Argumentative Essay On What Role Does The World Trade Organisation (WTO) Play In The International Business

Published: 2021-06-22 00:26:11
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Category: Business, Law, World, Organization

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1.0 The role of World Trade Organization
The World Trade Organization is an establishment that was set up out of the Uruguay rounds of General Agreement on Tariffs and Trade negotiations in 1995. It was set up as a replacement for the General Agreement on Tariffs and Trade which had previously been charged with the duty of coordination of trade relationships among its partners. The role of World Trade Organization is stipulated in the agreement that led to its formation which had a charter for the Multilateral Trade Organization mainly outlining the mechanism for the settlement of trade disputes and a Trade Policy Review Mechanism (TPRM). The roles of World Trade Organization mainly involve removing international trade barriers and putting in place mechanisms to resolve trade disputes between member states.
It is responsible for the facilitation of the operation, administration, implementation and advancement of the agreement that led to its establishment and other Multilateral Trade Agreements in addition to setting up a framework within which Plurality Trade Agreements can be implemented, administered and operationalized (Park, Duk and Eggers, 2006). The world trade organization provides a forum for its member states to carry out negotiations on trade relations that are covered under the agreements in the annexes that led to the establishment of the world trade organization and provides an opportunity of such negotiations to be discussed by the Ministerial Conference.
It facilitates the understanding on the rules and procedures that govern the settlement of disputes arising among the signatories and the trade policy review mechanism that are key aspects of the agreement that led to its formation. It enhances the co-operation as it deemed appropriate with the monetary agencies such as the International Monetary Fund and the World Bank with the aim of attaining greater coherence in the formulation of policies on global economics. This is important in building an improved understanding and coordination between trade organizations in this case the World Trade Organization and the monetary institutions (Salas, Mauricio and Jackson., 2007).
The World Trade Organization is responsible for the promotion of economic peace and stability among the signatories its multilateral system that is based on consenting member states. There are currently slightly more than 140 member states that have assented to the rules of the World Trade Organization in their individual trade legal framework hence World Trade Organization rules are an essential part of the legal system of these countries (Salas, Mauricio and Jackson., 2007). The rules, therefore, have to be observed by the local companies and nationals in the course of their business dealings in the international arena.
2.0 How the World Trade Organization facilitates international Trade
The WTO was established to facilitate international trade, economic growth and development. There have been claims that WTO has largely been hijacked by the industrialized nations such as USA, Canada and Japan who use the organization as a tool by which their corporations to expand their markets at the expense of the developing countries especially after the collapse of the Doha talks (Hudec and Robert, 2008) . However the dramatic changes in multilateral trade policies advanced by the WTO have seen more developing countries play more active role in the organization and others rushing to join the organization. Currently about 67% of the WTO 150 members are developing countries and are relying on their numbers to negotiate for more favorable trade policies. WTO therefore helps in enhancing fair international trade in various ways which is particularly important for developing countries which are more disadvantaged in terms of both technology and financial muscle.
WTO has been on the forefront in advocating for market liberalization policies instead of proctetionalism policies. In line with this WTO has helped in lowering trade tariffs imposed by the developed countries on goods and services from the developing countries. Through the WTO the developing countries have been able to negotiate for the reduction of subsidies provided to farmers and exporters by the developed countries thus enable goods from the developing countries to compete fairly in the international markets. Therefore the WTO provides the developing countries a forum and mechanism through which they can negotiate for favorable terms. These terms of trade has given more market access to developing countries hence boosting their economies. The favorable trade terms are not just limited to goods but also cover the services, for instance the policy on easier and more transparent movement of manpower from developing countries to the developed countries which was proposed by Venezuela and India.
WTO has also facilitated negotiations to come up with policies to check hard core cartels and middle-men who tend to reduce the income of the producers a majority of whom are in the developing countries. In addition WTO through agreement on trade-related aspects of intellectual property rights has helped develop policies that encourage innovation and economic benefits from the innovations. These policies mean that developing countries can benefit economically from their innovations and resources without being robbed by the developed world. Through the generalized system of preferences (GSP) the WTO has helped developing countries access to developed countries markets (Gleason, Carolyn and Walther, 2009).
Another way in which WTO facilitates international trade is by resolving trade disputes between member states. On case in mind is the 2010 Dispute DS404 in which Viet Nam complained against U.S.A’s antidumping measures on specific shrimp from Viet Nam. In this case Vietnam felt that these measures were in contravention of WTO provisions and the international organization ruled in favor of Vietnam. In another incidence WTO ruled in favor of Antigua in a dispute involving online gambling where Antigua was granted the right to suspend twenty one million dollars annually in intellectual property rights held by U.S.A companies. It is worth noting that most of these trade disputes arise from the conflict between local policies in some countries and international policies thus the need to have an international body arbitrate. Finally WTO gives technical assistance to member states which is particularly helpful to the developing countries which have benefited from training and seminars facilitated by WTO to assist in capacity building.
References
The Royal Institute of International (2006). The World Trade Organization: Constitution and Jurisprudence. London: Chatham House Papers.
Gleason, N. Carolyn, B. and Walther, P. (2009) The WTO Dispute Settlement Implementation Procedures: A System in Need of Reform. Law and Policy in International Business, 709-736.
Hudec, J. and Robert, E. (2008) The GATT Legal System and World Trade Diplomacy. London: Praeger.
Lash, W. (2006) The limitted but important role of WTO. Cato Journal, 19 (3), 371-377.
Park,M. Duk, Y. and Eggers, B. (2006). International Economic Law in Times That Are Interesting. Journal of International Economic Law ,12 (4), 3-14.
Salas,K. Mauricio,H. and Jackson, J (2007) Procedural Overview of the WTO-EC Banana Dispute. Journal of International Economic Law , 45 (6), 145-166.
Wohl, I. (2009). The Antigua-United States Online Gambling Dispute. Journal of International commerce and economics, 22-44.

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