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Essay on World Trade Organization (WTO)

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❶A wholesaler specializes in a limited variety of goods.

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These policies dictate the terms of trade between nations in the global markets. International trade policies are particularly of utmost concern to Less Developed Countries LDCs because they determine the terms on which such countries will participate in the global market. Free trade policies, for instance, eliminate barriers to commodities produced and traded by the parties, thus opening up markets. A multinational trade agreement is arguably the best outcome of various trade negotiations involving major trading nations or territories.

GATT was set up in by major countries such as the United States in the wake of the global wave of protectionism. GATT significantly reduced tariff barriers among industrial countries particularly on manufactured goods. International trade and their consequential policies improve and facilitate international relations, trading, technology sharing, consumption and real income of countries involved. International trade represents a considerable share of GDP in most states as well as countries globally.

The behavior and motivation of countries or corporations involved in international trade do not change significantly compared to domestic trade. Nevertheless, international trade is arguably more costly relative to domestic trade due to the policies reinforced.

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International Trade and Policies International trade refers to exchange of goods, services, and capital across international borders or territories. Essay Tips Strong persuasive essay topics Guide on academic paper writing Using narrative essay samples Writing a non-fiction essay 5-paragraph essay writing hints Healthy essay topics Finding a reliable essay writing company Essay topics for children Where to buy an essay Finding a comparative essay sample Persuasive essay conclusion History comparative essay hints Sample essay about impulsiveness Writing a layout for critical essay Psychology essay topics How to start an essay Persuasive research essay topics Creating college essay Finding help with graduate school paper College essay topic ideas Structuring an essay Writing an essay conclusion Critical analysis essay intro samples The US and Canada: Editing Tips Paper proofreading Quick essay editing.

One of the achievements of the Uruguay Round of multilateral trade talks was to increase the amount of trade under binding commitments. For goods, these bindings amount to ceiling on customs tariff rates. A country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade.

In agriculture, per cent of products now have bound tariffs. The result of this is a substantially higher degree of market security for traders and investors. The trading system under the WTO attempts to improve predictability and stability in other ways as well. One way is to discourage the use of quotas and other measures used to set limits on quantities of imports as administering quotas can lead to more red-tape and accusations of unfair play.

Many WTO agreements require governments to disclose their policies and practices publicly within the country or by notifying the WTO. The regular surveillance of national trade policies through the Trade Policy Review Mechanism provides a further means of encouraging transparency both domestically and at the multilateral level. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair, and undistorted competition.

The rules on non-discrimination—MFN and national treatment—are designed to secure fair conditions of trade. The WTO has also set rules on dumping and subsidies which adversely affect fair trade.

The issues are complex, and the rules try to establish what is fair or unfair, and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade. Many of the other WTO agreements aim to support fair competition, such as in agriculture, intellectual property, and services.

Despite intensive negotiations, deadlines were missed and negotiations across all areas of the Doha work programme were suspended mainly due to lack of convergence on major issues in agriculture and NAMA in July Agriculture remains the most contentious issue in the recent Ministerial Conferences, widening the developed- developing country divide. Major developed countries continue to give high amount of subsidies to their farmers.

Interestingly, developed countries have fulfilled their obligation of reduction in reducible subsidy in technical terms despite increasing the absolute amount of subsidy. Besides, the EU and the US continue to give export subsidies as well. Ironically, developed countries are pressurizing developing countries to reduce their tariffs substantially. This poses a threat to the domestic farming sector of developing countries, which has got serious socio-economic and political implications.

This makes negotiations in agriculture extremely complex. Developed countries, on the other hand, are keen on market access for their industrial products. The issues leading to the deadlock of the Doha negotiations are shown in Fig. In order to reach a settlement, the complexity of issues between the key players had to be addressed and a compromise reached. The US was looking for improved market access, with an average tariffs cut by around 66 per cent, while the G20 group of larger developed countries led by India and Brazil were looking for a cut of around 54 per cent.

The EU had offered a 46 per cent average tariff cut. The EU was looking for improved market access to larger developing country markets for industrial products with a maximum tariff of about 15 per cent, besides improved access to services trade. Any breakthrough in the negotiation process required further reduction of agricultural subsidies by the US, greater reduction in tariffs on agricultural goods by the European Union, and greater market access offered by larger developing countries such as India and Brazil to the industrial goods of other countries.

