1. NS3040 Fall Term 2018 World Trade Organization (WTO)
Federal Reserve Bank of Chicago, Strong Dollar Weak Dollar

2. WTO I
The Bretton Woods conference (1944) established the financial architecture for the world economy.
Three new international organizations were formed:
The General Agreement on Tariffs and Trade
Prevent trade wars, dismantle 1930s protectionism
The International Monetary Fund
Help maintain exchange rates, prevent currency wars
The World Bank
Help countries that were locked out of capital markets borrow at
reasonable rates of interest
At the time fears that the Western economies would slip back into economic depression once war expenditure fell off.
The new organizations were designed to prevent this through providing global governance and country assistance to facilitate world trade and finance
CFR Backgrounder WTO

3. WTO II
The GATT and later WTO are the bodies responsible for overseeing the rules of international trade.
Duties include:
Monitoring trade agreements
Settling disputes
Facilitating trade talks
The original GATT had 23 members.
Now there are over 150 countries or 97 percent of world trade
Original GATT dealt mainly with manufacturing
With the development of trade in services as well as other non-manufacturing categories, the GATT evolved into the WTO – broader mandate
CFR Backgrounder WTO

4. WTO III In addition to services such as banking and telecommunications
The WTO sets rules for protecting intellectual property rights and
Settles international trade disputes which the GATT did not cover
Decisions in the WTO are binding and made by consensus
Member nations enforce WTO rules by imposing sanctions on states that break them.
Organization is located in Geneva
Has various rounds of trade liberalization.
The current Doha round was started in 2001 with an original deadline of January 1, 2005
CFR Backgrounder WTO

5. WTO IV There a number of distinct benefits to belonging to the WTO
The system helps promote peace
Disputes are handled constructively
Rules make it easier for all
Freer trade cuts the cost of living
It provides more choice of products and quantities
Trade raises incomes
Trade stimulates economic growth
The basic principles make life more efficient
Governments are shielded from lobbying
The system encourages good governance.

6. WTO V
Over the years a number of misunderstands have surrounded the WTO – mainly conspiracy theories
The WTO dictates policy
The WTO is for free trade at any cost
Commercial interests take priority over development
… over the environment
... over health and safety
The WTO destroys jobs, worsens poverty
Small countries are powerless in the WTO
The WTO is the tool of powerful lobbies
Weaker countries are forced to join the WTO
The WTO is undemocratic.