| Eco
Fundas |
Role of the World Trade Organization
|
|
The world Trade Organization is a legal and formal institution
for multilateral trading, providing a platform on which trade
relations among countries evolve through collective debate,
negotiation and adjudication. It provides the principal contractual
obligations determining how governments frame and implement
domestic trade legislation and regulations
The WTO was established on the 1st of January 1995,as a successor
to GATT –general agreement on trade and tariff, after
the Uruguay round with the prime intention of strengthening
the world economy and leading to more trade, investment and
employment throughout the world. Potential membership –152
countries out of which 76 became members on the first day itself.
There are various advantages of being a member of the WTO and
there are also a lot of questions that crop up when we talk
of the facilities offered by the WTO. Are they Answerable?
(i) MFN-The most favored nation status that is offered to countries
especially the developing and the third world nations. This
ensures non-discrimination and is designed to secure fair conditions
of trade .It also ensures that a product manufactured by a LDC
does not lose out to a developed nation in the international
market.
(ii) Anti Dumping Duties – What is dumping? When substandard
products manufactured in a country are dumped into another country
and sold at a price lower than that of the domestic market rate
is called dumping. Similarly the issues regarding subsidies.
Handling these issues are complex, but the rules and agreements
of the WTO try to establish What is fair or unfair, and how
the government can respond in particular by levying anti dumping
duties calculated to compensate for damage caused by unfair
trade.
(iii) Liberalization-Is it a bane or a boon? Especially the
developing countries and countries in transition to market economies.
Technology transfer, boost in R&D, FDI (foreign Direct Investments),
employment opportunities in MNCs and so goes the list. Are all
this only a economic and financial myth? The FDI in no way have
benefited the third world nations. The investment comes from
the headquarter of the MNC into its branch and gets back the
same way.Does the WTO exist only for the Industrialized nations?
(iv) IPR-Intellectual Property Rights - Patents and patenting,
an issue or a non-issue? Can Basmati, Neem and turmeric be patented?
Can generic products be patented? Process patents Product patents?All
the countries now having process patents have to introduce Product
patents by 2005Their duration will be 20 years. Compulsory licensing
provisions will be tightened. Increased safety measures regarding
patenting has been introduced. There has been reduction in the
severity of price control.
(v) Dispute arbitrator - The WTO acts as dispute arbitrator.
third world nations cannot afford to involve themselves in a
legal hassle with a developed nation. This is where the WTO
steps in and settles the disputes amicably. There is a possibility
of appeal to either party when they present the case in front
of the panel consisting of an appellate body which has people
of recognized standing in the field of law and international
trade. The report of this body has to be unconditionally accepted
The WTO advocates Transparency in all the member county’s
trade rules, lesser red tapism and improvement of predictability
and stability. It contributes primarily to development ,especially
that of the least developed nations. It understands that these
nations need flexibility in the time taken to implement agreements,
need time to adjust to the unfamiliar. TO accelerates implementing
market access commitments on goods exported by these countries
and seeks increased technical assistance to developing nations
as was seen in the recent Seattle Rounds.
Seattle Fiasco
The most recent round of the WTO held last year at Seattle was
a fiasco with no conclusion arrived at, because of the contencious
issue of farm subsidies with the US accusing the BRIC countries
of not relenting on farm prices while the BRIC nations accusing
the U.S. of unfairly favouring their farmers. -- trying to dominate.
Child Labor and Environmental issues also dominated the rounds.
The round concluded without any concrete agreements.
|
