The WTO

• The WTO - information and aim

  • Bretton Woods Institution
  • Responsible for 97% of world trade
  • Aims to reduce barriers to trade
  • Helps write trade agreements
  • Ensures states are upholding agreements
  • Provides research on global trade and economic policy
  • Helps resolve trade disputes and prevent trade wars
• How is the WTO different to the IMF/World Bank

  • WTO focuses on trade whilst the IMF focuses on economic crises and the world bank is focused on poverty reduction
• The success of the WTO

  • 22 yrs after its formation, tariffs have decreased to an average of 9%
  • 95% of the trade that happens globally is done by WTO members - thus following regulations laid down by the WTO
  • Many countries us the WTO to resolve trade disputes
  • Developing nations benefit from the most favoured nation policy
• WTO rules and MFN policy

  • Decisions are made by consensus and are binding
  • Every member must agree for a round to be successful
  • There are 9 negotiated rounds
• Failures of the WTO: Doha Round

  • Development round - extend free trade to developing nations
  • Developing nations objected to dropping protectionist agricultural policies whilst developed nations subsidised their farming industry
  • The round was abandoned in 2015
• The EU's Common Agricultural Policy

  • 40% of the EU budget is spent on 5% of the population (farmers)
  • It provides subsidies to EU farmers to enable them to sell at low prices outside of the EU
  • Increases competitiveness of EU products but it ignores free market rules of supply and demand because there is too much supply and not enough demand
• Criticisms of the WTO

  • Political power resides with western powers who gain the most from deals
  • The WTO is too slow due to the need for consensus and the ministerial conferences are too infrequent (every 2 yrs)
  • Trans Pacific Partnerships bypass the WTO which makes the WTO redundant