International organisation of WTO

"Developing Countries Should be Exempted from WTO Rules. Discuss."

Introduction:

WTO is an international organisation which contributes to the trade between member countries, solves problems of trade and also it is an organisation who perform international agreement. WTO is the only organisation that deals with international rules of trade between countries. Its main objective is to conduct trade freely and smoothly in the global Market. WTO is managed by general council and it is conducted 12 times every year. The two very important activities of WTO is to solve problems in the international trade and steps to set up MTN`s. WTO helps to reduce trade barriers between countries which ultimately lead to reduce barriers between people and countries.

Functions of WTO are the one`s like solving trade disputes ,observing national trade policies, finalising WTO trade, providing technical training and help for developing countries. The main part of WTO is the multilateral trading system and this is the agreement for member nations guaranteeing trade rights. The principles of Multilateral trading system is to trade without discrimination, more free trade through negotiation, to reduce unfair practices like dumping products and subsidies at low cost, to make profit in market share and multilateral trading system should be flexible to developing countries. Dispute Settlement is one main feature of WTO.

The World Trade Organisation was came into effect on January 1,1995. It was created during Uruguay round meeting and it has membership of 153 countries and secretariat staff of 625. It is one of the youngest global organisation ,who is the successor of GATT which formed in the wake of second world war. The multilateral trading system which was developed during GATT had a very long history of 50 years. There was tremendous growth in world trade during the past 50 years that is merchandise exports is 6% annually and total trade in 2000 was 22 times better the level of 1950. The multilateral trading system is expanded through number of negotiations held under GATT. The first meeting was dealing with tariff reduction and later meeting was held on anti dumping and non tariff measures. The last meeting in 1986-94 Uruguay round lead to the creation of WTO. In February 1997 agreement was made with 69 governments on telecommunication services. In 2000 new talks were began on services and agriculture. The fourth WTO was held in Doha, Qatar in November 2001.In this meeting the issues like subsidies, anti dumping, non agricultural tariffs, intellectual property and variety of matters put forward by developing countries in as a barrier they face in applying the latest WTO agreements.

Overview of developing countries in the WTO is that Developing countries consist of one third in WTO that is around 150 members and because of large number of developing countries they play a major role in the WTO. Since they are the emerging market in the global economy they should be considered with special needs and developing countries are the people who have different views and opinions. The developing countries needs are considered in three ways like WTO agreements, the committee on development and trade and the WTO secretariat.

In WTO agreements there are number of provisions available to developing countries in the WTO and these provisions allow developing countries to treat fairly than other members of WTO. The agreements like General Agreement on Trade and Tariff (GATT) and General Agreement on Trade in Services (GATS) allow developing some special preference over developed countries. Others steps in WTO agreements are the developing countries are given extra time to meet their obligations. By giving special provision developing countries are given trading opportunities through greater market access . Examples are technical trade barrier and services. When implementing domestic or global measures developing countries are given special preference to protect the interest of developing countries in the WTO.

The committee on development and trade works on specific tasks like technology transfer, trade and debt in developing countries. In this it is also discussing about how special measures are considered favouring developing countries are applied, measures to improve participation in WTO, what are the principles for technical cooperation , how to get trade preference in trade and also how to lower trade barrier in developing countries. The main aim of WT0 secretariat is to provide technical assistance in various category of WTO disputes and also in legal issues.

Uruguay Round 1986-94 provide a large number of opportunities for making profit for developing countries and also liberalization policy through Doha Agenda Negotiations. Export opportunities for developing countries are it helps to terminate quotas in developing countries exports of textiles and clothing's, decreasing custom duties on industrial goods, it helps to improve the number of products under WTO, whose custom rates are difficult to increase. It helps to terminate bilateral agreements to limit access of trade quantities of particular products. Under WTO liberalization boosts the world demand for developing countries exports and also helps in increasing global GDP. The developing countries are benefited with policy of non-discrimination which will help to trade with special provisions and concessions in trade. The developing countries are benefited from formulation of Dispute Settlement rules such as granting special preferential treatmen in trade and also from providing technical assistance to developing countries. The developing countries are benefited from reduced tariff rates in agriculture and textiles.

The issues or concerns of developing countries in WTO are that developing countries are facing higher tariff on selected goods which affect their significant export in the important markets. For example they face higher tariff on fish products, textiles etc. The other problem is tariff escalation and it means if a country want to protect manufacturing or processing industry then the government will set higher duties on finished goods and lower duties on imports of components and raw materials to protect the industry of the country. There are also other problems like the decline of preferences of trade means that special tax preference provided by developed countries are affected for some developing countries if normal tax are deducted because it will make variation between normal tax and special preferential tax. The Uruguay round mostly benefited developed countries than developing countries in the matters like services, intellectual property rights ,telecommunication, export subsidies and greater access to developing countries market access etc.

According to WTO (1999) in Uruguay round developing countries were given special and preferential treatment to protect the interest of the developing countries but in reality many of the WTO agreement which were supposed to protect the interest of developing countries trade were affected badly. For example the WTO agreement like Technical barrier on Trade (TBT) agreement which is used to protect the needs of the developing countries , Agreement on Sanitary and Phytosanitary Measures (SPS) and Agreement on Subsidies and Countervailing Measures which are required to safeguard the interest of developing countries trade are not protect when it came into reality. The developing countries argues that transition period given in the WTO agreement is too short and also it is said that WTO secretariat which provide technical assistance to developing countries is slow and inefficient.

In conclusion in my opinion i would like to say that the developing countries should be exempted from WTO because there are many disadvantages than advantages. Even though the WTO`s non discrimination policy and technical assistance give special provision and also preferential treatment to developing countries it does not solve the problem of developing countries. There are many disadvantages for developing countries like it leads to more market access to developed countries and also lowering the profit of developing countries.

There are many special provision and preferential treatment to protect the interest of developing countries in WTO agreement but when it comes to reality these rules and agreement will not come into practice. Many issues like intellectual property, safeguards agreements, Anti Dumping and Countervailing Duties ,Subsidies Agreements in developing countries will be discussed in WTO agreements but when it comes to practice it will Snot be taken into account and most of time when comes to WTO agreements Developed countries are most benefited than developing countries. At last ,since WTO agreement are having more disadvantages that advantages i would recommend that developing countries should be exempted from WTO.

References:

Hoekman, B.M., & Kostecki, M.M. (2001), The Political Economy of The world Trading System: The WTO and Beyond, New York, Second Edition, Oxford University Press: ISBN: 0-19-829431-X.

(http://www.wto.org) Accessed on 6th March 2010.

(http://www.wto.org/english/res_e/doload_e/inbr_e.pdf) Accessed on 9th March 2010.

(http://www.wto.org/english/thewto_e/whatis_e/tif_e/utw_chap6_e.pdf) Accessed on 10th March 2010.

(http://www.hiebs.hku.hk/working_paper_updates/pdf/wp1190.pdf) Accessed on 12th March 2010.

(http://link.wits.ac.za/research/SA-CTO-P.pdf) Accessed on 14th march 2010.

World Trade Organisation (1999) Background Document for High-level Symposium on Trade and Development, Geneva; WTO.

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