THE CONTEMPORARY WORLD

Presented by: 2BSA-1

Fajardo, Daniella Marie

Pineda, Marvielyn

Reyes, Arlyn

Presented to:

Mrs. Mildred Abiva

 WORLD TRADE ORGANIZATION

The World Trade Organization (WTO)

is the only global international
organization dealing with the rules of
trade between nations. At its heart are
the WTO agreements, negotiated and
signed by the bulk of the world’s
trading nations and ratified in their
parliaments. The goal is to ensure that
trade flows as smoothly, predictably and freely as possible. It is a global organization made
up of 164 member countries that deals with the rules of trade between nations.

The World Trade Organization is a global organization made up of 164

member countries that deals with the rules of trade between nations.

The goal of the WTO is to ensure that trade flows as smoothly and predictably as
possible. 

The WTO was born out of the General Agreement on Tariffs and Trade (GATT),
which was established in 1947.

If a trade dispute occurs, the WTO works to resolve it.

The WTO was born out of the General Agreement on Tariffs and Trade (GATT),
which was established in 1947. GATT was part of the Bretton Woods-inspired family,
including the International Monetary Fund (IMF) and World Bank. A series of trade
negotiations, GATT rounds began at the end of World War II and were aimed at reducing
tariffs for the facilitation of global trade. The rationale for GATT was based on the most-
favored-nation (MFN) clause, which, when assigned to one country by another, gives the
selected country privileged trading rights.8 As such, GATT aimed to help all countries
obtain MFN-like status so no single country would hold a trading advantage over others.
The WTO replaced GATT as the world's global trading body in 1995, and the current set
of governing rules stems from the Uruguay Round of GATT negotiations, which took place
from 1986 to 1994. GATT trading regulations established between 1947 and 1994 (and in
particular those negotiated during the Uruguay Round) remain the primary rule book for
multilateral trade in goods. Specific sectors such as agriculture have been addressed, as
well as issues dealing with anti-dumping.

RATIONALE OF ORGANIZATION

The World Trade Organization — the

WTO — is the international organization
whose primary purpose is to open trade for
the benefit of all. The WTO provides a forum
for negotiating agreements aimed at reducing
obstacles to international trade and ensuring a
level playing field for all, thus contributing to
economic growth and development. The WTO
also provides a legal and institutional
framework for the implementation and
monitoring of these agreements, as well as for
settling disputes arising from their
interpretation and application. The current body of trade agreements comprising the WTO
consists of 16 different multilateral agreements (to which all WTO members are parties)
and two different plurilateral agreements (to which only some WTO members are parties).
Over the past 60 years, the WTO, which was established in 1995, and its predecessor
organization the GATT have helped to create a strong and prosperous international
trading system, thereby contributing to unprecedented global economic growth. The WTO
currently has 164 members, of which 117 are developing countries or separate customs
territories. WTO activities are supported by a Secretariat of some 700 staff, led by the
WTO Director-General. The Secretariat is located in Geneva, Switzerland, and has an
annual budget of approximately CHF 200 million ($180 million, €130 million). The three
official languages of the WTO are English, French and Spanish. Decisions in the WTO are
generally taken by consensus of the entire membership. The highest institutional body is
the Ministerial Conference, which meets roughly every two years. A General
Council conducts the organization's business in the intervals between Ministerial
Conferences. Both of these bodies comprise all members. Specialised subsidiary bodies
(Councils, Committees, Sub-committees), also comprising all members, administer and
monitor the implementation by members of the various WTO agreements.

The WTO's main activities are:

Negotiating the reduction or elimination of obstacles to trade (import tariffs, other

barriers to trade) and agreeing on rules governing the conduct of international
trade (e.g. antidumping, subsidies, product standards, etc.)

