Group-III-Term-Paper

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal WORLD TRADE ORGANIZATION Submitted by: Abelinde, Herose Cañazares, Jemayma Castro, Glory Marie De Lara, Heidie Loureyn Laceda, Vina Irish Rivera, Kian Charles Submitted to: Loyd Jester Dometita World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal ABSTRACT This paper discusses the history of the World Trade Organization that operates in the whole nation. It examines the fundamentals of the WTO such as what the World Trade Organization is, how it was formed, the countries that make up the WTO and the goal of the World Trade Organization for trading across the globe. It will also explain the issues with regards to WTO, the countries affected by the issues and the effect of WTO in regulating the world's economy. World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal INTRODUCTION International trade has been a battle between free trade. It has been expanding and trade agreements have been increasing with complications. According to Tarver (2021), the definition of trade is a basic economic term that refers to the exchange of goods or services between two parties. Trade is needed for the global economy to remain competitive. Trade is central to ending global poverty (World Bank Group 2018). It helps in lowering international goods prices in the world. Many organizations have been formed in order to improve the global trading industry through the years and one of these is the World Trade Organization (WTO). It administers a global system of trade regulations and it helps the developing countries. It is the only international trade organization that deals with trade rules between nations and has fueled globalization, which has both positive and negative societal consequences. History of World Trade Organization After World War II, the governments from all over the world, which was led by the United States and various industrialized countries, strive to establish an open and nondiscriminatory trading system with the grounds of upgrading the economic growth of all countries. These countries have met to discuss the economic downturn and military aggression in the 1930s, upon their meeting; they saw open trades as essential for World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal economic peace and stability. The intention of those negotiators was to establish an International Trade Organization (ITO) that would address not only trade barriers but also concerns that were not directly related to trade, particularly employment, investment, restrictive business practices and agreement on commodities. The ITO was intended to be a specialized agency of the United Nations, but the treaty of ITO was not approved by the United States and a few parties who have signed the agreement with the US. Alternatively, in 1948, a preliminary agreement on tariffs and trade laws was established and implemented. This agreement was named as the General Agreement on Tariffs and Trade (GATT). It became the primary set of regulations that governed international trade for the next 47 years. The GATT has developed trade principles that are still useful until now. One of these was the 'nondiscrimination in the agreement of international trade in goods'. It also stated that imported and domestic goods should be treated equally. Another one is the application of any trade barriers in an open and equitable manner. When the time that GATT was created, tariffs were ultimately a common and evident form of trade barrier. Tariffs are the 'bound' that was set to maximum levels and were not allowed to rise above the negotiated level. One of the chief goals of GATT was to reduce trade barriers. In regards to this, the contracting parties of GATT have assembled occasionally to deal with tariff reductions and other trade barriers as well as the revision to some GATT rules. Their negotiation was called 'rounds'. These rounds of negotiation were held purposely for tariff reductions and later on the rounds also included nontariff trade barriers. The Uruguay Round that lasted World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal from 1986 to 1994 is the most recent and comprehends most of the set of negotiations in the history of GATT. The agenda reform by the existing GATT system as well as the expansion of rules to cover new areas including service trade and the trade aspect of intellectual property rights (copyrights, trademarks and patents). These agreements were the results of the Uruguay Round that require negotiation on agriculture, services, and intellectual property rights and govern acquisition began in the year 2000. One of the significant changes from the Uruguay Round was the establishment of a new trade formation which is the 'World Trade Organization'. It was a permanent institution with 'members' rather than just 'contracting parties' and it became official on January 1, 1995. Goals of World Trade Organization and its members The World Trade Organization is composed of 164 members that account for 195 countries in the world. These countries have joined to enjoy the benefits of substantial international trade that are granted by the World Trade Organization (Amadeo 2022). The WTO provides each member with the same benefits and treats each country with equality. There is a balance of rights and obligations among these members. The World Trade Organization is a place where government members visit in an attempt to sort out the trade problems between countries. Talking and communicating plays a major role in WTO since the organization itself was a product of negotiation, everything about the WTO is the result of negotiation. The WTO system aims to help the flow of trade as World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal freely as possible. It removes the barrier and ensures that the rules around the world are known by individuals, companies and government assures that there will be no sudden changes in their policy. In short, their rules need to be transparent and predictable by the people. The World Trade Organization is not just about expanding trade. In some cases, it rules, supports and maintains trade barriers on different countries. For example, protecting the consumers and preventing disease from spreading and affecting a lot of people. The agreement of the WTO was negotiated and signed by its members on the world's trading nations. These agreements stated the legal ground-rules of the internal commerce. These documents are essential contracts that bind the government to keep and retain their trade