Secures better access to overseas markets encourages free trade and the

Secures better access to overseas markets encourages

This preview shows page 5 - 7 out of 17 pages.

Secures better access to overseas markets → encourages free trade and the obtaining the surplus products → countries are better off in terms of BOP. Fair, rule-based trading environment. Helps developing economies → agreed by advanced economies that developing nations weren't equally benefiting in the globalisation process → agricultural subsidies in advanced economies directly penalise developing nations → robs them of valuable export income → WTO helped with trade concessions. Disadvantages: Undemocratic → marginalises developing countries → leads them to not participate in discussions and disadvantages poor countries from representing their interests → unfair discussion → inequality amongst advanced and developing nations. Still a number of countries that have significant levels of protection- non-member countries are excluded. Have a number of 'trade rounds' open for negotiation. Uruguay Round → 8 th round of GATT trade negotiations which began in 1986 and competed in 1993 in Geneva. Countries negotiated new agreements to reduce agricultural subsidies, to lift restrictions on foreign investment, and to begin the process of opening trade in services e.g insurance. Cairns Group of free trading agricultural exporters (incl. Australia) → Uruguay Round caused agreement by USA and EU to cut agricultural subsidies before 2000 → cut of agricultural tariffs of 36% → domestic support measures (subsidies) to be cut by 20% → export subsidies cut by 21% in quantitative terms. Also reduced beef and rice subsidies by EU and USA for exports to Asian market over 1994- 2000 → Japan and South Korea to open domestic rice markets to imports. Doha Round → 9 th round of WTO talks → November 2001 in Qatar → intention of reducing global protection and achieving protection and achieving free and fair trade. Negotiated items → further reductions in agricultural protection → trade concessions from advanced countries to developing countries to increase their market access for agricultural and manufactured exports → measures to allow environmental/labour standards to be imposed on trade related activities. Economists estimate that cutting trade barriers in agriculture, manufacturing and services by one third would boost the world economy by $613 billion — equivalent to adding an economy the size of Canada to the world economy.
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Additional income means that resources are available for governments to redistribute. WTO is the custodian of trade rules that are relevant to the rapidly evolving realities of international commerce. International Monetary Fund Formed: 1944 (Bretton Woods Agreement) → 188 member countries in 2013. Role: financial assistance to countries that experience temporary BOP difficulties → difficulty in servicing foreign debt obligations → promotes international financial stability.
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