Background of World Trade Organization - Essay Example

and Section # of INTRODUCTION Background of WTO The World Trade Organization (WTO) is said to be the only legislative body after GATT that works between countries forming trade ties in order to help importers exporters, etc. These negotiations are carried out between various countries and are called trade agreements. The World Trade Organization has approximately 153 member countries which represent more than ninety seven percent of the globe’s trade networks. There are over 30 countries which are seeking a membership in World Trade Organization. The World Trade Organization is headed by the ministerial conference. A meeting is held between the members of World Trade Organization once in every two years. It has a general council which makes sure that the conference’s decisions are being implemented to its fullest. The headquarters of World Trade Organization is located in Geneva, Switzerland. Wallach, (2004, pp. 69-87) Background of the subject The World Trade Organization has been working on a Doha Development Agenda also known as the Doha Round. This negotiation started in 2001 which is being done in order to treat poorer countries in an equitable manner and not to give undue benefit to richer countries. However, a World Trade Organization has not been able to reach on to a decision as because there are countries which have a different opinion on the matter. There is a disagreement between exporters of the agricultural commodities and countries which have a large number of farmers so as to protect the farmers from surges in imports. Aims and objectives Maintaining peace is the top priority of World Trade Organization. World Trade Organization makes sure that the trade between the countries takes place smoothly and there are healthy and professional relationships being created in the process. As far as free trade and sales is concerned, World Trade Organization plays the role of a middleman between the countries responsible for building confidence in the concept of free trade. Had there been a dispute, both sides would lose. It helps countries reach a consensus in their decisions after negotiations. Bossche, (2008) When two super powers are trying to have a consensus although they are not on the same wavelength, then disputes arise. World Trade Organization helps solving disputes like these in a constructive manner. The World Trade Organization has a set of rules which the countries are bound to follow in order to avoid these disputes. It is said that the weaker counties try to enjoy more bargaining power as they are the deprived ones among the other countries; however, the World Trade Organization brings them all on the same page applying the same set of rules to all countries. As citizens of a country we are all consumers of what we buy every day. Free trade reduces our costs of living including prices of food, energy, clothes, consumer goods and services. Not only has this but free trade given us more options and choices of commodities available to buy at cheaper prices meaning import of goods. For example, flowers from any part of the world can be bought and sold to a person living across the globe. Wallach, (2004) World Trade Organization works on the negotiations between counties trying to remove the trade barriers between the countries which lead to an increase in trade. This eventually leads to a rise in incomes of the importers and retailers buying the imported goods to sell to the local consumers. Lanoszka (2009) An increase in trade leads to a boost in the economy with a higher employment rate of the country. This is all because of no trade barriers resulting in free trade among countries. Bossche, (2008) ANALYSIS Implications of International Trade World Trade Organization initially when popular among nations did not realize the environmental hazards free trade – trade with no barriers was creating. It is important to highlight here that not only are the natural resources being depleted at a faster rate but also the environmental breakdown and extinction of species are to be blamed on the no barriers involved in trade. The increase in trade has led the countries of the world to over use the natural resources of the world with out any one questioning them about the over use or rather the misuse of the resources. The increase in trade has resulted in an increase in the use of harmful chemicals in the production processes of the goods and their wastages being discarded into the oceans destroying wildlife. This has led the World Trade Organization to think about having some barriers in the trade policies. Bossche, (2008) The increase in trade due to no barriers in trade has led to an increase in the world’s dependency on oil which has led to a global climatic change where countries with hot climates are growing hotter and the ones with cold climates are growing colder. The rise in trade also increases the country’s dependency of oil and energy and would ultimately result in a war between nations to fight for this then scarce resource. Lanoszka (2009) The growth of the foreign direct investment of my country Britain is as crucial as to any other country in the world. As there is a decrease in the trade barriers, more and more countries try to gain control over the assets of the nation and also the resources through investments. When a company which has a manufacturing site in the UK shuts it down and opens it in a place where there is cheap labor and cheap resources for example in China. The companies that are investing outside UK for cheap labor and raw materials is fine as long as the labor and the rules there are not exploited and taken advantage of. Technically, the same rules as that of UK should be implemented in China. However, multibillionaire companies end up forcing the government and the World Trade Organization to make trade agreements which do not include such policies; hence, earning money at the expense of the rights of the citizens of the nation in this case China. Sampson (2009) The World Trade Organization is said to be fundamentally undemocratic in the UK. There are various reasons for this. The impact of their policies reaches out to every part of the planet but in no way can their decisions said to be democratic. World Trade Organization’s