Unit 4 Macro: The World Trade Organisation (WTO)
Revision notes and resources on the World Trade Organisation (WTO)
The World Trade Organisation (WTO) is a multi-lateral organisation based in Geneva, Switzerland with 156 countries
It helps to promote free trade by persuading countries to lower their import tariffs and other barriers to open markets including widespread use of import licences, export subsidies and other non-tariff barriers
The WTO was established in 1995 and was preceded by the General Agreement on Tariffs and Trade (GATT).
Membership of the WTO has expanded with the successful admission of China, India and latterly, Russia to the WTO as an event of huge significance.
Russia is the most recent country to join the WTO. Countries that join the WTO have to introduce a large number of economic and legal changes and agree to abide by established global trade rules
The WTO oversees the rules of international trade
provides a forum for settling trade
disputes between governments
has the power to levy fines when breaches of global trade agreements have
seeks to make trade between countries transparent
Countries that join the WTO are required to achieve sustained reductions in average import tariffs. After WTO entry in July 2012 Russia’s average import tariffs will decline from 9.4% to 6.4% on industrial goods and from 15.6% to 11.3% for agricultural goods.
Is the influence of the WTO reducing? There has been rapid growth of bi-lateral trade agreements between countries rather than through multi-lateral trade agreements. Non-tariff barriers proliferate and the WTO does not seem to have been effective in curbing these types of protectionism. The WTO has found it hard to make progress in dismantling entrenched systems of agricultural protection / financial support especially farm policies in advanced nations. This has led many critics of the WTO to argue that the WTO is run in the interests of manufacturers and farmers in the developed world - there are strong protectionist interests within the WTO framework.
Noam Chomsky- What's the WTO?