Arabi Moorthy and Prachi Vyas W ORLD T RADE O RGANIZATION

What is the WTO? Only global international organization that deals with the rules of trade between nations Goal is to help producers of goods and services, exporters, and importers conduct their business

Important Documents Final Act: signed in Marrakesh in 1994; functions as a “a cover note” to which everything else is attached Agreement Establishing the WTO (the WTO Agreement): an umbrella agreement; founding charter of the organization and the basis for everything the WTO does Agreements Manages about 60 different “agreements”, which have the status of international legal texts Member countries must sign and ratify all WTO agreements on accession Examples: Agreement on Agriculture Agreement on Tariffs and Trade

Age and Changes Created in January 1, 1995 in order to replace GATT, under the Marrakech Agreement Whereas GATT regulated trade in merchandise goods, WTO also covers trade in services: Telecommunications, banking, and issues such as intellectual property rights

Members in the WTO 153 Members as of 2/10/11 China formally joined the body in December 2001 after a 15-year battle Russia joined only after convincing the EU and US that it had reformed business practices

Membership First: Government applying for membership must describe all aspects of its trade and economic policies that have a bearing on WTO agreements Second: Cover tariff rates and specific market access commitments, and other policies in goods and services; talks determine the benefits (in the form of export opportunities and guarantees) other WTO members can expect when the new member joins Third: Draft membership treaty with protocol of accession and list of commitments Fourth: Final package presented to the WTO General Council or the Ministerial Conference; needs a two-thirds majority vote in favor of the applicant

Membership Cont. Non-member governments may become WTO observers before they make an application to accede Status is granted initially for five years; observer governments are then expected to take a stance on accession within that period of time Iran - Observer government - General Council established a Working Party to examine the application of the Islamic Republic of Iran on 26 May Submitted its Memorandum on the Foreign Trade Regime in November The Working Party has not yet met.

Leadership in the WTO Highest body: Ministerial Conference - Meets every two years - Elects the organization's chief executive (the director-general) - Oversees the work of the General Council. - Setting for negotiating global trade deals, known as "trade rounds" which are aimed at reducing barriers to free trade General Council - In charge of the day-to-day running of the WTO - Made up of ambassadors from member states who also serve on various subsidiary and specialist committees. - Among these are the Dispute Settlement Panels which rule on individual country-against-country trade disputes

Leadership Cont. Director-General: Pascal Lamy - Supervises the administrative functions of WTO - Little power over matters of policy; role is primarily advisory and managerial - Appoints the members of the staff of the Secretariat - Determines staff duties and conditions of service - Appointed by WTO members for a four-year term

Advantages of Membership 1. Peace 2. Disputes: fair outlet for dealing with disputes over trade issues, international confidence 3. Rules: agreed rules give governments a clearer view of which trade policies are acceptable. 4. Cost of living 5. Choice: more options, broader range of qualities 6. Incomes 7. Growth and jobs 8. Efficiency: trade allows a division of labor between countries. It allows resources to be ] used more appropriately and effectively for production. 9. Lobbying: governments need to be armed against pressure from narrow interest groups, and the WTO system can help. 10. Good government: Remove the use of quotas and reduces corruption because it places constraints on member countries

Disadvantages of WTO Too powerful: it can compel sovereign states to change laws and regulations by declaring them to be in violation of free trade rules. Run by the rich, for the rich: does not give significant weight to the problems of developing countries For example, rich countries have not fully opened their markets to products from poor countries. Indifferent: in regards to impact of free trade on workers' rights, child labor, the environment and health Lack democratic accountability: its hearings on trade disputes are closed to the public and the media

International Impact China: - Opened up China’s market for more international trade and investment, and opens up the world economy for China’s exports. Russia: - Diminished the monopoly that Russia’s banks and insurance companies enjoyed. - Boost key segments of Russia’s economy as foreign markets are opened to Russian products like grain, transport, tourism, construction and engineering Nigeria: - Helped increase accountability and transparency in the government to combat corruption

International Impact Mexico: - Weakened local laws - U.S. filed a WTO challenge against Mexico for violating rules on anti-dumping measures - Deepened land privatization in Mexico by banning communal ownership as “discriminatory” and removing restrictions on who could buy land UK: - Prevents trade-distorting behavior by multinational corporations. - Created broader market with more transparency

Works Cited