In order to make the world trade as free as possible, the World Trade Organization (WTO) relies upon principles. Firstly, the non-discrimination principle ensures that no country benefits more from trade than another country. The WTO wants to promote equality among the members. Moreover, the non-discrimination principle also ensures that a country does not differenciate between foreign and national products and services in applying taxes to foreign goods and services in order to make local products more competitive. However, there are some exceptions, notably for developing countries who are not obligated to follow the non-discrimination principle. Secondly, the members of the WTO have a transparency obligation. Indeed, they must publish and inform the WTO when they modify and add new laws or regulations about trade. Thirdly, the countries have to open their borders to facilitate the trade between members by lowering tariffs and non-tariff barriers to trade. To conclude on WTO principles, the organization wants to promote a more free world trade and avoid unfair competition. How can we identify and asses the economic benefits that might occur as a result of a successful conclusion to the current and recent trade negotiations at the WTO? How can we use economics to identify the beneficiaries of the current failure to reach agreement?
Tags: WTO successes, Importance of WTO, WTO successes and failures, WTO failures, Successes and failures of WTO
[...] This part of the world has benefited and still benefits from technology transfer (L'Hebdo, 2001). The transfer of technology is important for the economic growth of developing countries. Indeed, they have access to the know-how and the organizational method of foreign investors and can then boost their economy (Luan Hsu, Y., Mckern, B., 1990). FDIs in these countries have also brought employments (L'Hebdo, 2001). The movement of FDIs towards developing countries have had an impact on the localization of comparative advantages (Widodo, T., 2008). [...]
[...] Thirdly, improvement of trade exchange procedures would have reinforced the African competitiveness by the implementation of new structures and infrastructures to control trade exchange. However, African countries refused to conclude this agreement because they considered that it will limit their freedom of undertaking initiative outside the WTO. In other words, they would have the feeling that the organizations would take control of their national procedures. Moreover, this failure allowed developing countries, notably African countries, to not spend big amounts of money to implement these reforms which would have weakened their budgetary balance. [...]
[...] On one hand, developed countries did not want to reduce their own barrier for trade of goods and services towards developing countries, especially in the sector of agriculture. On the other hand, developing countries ask principally for a reduction of non-tariffs, tariff barriers and for bigger market openness from developed countries. The WTO is faced with, for the first time, with important problems of divergence between the United States, the European Union and developing countries (Schott Jefrey, J., 2000). Will a future negotiation work? [...]
[...] To conclude on WTO principles, the organization wants to promote a more liberated world trade and avoid unfair competition. Broadly speaking, the WTO aims to eliminate protectionism. In a way, all countries are not endowed with equal natural resources and factors of production, some countries can have a lack of some resources and factors of production whereas other countries are fully-endowed with those resources and factors. The fact that countries have low endowment with specific resources creates uncompetitive imports for a country which applies protectionist barriers (Penfield Treavis, 1964). [...]
[...] Developed countries, and China as an exception, are taking advantage of the WTO agreements in terms of exports and imports. This round has helped France to stimulate its exports of goods and services as they represented of the GDP in 1995 and went up to in 2000 (IMF data Mapper, 2009). Services have largely contributed to this increase. Concerning imports, France has equally experienced a strong increase of between 1995 and 2000 (INSEE,2009). Today's trade liberalization is demonstrating the theory of comparative advantage. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
