WORLD TRADE ORGANIZATION
Introduction
In order to maintain good trading relationship of different nations, World Trade Organization has been established. The World Trade Organisation (WTO) is the legal and institutional framework of the multilateral trading system. The World Trade Organisation exists to regulate international trade. Its key principle is non discrimination, ensuring that similar products from different countries must be treated the same way. The WTO is a member-driven organisation which nearly always works on a consensus basis. As an international organisation it has a sound and accountable legal basis because all WTO members have ratified the WTO Agreements. The WTO’s rules are set out in a range of international trade agreements covering trade in goods (the GATT), services, intellectual property and agriculture.
The World Trade Organization (WTO) is the sole global association addressing the international decrees of trade involving countries. Its major purpose is to guarantee that trade runs as efficiently, predictably, and liberally as probable. The end result is reassurance. Consumers and producers are aware that they can take pleasure in safe supplies and superior alternative of the completed products, components, raw materials and services that they utilize. Producers and exporters are aware that foreign markets will continue to be open to them. The consequence is similarly a more affluent, nonviolent and responsible economic world. Decisions in the WTO are characteristically acquired by consensus among every member nations and they are approved by members’ legislative bodies. Trade hostility is directed into the WTO’s dispute settlement procedure where the center is on understanding agreements and pledges, and how to guarantee that nations’ trade policies stick to them.
By lessening the trade obstructions, the WTO’s scheme similarly collapses other barricades involving peoples and nations. At the core of the organization recognized as the multilateral trading system are the WTO’s agreements, discussed and sanctioned by a great majority of the world’s trading countries, and approved in their legislative bodies. These agreements are the officially authorized essentials for global commerce.
Fundamentally, they are contracts, promising member countries vital trade rights. They similarly compel governments to maintain their trade policies within established restrictions to everyone’s advantage. The agreements were discussed and ratified by governments, but their principle is to assist producers of goods and services, exporters, and importers carry out their business. The objective is to progress the wellbeing and interests of the citizens of the member countries. This study will take into consideration the discussed attributes of the WTO in different nations.
Impact of WTO in Different Nations
According to WTO’s organizational statement, its objective is to “help trade flow smoothly, freely, fairly and predictably…It consists of 135 member nations that shared 90% of the world trade” (2002). In every areas of trade, the WTO promotes the removal of barriers to international competition, enabling countries to benefit from globalization. (2002) states, “the Organization was to be the centre piece of a much consolidated and significantly widened regulatory framework designed not only to administer a series of legal agreements, covering trade in goods and services, intellectual property rights, and overseas the wherewithal to settle trade disputes, but to provide a permanent forum in which further liberalization could be pursued through periodic negotiation”.
Furthermore, the WTO has a straightforward rationale: free trade
ultimately benefits everyone, even if it means that some people must adjust when trade barriers are lowered (1999). As what (2003) beleives, “all WTO members were on an equal footing, as each one had to subscribe to all the agreements. Dispute settlement was given legal force: where judgement went against a country, it could no longer escape the obligation to correct its policies”. In this sense, it sounds almost perfect of having such a platform in dealing with international trade issues.
With the increase in international trade and the expansion of the global market starting in the 1970s, one recognises a dramatic change in the international economic structure. Large multinational corporations with far-flung corporate networks and global factories dominate this new economic order. Rich and highly industrialised nations like the United States, Japan, Canada, members of the European Union and some newly industrialised countries have experienced unprecedented levels of economic growth and development. On the other side of the picture, a significant number of nations, those who belong to developing countries and least developed countries are not enjoying this unprecedented level of economic growth and development.
Economic growth and development in the world have always been uneven. Since the end of World War II, many of the developing countries have been attempting to catch up economically with the developed countries by promoting industrialisation and using trade policy to cope with the disparate domestic economic development.
Aiming to provide a ground for economic opportunities, the World Trade Organization (WTO) was established, following the conclusion of the Uruguay Round of the multilateral trade negotiation. WTO’s major mission is to make international trade flow as smoothly and freely as possible and to make the rules governing trade as transparent, fair and predictable as possible. Among the functions of the organisation include the administration and implementation of trade agreements, acting as a forum for trade negotiations, handling trade disputes, monitoring national trade policies, providing technical assistance and training for developing countries, co-operation with other international agencies in trade-related matters.
The World Trade Organisation (WTO), as the global apex trade body across the globe, provides a common institutional framework for the conduct of trade relations among its members, as well as the existing policies concerning trade margins and limitations (2000). WTO’s core mission is to remove both direct and indirect barriers to free trade. Direct barriers include import bans or quotas, customs duties, and government policies of buying from domestic producers; whereas indirect barriers include any government measure such as the regulation of products on environmental or health and safety grounds, or government support for domestic industries. Clearly, it is the grand mission of the WTO to advance the economic growth of developed countries, developing countries, and least developed countries.
According to Hash, WTO system can make major contributions to economic development and rising standards of living in both developed and developing countries ( 2000). This is partly due to a steady liberalisation and widening of WTO rules which are enforced through a dispute settlement mechanism that respects both the sovereign rights of WTO member countries and the fundamental principles on which the multilateral trading system is based. Moreover, current trade regime helps the creation of the enabling conditions that contribute to economic growth. These conditions, when properly supplemented by appropriate domestic policies, accounts to the broader sustainable development objectives of society.
According to (1999), developing countries are pursuing an aggressive approach in their effort to effectively integrate their economies in the multilateral trading system (MTS). This is in the lieu of their continued marginalisation in the global trade and investment. As developing countries have faltered on their commitments towards their weaker trading partners, they have stepped up their efforts to an early launching of a new round of multilateral trade negotiation (MTN) and broadening its scope through inclusion of new issues. The creation of the WTO provided a challenge and an opportunity in encouraging developing countries to be a part of the multilateral trading system (MTS) (1999).
WTO represents an institutionalised mandate to establish a global rule based trading regime evolving through various rounds of negotiations. Accordingly, implications of accession to the WTO, from the perspective of developing countries, is bound to be different in terms of coverage of the commitments, the degree of commitment, capacity required to face the challenges emerging from globalisation and the strength required to take advantage of the opportunities (2001). It is implied that WTO membership benefits developing countries in terms of predictability of trading environment, transparency about rules and provisions, market access which allows market entry and export diversification, and multilaterality of approach which allows participation through multilateral trade negotiations rather than bilateral agreements with trading partners.
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