Six ministerial conferences have taken place so far and have generated a lot of debate and controversies across the world, as discussed here:. Major developed countries brought in proposals to start negotiations in some new areas, such as investment, competition policy, government procurement, trade facilitation, and labour standards.

This evoked a lot of controversy. Significant pressure was built up by the developed countries for all members to accept their proposals; this was strongly opposed by developing nations. However, an agreement was finally reached to set up working groups to study the process of the relationship between investment and trade, competition and trade, and transparency in government procurement. These are generally termed as Singapore issues. The subject of trade facilitation was to be studied in the Council for Trade in Goods.

Conclusion of Information Technology Agreement was an important decision made during the Singapore Ministerial Conference based on the proposal brought by developed countries to have an agreement on zero duty on import of information technology goods. The second MC, held at Geneva Switzerland during May , discussed implementation concerns of developing and least developing countries that led to establishment of a mechanism for evaluation of implementation of individual agreements.

The US-sponsored proposals for zero duty on electronic commerce were discussed and an agreement was reached to maintain status-quo on the market access conditions for electronic commerce for 18 months. The agreement on status-quo actually meant that there would be zero duty on e-commerce since no country had been imposing duty on this mode of trade.

A declaration on global electronic commerce was also adopted. Electronic commerce was defined as the mode of commerce in which all operations of trade would be conducted through the electronic medium; these operations include placing the order, supplying the product, and making the payment.

They also include sale and transfer of goods through electronic medium, such as music and cinematographic products, architectural and machine drawings and designs, etc. However, the sale in which goods are physically transferred to the buyer would not be considered e-commerce. The third MC, held in Seattle US from 30 November to 3 December , witnessed dramatic changes in negotiations as the developing countries made intense preparations for the conference unlike in the previous MCs wherein issues brought in by the developed countries were chiefly discussed.

In Seattle too developed countries tried to push forward new issues, such as investment, competition policy, government procurement, trade facilitation, and labour standards. However, developing countries insisted upon priority attention to their proposals as these were related to the working of the current agreement, before any new issue could be considered.

No agreement on the issues could be arrived at, leading to a total collapse of the MC with a lot of confusion and without any decision. The fourth MC held during November , at Doha in Qatar further built up the divide between the developed and the developing countries in the WTO. On the one hand, developed countries were keen on formally pushing forward a new round of multilateral trade negotiations, which would include the issues of investment, competition policy, transparency in government procurement, and trade facilitation.

On the other hand, there was stiff resistance from developing countries to initiating a new round as they felt that they were still in the process of comprehending the implications of the last round, i.

Finally a comprehensive work programme was adopted at the end of Doha MC. Although formally it was not called a new round of negotiations, the work programme had all the attributes of a fresh round of multilateral trade negotiations. Members decided to work out modalities for negotiations on the Singapore issues and then start negotiations on the basis of the modality to be agreed by explicit consensus. To continue the commitment for establishing a fair and market-oriented trading system through fundamental reform of support and protection of agricultural markets, specifically through.

To give developing countries Special and Differential Treatment in negotiations to enable them effectively to take into account their development needs. To ensure negotiations on trade in services aimed at promoting the economic growth of all trading partners and the development of developing and least developed countries.

To reduce or eliminate tariffs and non-tariff barriers in non-agricultural markets, in particular on products of export interest to developing countries.

The fifth MC was held in Cancun Mexico during September under heightened strain between the major developed and developing countries. Developing countries believed that heavy subsidies on production and exports of agriculture in developed countries had been grievously harming their agriculture which is means of livelihood of their major population unlike in developed countries.

There was hardly any significant action perceived on the part of the developed countries in the areas of implementation of issues and Special and Differential Treatment. On the other hand, developed countries insisted upon starting the negotiations on the Singapore issues. Under this atmosphere of complete apprehension, anger, and mistrust, no agreement could be reached and the MC terminated without any comprehensive declaration.

It called for conclusions in of negotiations launched at Doha in and establishment of targets and time frames in specific areas. Elimination of export subsidies in cotton by developed countries in ; reduction of trade distorting domestic subsidies more ambitiously and over a shorter period.