Administering and monitoring the application of the WTO's agreed rules for trade
in goods, trade in services, and trade-related intellectual property rights

Monitoring and reviewing the trade policies of our members, as well as ensuring
transparency of regional and bilateral trade agreements

Settling disputes among our members regarding the interpretation and application
of the agreements

Building capacity of developing country government officials in international trade

matters

Assisting the process of accession of some 30 countries who are not yet members of
the organization

Conducting economic research and collecting and disseminating trade data in

support of the WTO's other main activities

Explaining to and educating the public about the WTO, its mission and its activities.
WHAT WE STAND FOR

The WTO agreements are lengthy and complex because they are legal texts covering a wide
range of activities. But a number of simple, fundamental principles run throughout all of
these documents. These principles are the foundation of the multilateral trading system.

Non-discrimination

A country should not discriminate between

its trading partners and it should not
discriminate between its own and foreign
products, services or national.

More open

Lowering trade barriers is one of the most obvious ways of encouraging trade; these
barriers include customs duties (or tariffs) and measures such as import bans or quotas
that restrict quantities selectively.

Predictable and transparent

Foreign companies, investors and governments

should be confident that trade barriers should
not be raised arbitrarily. With stability and
predictability, investment is encouraged, jobs
are created and consumers can fully enjoy the
benefits of competition — choice and lower
prices.
 More competitive

Discouraging ‘unfair’ practices, such as export subsidies and dumping products at below
cost to gain market share; the issues are complex, and the rules try to establish what is fair
or unfair, and how governments can respond, in particular by charging additional import
duties calculated to compensate for damage caused by unfair trade.

More beneficial for less developed

countries

Giving them more time to adjust, greater

flexibility and special privileges; over three-
quarters of WTO members are developing
countries and countries in transition to
market economies. The WTO agreements
give them transition periods to adjust to the
more unfamiliar and, perhaps, difficult
WTO provisions.

Protect the environment

The WTO’s agreements permit members to take measures to protect not only the
environment but also public health, animal health and plant health. However, these
measures must be applied in the same way to both national and foreign businesses. In other
words, members must not use environmental protection measures as a means of disguising
protectionist policies.
 WHEN AND HOW THE ORGANIZATION FORM

From the early days of the Silk

Road to the creation of the General
Agreement on Tariffs and Trade
(GATT) and the birth of the WTO,
trade has played an important role in
supporting economic development and
promoting peaceful relations among
nations. The WTO was born out of the
General Agreement on Tariffs and Trade (GATT), which was established in 1947. GATT
was part of the Bretton Woods-inspired family, including the International Monetary Fund
(IMF) and World Bank. A series of trade negotiations, GATT rounds began at the end of
World War II and were aimed at reducing tariffs for the facilitation of global trade. The
rationale for GATT was based on the most-favored-nation (MFN) clause, which, when
assigned to one country by another, gives the selected country privileged trading rights.8
As such, GATT aimed to help all countries obtain MFN-like status so no single country
would hold a trading advantage over others.

WTO replaced GATT as the world's global trading body in 1995, and the current
set of governing rules stems from the Uruguay Round of GATT negotiations, which took
place from 1986 to 1994. GATT trading regulations established between 1947 and 1994
(and in particular those negotiated during the Uruguay Round) remain the primary rule
book for multilateral trade in goods. Specific sectors such as agriculture have been
addressed, as well as issues dealing with anti-dumping. The WTO's founding and guiding
principles remain the pursuit of open borders, the guarantee of most-favoured-nation
principle and non-discriminatory treatment by and among members, and a commitment to
transparency in the conduct of its activities. The opening of national markets to
international trade, with justifiable exceptions or with adequate flexibilities, will encourage
and contribute to sustainable development, raise people's welfare, reduce poverty, and
foster peace and stability. At the same time, such market opening must be accompanied by
sound domestic and international policies that contribute to economic growth and
development according to each member's needs and aspirations.

CRITICISMS AND THE RESPONSE OF THE ORGANIZATION

The World Trade Organisation (WTO) is committed to improving free trade amongst its
member countries. However, its role has been controversial creating polarised views.

