Chapter-2.pdf - Chapter 2 Basics principles of International Trade lundi 14 octobre 2019 16:02 The concern of the WTO to develop International Trade

Chapter-2.pdf - Chapter 2 Basics principles of...

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Chapter 2 : Basics principles of International Trade lundi 14 octobre 2019 16:02 The concern of the WTO : to develop International Trade without discrimination through progressive and negotiated liberalization. This development is achieved through the introduction of transparent general principles which promote fair competition. The reality highlights some exceptions and areas of disagreement . 1. General principles: 1. The Most-Favored-Nation clause: All imported products must be treated in the same way, whatever the country of origin. The WTO member State must make available to all member States the most favorable regime it accords to like products of a given State because of a bilateral agreement . The difficulties of implementing the Most-Favored-Nation rule A. Extremely targeted bilateral agreements may constitute a parade: ex: trade facilities granted between 2 countries for a very precise commodity: Switzerland and Germany could provide for a specific import regime for brown sheep meat having been bred in the Alps . The benefits of this international trade would be limited to a few countries and not to all WTO members. B. If the Most-Favored-Nation clause is strictly applied, the creation of customs union or regional economic union (ex EU) becomes meaningless: The solution: at the time of the GATT already, this exception was allowed. C. The main difficulty still unresolved : the automatic nature of the clause does not take into account the bilateral concessions that may have justified the establishment of a favorable regime between two countries. The other Member States enjoy the benefits « free ride ». We can correct this by asking the same concessions to those who want to take advantage of it, but the clause loses all meaning ... 2. National treatment clause :
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Imported product : domestic product once it is on the market -> assimiliation of products irrespective of origin : Equal conditions of competition among all similar product : equal tax treatment Marketing is subject to the same regulations 3. Continued customs protection : Free Trade does not imply a waiver
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