world trade organisation

what is it

formed in 1995 to replace the general agreement on tariffs and trade

aims to promote a multi lateral trading system built around the principles of free trade

strengths of WTO

• promoted an open trade system on multilateral agreed rules, promotes world trade and economic growth protectionist tariffs fallen below 5% in industrialised countries economic growth 5% per year and 8% increase in world trade

• makes decisions by consensus among all member states enforcement carried out in agreement by all members this ensures protection of developing countries which make up two thirds of membership

• liberal trade polices sharpen competition and inspire innovation and principle of comparative advantage suggests that humans prosper by using their assets to focus on what they do best then trading that for what others make.

weakness of the world trade centre

• its principle of free trade has been responsible for widening global inequality as industrialised countries gain access to developing countries markets without growing foreign competition, trade becomes about global needs and not local needs and places profit over the protection of the environment, local communities and workers rights

• the WTO lacks legitimacy as it favours the interests of the rich industrially advanced states over developing ones protectionist policies on agriculture are often tolerated in the north but strongly opposed when adopted in developing countries both the USA and EU common agricultural policy use quotas and tariffs to block imports of foreign foodstuffs while subsidising exports to undermine the livelihood of farmers in competitor countries

• negotiations are very slow due to disagreement in industrialised countries such as the USA and EU states and countries such as china brazil and India and south Africa in particular there is conflict over agricultural protectionism for example can be seen in the Doha round of negotiations which started in 2001 but have stalled due to these issues and the need for consensus decision making

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