International economics: The World Trade Organization

Résumé du document

Pascal Lamy, General Director of the WTO recently said that “negotiations towards a conclusion to the Doha Trade Round are 70% complete”. Indeed, the WTO trade talks have not been efficient over the last few years. Lowering agricultural and industrial tariffs, reducing subsidies in farming, dealing with services, opening markets and elaborating a more favorable treatment for developing countries are the main issues that still remain on the tables of negotiations (“Food Navigator, Europe”, online). The WTO multilateral trading system is obviously facing major difficulties in regulating international trade in a fast-changing world economy. First of all, we will present the WTO (role, different principles underlying the system, benefits…). Then, we will determine what the different economic costs of unsuccessful trade negotiations are. Finally we will see if there are any economic benefits to be gained from such a situation.

Extraits

[...] It is still continuing today. The main objectives were globally to make globalisation more inclusive and to assist the world poorest countries (notably by stopping subsidies and other barriers in agriculture and farming). More precisely, the subjects covered are still about the reduction of trade barriers, measures and regarding agriculture, competition, investments, environment, labour standards, intellectual property rights, patents and so on. However, the talks are sometimes really problematic and contentious. Indeed, no real agreement has been elaborated up to now. [...]

[...] Peterson Institute for International Economics (2006), Costs of Failure of Global Trade Negotiations Have Been Understated [online]. Available at: [Accessed 27th December 2007]. Guardian Unlimited (2003), The cost of failure [online]. Available at: [Accessed 27th December 2007]. Guardian Unlimited (2006), WTO trade talks fail over farm subsidy rift [online]. Available at: [Accessed 29th December 2007]. Food Navigator, Europe (2007), WTO leaders know the cost of Doha failure, Lamy [online]. Available at: [Accessed 27th December 2007]. Blackwell Synergy (2006), WTO, Talks Collapse [online]. [...]

[...] Protectionism has to be abolished as much as possible. Another significant function of the WTO is to assist developing, less developed and low-income countries that are confronted with free trade rules. In addition, it is important to mention the cooperation between the WTO and other international organisations such as the World Bank and the International Monetary Fund (IMF) (according to the WTO website and Janet Morrison, The International Business Environment, p. 262). I.B. What are the principles underlying the WTO system? [...]

[...] However, unsuccessful trade talks, which are weakening the legitimacy of the WTO, represent large costs for economies, especially for developing countries (increasing phenomenon of protectionism, growth of bilateral relations, risk of financial markets shocks, difficulties to create fundamental reforms in the domestic economies and so on). Bilateral trade deals are considerably increasing, mostly benefiting rich countries. We can wonder how the WTO will adapt its system to the current fast-growing world economy Reference list The International Business Environment, Diversity and the global economy. U.S.A.: Palgrave MacMillan. Nigel Grimwade (2000) International trade, new patterns of trade, production and investment. [...]

[...] Available at: [Accessed 30th December 2007] The Library of Economics and Liberty (2002), Adam Smith [online]. Available at: [Accessed 30th December 2007]. The International Economics Study Center (2006), The Heckscher-Ohlin Theorem [online]. Available at: [Accessed 30th December 2007] BBC News (2007), Profile: World Trade Organization [online]. Available at: [Accessed 29th December 2007]. Global Issues (2006), The WTO and Free Trade [online]. Available at: [Accessed 29th December 2007]. Third World Network (1999), Transparency, Participation and Legitimacy of the WTO [online]. Available at: [Accessed 30th December 2007]. [...]