World Trade Organization - Essay Example

? World Trade Organization . World trade organization is an international business organization that deals with worldwide trade regulations between countries. It was established in the year nineteen ninety five. The main goal for establishment of world trade organization is to ensure all entities involved in trade transactions conduct their businesses smoothly and freely. Importers, exporters and producers of goods are some of the entities associated with trade transactions. The trade organization has its headquarters based in Geneva, Switzerland. It was created by the Uruguay Round negotiations between nineteen eighty six and nineteen ninety four. Currently it has a membership of one hundred and fifty nine countries. This paper focuses on the functions of world trade organization and how it was establishment. It also looks at how the international organization handled a trade dispute. Objectives of World Trade Organization The world trade organization was formed to achieve various objectives. Promotion of global trade is one of the aims for its formation. The trade organization ensures that all countries benefit from business operations in the international market (Sinha, 2012). For example, Content Cow Dairy Inc Company can realize better returns from its milk sales globally from this objective. Additionally, increase in the level of production among trading countries is another objective of world trade organization. To achieve this objective, the trade organization ensures that member countries enlarge their productivity through utilization of world resources. Another objective of world trade organization is implementation of global trading systems. This is done by ensuring member countries adhere to the set regulations of world trade among its members. Functions of World Trade organization The world trade organization was established to carry out various business functions globally. Implementation of its objectives and trade agreements among its member countries is one of the core functions of world trade organization. The global organization provides a framework to ensure the smooth flow of business operations internationally. It also administers multilateral trade agreements among countries as a way to implement its objectives (Sinha, 2012). This trade organization can be beneficial to Mr. Swanson of Content Cow Dairy Company because of one main reason. Firstly, his milk product business will flow smoothly between different countries globally because of the framework provided by the trade organization. Eventually, the Dairy Cow Company will be able to reach more markets internationally with the presence of a well defined business agreement. From the above explanations, the world trade organization provides a favorable environment to conduct business activities. World Trade organization provides a platform for negotiations (Sinha, 2012). It provides a forum where its members can debate on the issues affecting them. This organization offers its member countries opportunities to discuss trade relation matters. Seeking new markets could be one issue that affects operations of businesses among different countries. This organization offers its members with different options of accessing new markets. For example, Content Dairy Cow president is seeking fresh markets overseas to promote his company’s products. Through world trade organization, the president can find new markets. This is achieved through the negotiation forums offered by the trade organization (Ahearn, 2010). Additionally, the trade organizations offer its members the best markets to sell their products and services internationally. For example, Egypt is Content Dairy Company’s major market. The world trade organization can propose better plans for the company maximize profits from this prime market. Use of consulting firms or agencies to give advice on business operations is also another function of the world trade organization. The organization uses legally established trade consulting agencies to ensure its members get appropriate information concerning business activities (World Trade Organization, 2008). These consulting firms include principals such as attorneys, custom officials and brokers. For example, Content Cow Dairy Company sought advice from Alexander and Kravis trade consulting firm. These trade consulting firms mainly advises its clients on importation and exportation of business products and services. In the Content Dairy Cow Company, the consulting firm offered advice on the importation and exportation of products to and from the United States. Trade consulting agencies are able to offer advice to member countries because they are knowledgeable about business conditions and operations globally. The assist member countries in identifying potential markets for their products and develop good relationship with foreign distributers. They also provide specialists who make arrangements of shipping through import and export documents they prepare. World Trade Organization Dispute A dispute arises when there is no agreement between members of the world trade organization. It occurs when the disagreeing members fail to meet world trade organizations policies. The Uruguay Round agreement introduced a clearly defined process of dispute settlement (World Trade Organization, 2013). During dispute settlement, rulings are first made by the trade organization panel. The world trade organization membership can either endorse or reject the rulings made. This defined process involves the use of fixed timetables for settling disagreements (Bossche, 2008). This introduced discipline because cases were given a stipulated length of time. Use of fixed timetables and flexible deadlines accelerates the process of dispute resolution. For example, if a case runs during its first ruling, it normally takes about fifteen months if disputing parties make appeals. Flexibility of time limits depends on the nature of the case. Urgent cases such as dispute involving perishable products are normally resolved faster. According to the Uruguay Round agreement, member countries cannot prevent the adoption a ruling if a case is lost. Under its predecessor, General Agreement on Tariffs and Trade (GATT), case rulings could only be adopted when all the members of the organization came to a consensus (World Trade Organization, 2013). This meant that a ruling could be blocked by just a single objection. Currently, case rulings are adopted automatically. Any member country that needs to block a ruling has to plead with the members of the world trade organization. Therefore, in the analysis of dispute resolution, it has to go through stages. The first stage involves consultations between disputing countries. In the second stage, panel members are appointed who then prepare reports for both disputing parties and world trade organization members. Finally, the dispute settlement body adopts the report if no appeals are made. This body can then give resolutions to the disputing parties from the adopted report. Importation of bananas was a case brought to the world trade organization by the Columbian government (World Trade Organization, 2013). Columbia applied for this case on first of January the year two thousand and six. On twenty first March the year two thousand and seven, it requested for consultations with the communities in Europe. This case involved the tariffs levied on the two different banana types. The Columbian government imported ACP and MFN types of bananas. There was a dispute because ACP types of bananas were imported at zero rates. On the other hand, MFN tariff rate was set at one hundred and seventy six units per tone. The Columbian considered this tariff levied as contrary to agreements stipulated in General Agreement on Tariffs and Trade articles. In their argument, its only ACP bananas that benefits from zero tariff rate. On eighth November the year twenty twelve, the European Union reached on a solution. Their resolution was to implement proper ways of lowering tariffs on MFN bananas. Evaluation of World Trade Organization and Conclusion From the above analysis of the world trade organization, its members have benefited from the business solutions it provides. Through the use of consulting agencies, business owners can realize maximum returns from the goods and services they import or export. Realization of maximum returns is possible because these agencies provide advice to its clients concerning business foreign practices. They also provide long term strategies for expansion of client businesses among different countries globally. Good international business relationships between member countries have been facilitated since the establishment of this organization. A proper avenue for dispute settlement that involves defined stages has enabled achievement of better trade relations internationally. Additionally, the forums for negotiations provided by the trade organization have enabled its members to expand on their production capacities. In conclusion, the world trade organization plays significant roles in ensuring its members conduct their businesses in a free and smooth manner. From the functions discussed earlier, the world trade organization acts as supervisory body to its members internationally. References Ahearn, R.J. (2010). World Trade Organization (WTO): Issues in the Debate on Continued U.S Participation. Darby: DIANE Publishing. Bossche, P.V. (2008). The Law and Policy of the World Trade Organization: Text, Cases and Materials. Cambridge: Cambridge University Press. Sinha, A. (2012). What are the functions and objectives of WTO?. Retrieved from http://www.preservearticles.com/201012291900/functions-and-objectives-of-wto.html World Trade Organization. (2008). Understanding the WTO. Geneva: World Trade Organization. World Trade Organization.(2013). What is the WTO?. Retrieved November 15, 2013 from http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm Read More