Elimination of export subsidies in agriculture by with substantial part in the first half of the implementation period. Developing countries, such as India will continue to have right to provide marketing and transport subsidies on agricultural exports for five years after the end date for elimination of all forms of export subsidies.

The agreement that the three heaviest subsidizers, i. Developing countries like India with no Aggregate Measurement of Support AMS will be exempt from any cut on de minimus entitlement to provide subsidies annually on product-specific as well as non-product specific basis each up to 10 per cent of the agricultural production value as well as on overall levels of domestic trade distortion support consists of the AMS, the Blue Box, and de minimus.

The agreement that developing countries were to have flexibility to self-designate appropriate number of tariff lines as special products. In order to address situations of surge in imports and fall in international prices, both import quantity and price triggers have been agreed under the Special Safeguard Mechanism for developing countries. No sub-categorization of developing countries when addressing concerns of small, vulnerable economies. Subsequently, at the General Council meeting held at Geneva on 31 July , an agreement was reached on the framework in order to conduct the negotiations.

Preliminary agreements were reached on broad approaches, especially in the areas of agriculture and industrial tariffs. It was decided to drop the three Singapore issues on investment, competition policy, and government procurement whereas negotiations on trade facilitation were to follow. Over the years, the divide between the developed and developing countries in the WTO has widened, leading to deadlocks in the process of multilateral negotiations. It has also triggered widespread demonstrations Fig.

Although developing countries form a much bigger group numerically under the WTO, decision making is significantly influenced by the developed countries. The major issues of concern from the perspective of developing countries are summarized here: The basic objective of the WTO framework is to liberalize trade in goods and services and protection of intellectual property. Countries with supply capacity directly benefit from expansion of exports whereas countries with intellectual property benefit from monopoly privileges, including high financial returns to owners of IPRs.

As most developing countries neither have good supply base for goods and services nor much of IPRs, their direct gains from the WTO system is much lower compared to developed countries. Reciprocity is the basis for liberalization under the WTO system. Countries get more if they are able to give more; conversely, they also get less if they give less. Since member countries have vastly diverse levels of development, there is an in-built bias in the system for increasing disparity among countries.

Although provisions such as differential and more favourable treatment have been incorporated in the WTO framework, these have several limitations and have hardly worked satisfactorily. Retaliation is the ultimate weapon for enforcement of rights of member countries. Since developing countries are weak partners and retaliation by them against any major developed country has both economic and political costs, they are at a considerably disadvantageous position in their capacity to enforce rights and obligations.

The basic principles of the multilateral framework, such as national treatment, i. Developed countries significantly influence the decision-making process as they possess enormous resources to make elaborate preparations for the negotiating process.

As their views are put forth effectively and strongly, the issues of their interest take centre stage leading to frustration among developing countries. Countries who have not participated are expected to agree when the results are brought forth in larger groups. It is difficult to stop decision-making at this stage as any such move by developing countries would mark them as obstructionists and have political repercussions.

Developed countries often take advantage of escape routes and loopholes in the agreements. For instance, the Agreement on Textiles was back-loaded and left the choice of products to the importing countries. As developed countries were importers and had been imposing restraints, they chose only such products for liberalization that were not under import restraints without significantly liberalizing their textile imports until the end of when the agreement was automatically abolished.

Similarly developed countries could fulfill their obligation of reduction of subsidies in agriculture despite actually increasing considerably the absolute quantum of subsidy. Developing countries view the WTO as an institutional framework to extract concessions from them, obstructing their goals of development and self-reliance.

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Trade is the process of purchasing and procuring of goods and services with the object of selling them at a profit. Trade means buying and selling of goods. It involves the exchange of commodities.

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ADVERTISEMENTS: In this essay we will discuss about World Trade. After reading this essay you will learn about: 1. Introduction to World Trade 2. Direction of World Trade 3. Composition of World Merchandise Trade 4. World Commercial Services Trade 5. Direction of World Commercial Services Trade 6. Composition of World Commercial Services Trade.

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This is an outstanding essay example that looks at the problem of international policies and trade. Feel free to read this paper sample that may be useful. International trade is when countries exchange goods and services with one another. Usually each country will use money to pay for the goods or services from the other country. Goods can be things like clothes, food, machine parts, or even things like furniture. Services are tasks or jobs that one 3/5(19).

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