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Impact of WTO on Economy


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Impact of WTO on Economy

  1. 1. Its Impact on Economy Preston University, Islamabad
  2. 2. Presented by:• Rizwan Qamar 2
  3. 3. Outline What is WTO Brief Overview Agreements of WTO Principles of Trading Impacts of WTO Criticism on WTO Conclusion Questions?? 3
  4. 4. The InternationalOrganization thatGoverns the Rules ofTrade Between Nations Functions: -administer WTO trade agreements -forum for trade negotiations -handle trade disputes -monitor national trade policies -technical assistance and training -cooperate with international organizations 4
  5. 5. Successor to GATTInternational Organization embodied in results of Uruguay RoundEstablished: 1 January 1995Member driven (153 Members)Decision making by CONSENSUSSingle Undertaking –several topics negotiated togetherServiced by Secretariat - 600+ staffBased in Geneva 5
  6. 6. Ministerial WTO Conference Organization Trade General Dispute Policy Review Council Settlement Council CouncilCommittees for Trade Council for Trade in Goods for TRIPS in Services Committees CommitteesWorking Working WorkingParties Parties Parties 6
  7. 7. Ministerial Conferences+ Singapore (1996)+ Geneva (1998)+ Seattle (1999)+ Doha, Qatar (2001)+ Cancun, Mexico (2003)+ Hong Kong, China (2005) 7
  8. 8. Main WTO Agreements Agreement on Agriculture (AoA) General Agreement on Trade in Services (GATS) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 8
  9. 9. PRINCIPLES OF TRADE• Most Favorite Nation• National Treatment• Negotiations• Barriers not raised Arbitrarily• Discourage unfair practices GATT Articles 9
  10. 10. MOST FAVORED NATION Principle of Non-Discrimination • Tariffs and regulations applied without discrimination • WTO Members receive most preferential trade terms GATT Article 1 10
  11. 11. Impact of WTO on Economy• Helps promote peace between nations• Disputes are handled constructively• Rules make it easier for all – WTO based on rules not on power• Free trade cuts the cost of living, provides more choice of products and quality• Trade stimulates economic growth• Trade raises income of country and it‘s people• Basic principles make life more efficent• Governments shielded from lobbying• System encourages good governance 11
  12. 12. Helps promote peace between nations• This sounds like an exaggerated claim, and it would be wrong to make too much of it. Nevertheless, the system does contribute to international peace, and if we understand why, we have a clearer picture of what the system actually does. 12
  13. 13. Disputes are handled constructively• As trade expands in volume, in the number of products traded, and in the numbers of countries and companies trading, there is a greater chance that disputes will arise. The WTO system helps resolve these disputes peacefully and constructively. 13
  14. 14. How WTO Resolves Disputes• Member country complains about violation of trade rule• Panel of judges chosen• Judicial-type hearing at WTO• Finding• Appeal and final ruling• Implementation (in reasonable time) or penalties/compensation 14
  15. 15. Rules make it easier for all – WTO based on rules not on power• The WTO cannot claim to make all countries equal. But it does reduce some inequalities, giving smaller countries more voice, and at the same time freeing the major powers from the complexity of having to negotiate trade agreements with each of their numerous trading partners. 15
  16. 16. Trade stimulates economic growth• Trade clearly has the potential to create jobs. In practice there is often factual evidence that lower trade barriers have been good for employment. But the picture is complicated by a number of factors. Nevertheless, the alternative — protectionism — is not the way to tackle employment problems. 16
  17. 17. Free trade cuts the cost of living• We are all consumers. The prices we pay for our food and clothing, our necessities and luxuries, and everything else in between, are affected by trade policies. 17
  18. 18. Trade raises incomes• Lowering trade barriers allows trade to increase, which adds to incomes — national incomes and personal incomes. But some adjustment is necessary. 18
  19. 19. Governments shielded from lobbying• The WTO helps governments take a more balanced view of trade policy. Governments are better-placed to defend themselves against lobbying from narrow interest groups by focusing on trade-offs that are made in the interests of everyone in the economy. 19
  20. 20. System encourages good governance• Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse. The rules also discourage a range of unwise policies. For businesses, that means greater certainty and clarity about trading conditions. For governments it can often mean good discipline. 20
  21. 21. Criticism of the WTO• fundamentally undemocratic• ..tramples labor and human rights• ..would privatize essential services• destroying the environment• endangering human lives• increasing inequality• ..hurts poor countries in favor of rich powerful nations• ..undermines local level decision-making and national sovereignty 21
  22. 22. The WTO Is Fundamentally Undemocratic• rules are written by and for corporations with inside access to the negotiations• simple requests for information are denied• proceedings are held in secret 22
  23. 23. The WTO Will Not Make Us Safer• domination of international trade by rich countries for the benefit of their individual interests fuels anger and resentment that make us less safe 23
  24. 24. The WTO Tramples Labor and Human Rights• The WTO encourages a race to the bottom in wages by pitting workers against each other• The WTO has ruled that it is illegal for a government to ban a product based on the way it is produced, such as with child labor• It has also ruled that governments cannot take into account "non commercial values" such as human rights 24
  25. 25. The WTO Is Destroying the Environment• The WTO is attempting to deregulate industries including logging, fishing, water utilities, and energy distribution, which will lead to further exploitation of these natural resources. 25
  26. 26. The WTO is Increasing Inequality• the richest 20 percent of the worlds population consume 86 percent of the worlds resources while the poorest 80 percent consume just 14 percent. WTO rules have hastened these trends by opening up countries to foreign investment and thereby making it easier for production to go where the labor is cheapest and most easily exploited and environmental costs are low. 26
  27. 27. The WTO Hurts Poor, Small Countries in Favor of Rich Powerful Nations• many important decisions get made in a process whereby poor countries negotiators are not even invited to closed door meetings• Many countries do not even have enough trade personnel to participate in all the negotiations• many countries are too poor to defend themselves from WTO challenges 27
  28. 28. CONCLUSION 28
  29. 29. Recommendations• The Organization should operate democratically• Every country must have equal representation• Rich countries should promote poor countries• Some laws must be prepared related with Human Rights, Child Labour, Environment• The Dispute settlement system must be Powerful to implement decisions• Public services must remains profit free. 29
  30. 30. For more information: ? 30
  31. 31. WTO TRADE ORGANIZATION Thank you