The structure and functions of WTO. Is WTO helpful to international business or is it a hindrance? Substantiate your answer with examples.
The structure and functions of WTO. In this increasingly globalized scenario, companies need to
be globally competitive in order to survive. Knowledge and understanding of
different countries’ economies and their market is a must for establishing
oneself as a global player. Now the business has gone beyond the boundaries of
a nation and has turned into the international business. Explain the structure and functions of WTO. It’s quite necessary
to understand the meaning of international trade and the international
organization popularly known as World Trade Organization (WTO) and its
contribution towards the international business and smooth trading between
countries.
International trade is defined as a contract where two
parties (These parties may operate their business in different countries
trading in goods and services) enters into the transaction of buying and
selling of goods and services irrespective of national boundaries.
Since no nation can produce all its needs by itself alone,
international trade has become not only a means by which nations source those
goods and services they lack or do not have in sufficient quantities but also a
subject of international politics either for achieving, promoting or
maintaining peace between international trading partners or countries. Explain the structure and functions of WTO. As a
result of external developments in countries with which countries inter-depends
or depends on for the essential products and sometimes wars are also fought to
preserve the national security. Its has been a common observation that one of
the reasons for US going into the Gulf wars on the side of Kuwait against Iraq
was US’s intention to preserve the vulnerability of its economy to oil crisis
if it’s cut off from oil purchase from the Gulf by the hostile Iraq that had
annexed the oil-rich portions of Kuwait.
The allied countries involved in World War 2nd realized at
the end of the war that the trade tensions among the allied countries
contributed on outbreak of World War 2nd. Explain the structure and functions of WTO. They felt the need for an
organization for international cooperation which can work among countries to
establish a discipline in economic relations in order to prevent future
disputes. However, the resolution passed in 1946 by the United Nations Economic
and Social Council [ECOSOC] to prepare a protocol to establish a world
organization whose parties would jointly establish rules for trade among them,
was to be embodied in the International Trade Organization [ITO]. Explain the structure and functions of WTO. The first
attempt by an international body to bring out fair and uniform guidelines for
international trade at both private and international levels was at the Havana
Conferences [1947 and 1948] consequent to which a charter for ITO [The Havana
Charter] was drafted. Explain the structure and functions of WTO. Somehow, the ITO did not receive necessary support but
the GATT (General Agreement on Tariffs and Trade) which was drafted parallel
with the Havana Charter after negotiations in Geneva, was adopted by a
provisional protocol under which the signatories agreed to apply GATT until ITO
could take over supervisions of international trade. Explain the structure and functions of WTO. When ITO collapsed, GATT
used to order the international trade relationships of the signatories.
Multilateral negotiations went for a series of rounds, and the the Uruguay
Round of which brought the World Trade Organization into existence, and it has
become an umbrella organization with responsibility for the GATT.
Explain the structure and functions of WTO. The World Trade Organization is therefore the organization
which was set up out of the Uruguay Round of General Agreement on Tariffs and
Trade negotiations in 1995 and which became the successor to and replacement of
the General Agreement on Tariffs and Trade [GATT] and it inter alia regulates
trade and tariffs worldwide and settles trade disputes amongst members. Explain the structure and functions of WTO. The
“Dunkle Text’ contained a charter for a Multilateral Trade Organization [MTO]
aimed at providing an institutional framework within which the results of the
Uruguay Round could operate. Within the MTO was established a new dispute
settlement mechanism and a Trade Policy Review Mechanism [TPRM]. Explain the structure and functions of WTO. There was a
framework which, provided annexes of the more important areas such as the
General Agreement on Trade in Services [GATS] and The Agreement on Trade
Related Intellectual Property [TRIPS] which were a part of the Text. (David
Hartridge 2000)
Contrary to the position of almost all contracting parties to
GATT for the retention of MTO, at the insistence of the US, it was changed to
WTO. GATS has two parts, the short framework agreement which is substantially
similar to the GATT and the schedules of national commitments which members
have undertaken and which form a part of the Agreement in the same way that
tariffs are part of the GATT. (David Hartridge 2000)
However, in GATS, governments freely choose which services to
include in their schedules and in the committed sectors, they are free to
maintain limitations on the degree of market access and national treatment they
are prepared to guarantee. Explain the structure and functions of WTO. Therefore, negotiations for further liberalization
will involve negotiators pressing their partners to include more sectors in
their schedules and to remove some of the limitations they still maintain. Explain the structure and functions of WTO. The
Agreement provides for every means by which services can be traded and supplied
and is not limited to cross-border trade as with GATT, but also consumption
abroad, which means the freedom of shippers to use foreign transport providers,
the right to set up any type of business to supply the service in the export
market [establishment trade], and the temporary movement abroad of individuals
to provide a service, all of which show that GATS is also concerned with
foreign direct investment. (David Hartridge 2000)
It has been argued by Professors Gabriel Moens and Peter
Gillies that the aims of GATT are equality of treatment for both imported and
exported goods and the creation of a world wide open trading system and that
the essential GATT principle is that of non-discrimination from which three
other principles are derived, namely the most-favoured-nation principle, the
national treatment principle and the reciprocity principle. Explain the structure and functions of WTO. They also argued
that the GATT and WTO Agreements are essentially the multilateral acceptance of
disciples upon the exercise of sovereignty whereby parties agree to limits upon
what they will and will not do in respect of trade regulation, for instance in
the setting of tariffs and other barriers to trade in goods and services and
investment and that this does not necessarily mean a surrender of sovereignty
of state since countries still retain the power to take actions under domestic
regulation in violation of their international obligations. Explain the structure and functions of WTO. This writer
respectfully partially disagrees with the learned professors because as a
member of the international community and signatory to any treaty, a member
state is bound to fulfill its treaty obligations failing which it might be
sanctioned should it use its domestic regulations to circumvent what it
voluntarily bound itself to perform by an international agreement. The
principle of pacta sunt servanda will apply in that case. (Cavendish 1998)
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