The critical mass decision making approach is one allows decisions to be passed when the members most affected can reach agreement, regardless of whether members less involved oppose them. This could help solve the problems that the growing membership, and there lack of like-mindedness brings.
The Essay on Hoekman B 2001 Wto Trade Country
... justified. The World Trade Organization is designed to create the rules involved with trade. These trading rules include all countries, not just ... Fourth, transparency is important for the WTO because it "requires members to publish their trade regulations, to establish and maintain ... is an important part of negotiation where, ideally, each side makes mutual changes in trade policy that bring other ...
The impact of the WTO on developing countries and their access to participation has long been the source of many criticisms in relation to how they are treated compared to their developed counterparts. Despite there being an overall positive increase in world trade since the WTO began Subramanian and Wei (2005) found that this was uneven, with a higher growth being seen in the developed countries. Criticism is also raised of the dominance of the developed countries, the US and EU in which a favourable bias of developed nations allows them to satisfy their own needs, before thinking of others. As well as this, (Herman, 2009) suggests that some of the smaller and poorer nations may be forced out of negotiations as they cannot afford the high costs and resources needed to have representatives present at the meetings. Those that are not able to participate, the smaller developing countries will then be less enthusiastic about such participation leaving the developed nations to lead negotiations and agreements. Critics such as (Dadush, 2009) have also argued that the least developed country classification (LDC) and the preferential treatment it offers to them is proving more problematic than beneficial particularly for Africa, wth nations needing support being neglected.
The Essay on World Trade Organization WTO
... global trade talks, largely because of disagreements between industrialized and developing nations. These disagreements focused on agricultural subsidies provided by the developed countries, particularly ... new and existing free trade agreements, to oversee world trade practices, and to settle trade disputes among member states. The WTO was established in 1994 ...
As the larger developing countries become of greater importance and power such bias towards developed countries must be overcome. The recent global financial crisis, which began in 2008 can be seen to have caused the WTO and the progress of the Doha round’s priority to drop in importance, as countries prioritise overcoming the recession that the downturn has brought. This has led to a sharp rise in trade protectionism in which home countries will try to protect their domestic industries particularly in light of the financial crisis. Such a rise has shifted the importance of trade liberalization, for which the WTO encouraged towards bilateral and regional agreements, between nations, proving problematic for the system to govern.
In order to ensure the survival of the World Trade Organisation and its relevance to future world trade, it must change. The WTO must reflect the current changes that have taken place in the economy, and adopt to reflect the new distribution of power amongst its members, particularly the important rise of the BRIC nations. If it fails to do this its importance to world trade will cease to be relevant. As seen in the DDA, consensus based decision making may be ineffective with the growing number and diversity of members. Suggestions to overcome the problem include ‘Critical-Mass’ thinking and the creation of smaller groups of members based on similar trading characteristics may improve the system. In light of the recent financial crisis the role of the WTO is critical, in which its positive impact on world trade to date may become forgotten in light of recent criticisms.
The WTO needs correct leadership to overcome the challenges today, to maintain its future survival and ensure it continues to be of success and further improve world trade. If change is not implemented successfully, the great negotiation forum it once was it will instead result in a forum in which the great members will struggle to compromise on trade issues thus harming the WTO’s main purpose which is to encourage the growth of world trade.
