15.3 Flashcards
What is the world trade organization
a global trading organisation set up in 1995 to provide a legal framework to enhance world trade. It has 153 member countries which account for 97% of world trade.
What are the functions of the WTO
Administers WTO Trade Agreements: The WTO oversees the implementation of international trade agreements.
Provides a Forum for Trade Negotiations: It offers a platform for members to discuss trade issues and negotiate trade agreements to liberalize trade.
Handles Trade Disputes: The WTO settles disputes between members based on the legal foundations of trade agreements.
Monitors National Trade Policies: It reviews members’ trade policies and ensures transparency of trade policy changes.
Provides Technical Assistance and Training for Developing Countries: The WTO assists with training in trade-related matters for government officials, journalists, academics, and private sector representatives from developing countries.
Facilitates Cooperation with Other International Organizations: It works alongside organizations like the World Bank and IMF to coordinate global policies.
criticisms and challenges of WTO
Trade Rules Bias: The WTO has been accused of creating rules that favor developed countries over developing ones. Agreements like the Uruguay Round achieved significant tariff reductions, but many argue the benefits have not been equitably shared. The Human Development Report stated that despite developing countries housing the majority of the world’s population, they saw minimal income gains from such agreements.
Agricultural Protection and Services: The WTO has struggled to establish agreements on agricultural protection and services, with negotiations like the Doha Development Round collapsing due to disagreements, primarily focused on protecting developed country farmers, often at the expense of farmers in developing nations.
Intellectual Property and MNCs: The protection of intellectual property has increased costs for developing countries to acquire new technology. Furthermore, multinational corporations no longer need to buy supplies locally, impacting local producers.
Environmental and Labor Issues: There are claims that the WTO does not pay adequate attention to environmental and labor issues, sometimes ignoring them or not tying them to trade policy, which some see as a form of ‘hidden’ protection.
Unequal Bargaining Power: Critics argue that the WTO’s decision-making process is undemocratic, with economically powerful countries having more influence despite the one-member-one-vote rule.
Fragmentation of Global Trade: The formation of trading blocs has led to concerns about the fragmentation of global trade, potentially slowing down the process of global trade liberalization.
Blocking of Dispute Resolution Powers: A key function of the WTO is to resolve trade disputes through its Appellate Body. However, recent actions, like the blocking of appointments to this body, have threatened the WTO’s ability to carry out this function, leading to concerns over its effectiveness in dispute resolution.