policies that were agreed upon the limits. Although it was negotiated and signed by the government, its intent is to help the producers of goods and services, exporters and importers in conducting their business at the same time; it allows the government to reach social and environmental objectives. Issues Related to World Trade Organization Over time, there are issues arising in relation to the World Trade Organization. One of these is that developing countries do not share common interests and may find themselves on opposite sides of a negotiation. For this reason, many alliances among different groups of developing countries were formed. These differences can be found in matters of enormous importance to developing countries, notably agriculture. For World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal example, developing countries have organized themselves and formed an alliance which is the African Group and the Least Developed Countries Group. The Developing countries complain on the Doha Agenda that they face high tariffs on selected products. For example, tariff peaks on textiles, clothing and fish products. Another issue is 'Tariff Escalation' where the importing country looks after its production by setting up low duties on import of raw materials and components, and high duties on goods. The developing countries are worrying with the 'Erosion of Preferences' since the special tariff permit that was granted by the developing countries on imports from certain developing countries becomes trivial if the normal rates of tariff are cut down because there is a difference that arises between the normal and preferential rates and thus, the rates are lessen. Developing countries can benefit from these changes if only their economies are capable of modifying with change. It depends on the union of actions that starts from improving policy implementation and management of macroeconomics to boost training and investment since least developed countries are the worst when it comes to making adjustments because those countries lack human and physical capital, poor infrastructure and institutions that function inadequately. Sometimes these countries even have poor political stability. Effects of World Trade Organization in Global Economy The World Trade Organization has been lowering the trade barriers and increasing the trade among its countries as much as possible. It has maintained trade barriers World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal across the global context. The WTO attempts to provide a negotiation intervention that benefits the global economy. Once these negotiations are complete and an agreement takes place, the World Trade Organization offers to interpret those agreements in case of a future dispute. All agreements of WTO incorporate a settlement process, whereby the organization legally conducts a neutral conflict resolution. The World Trade Organization has contributed to peace and stability. It helps sustain trade growth and it stabilizes the world's economy through demoralizing inverted stride by making the policy predictable. The WTO has increased certainty and they are the confidence builders of the countries. When the world economy is in a state of turbulence, the WTO system can contribute to the stability of the world's economy. The World Trade Organization is a big help to developing countries. It boosts economic growth and helps the countries to develop. Through this, commerce and development are good for each other. Besides, the agreements of the WTO are full of provisions that consider the interest of the developing countries. The least developed countries can receive special treatment such as exemption from many provisions. The developing countries can also use their needs to justify their actions that are not normally allowed based on the agreement. For example, their government gives certain subsidies. The WTO has a role to play, particularly as a convention and as an agency that distributes information on trade related development. The World Trade Organization provides better communication. It has set up reference centers for over 100 trade ministries and regional organizations in capitals of the developing and least developed countries. It equips those countries with World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal computers and internet access that enables their ministry to keep updated with regards to events of WTO through accessing its massive database of its official documents and other related material online. The World Trade Organization can stimulate employment by helping its members to use trade as their means to raise their living standards, create jobs and improve the lives of the people worldwide. The WTO can also do numerous things including giving the weak a stronger voice, encouraging good governance, supporting the environment and health, cutting the cost of doing business internationally and settling disputes and reducing trade tension internationally. CONCLUSION In conclusion, this paper has identified the goals of the World Trade Organization and how it affects the developing and least developing countries. The WTO has both advantages and disadvantages that drive the world's economy. The World Trade Organization is the only international trade institution that operates across the whole nation. It then assists the product and service makers, as well as importers and exporters in their operations. The WTO also promotes a global economy and provides wealth to underdeveloped countries through expansion of trade. The vital point is that, without trade, the worth of products and services would be much greater than they're now, and numerous entrepreneurs from small to large scale businesses would be unable to compete in the global market. World Trade Organization Group III

Republic of the Philippines UNIVERSITY OF RIZAL SYSTEM Tanay, Rizal REFERENCE LIST: 1. https://www.investopedia.com/terms/t/trade.asp 2. https://www.investopedia.com/articles/investing/011916/brief-history- international-trade-agreements.asp 3. https://www.thebalance.com/wto-membership-benefits-and-importance- 3306364 4. https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm#:~:text=The %20WTO%20began%20life%20on,50th%20anniversary%20of%20the%20sys tem.) 5. The World Trade Organization: Background and Issues. (2008). EveryCRSReport.com. Retrieved from https://www.everycrsreport.com/reports/98 6. 928.html#:~:text=The%20World%20Trade%20Organization%20 (WTO,Round%20of%20multilateral%20trade%20negotiations. World Trade Organization Group III