policies that are written by them are covertly disclosed to the companies which then take advantage of it and make amendments before the final draft is published. In United Kingdom, the trade sector gets a vast input in those policies; however, labor, environmental and consumer rights are disregarded or rather overlooked. No one knows how the secret global governing body in the World Trade Organization was formed or rather who and when were its members elected? Lanoszka (2009, pp. 20-64) World Trade Organization is said to make the world a safer and a better place with no barriers while the trade is taking place. Instead of promoting peace and an understanding between the trading nations the policies are for the sole benefit of the individuals and not for a mass purpose. This creates fury and anger in the people of Britain. If a company opens up a manufacturing site in India, it has to make sure that the labor on the factory sites in India - hired by that company – is not being forced to work in an unsanitary or hazardous place. Instead, the same policies and rules for the protection of human rights should apply to every company where ever it settles down – be it its parent country or not. Bossche, (2008) As mentioned earlier the rights of humans are disregarded or overlooked and companies make profit at the expense of human rights. The World Trade Organization’s policies mention that the product will be banned if it has been produced in a way which violates the human rights. For example, in Pakistan the weaving and carpet industry has only young children and women working in them because of their feeble and soft hands they weave and British off the dust of raw carpets. The dust particles that are in the air after the brushing of the carpet is then inhaled by the young children and women causing respiratory problems and early death. Privatization of assets means selling them to private companies for profit rather than for the good of the citizens of the nation. Mehmet (2003) Wallach, (2004) RECOMENDATIONS The rise in trade also increases the country’s dependency of oil and energy and would ultimately result in a war between nations to fight for this then scarce resource. The world trade organization should keep a tab to what extent is the trade to be free. Various companies force the government and the World Trade Organization to make trade agreements which do not include policies such as labor rights, environmental and consumer rights etc; hence, earning money at the expense of the rights of the citizens of the country where the company is manufacturing its goods. In my opinion, the world trade organization should make certain policies and make sure that the countries’ companies abide by the. Non-compliance of those policies should result in penalties to the company and to the nation to which it belongs to. This would develop a sense of responsibility in the nation as well as the company. Wilkinson (2006) While the policies are being made, the trade sector gets a vast input in those policies; however, labor, environmental and consumer rights are disregarded or rather overlooked which results in the companies taking advantage of labor and payest them the lowest in the line. As the only trade organization existing in the world, every couple of months it should make sure that the policies that are made have an equal input from all the sectors of various countries which especial emphasis on labor, consumers and environmental rights. Non-compliance of the policies should result in substantial penalties to the company and to the parent nation. The World Trade Organization needs to realize that promotion of equity and justice is the key to peace and understanding among nations which is part of the mission of World Trade Organization. World Trade Organization should make sure that there are no disputes among the nations while entering a trade contract. Free trade was suppose to help countries to have an access to goods and services that weren’t available or even if they were they were highly priced. The reduction in the amount of trade barriers should remain, however WTO should see to it that the countries are not misusing this policy. Sampson (2009) CONCLUSION Peace is the top priority of WTO. It makes sure that the trade between the countries takes place smoothly and there are healthy and professional relationships being created in the process. Although free trade given us more options and choices of commodities available to buy at cheaper prices meaning import of goods and also has lead to an increase in trade and this eventually leads to a rise in incomes of the importers and retailers buying the imported goods to sell to the local consumers. But the hype about free trade and World Trade Organization is no more. The tide is now turning around and countries want the sovereignty that they had before on their decision making back. When the World Trade Organization met in 2001, the countries’ negotiations on trade had disagreements and could not reach on a consensus. Wallach, (2004) BIBLIOGRAPHY Baldwin, R. (2009) Multilateralizing Regionalism: Challenges for the Global Trading System (World Trade Organization), pp. 68-94. Cambridge University Press Bossche, P. (2008) The Law and Policy of the World Trade Organization: Text, Cases and Materials, pp. 38-59. Cambridge University Press.  Lanoszka, A. (2009) The World Trade Organization: Changing Dynamics in the Global Political Economy, pp. 20-64. Lynne Rienner Publisher. Mehmet, O. (2003) Global Governance, Economy and Law: Waiting for Justice, pp.106-155. Routledge Sampson, G. (2009) The WTO and Global Governance: Future Directions, pp. 58-105. United Nations University Press. The Yes Men. (2004) The Yes Men: The True Story of the End of the World Trade Organization, pp. 65-98. The Disinformation Company. Wallach, L. (2004) Whose Trade Organization?: A Comprehensive Guide to the World Trade Organization, pp. 69-87. New York. The New Press. Wilkinson, R. (2006) The WTO: Crisis and the Governance of Global Trade, pp. 84-99 Steger, D. (2004) World Trade Organization (Critical Perspectives on the World Economy), pp. 98-123 . World Trade Organization, (2008) Dispute Settlement Reports 2008: World Trade Organization Dispute Settlement Reports, pp. 3889-4370. Cambridge University Press Read More