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Sometimes counties tax imports at rates that are

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Sometimes counties tax imports at rates that are lower than thebound rates. Frequently this is the case in developing countries. In developed countiesthe rates actually charged and the bound rates tend to be the same. Ac country can changeits bindings, but only afternegotiating withits trading partners, which could meancompensating them for loss of trade.One of the achievements of Uruguay Round ofmultilateral trade was to increase the amount of trade under binding commitments (seetable). In agriculture, 100% of products how have bound tariffs. The result of all this – asubstantially higher degree of market security for traders and investors. The system tiresto impose predictability and stability in other ways as well. One way is to discourage the
Compiled By Peter MungaiMBA, M.A BBA, HND-HR,DIP-HR7070use of quotas and other measures used to set limits on quantities of imports –administering quotas can lead to more red-tape and accusatons of unfair play. Another isto make countries trade rules as clear and public (“transparent”) as possible publiclywithin the country or by notifying the WTO. The regular surveillance of national tradepolicies though the Trade Policy Review Mechanism provide a further means ofencouraging transparency both domestically and at the multilateral level.Promoting fair competitionThe WTO is sometimes described as a “free trade” institution but that is not entirelyaccurate. The system does not allow tariffs and in limited circumstances other forms ofprotection. More accurately, it is a system of rules dedicated to open, fair and undistortedcompetition.The rules on non-discrimination – MFN and national treatment – aredesigned to secure fair conditions of trade. So too are those on dumping (exporting atbelow cost to gain market share) and subsidies. The issue are complex and the rules tryto establish what is fair or unfair an how governments can respond in particular bycharging additional import duties calculated to compensate for damage caused by unfairtrade. Many of the other WTO agreements aim to support fair competition: in agriculture,intellectual property, services, for example. The agreement on government procurement(a “plurilateral” agreement because it is singed by only a few WTO members) extendscompetition rules to purchases by thousands of “government” entities in many countries.And so on.Encouraging development and economic reformIt is widely recognized by economists and trade experts that the WTO systems contributeto development. It is also recognized that the least developed countries need flexibility inthe time they take to implement the agreements. And the agreements themselves inheritthe earlier provisions of GATT that allow for special assistance and trade concessions fordeveloping countries. Over three quarters of WTO members are developing countries andcountries in transition to market economies.During the seven and half years of the

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Term
Spring
Professor
DR.MANU
Tags
Economics, International Trade, World Trade Organization

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