Apr 1, 2015

IR - One Definition A Day: WTO - World Trade Organisation

IR - One Definition A Day: WTO - World Trade Organisation

This new IGO was established as a result of the Uruguay Round of trade negotiations conducted under the aegis of the GATT process. In effect the establishment of the WTO realises the intentions of the Bretton Woods system that an International Trade Organisation would be set up to match the other Bretton Woods institutions - the IMF and the World Bank. 

The WTO is more than simply a 'tidying up operation'. It does represent the collection under one rubric of all the GATT agreements reached at the various 'rounds' since 1947. Additionally, WTO has enhanced the bureaucracy available to monitor adherence to the principles of multilateralism inherent in the GATT philosophy. WTO also has greater powers for identifying non-compliance with agreements and for the resolutions of disputes between parties. It is reasonable to assume that future trade negotiations will be conducted upon a more regular and routine basis than hitherto.

The establishment of the WTO does not mean that all road blocks to a more liberal trade regime have been removed. In particular the issue area of the enviroment has not been addressed until recently. Free traders and protectionists both tend to hijack the arguments on the environment to support their point of view. It is likely that the WTO will be far more cognizant of the environmental aspects of trade agreements than GATT was. 

The continued subsidisation of agriculture is another issue area which the WTO will have to address. This is mainly a First World dispute at present with the US ranged on the one side in favour of proceeding faster and further, while the European Union and Japan are more cautious. Finally it is salutary to remember that over 30 per cent of world trade is conducted between MNCs and that the state-centrism of the WTO will need to change if it is to become truly an institution for the management of trade, rather than simply for trade between states.

(Source: wikipedia)

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