Presentation on theme: "The World Trade Organization"— Presentation transcript:
1 The World Trade Organization The WTO was created during the Uruguay Round of GATT to police and enforce GATT rulesMost comprehensive trade agreement in historyFormation of WTO had an impact onAgriculture subsidies (stumbling block: US/EU)Applied GATT rules to services and intellectual property (TRIPS)Strengthened GATT monitoring and enforcement
2 The WTO145 members in 2003 (153 in 2008)Represents 90% of world trade9 of 10 disputes satisfactorily settledTariff reduction from 40% to 5%Trade volume of manufactured goods has increased 20 times
4 The WTO Policing organization for: GATTServicesIntellectual propertyResponsibility for trade arbitration:Reports adopted unless specifically rejectedAfter appeal, failure to comply can result in compensation to injured country or trade sanctions
5 WTO at work 280 disputes brought to WTO between 1995 and 2003 196 handled by GATT during its 50 year historyUS is biggest WTO userBig wins - beef - bananasBig loss - Kodak
6 The WTO -achievements Telecommunications (1997) 68 countries (90%) of world telecommunications revenuesPledged to open their market to fair competitionFinancial Services (1997)95% of financial services market102 countries will open, their markets to varying degrees
7 Doha agenda -WTO Cutting tariffs on industrial goods and services Phasing out subsidiesReducing antidumping lawsWTO regulation on intellectual property should not prevent members from protecting public healthTRIPS agreement
8 WTO - criticismsFree Trade benefits developed countries more than developing countries. Developing countries need some trade protection to be able to develop new industries. The WTO have sought to maintain same rules for developing countries, however, many of the existing industrialised nations used tariff protection when they were developing. Therefore, the WTO has been criticised for being unfair and ignoring the needs of developing countries. (This is related to the infant industry argument)Free trade has often ignored environmental considerations. e.g. Free trade has enabled imports to be made from countries with the least environmental protection. Many criticise the WTO’s philosophy that the most important economic objective is the maximisation of GDP. In an era of global warming and potential environmental disaster, this may be the least important.
9 WTO - criticismsFree trade ignores cultural and social factors. Arguably a reasonable argument for restricting free trade is that it enables countries to maintain cultural diversity. Some criticise the WTO for enabling the domination of the multinational companies.The WTO is criticised for being undemocratic. It is argued that its structure enables the richer countries to win what they desire; arguably they benefit the most.Critics contend that small countries in the WTO wield little influence, and despite the WTO aim of helping the developing countries, the politicians representing the most influential nations in the WTO (and within those countries or between them, influential private business interests) focus on the commercial interests of profit-making companies rather than the interests of all.
10 WTO - criticismsSteve Charnovitz, former Director of the Global Environment and Trade Study (GETS), believes that the WTO "should begin to address the link between trade and labor and environmental concerns." He also argues that "in the absence of proper environmental regulation and resource management, increased trade might cause so much adverse damage that the gains from trade would be less than the environmental costs."Further, labor unions condemn the labor rights record of developing countries, arguing that to the extent the WTO succeeds at promoting globalization, then in equal measure do the environment and labor rights suffer.Other critics have characterized the decision making in the WTO as complicated, ineffective, unrepresentative and non-inclusiveThird World Network has called the WTO "the most non-transparent of international organisations", because "the vast majority of developing countries have very little real say in the WTO system".