international trade and the world trade organisation

International Trade and the World Trade OrganizationInternational Economic RelationsMetropolitan University PragueMartin Kolmhofer2011/2012

The WTO is based in Geneva: 153 member states

90 % of World Trade are done between WTO members

The idea to establish an institution to regulate international trade started at the end of WWII

WTO ideology is based on classical theories of free trade (Adam Smith, David Ricardo).Great Depression 1929 was seen as one of the reasons for WWII because of return to protectionism.

Video: Why do countries restrict trade?

1948: 23 countries signed GATT (General Agreement on Trade & Tariff) 3 did not ratify

The GATT was replaced by the WTO in 1994

2011: 153 members + 31 countries with observer status

Trade routes: Ship, Plane, Internet

China joined WTO in 2001 – by now China is the biggest exporter of finished goods

Russia?

Russian access talks (started 1993) are difficult:Russia does not want to grant access to its mining industry to foreigners

Budget: 8 countries contribute more that 50%, 39 smallest countries only 0,6 %

The European Union has one vote per member + one vote as an organization (27+1)

MFN (Most Favoured Nation) clauseHas some exceptions: Regional Free Trade Areas

4 big Free Trade Areas: EU, Mercosur, NAFTA, ASEAN

Average tarrifs (as percentage of the value of the good) have decreased considerably

Dispute Settlement Body (DSB)Example: EU refuses to import genetically manipulated beef from Canada & US

Considered by DSB as NON-TARIFF BARRIER.

Example: US subsidies for BOEING were considered illegalEU was allowed to react with sanctions

Agricultural Products: Big area of debate

Doha Round commenced in November 2001Major issue: agriculture and agricultural subsidies

Developed vs. developing countries / EU vs. US

CAIRNS Group: Trade group of 17 agricultural exporting countries, accounting forone-third of the world's agricultural exports.

G90: Alliance between the poorest and smallest developing countries