Pascal Lamy, General Director of the WTO recently said that “negotiations towards a conclusion to the Doha Trade Round are 70% complete”. Indeed, the WTO trade talks have not been efficient over the last few years. Lowering agricultural and industrial tariffs, reducing subsidies in farming, dealing with services, opening markets and elaborating a more favorable treatment for developing countries are the main issues that still remain on the tables of negotiations (“Food Navigator, Europe”, online). The WTO multilateral trading system is obviously facing major difficulties in regulating international trade in a fast-changing world economy. First of all, we will present the WTO (role, different principles underlying the system, benefits…). Then, we will determine what the different economic costs of unsuccessful trade negotiations are. Finally we will see if there are any economic benefits to be gained from such a situation.
[...] We can wonder how the WTO will adapt its system to the current fast-growing world economy Reference list The International Business Environment, Diversity and the global economy. U.S.A.: Palgrave MacMillan. Nigel Grimwade (2000) International trade, new patterns of trade, production and investment. 2nd ed. U.K.: Routledge, Taylor & Francis Group. N. McCulloch, L. Alan Winters, X. Cirera (2001) Trade Liberalization and Poverty: A Handbook. U.K.: DFID. Novethic (2006), Echec de l'OMC: Quel avenir pour les pays les plus pauvres? [online]. [...]
[...] Evaluation of the different economic costs of this failure According to the “Guardian Unlimited” website, the WTO world trade talks, especially in Geneva in 2006 (Doha Round of negotiations), was a real failure. Indeed, the United States and the European Union were accused of not doing enough to reduce farms subsidies. France actually accused the intransigence of the United States to be responsible of this failure. The U.S. trade negotiators answered to that by saying that the E.U., India and Japan were intransigent too. [...]
[...] The world trade talks in Hong Kong in 2005 resulted in a deal or declaration regarding a deadline for stopping subsidies of agricultural export by 2013. Developed nations are also required to open their markets to goods from the poorest countries. But the negotiations were officially stopped in July 2006, in Geneva, because no real agreement could be found. In June 2007, negotiations in the Potsdam conference also failed as the U.S.A., the European Union, Brazil and India could not reach an agreement regarding subsidies in farming and the opening of agricultural markets (“Third World Network”, “Public Citizen”, “Guardian Unlimited” and WTO websites). [...]
[...] In addition, it is important to mention the cooperation between the WTO and other international organisations such as the World Bank and the International Monetary Fund (IMF) (according to the WTO website and Janet Morrison, The International Business Environment, p. 262). I.B. What are the principles underlying the WTO system? According to the WTO and “Global Issues” websites, we can evoke five main principles of the trading system: - A freer and more competitive trade, by lowering trade barriers (as we mentioned previously) and by discouraging unfair practices (export subsidies for example), through long-term negotiations. [...]
[...] We can also evoke some trade patterns or theories of the Contemporary World First, the “Demand theory is related to consumer goods and high-income countries. This theorem particularly mentions that international trade is explained or driven by the structure of the demand in different countries (nothing is actually driven by supply, but only demand). This notably explains intra-industry trade. Then, the “Economies of Scale” principle deals with the advantages of specialisation. Indeed, a firm can produce goods at a decreasing per-unit cost. [...]
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