WTO is an international economic organization concerned with the regulation of international trade between nations.
Governments seek out for WTO to sort out the trade problems they face with their partners.
Post Content - In Short
- History of WTO
- Pros Of WTO
- Helps promote peace within nations
- Disputes are handled constructively
- Rules make life easier for all
- Free Trade Cuts Cost
- Range Of Qualities & Products
- Trade raises income
- Increases Jobs Opportunity
- Basic principles make life more efficient
- WTO Helps Government Against Lobbying
- The system encourages good governance
- Cons Of WTO
History of WTO
WTO was formed in the process of negotiation and it means negotiation its talks out problems and reaches to the solution. It has a certain set of rules and principle which has to be followed by all the participating countries which are signed by representatives of government and issued by their parliament.
The WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), was established by a multilateral treaty of 23 countries in 1947 after World War II. WTO’s structure took shape in 1986-94 negotiations called the Uruguay Round and it was the eight-round of GATT.
The latest host to new negotiations was under the “Doha Development Agenda” launched in 2001.
WTO prevented major trade war during the global recession in 2008/09. There was a fall in global trade during the 1930s, the tax in 1930s was 50% compared to the 2000s it came down to 9% according to VOX.
WTO encourages non-discrimination, prevents trade dispute and lowers trade barriers. Economists estimate the world economy would boost by $613 million by cutting down trade barriers in agriculture, manufacturing and other services.
Pros Of WTO
Helps promote peace within nations
The world is competitive and while trading between countries any conflict should be avoided and the solution should be made immediately.
If there are any issues and problems or some country is trying to break the rule then the WTO makes it sure they step back and work by the rules. Peace assures international confidence and cooperation in the economic world that is maintained and handled by WTO.
It takes no time to break peace but WTO shows the importance of working hand in hand and dependency over one another which helps in making and maintaining peace.
Disputes are handled constructively
The trade expansion decides and shows the extension and strengthening of the country. So, as the trading volume is extended, the number of products to export as well as the countries and company linked with trading are added.
When so much is going on there is a greater chance of disputes and conflict. Likewise, there are many rules and regulations commencing international trade whenever there is a conflict of understanding or in agreement.
The first step countries take turns to some organization particularly WTO, to settle their trade disputes.
Rules make life easier for all
Despite the power and strength the country possesses, rules simplify the limitations and procedures. There will be many transactions, issues, meeting, business or trading going on between the countries and its obvious to have conflict, but it doesn’t mean war but negotiable ones.
This is where the rules play a vital role in handling these issues. It balances the power of the bigger countries by giving the bargaining upper hand to the smaller countries which even lessens the burden for powerful countries.
Free Trade Cuts Cost
World trade organisation lowers trade barriers and make it possible for countries to maintain their economy and import-export good with each other without any discrimination.
Many countries apply protectionism to raise the economy and consume their products. This results in price rise and less consumption of imported goods cause tax is high. WTO lowering the barrier results in reduced costs of production of goods and services.
Range Of Qualities & Products
The environment for international trade is made favourable by lowering the trade barriers(protectionism). All the good made around the world can be exported and imported from different parts of the world.
It gives customers a variety of choices, and a range of qualities they can afford or they prefer.
Trade raises income
WTO prefers the import and export of the goods all around the world which enable the flow of foreign exchange raising the country’s income. International trading is encouraged and supported by the government if they can benefit from it.
It increases the competition as the imported goods hit the market, but the government can play its role by using the cash in producing quality products or utilizing it by providing loans in different sectors.
Increases Jobs Opportunity
With the growth in income, the government or the companies benefiting from the trade will have to invest in some new faculty which creates jobs and employment. When job holders and employment increases its economic growth.
As the companies who import and export will need more employees and assign them to different departments to handle those affairs. This increases jobs opportunity and will make their citizens aware of and knowledgeable about international trade.
