The World Trade Organization (WTO)

Résumé du document

The World Trade Organization (WTO) is a multilateral trading system; in other words, it is shaped by multilateral agreements between member states based on four principles. The first principle is transparency on trade exchanges and WTO decisions. Members have a transparency obligation such as making public WTO practices, laws and new regulations that may influence the nature of trade and investments. The second principle is non-discrimination which aims to not favour one member to another one. This point can be split into two forms. Firstly, it refers to Most Favoured Nation (MFN) treatment. In fact, goods have to be treated fairly and without discrimination within marketplaces. Secondly, the National Treatment is a safeguard which prevents countries to make imported goods not competitive by applying taxes, charges or even unjustified administrative practices that local products are not subjected to. Reciprocity is also an important feature of the negotiations process. When a country grants a favour to another country, the latter has to make an offer back as well as to the rest of the member states. Finally, progressive trade liberalization principle aims at creating a more free and fairer trade and investments by lowering tariff protections. Importantly, the consensus decision-making wants every single country to agree with the WTO decisions. In theory, there is no influence over member states. How can we identify and asses the economic benefits that might occur as a result of a successful conclusion to the current and recent trade negotiations at the World Trade Organization? How can we use economics to identify the beneficiaries of the current failure to reach an agreement?

Extraits

[...] cited by WTO website, 2009). Additionally dynamic foreign investments under the TRIM agreement have allowed for technology transfer to developing countries. Thus, countries like China have gained competitive advantage in labor-intensive product thanks to more efficient production processes brought by investors from developed countries J. and Wang, J cited by Argwal, J. and Wu, T., 2004). FDIs have risen wages in some developed countries. For example, in developing countries of Eastern Europe, workers earn of the German wage level at exchange rate parity” in 1994 (Berend, T., 2006). [...]

[...] Indeed, service is a growing sector which represented 20% of total trade and 60% of global GDP in 2004 (Cornford, A., 2004). This international advantage in financial services can be also explained by the factor of proportion theory of Heckscher and Ohlin which holds that places specialised their productions according to factors of production they have in abundance (Krugman, P. and Obstfeld, M., 1990). Indeed, this country owns infrastructures and high- skilled people to produce this kind of services. France has also benefited from Service Agreement as the country is the third global services exporter. [...]

[...] For instance, the UR Agreement on Textile and Clothing imposed all countries to lower their quota restrictions by 33% by 2005. In 2009, the EU and the US have removed less than and respectively (Doha Ministerial Joint Statement of Ministers of 24 Developing Countries, WTO website, 2009). Additionally, global economy has not grown steadily. Indeed, the Asian (1997) and Russian (1998) financial crisis have made the objectives of the UR more difficult to achieve (Berman, N., n.d). Despite its unachieved objectives, the UR has largely contributed to better economic and welfare outcomes globally. [...]

[...] The EU refused to eliminate agricultural subsidies to export demanded by agricultural exporters of Cairn group (Oudghiri, M., 2001). Moreover, the agricultural issues are important for developing countries because they prevent them to increase their export as “they are burdened with high import tariffs” (Gomes Pereira et al, 2009). Indeed, the agriculture is a key issue for fast-growing developing countries like Brazil, China and India given the significant part of their agribusiness in their economy. Those countries have already reduce their tariff by about 30% while developed nation did nothing (Stelzer, I., 2006). [...]

[...] For instance, France has bilateral agreements with Morocco on tourism or with China on intellectual property (doc.diplomatie.gov.fr, 2009). Even if Doha Round failed, developing countries have benefited from the Doha Declaration in 2001. Since the UR, developing countries could not afford to pay for patented drugs made in developed countries. TRIPs agreement under UR largely benefited developed countries as of the world's patents are owned by developed countries” and it charged $60 billion annually in royalty payment to developing countries (Reid, S., 2006). [...]