Economics - WTO PPT - Prof. Uddeepan Chatterjee, Study notes of Economics

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Introduction

Proliferation of trade and emergence of the global economy Proliferation of trade and emergence of the global economy

Intensification of global competition Intensification of global competition

More emerging markets More emerging markets

Developments in technology allow communications with

global consumers and movement of goods

Developments in technology allow communications with

global consumers and movement of goods

The 20th to the 21st Century Financial and industrial development assistance to rebuild Japan Financial and industrial development assistance to rebuild Japan Role of Agency for International Development to foster economic growth in the underdeveloped world Role of Agency for International Development to foster economic growth in the underdeveloped world Greater demand for U.S. goods and services Greater demand for U.S. goods and services Greater cooperation among trading nations GATT via reduction of tariffs and trade barriers Greater cooperation among trading nations GATT via reduction of tariffs and trade barriers GATT replaced by the World Trade Organization (WTO) and new era of free trade GATT replaced by the World Trade Organization (WTO) and new era of free trade

21st Century: The First Decade and Beyond With exception of China, slower economic growth in U.S. and other countries is currently evident. With exception of China, slower economic growth in U.S. and other countries is currently evident. Faster growth rates expected in developing countries such as Brazil, China, India, Indonesia, and Russia. Faster growth rates expected in developing countries such as Brazil, China, India, Indonesia, and Russia. Companies need to be more efficient, improve productivity, expand global reach, and respond quickly. Companies need to be more efficient, improve productivity, expand global reach, and respond quickly. Greater growth in international sales expected by smaller firms. Greater growth in international sales expected by smaller firms.

World Trade Organization

(WTO)

Unlike GATT, Unlike GATT, is an institution, not an agreementis an institution, not an agreement It sets many rules governing trade between its 151 members WTO provides a panel of experts to hear and rule on trade disputes between members and unlike GATT, issues binding decisions

WTO: Birth

• (^) 1990: Canada’s proposal for an TO came as a surprise..
  • (^) Motivated by a wish to create a single institutional framework for world trade
  • (^) Subsequently supported by EU
  • (^) Initially opposed by US, then agreed upon (including the name change)
• (^) 1 January 1995, Geneva: WTO’s foundation
• (^) Established following decisions embodied in the Final Act of the Uruguay Round signed on 15 April 1994 in Marrakech The 1994 Marrakech Agreement Establishes the WTO, and Charges it “to provide the common institutional framework for the conduct of trade relations among its members in matters for which agreements and associated legal obligations apply”.

General functions of the WTO

1.Facilitate operation and implementation of Multilateral Trade Agreements 2.Serve as a negotiating forum for members 3.Administer the dispute settlement mechanism 4.Provided surveillance of trade policies 5.Cooperate with the World Bank and the IMF

Principles of WTO

Transparency

MFN Treatment

Dismantling Trade Barriers

Rule Based Trading System

Treatment for LDC’s

Competition Principle

Environment Protection

Criticisms for WTO

• Negotiations and Decision making in the WTO

are dominated by the developed countries.

• Many developing countries do not have the

knowledge resources to effectively participate in

the WTO discussions & negotiations.

• The WTO has not been successful in imposing

the disciplines on the developed countries.