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Introduction to the global economy - Essay Example

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The World Trde Orgniztion (WTO) hs become the orgniztion pr excellence for deling with interntionl trde. The trnsformtion of the Generl greement on Triffs nd Trde (GTT) into the WTO ws nturl phenomenon tht ccompnied profound chnges in the interntionl economic scene…
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Introduction to the global economy
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Download file to see previous pages The WTO greements ssist the ctivities of trnsntionl enterprises, the principl plyers in globliztion, nd the Uruguy Round confirmed this liberliztion. From the Genev Round in 1947 to tht of the Uruguy Round in 1986-1994, the level of triffs pplied to industril products hs fllen from 40 per cent to 3.8 per cent, nd the reduced triffs tht hve been consolidted hve fcilitted the estblishment of trnsntionl economy.
In the following pper I will further discuss the importnt of GTT nd WOT for interntionl trde. The nlysis will include historicl bckground of orgniztions followed by explntion of GTT replced by WTO nd generl results of such trnsformtion nd concluded by the short nd long term consequences of WTO's running.
The GTT hs been clled "remrkble success history of post-wr interntionl orgniztion tht ws never intended to become one" (Grhm, 1983: 124). It strted out in 1947 s set of rules to ensure nondiscrimintion, trnsprent procedures, the settlement of disputes nd the prticiption of the lesser-developed countries in interntionl trde. To increse trde, GTT used triffs concessions, through which member countries greed to limit the level of triffs they would impose on imports from other GTT members. n importnt tool is the Most-Fvored Ntion (MFN) cluse, which clls for ech member country to grnt every other member country the sme most fvorble tretment tht it ccords to ny other country with respect to imports nd exports. (Brber, 1982: 9). MFN, in effect, provides for equl, rther thn specil, tretment.
The GTT ws built on severl principles:
1. The Most Fvoured Ntion (MFN) cluse, which ensures non-discrimintory tretment. This principle, ccording to which ll dvntges, fvours, privileges or immunities grnted by one contrcting prty to product originting from or destined for ny other country shll, immeditely nd unconditionlly, be extended for the sme tretment to ny similr product originting or destined for the territory of ll other contrcting prties promotes the cuse of liberliztion. This principle reduced the trnsction costs of the negotitions for the members. ll countries hving n interest in product nd seeking to improve ccess to it in n exporting country nd hving negotited this concession, must ccord the sme to every other country.
2. The second principle of this system is tht of ntionl tretment nd is intended to complement the MFN cluse. It stipultes tht every imported product fter pyment of the customs duties must not receive less fvourble tretment thn locl product. Ech member stte is obliged to tret locl nd imported products in the sme wy.
3. The third principle is tht of trnsprency. The Mrrkesh greements reinforce trnsprency by djusting notifiction nd informtion procedures. ll lws nd regultions must be published, in order to enble other members to consult them nd ensure tht they conform to the previling legl texts in force. Trnsprency is lso the im of the review mechnism of trde policies. This enbles WTO members to exmine the implementtion of the trde policy of member stte or group of countries within regionl greement. It gives more trnsprency to trde policies. t present, the trde policies of the four biggest exporters - the United Sttes, the Europen Union, Jpn nd Cnd - re exmined every two yers, those of the sixteen other lrgest exporters every four yers, nd those of developing countries every six ...Download file to see next pagesRead More
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