– 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.
– 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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- Three '07
- International Trade, World Trade Organisation