The document outlines the principles of the World Trade Organization (WTO) and the multilateral trading system, emphasizing concepts such as trade without discrimination, fair competition, and gradual trade liberalization. Key components include most-favored-nation treatment, national treatment, and the importance of predictability and transparency in trade agreements. The WTO also supports development by providing flexibility for developing countries in meeting obligations.

1. Understanding Multilateral trading World trade organization (wto) Justin Williams

2. Global Partnerships The WTO consists of fundamental principles that are the foundation of the multilateral trading system principles include: trade without discrimination Freer trade: through negotiation predictability: through binding and transparency promoting fair competition encouraging development and economic reform

3. Trade without discrimination 1. Most-Favored-Nation Treatment under WTO agreements countries cannot discriminate between trading partners if someone is granted a special favor (lowering custom duty rates) then this must be done for all other WTO members Exceptions: 1. countries can set up free trade agreement that only applies to goods traded within group (trading partners) and discriminates against goods from outside 2. countries can grant developing countries access to their markets 3. countries can raise barriers against products that are considered to be traded unfairly from specific countries.

4. Trade without discrimination 2 . Treating Foreigners and locals Equally imported (foreign) and locally-produced goods should be treated equally [at least after foreign goods have entered market] should also be treated equally: foreign and domestic services, local trademarks, copyrights and patents this is the principal of “ national treatment ”: treating foreign goods as you would treat your own nation’s “ National treatment ” is only applied once a product has entered the market thus, a country is allowed to charge customs duty on an import (not in the market) and not charge customs on a locally-produced product.

5. Freer Trade: Gradually Through negotiation Encouraging Trade lowering trade barriers ; customs duties, quotas that restrict specific quantities and import bans (most obvious) changing exchange rate policies (have been discussed) General Agreement on Tariffs and Trade (GATT) 1947 (1947-1994) 8 rounds of trade negotiations which discussed: tariffs, tariffs & anti-dumping measures, tariffs & non-tariffs measures “framework” agreements, tariffs & non-tariff rule result: by mid-1990s industrial countries’ tariffs rates on industrial goods fell to less than 4% Doha Development Agenda : currently hosts 9th round of trade negotiation Opening markets (beneficial but requires adjustment) thus WTO allows gradual changes through “ progressive liberalization ”

6. Predictability: Binding & Transparency certain promises from countries promote future opportunities ex/ promise to not raise trade barrier gives businesses a clearer view of their future opportunities therefore with stability and predictability, investment is encouraged (therefore jobs are created and consumers can enjoy benefits of competition) When countries agree to open their markets for goods/services they “bind” their agreement (through set tariffs, tax import rates, etc) a country can change it’s binding agreements by negotiating with trading partners bounding of products promotes a higher degree of market security for traders and investors & therefore predicability ( why predictability is important ) improve predictability: transparency making countries’ trade rules as clear and public as possible to not cause confusion

7. Promoting Fair Competition the rules of the WTO try to establish what is fair and unfair and how governments can respond caused by unfair trade Most-Favored-Nation (MFN) National Treatment Partly a “free trade” institution because: allows tariffs and other limited forms of protection BUT NOT ENTIRELY FREE TRADE because of aforementioned rules

8. encouraging development and economic reform WTO system contributes to development WTO understands that over 3/4s of members are developing countries, they sometimes need special assistance and flexibility in time to implement WTO agreements Uruguay Round (negotiation talks) helped to increase bindings in developed countries and the end of Round; developing countries were more prepared to take on most obligations required of developed countries their are still concerns about obligation which are currently being discussed in Doha Development Agenda

9. http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm#rounds