These are some of the criticisms of the WTO

1. Free Trade benefits developed countries more than developing countries. It is

argued, developing countries need some trade protection to be able to develop new
industries; this is important to be able to diversify the economy. It is known as
the infant industry argument. Many developed economies used a degree of tariff
protection in their development phase. Economist Ha Joon Chang argues WTO
trade rules are like ‘pulling away the ladder they used themselves to climb
up’ (Kicking away the ladder at Amazon)

2. Most favoured nation principle. This is a core tenant of WTO rules – countries
should trade without discrimination. It means a local firm is not allowed to favour
local contractors. It is argued this gives an unfair advantage to multinational
companies and can have costs for local firms and the right of developing economies
to favour their own emerging industries.

3. Failure to reduce tariffs on agriculture. Free trade is not equally sought across
different industries. Both the US and EU retain high tariffs on agriculture, this
hurts farmers in developing economies who face tariff protection

4. Diversification. Arguably developing countries who specialise in primary products

(e.g. agricultural products) need to diversify into other sectors. To diversify they
may need some tariff protection, at least in the short term. 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.

5. Environment. 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, increasing GDP may be the least important. Arguably the
WTO should do more to promote environmental considerations.

6. Free 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 multinational companies which
reduce cultural diversity and tend to swamp local industries and firms.

7. 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.

8. Slow progress. Trade rounds have been notoriously slow and difficult to reach an
agreement.
 9. WTO becoming overshadowed by TIPP agreements which fall outside the purvey of
WTO rules.

Evaluation – response to these criticisms

In response to these criticisms,

 Failure of countries to agree tariff reduction in agriculture is not the fault of WTO,
but countries themselves.

 Free trade and growth of exports have been an important factor in raising living
standards, especially in south-east Asia, which has benefitted from the remarkable
growth of world trade.

 The growth of world trade has helped reduce absolute poverty.

 In recent years, the WTO has made more efforts to consider the situation of
developing economies. Recent rounds have put pressure on developed countries to
accelerate removing restrictions on imports from the least-developing countries.
 The WTO has over 160 members representing 98 percent of world trade. Over 20
countries are seeking to join the WTO.
 WTO has been given credit for helping to avoid trade disputes.
MEMBERS OF WORLD TRADE ORGANIZATION

