1. WTO uprising
The World Trade Organization (WTO) was commenced on 1st January 1995 replacing the General Agreement on Tariffs and Trade (GATT). Firstly, we have to go back to year 1994 when John Maynard Keynes during Bretton Wood conference had presented his statement about restructuring international finance and currency relations. Both Keynes and Harry White (American mister of state in U.S. treasury) believed that Bank for Reconstruction and International Stabilization Fund should be established. In their opinion it was a must to support global economy. What is more Keynes recommended that debtors and creditors should change their policies. Countries with payment surplus should increase their imports from deficit countries and create a foreign equilibrium. Its establishment was one of six crucial agreements taken during that time. The other five were: 1) Goods and investment — the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures, 2) Services — the General Agreement on Trade in Services, 3) Intellectual property — the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 4) Dispute settlement (DSU), 5) Reviews of governments' trade policies (TPRM).
General mission of the WTO can be defined as creating a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all members, thus contributing to economic growth and development. Because of that WTO provides a legal and institutional framework for the implementation and monitoring all of agreements. The current body of trade agreements comprises the WTO consisting 16 different multilateral agreements (to which all WTO members are parties) and two different plurilateral agreements (to which only some WTO members are parties). All in all, there 153 members of WTO (2008).
Map shows status of WTO:
WTO founder members (1 January 1995)
WTO subsequent members
The principles of WTO
The WTO agreements must cover a wide range of activities. They include such categories as: agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property. At the same time they must be fair and reliable for all members therefore WTO defined five crucial and basic principals:
1)Non-Discrimination means: the most favored nation (MFN) rule, and the national treatment policy. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members. National treatment means that imported goods should be treated no less favorably than domestically produced goods (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al. discriminating against imported goods).
2)Reciprocity relates two issues: a) to limit the scope of free-riding that may arise because of the MFN rule b) to obtain better access to foreign markets.
3)Binding and enforcing commitments. The tariff commitments made by WTO members in a multilateral trade negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade.
4)Transparency. The WTO members are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO. These internal transparency requirements are...