Role Of The World Trade Organization In Multilateral International Trade: An Evaluation

1056 words - 5 pages

Introduction
Until the end of twenty centuries, multilateral international trade was functioning without an international organization that coordinate between countries. Some people might justify the role of General Agreement on Tariffs and Trade (GATT) in multilateral trade since the GATT has been providing the rules for the international trading system before the establishment of the World Trade Organization (WTO). However, GATT was only a set of rules set by its trading nations with no institutional foundation, and it did not have the same international influence as other international organizations such as the International Monetary Fund (IMF) or the World Bank (Krueger & Aturupane ...view middle of the document...

From the purposes and principles of the WTO, it provides rules that work for all member countries so that rising trade barriers will not be decided under any country’s interests along. Since more countries have started trade between other nations and that means a greater possibility of disputes. The WTO is a forum that helps countries to settle such disputes because the WTO agreement provides a solid legal constitution. Therefor, when it comes to disputes, the WTO will be able to settle the problem according to the agreement. There has been approximately 300 disputes have occurred since the Uruguay Round, without a efficient and harmony settlement, some of the dispute might have led to more serious conflicts (WTO 2008).

Shaping a fair and free world trade system
The Uruguay Round has not only resulted in the creation of the WTO, but to be the first comprehensive round of multilateral trade negotiation. It covered agreements on a broad scale, such as tariffs/non-tariffs barriers, anti-dumping, dispute settlement, textiles and clothing, agriculture, and trade in services (Jawara & Kwa 2003).

As the only international organization that deals with trading issues between nations, WTO has three main purposes, which are making trade flow as freely as possible, provides a forum for trade negotiations and dispute settlements (WTO 2001). Working towards to the purposes, the multilateral trading system of WTO runs under a number of principles. Firstly, countries should not discriminate between any trading partners also known the ‘most favoured nation’ (MFN) as well as its domestic and foreign goods and services. Secondly, countries should lower the trading barriers and tariffs progressively through negotiation to help the system becomes freer. Thirdly, the system should be predictable so that the companies and governments understand the trade barriers will not be raised arbitrarily. Finally, less developed countries are more beneficial by having better flexibility and privileges (WTO 2001). These principles drive the WTO into a new era of multilateral international trade, where the trade disciplines between countries are strengthened and expanded into new fields, the markets are secured and available to more...

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