Role of WTO in International Trade
WTO plays an important role in international trade which is described as follows:-
1. Specialized Help for Export: In 1964, the WTO established the International Business Centre to help developed countries in their export. It is jointly operated by the WTO and the United Nations.
It provides information and advice about export markets and marketing techniques and also assists in establishing export promotion and marketing services, and in the training personnel required for these services.
2. WTO in Global Economic Policy-Making: WTO co-operates with the International Monetary Fund, the World Bank and other multilateral institutions for achieving greater coherence in global economic policy making.
3. Taking Information: WTO takes regular information from the member countries about their policies and tariffs. According to various agreements, the government has to notify the WTO about the modified trade measures such as safety standards, technical standards, anti-dumping and countervailing duties, etc. Thus, it keeps itself updated regarding any development and it also the rules of trade between disseminates information. to the member countries that help them in increasing their exports.
4. Encouraging Development and Economic Reform: GATT allows for special assistance and trade concessions for developing countries. WTO agreements give them transition periods for adjusting to the more unfamiliar difficult framework.
5. Giving Information to Public: It also disseminates information to the public regarding the developments in WTO through its publication and its websites.
6. Helping Developing and Transition Economies: Developing countries make up about three quarters of the total WTO membership. The role of WTO increases since most of these developing countries are in transition phase as they are shifting from planned economic system towards based economic system.
Policies of WTO for International Business
The main function of WTO is to act as a dispute settlement mechanism. The WTO agreements are complex and lengthy as they are legal texts covering a wide range of activities. They are:
1. Agreement on Trade in Services: The agreement on trade in services is concerned with tourism, telecommunications, banking, professional services and many more.
2. Tariffs: What the Uruguay round did is that on 26 March, 1997,40 countries which account for more than 92% of world trade in information technology products, agreed to eliminate import duties and other charges on these products by 2000 so as to facilitate international trade with all members.
3. Anti-Dumping: When products are dumped, it normally leads to unfair competition and so as to have fair competition. WTO developed the *Anti-Dumping Agreement which states that if a country is facing dumping of goods, it has to charge extra import duty on the particular product from the particular exporting country so as to bring its price closer to the ‘normal value.
4. Non-tariff Barriers: The agreement on import licensing procedures is concerned about import licensing that should be simple, transparent and predictable.
MNCs. In fact, this strategy of the WTO has not benefited the developing countries.
One can see that the market access of these countries in industry has not improved, non-tariff barriers like anti-dumping measures have increased and domestic support and export subsidies for agricultural products in the rich countries still remain high. Thirdly, it is criticised that labour relations and environmental issues have been side-lined or ignored by the WTO. Finally, decision-making process in the WTO is rather non-transparent, ineffective and non-inclusive since “the vast majority of developing countries have very little real say in the WTO system.”
