DSST Business Ethics Study Guide sm 2

The multilateral agreements on trade in goods

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— the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures Services — the General Agreement on Trade in Services Intellectual property — the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Dispute settlement (DSU) Reviews of governments' trade policies (TPRM) [21]
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Functions Among the various functions of the WTO, these are regarded by analysts as the most important: It oversees the implementation, administration and operation of the covered agreements. [28][29] It provides a forum for negotiations and for settling disputes. [30][31] Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making. [29][31] Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. [32] The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization. [33] Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank. [30] [ edit ] Principles of the trading system The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy games. [34] Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO: 1. Non-Discrimination . It has two major components: the most favored nation (MFN) rule, and the national treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members. [34] "Grant someone a special favour and you have to do the same for all other WTO members." [35] National treatment means that imported goods should be treated no less favorably than domestically-produced goods (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al. discriminating against imported goods). [34] 2. Reciprocity . It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A
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related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialize.
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