The Role of World Trade Organization and Its Impact on Globalization

Pages: 10 (2984 words) Published: April 14, 2014
THE ROLE OF WTO AND ITS IMPACT ON GLOBALIZATION,
GLOBAL POVERTY AND INEQUALITY
INTRODUCTION
Over the last few decades, inventions in the field of science and technology enlarging the domain of the global economy. In other terms, rapid globalization driven by advancement in technology and liberalization, shifting the weight from national economies to a global economy, in which rapid and without barrier financial capital flows and production is internationalized between countries, since the 1990, globalization has become a reality and a key economic factor.

The trade barriers has positive link with the poverty if trade barriers are high it will also raise the poverty level. Restriction in the shape of tariffs a developing country farmer must pay reducing the possibility of exporting to the developed countries because this trade will not remain viable where he will compete with the developed country farmer who are enjoying heavy government subsidy but he have to pay almost 100% import duty for many agriculture products. Unable to export, on a small scale mean less income for attaining better health facilities and education for their children and on a large scale impossible for developing countries to change their status form poor country to developed country because of its massive trade deficits. Whereas developed countries have better resources and it is almost impossible for developing countries to compete with them in a technological advanced products. This is one of the major reason they are the biggest beneficiary of this imbalance trade system which is base on inequality and leads towards poverty.

THE ROLE OF WTO AND ACHIEVEMENTS
The World Bank suggests broad trade liberalization would lift 300 million people out of poverty by 2015 (World Bank/Global Economic Prospects and the Developing Countries 2002).

So what should the role of World Trade Organization and its impact on global poverty and inequality? The WTO is become a leading player for current international trade and its related issues between different countries, some of their main objectives are to provide level playing fields for all and provide special relaxation in policies for developing countries in focus of reduce global poverty and inequality. Whereas according to their critics, who believe that both global poverty and inequality is rising with a greater pace compare to it use to be in the past before the existence of this organisation, according to them it's a proven fact by comparing the figure of per capita growth between 1980 to 2000 of developing countries it can notice easily that it fell to half which was achieved between the period of 1960 to 1980.

For better understanding it is essential to understand what actually is World Trade Organization in view of its vision and progress so far, what is their main role and objectives and is their polices have any impact to reduce global poverty and inequality.

The state role has redefine by the rapidly strengthening globalization. In "Free Market vs. Government: the struggle for commanding heights" Yergin argues that the "commanding heights" of the domestic economy and strategic sectors are captured by the ideas of deregulation, privatization and free market and competition. In contrast, global financial institutions, capital investors and multinational firms becoming stronger because of globalization. Different stake holders like state, civil society and multinationals are force to shift towards restructuring their traditional approach in view of new economical challenges and emerging difficult realties. Traditional governments role are squeezing and balance of power shifting towards the new global actors which are becoming more powerful with the help of technological revolution and strong contact with global institutions. International business community and NGOs are successful for identify themselves as a essential participants at the annual meeting of the World Economic Forum....


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