1. Abstract I opted to choose this large subject which is "WTO - World TradeOrganization" because it’s a field that is present all over the world and hastremendous influence both the government and society. WTO is designed topromote the economic, financial and trade among member states, as anessential condition to increase economic development. In this article I intendto inform a little of this big organization and we are able to understand theimportance that the WTO has to trade market. The WTO is important becausesince the decade of 1990 the trade increased at an average rate of 7%.The WTO advantages are: The system promotes good governance; Trade increases the access; A freer trade means lower cost of living; The system helps promote peace.About 75% of WTO members are Developing Countries, which allows WTOmembers develop. Pic.1) Map of WTO members. Pic.1) Map of WTO members. Valter Telo 3
2. World Trade Organization 2.1. Description The organization was founded January 1, 1995 with the purpose of enforcing the rules established by the GATT, in particular as respect the increase in living standards and real income, the achievement of full employment, the optimization of globalresources and the preservation of environment. The WTO includes 127 countries, 153members (more than 97% of total world trade and 30 observers) and operates througha permanent International Conference and Ministerial Conference, its highest body,where each country is represented by a minister. The most important decisions aretaken unanimously; the details of implementation of the measures are approved bymajority vote. The WTO headquarters is at Geneva, Switzerland.Their objectives are: 1. To raise the levels of life; 2. To improve full employment; 3. To attain the objectives with sustainable development and environmental protection; 4. To ensure the rich and poor countries benefit from fair deals for both. Pic.2) WTO headquarters. Valter Telo 4
2.2. Story At the end of World War II has been an important step for global trade. WTO arises from the junction of the International Trade Organization and the Havana’s letter, but was not accepted bythe North Congress of USA. The principles (of ITO - Havana’s letter) wereintroduced into the GATT (1947, temporarily) aimed at removing tradebarriers so as to facilitate the exchange of products between countries.There were 8 rounds of negotiations at GATT: 1. Genebra (1947); 6. Kennedy (1964/67); 2. Annecy (1949); 7. Tokyo (1973/79); 3. Torquay (1950/51); 8. Uruguai (1986/93); 4. Genebra (1955/56); 9. Doha (2001/…). 5. Dillon (1960/61); That after the Uruguay Round (1995) was established WTO. The WTOcame into January 1, 1995. Slovenia joined the WTO on 30 July 1995. Theactual director-general of WTO are Pascal Lamy since 2005. The structure ofWTO is: The Ministerial Conference (council that makes decisions, meetperiodically for two years); The General Council (solves trade disputes amongmembers); The Councils on Trade in Goods; and The Secretariat and DirectorGeneral (does not take decisions only helps administratively). Valter Telo 5
2.3. Principles Non-Discrimination: Most favored nation (MFN): – (Non-discrimination between countries in the WTO, the measures taken by a member of WTO in relation to another, must be equal to all other members). National treatment: – (This treatment should be applied to services, products, which require that there be no discrimination in domestic products and products of a member state. Reciprocity – This principle assumes that, when Countries joins the organization, reducing tariff barriers, also hopes that member countries do the same. Binding and enforceable commitments – This principle provides that trade agreements are listed in a "schedule" list of Concessions. If satisfaction of a transaction is not successful, the country concerned may claim the WTO. Transparency – This principle requires an internal transparency forcing member states, to always notify the transactions of trade measures. There is the Trade Policy Review Mechanism (TPRM) to supervise the transparency. Valter Telo 6
Safety valves – This principle requires WTO member may restrict trade for member states if and only if for: Ensuring articles to "fair competition"; Attain articles to non-economic finishes; Others (allow Intervention for Economic Reasons).2.4. Evolution After the World War II it was necessary to build an organization for economiccooperation, at this time were created the IMF (International Monetary Fund) andGATT. In December 1945 USA took advantage of the fact that already knew theirallies in war and therefore do business with low Tariffs, creating the ITO(International Trade Organization). In March 1948 letter from the ITO (Havana’s letter) was not successful,because North American Congress never approved it. On October 30 of 1947, 23Countries have signed (Final Act authentic of the General Agreement on Tariffs andTrade). From 1948 to 1995 the GATT was the only organization to deal withinternational trade. After the Uruguay round of GATT was transformed to the WTO. Valter Telo 7
2.5. Rounds Year Name Number of countries Issues 1947 Genebra (1947); 23 countries Tariffs 1949 Annecy (1949); 13 countries Tariffs 1950/51 Torquay (1950/51); 38 countries Tariffs 1955/1956 Genebra (1955/56); 26 countries Tariffs 1960/61 Dillon (1960/61); 26 countries Tariffs 1964/67 Kennedy (1964/67); 62 countries Tariffs, Antidumping measures. Tariffs, Non-tariff measures, Export 1973/79 Tokyo (1973/79); 102 countries restrictions, Measures for controlling the Proliferation. Tariffs, Agriculture, Services, 1986/93 Uruguai (1986/93); 123 countries Intellectual property, Textiles. Industrial tariffs and Non-tariff 2001/… Doha (2001/…). 149 countries barriers, Trade remedies, Agriculture, Services. Evolution 160 149 140 123 120 102 100 Countries 80 62 60 38 40 23 26 26 13 20 0 Genebra Annecy Torquay Genebra Dillon Kennedy Tokyo Uruguai Doha (1947); (1949); (1950/51); (1955/56); (1960/61); (1964/67); (1973/79); (1986/93); (2001/…). Names Pic.3) Table and graph of Rounds.
3. Conclusion With this work I concluded that an organization that promotes trade (inthis case the WTO) is important for international relations. We could not talkabout international trade without talking about the WTO. Currently, theWTO is also target of criticism; in particular, do not respect the principle ofnondiscrimination. We must know that the WTO is not an independentorganization but an organization that makes a decision only when allcountries are into agreement. We must also keep in mind that the less developed countries do not havemuch influence in the organization, but also has the right to express theiropinion. It is indispensable the existence of the WTO, because if did notexist, the trade was faced with a restriction products (less variety), as wellas their prices would be more expensive. With this work, in the course of Economic Diplomacy, I wanted to makeknown the importance of the WTO (members, rounds, principles, etc). Theorganization goes far beyond what was written in this paper because of itsscale. Finally, referencing that protectionism is not a good policy for anycountry. Valter Telo 9
4. References Websites: http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm; http://en.wikipedia.org/wiki/World_Trade_Organization; http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm; http://www.globalissues.org/article/42/the-wto-and-free-trade. http://www.iisd.org/trade/handbook/3_1.htm Books: “An introduction to the WTO Agreements”, By Bhagirath Lal Das. Valter Telo 10