Arabi Moorthy and Prachi Vyas

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World Trade Organization

• Arabi Moorthy and Prachi Vyas

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What is the WTO?

• Only global international organization that deals
  with the rules of trade between nations
• Goal is to help producers of goods and services,
  exporters, and importers conduct their business

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Important Documents

• Final Act signed in Marrakesh in 1994 functions
  as a a cover note to which everything else is
  attached
• Agreement Establishing the WTO (the WTO
  Agreement) an umbrella agreement founding
  charter of the organization and the basis for
  everything the WTO does
• Agreements
• Manages about 60 different agreements, which
  have the status of international legal texts
• Member countries must sign and ratify all WTO
  agreements on accession
• Examples Agreement on Agriculture
• Agreement on Tariffs and
  Trade

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Age and Changes

• Created in January 1, 1995 in order to replace
  GATT, under the Marrakech Agreement
• Whereas GATT regulated trade in merchandise
  goods, WTO also covers trade in services
• Telecommunications, banking, and issues such as
  intellectual property rights

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Members in the WTO

• 153 Members as of 2/10/11
• China formally joined the body in December 2001
  after a 15-year battle
• Russia joined only after convincing the EU and US
  that it had reformed business practices

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Membership

• First Government applying for membership must
  describe all aspects of its trade and economic
  policies that have a bearing on WTO agreements
• Second Cover tariff rates and specific market
  access commitments, and other policies in goods
  and services talks determine the benefits (in
  the form of export opportunities and guarantees)
  other WTO members can expect when the new member
  joins
• Third Draft membership treaty with protocol of
  accession and list of commitments
• Fourth Final package presented to the WTO
  General Council or the Ministerial Conference
  needs a two-thirds majority vote in favor of the
  applicant

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Membership Cont.

• Non-member governments may become WTO observers
  before they make an application to accede
• Status is granted initially for five years
  observer governments are then expected to take a
  stance on accession within that period of time
• Iran
• - Observer government
• - General Council established a Working
  Party to examine the
• application of the Islamic Republic of
  Iran on 26 May 2005
• - Submitted its Memorandum on the Foreign
  Trade Regime in
• November 2009
• - The Working Party has not yet met.

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Leadership in the WTO

• Highest body Ministerial Conference
• - Meets every two years
• - Elects the organization's chief
  executive (the director-general)
• - Oversees the work of the General
  Council.
• - Setting for negotiating global
  trade deals, known as "trade
• rounds" which are aimed at
  reducing barriers to free trade
• General Council
• - In charge of the day-to-day running
  of the WTO
  
• - Made up of ambassadors from member
  states who also serve on
• various subsidiary and specialist
  committees.
• - Among these are the Dispute
  Settlement Panels which rule on
• individual country-against-country
  trade disputes

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Leadership Cont.

• Director-General Pascal Lamy
• - Supervises the administrative functions
  of WTO
• - Little power over matters of policy
  role is primarily
• advisory and managerial
• - Appoints the members of the staff of
  the
• Secretariat
• - Determines staff duties and conditions
  of service
• - Appointed by WTO members for a four-year
  term

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Advantages of Membership

• 1. Peace
• 2. Disputes fair outlet for dealing with
  disputes over trade issues, international
  confidence
• 3. Rules agreed rules give governments a clearer
  view of which trade policies are acceptable.
• 4. Cost of living
• 5. Choice more options, broader range of
  qualities
• 6. Incomes
• 7. Growth and jobs
• 8. Efficiency trade allows a division of labor
  between countries. It allows resources to be
• used more appropriately
  and effectively for production.
• 9. Lobbying governments need to be armed against
  pressure from narrow interest groups,
• and the WTO system can
  help.
• 10. Good government Remove the use of quotas and
  reduces corruption because it places
• 
  constraints on member countries

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Disadvantages of WTO

• Too powerful it can compel sovereign states to
  change laws and regulations by declaring them to
  be in violation of free trade rules.
• Run by the rich, for the rich does not give
  significant weight to the problems of developing
  countries
• For example, rich countries have not fully opened
  their markets to products from poor countries.
• Indifferent in regards to impact of free trade
  on workers' rights, child labor, the environment
  and health
• Lack democratic accountability its hearings on
  trade disputes are closed to the public and the
  media

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International Impact

• China
• - Opened up Chinas market for more
  international trade and
• investment, and opens up the world
  economy for Chinas exports.
• Russia
• - Diminished the monopoly that Russias
  banks and insurance
• companies enjoyed.
• - Boost key segments of Russias economy
  as foreign markets are
• opened to Russian products like grain,
  transport, tourism,
• construction and engineering
• Nigeria
• - Helped increase accountability and
  transparency in the
• government to combat corruption

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International Impact

• Mexico
• - Weakened local laws
• - U.S. ?led a WTO challenge against
  Mexico for violating rules on
• anti-dumping measures
• - Deepened land privatization in Mexico
  by banning communal
• ownership as discriminatory and
  removing restrictions on who
• could buy land
• UK
• - Prevents trade-distorting behavior by
  multinational corporations.
• - Created broader market with more
  transparency

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Works Cited

• 1. http//econ.economicshelp.org/2007/06/advantage
  s-and-disadvantages-of-wto.html
• 2. http//www.wto.org/english/thewto_e/whatis_e/ti
  f_e/org3_e.htm
• 3. http//www.cepr.org/meets/wkcn/2/2363/papers/Ta
  ng.pdf
• 4. http//www.wto.org/english/tratop_e/tpr_e/tp75_
  e.htm