Trade - WTO Flashcards
what is the world trade organisation
- what is its main aim
an intergovernmental organization that regulates and facilitates international trade
- deals with the rules of trade between nations
- main aim to eliminate discrimination in trade
what are the 4 most important things about the WTO
- deals with rules governing trade between nations
- regulates member governments to prevent discrimination in trade
- negotiates reductions in discrimination in trade policy
- is single undertaking with unanimous agreement
what does the WTO actually do? 5
- facilitate trade negotiations - sets rules
- monitoring compliance = through the trade policy review mechanism
- dispute settlement mechanism (DSM) = enforces rules
- provides technical assistance to DCs to help them comply with agreements (customs procedures, laws)
- has negotiating groups in Geneva
what are the 4 core principles of WTO
- MFN = most favoured nation
- NT = national treatment
- bound tariffs
- single undertaking
what is the most favoured nation principle
- establishes the baseline for tariffs and treatment of goods at the border
- no country can be treated worse than the most favoured by that country
- MFN tariff = tariff that all other countries face or lower
- treatment of goods at the border + tariffs
- countries can be treated better if they have special agreements
what is the national treatment principle NT
- products imported from other countries must be treated the same as domestically produced products once they have entered the country
- only difference = tariff
- non-discriminatory rules
what are bound tariffs
- the maximum tariff rate for a given product that a country has committed not to exceed
- can set their tariff lower than bound tariff
what does single undertaking mean
they agree everything as a whole package
- some things are separate = GATS , trade faciliatation policy
what are the 3 areas that AoA covers
agreement on agriculture
agricultural policy reform that -
specific binding commitments in:
- market access
- domestic support
- export subsidies
What does AoA do?
- gives DCs greater market access
- DC’s and Development countries reduce tariffs on agriculture goods
- LDC’s dont have to reduce any tariffs
- developed countries = eliminate export subsidies and reduce domestic support of farmers
- non-trade distorting subsidies allowed - protect the environment and support rural communities and small farmers
- developing countries = want to apply subsidies for development reasons - subsidise fertliser
why do developing countries have to eliminate export subsidies under WTO
- is this opposed?
why
* because of unfair competition for countries that are major exporters of food
who could be harmed
* developing countries that are net importers of food and get their food from developing countries - wont get it for cheaper anymore if export subsidies go
what is GATs and what is its aim
General agreement on trade in services
- aim is to establish a framework for the liberalisation of international trade in services
- establishes set of rules and principles to govern fair trade of services
what is the reason of the 4 modes of GATS
- GATS categorises trade in services into 4 modes
- modes describe different ways that services can be traded across borders
- member countries make commitments about the extent they are willing to open up their markets in each mode
what are the 4 modes
- cross border supply
- residents can buy from a foreign provider - consumption abroad
- consumer can purchase foreign services when abroad in that foreign country - commercial presence
- service provider establishes commercial presence in foreign country = FDI - movement of people
- supplier can move workers across borders to supply services
what is the trade facilitation agreement
- streamline customs procedures
- facilitate the smooth flow of goods across borders
- harmonising rules and procedures = reduces administrative costs for LDC
- simplify rules
- financial support - donors