Basic principles make life more efficient
The principles of WTO make trading more efficient and cut costs. It makes life simpler for the enterprises directly involved in international trade and producers of goods and services.
Non-discrimination helps a smaller organisation or a smaller country to target high goal and deal with companies globally as they are given the bargaining and negotiating advantage.
The commitments lowering trade barriers increases other countries access to one’s market. These factors make trading simpler cutting companies cost and increasing confidence in the future.
WTO Helps Government Against Lobbying
The government has advantage WTO being on their side because they can defend themselves against lobbying. Some groups may want the protectionism and stop imports that increase the price in the internal market as well as a rivalry with other partners where they would also raise trade barriers and everyone is at a loss.
WTO helps to work out with all these issues, it handles and divides the responsibility that has to be taken by both the importer and exporter according to goods and materials being supplied, countries economic condition and its global rate.
This help balancing the international trade and the economic growth of the country and individuals.
The system encourages good governance
WTO does not control the country’s government but it eradicates the illogical policies and constitution applied by the government just benefitting for some personnel or increases trading difficulties.
It encourages the government to take the right decision for the welfare of the country and citizens. This helps the system to go under good governance reduces the opportunity for corruption.
Cons Of WTO
Non-Transparency Or Undemocratic
The transparency are only shown for the factor which makes trading efficient and simpler. The powerhouse who has a hold over the many multinational companies will have the upper hand during negotiations of the rules and regulations.
The environmental, human rights and labour organizations petitions are constantly ignored. Sometimes even the request for the information is denied and the proceedings are held in secret.
Not Safer For People
WTO’s principle is bringing peace and nations together with the free trade. On the other hand, the dominance of the rich and powerful countries are imminent, they won’t break the rules legally but will use the third country which is weaker and desperate to fluctuate the market and bring the decision in their favour.
When it favours them it surely is not going to be safe for us sometimes they even fund some terrorist attacks or mass murder which is not safer at all.
Labor And Human Rights Are Neglected
WTO has its rule where child labour and human rights should be maintained by the countries and companies. These are mere line and words written down in papers, companies while competing in the global and multinational standard with each other does not consider these issues.
The wages varying in labours make them work against each other there should be internationally recognized labour standards. The ILO estimates there are over 2.3 million men and women labourers who face death with accident or diseases caused in the working area.
Privatization Of Health & Education
WTO works for the good of all but it means money and income. All the good comes at the expense of a little bad.
Some sectors are fine to be privatized but the sectors as health and education, child and elder care are the ones that are carried out for the public good and it should be well managed and maintained by governments.
If these sectors are privatized then the working class or the ones low in social status are the ones to suffer the most. At Least these sectors should not be running for profit.
Destroying The Environment
Deforestation of a larger area to plant factories and the towers made for telecommunication is hampering the lifespan and migration of birds which hampers the agriculture sector the most and the unmanaged dumping of toxic wastes from the chemical factories not only pollutes the water and even the soil.
If it is not properly dealt with it will affect the locals and their upcoming generation in the future spreading diseases. WTO is trying to warn the industries exploiting the natural resources but its effectiveness is more in newspapers and articles than in practical workflow.
No Value Of Human Life
Trade-Related Intellectual Property Rights(TRIPs) patents copyright and trademarks come at the expense of health and human lives.
WTO protects pharmaceutical companies rights to gain profit against the government seeking to protect their citizen’s health by providing life-saving drugs in countries were health concern deaths are maximum.
As in 2001 developing countries won the right to produce generic drugs but in 2003 that right was again sanctioned and made difficult for all the countries to produce drugs. Again organisation like WTO favoured the corporate profit over human lives which is a pity.
Favours Multinational Companies
There are many rules which favour the multinational companies. In many developing countries there is more than 80% fund investment done by foreign countries. Some changes should be made in a certain time period after some observation.
The rule needs to highlight the advantage to both the importer and exporter to get better trading environment benefiting a particular country and their nationalities.