The World Trade Organization By: Adam Baker Brittany Lightheart Maria Morozova LibanAlmed
Introduction • General agreements on tariffs and trade(GATT) Formed in the 1940’s. • World trade Organization(WTO) formed in 1995. • The World Trade organization is a functioning body of people from around the world regulating trade throughout the countries that are involved with the World Trade Organization.
Objectives • One of the main objectives for the WTO is trade dispute settlement. The WTO addresses long delays, blocking by accused countries, and inadequate enforcement. These were the three problems with the old GATT system when there was a dispute between countries. • The original GATT did not have an agreement on many items including Agriculture. So with the formation of the WTO they addressed a lot of issues that GATT did not attend to.
Countries Involved in the WTO • The WTO has 157 members. The 27 states of the European Union are represented also as the European Communities. • There is a four-step process to becoming a member: • • The country submits an application which is reviewed by a committee of any country who wishes to be on it. • • The country negotiates bilateral trade agreements with any country it wishes. The terms of these bilateral agreements will automatically apply to all WTO members. • • The WTO review committee drafts the terms of membership which includes all changes to its trade policies that the country must put in place. • • Two-thirds of the WTO members must vote that the country can become a member. The country then must ratify the agreement and “Voila!” it is a member.
Member state of the World Trade Organization (WTO); dark green: member; light green: Observers; blue: members, dually represented with the European Union; gray: no official Interaction with the WTO.
World Trade Organization Pros and Cons • The WTO tries their hardest to increase equality for all countries, by increasing certainty. Similarly to the non-discrimination act, the WTO tries to give supporting nations the affordability regarding trade by making it accessible to businesses. The way this benefits individuals in prospering countries is by making it open to markets which provide goods and services when in demand. With this in mind, individuals who are in developing counties make this a viable source of income.
Cons • According to globalexhange.org, the WTO hurts the poor, and is in favor of powerful and rich nations. Supposedly the WTO operates on a consensus basis, but in reality they don’t. For instance, when decisions are being made we would rationally assume that other nations would be informed, but this is not the case. Many important decisions concerning trade are completed in a process. This process does typically not include poor countries since they do not have enough trade personnel to participate in all negotiating decisions being held.
Is the WTO Successful? • GATT was successful in the beginning with bringing down tariffs and opening up trade borders, but GATT started to have problems. • long delays, blocking by accused countries, and inadequate enforcement, were the 3 main problems with GATT.
Is the WTO Successful? • In November of 2011, the Doha Round was created. The negotiations of the Doha Round were meant to reduce agricultural subsidies, slash tariffs, and strengthen intellectual property protection. • The WTO is also a mediator between countries that have disputes. When two or more countries are arguing, they will bring it to the WTO and 3 neutral countries to the situation will hear both sides and then make a decision . • The countries usually listen to the decisions that are made, if they don’t they will suffer backlash in trade.