 Afghanistan — 29 July 2016

 Albania — 8 September 2000

 Angola — 23 November 1996

 Antigua and Barbuda — 1 January 1995

 Argentina — 1 January 1995

 Armenia — 5 February 2003

 Australia — 1 January 1995

 Austria — 1 January 1995

 Bahrain, Kingdom of — 1 January 1995

 Bangladesh — 1 January 1995

 Barbados — 1 January 1995

 Belgium — 1 January 1995

 Belize — 1 January 1995

 Benin — 22 February 1996

 Bolivia, Plurinational State of — 12 September 1995

 Botswana — 31 May 1995

 Brazil — 1 January 1995

 Brunei Darussalam — 1 January 1995

 Bulgaria — 1 December 1996

 Burkina Faso — 3 June 1995

 Burundi — 23 July 1995

 Cabo Verde — 23 July 2008

 Cambodia — 13 October 2004

 Cameroon — 13 December 1995

 Canada — 1 January 1995

 Central African Republic — 31 May 1995

 Chad — 19 October 1996

 Chile — 1 January 1995

 China — 11 December 2001

 Colombia — 30 April 1995

 Congo — 27 March 1997

 Costa Rica — 1 January 1995

 Côte d’Ivoire — 1 January 1995

 Croatia — 30 November 2000

 Cuba — 20 April 1995

 Cyprus — 30 July 1995

 Czech Republic — 1 January 1995

 Democratic Republic of the Congo — 1 January 1997

 Denmark — 1 January 1995

 Djibouti — 31 May 1995

 Dominica — 1 January 1995

 Dominican Republic — 9 March 1995

 Ecuador — 21 January 1996

 Egypt — 30 June 1995

 El Salvador — 7 May 1995

 Estonia — 13 November 1999

 Eswatini — 1 January 1995

 European Union (formerly EC) — 1 January 1995

 Fiji — 14 January 1996

 Finland — 1 January 1995

 France — 1 January 1995

 Gabon — 1 January 1995

 Gambia — 23 October 1996

 Georgia — 14 June 2000

 Germany — 1 January 1995

 Ghana — 1 January 1995

 Greece — 1 January 1995

 Grenada — 22 February 1996

 Guatemala — 21 July 1995

 Guinea — 25 October 1995

 Guinea-Bissau — 31 May 1995

 Guyana — 1 January 1995

 Haiti — 30 January 1996

 Honduras — 1 January 1995

 Hong Kong, China — 1 January 1995

 Hungary — 1 January 1995

 Iceland — 1 January 1995

 India — 1 January 1995

 Indonesia — 1 January 1995

 Ireland — 1 January 1995

 Israel — 21 April 1995

 Italy — 1 January 1995

 Jamaica — 9 March 1995

 Japan — 1 January 1995

 Jordan — 11 April 2000

 Kazakhstan — 30 November 2015

 Kenya — 1 January 1995

 Korea, Republic of — 1 January 1995

 Kuwait, the State of — 1 January 1995

 Kyrgyz Republic — 20 December 1998

 Lao People’s Democratic Republic — 2 February 2013

 Latvia — 10 February 1999

 Lesotho — 31 May 1995

 Liberia — 14 July 2016

 Liechtenstein — 1 September 1995

 Lithuania — 31 May 2001

 Luxembourg — 1 January 1995

 Macao, China — 1 January 1995

 Madagascar — 17 November 1995

 Malawi — 31 May 1995

 Malaysia — 1 January 1995

 Maldives — 31 May 1995

 Mali — 31 May 1995

 Malta — 1 January 1995

 Mauritania — 31 May 1995

 Mauritius — 1 January 1995

 Mexico — 1 January 1995

 Moldova, Republic of — 26 July 2001

 Mongolia — 29 January 1997

 Montenegro — 29 April 2012

 Morocco — 1 January 1995

 Mozambique — 26 August 1995

 Myanmar — 1 January 1995

 Namibia — 1 January 1995

 Nepal — 23 April 2004

 Netherlands — 1 January 1995

 New Zealand — 1 January 1995

 Nicaragua — 3 September 1995

 Niger — 13 December 1996

 Nigeria — 1 January 1995

 North Macedonia — 4 April 2003

 Norway — 1 January 1995

 Oman — 9 November 2000

 Pakistan — 1 January 1995

 Panama — 6 September 1997

 Papua New Guinea — 9 June 1996

 Paraguay — 1 January 1995

 Peru — 1 January 1995

 Philippines — 1 January 1995

 Poland — 1 July 1995

 Portugal — 1 January 1995

 Qatar — 13 January 1996

 Romania — 1 January 1995

 Russian Federation — 22 August 2012

 Rwanda — 22 May 1996

 Saint Kitts and Nevis — 21 February 1996

 Saint Lucia — 1 January 1995

 Saint Vincent and the Grenadines — 1 January 1995

 Samoa — 10 May 2012

 Saudi Arabia, Kingdom of — 11 December 2005

 Senegal — 1 January 1995

 Seychelles — 26 April 2015

 Sierra Leone — 23 July 1995

 Singapore — 1 January 1995

 Slovak Republic — 1 January 1995

 Slovenia — 30 July 1995

 Solomon Islands — 26 July 1996

 South Africa — 1 January 1995

 Spain — 1 January 1995

 Sri Lanka — 1 January 1995

 Suriname — 1 January 1995

 Sweden — 1 January 1995

 Switzerland — 1 July 1995

 Chinese Taipei — 1 January 2002

 Tajikistan — 2 March 2013

 Tanzania — 1 January 1995

 Thailand — 1 January 1995

 Togo — 31 May 1995

 Tonga — 27 July 2007

 Trinidad and Tobago — 1 March 1995

 Tunisia — 29 March 1995

 Turkey — 26 March 1995

 Uganda — 1 January 1995

 Ukraine — 16 May 2008

 United Arab Emirates — 10 April 1996

 United Kingdom — 1 January 1995

 United States — 1 January 1995

 Uruguay — 1 January 1995

 Vanuatu — 24 August 2012

 Venezuela, Bolivarian Republic of — 1 January 1995

 Viet Nam — 11 January 2007

 Yemen — 26 June 2014

 Zambia — 1 January 1995

 Zimbabwe — 5 March 1995