GREAT ZIMBABWE UNIVERSITY

SIMON MUZENDA SCHOOL OF ARTS

REG NO: M206854

PROGRAMME: BA DEVELOPMENT STUDIES

COURSE CODE: HDES 425

COURSE TITLE: AFRICAN REGIONAL ORGANISATIONS

LEVEL: 4.2

CELL N0: 0771479256

LECTURER: DR PHIRI

QN. Evaluate the effectiveness of WTO paying particular attention to its interaction with
third world countries
The World Trade Organization (WTO) is an intergovernmental organization that regulates and
facilitates international trade. With effective cooperation in the United Nations System,
governments use the organization to establish, revise, and enforce the rules that govern
international trade. It officially commenced operations on 1995, pursuant to the 1994 Marrakesh
Agreement, thus replacing the General Agreement on Tariffs and Trade (GATT) that had been
established in 1948. The WTO is the world's largest international economic organization, with
164 member states representing over 98% of global trade and global GDP. This essay shall
explore the relations and how this institution interacts with the third world or underdeveloped
nations.

The WTO facilitates trade in goods, services and intellectual property among participating
countries by providing a framework for negotiating trade agreements, which usually aim to
reduce or eliminate tariffs, quotas, and other restrictions; these agreements are signed by
representatives of member governments and ratified by their legislatures. The WTO also
administers independent dispute resolution for enforcing participants' adherence to trade
agreements and resolving trade-related disputes. Goldstein, Judith, Rivers, Douglas; Tomz
(2007) said that the organization prohibits discrimination between trading partners, but provides
exceptions for environmental protection, national security, and other important goals. This is
very important in the relationship with the third world nations by the world trade organizations.

The WTO is headquartered in Geneva, Switzerland. Its top decision-making body is the
Ministerial Conference, which is composed of all member states and usually convenes
biennially; consensus is emphasized in all decisions. Day-to-day functions are handled by the
General Council, made up of representatives from all members. A Secretariat of over 600
personnel, led by the Director-General and four deputies, provides administrative, professional,
and technical services. The WTO's annual budget is roughly 220 million USD, which is
contributed by members based on their proportion of international trade.

Studies show the WTO has boosted trade and reduced trade barriers. It has also influenced trade
agreement generally; a 2017 analysis found that the vast majority of preferential trade
agreements (PTAs) up to that point explicitly reference the WTO, with substantial portions of
text copied from WTO agreements. Goal 10 of the United Nations Sustainable Development
Goals also referenced WTO agreements as instruments of reducing inequality. However, critics
contend that the benefits of WTO-facilitated free trade are not shared equally.

The WTO precursor General Agreement on Tariffs and Trade (GATT), was established by a
multilateral treaty of 23 countries in 1947 after World War II in the wake of other new
multilateral institutions dedicated to international economic cooperation—such as the World
Bank (founded 1944) and the International Monetary Fund (founded 1944 or 1945). A
comparable international institution for trade, named the International Trade Organization never
started as the U.S. and other signatories did not ratify the establishment treaty, and so GATT
slowly became a de facto international organization.
Seven rounds of negotiations occurred under GATT (1949 to 1979). The first real GATT trade
rounds (1947 to 1960) concentrated on further reducing tariffs. Then the Kennedy Round in the
mid-sixties brought about a GATT anti-dumping agreement and a section on development. The
Tokyo Round during the seventies represented the first major attempt to tackle trade barriers that
do not take the form of tariffs, and to improve the system, adopting a series of agreements on
non-tariff barriers, which in some cases interpreted existing GATT rules, and in others broke
entirely new ground. Because not all GATT members accepted these plurilateral agreements,
they were often informally called "codes". (The Uruguay Round amended several of these codes
and turned them into multilateral commitments accepted by all WTO members. Only four
remained plurilateral (those on government procurement, bovine meat, civil aircraft, and dairy
products), but in 1997 WTO members agreed to terminate the bovine meat and dairy agreements,
leaving only two. Despite attempts in the mid-1950s and 1960s to establish some form of
institutional mechanism for international trade, the GATT continued to operate for almost half a
century as a semi-institutionalized multilateral treaty régime on a provisional basis.

Well before GATT's 40th anniversary (1987–1988), GATT members concluded that the GATT
system was straining to adapt to a globalizing world economy. In response to problems identified
in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain
countries' policies on world trade which GATT could not manage, etc.), a meeting in Punta del
Este, Uruguay, launched the eighth GATT round known as the Uruguay Round—in September
1986. In the biggest negotiating mandate on trade ever agreed, the Uruguay Round talks aimed to
extend the trading system into several new areas, notably trade in services and intellectual
property, and to reform trade in the sensitive sectors of agriculture and textiles; all the original
GATT articles were up for review.[35] The Final Act concluding the Uruguay Round and
officially establishing the WTO regime was signed on 1994, during the ministerial meeting at
Marrakesh, Morocco hence known as the Marrakesh Agreement.

The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the
Uruguay Round negotiations (a distinction is made between GATT 1994, the updated parts of
GATT, and GATT 1947, the original agreement which is still the heart of GATT 1994). GATT
1994 is not, however, the only legally binding agreement included via the Final Act at
Marrakesh; a long list of about 60 agreements, annexes, decisions, and understandings was
adopted. The agreements fall into six main parts. In terms of the WTO's principle relating to
tariff "ceiling-binding" (No. 3), the Uruguay Round has been successful in increasing binding
commitments by both developed and developing countries, as may be seen in the percentages of
tariffs bound before and after the 1986–1994 talks.
The highest decision-making body of the WTO, the Ministerial Conference, usually meets every
two years. It brings together all members of the WTO, all of which are countries or customs
unions. The Ministerial Conference can take decisions on all matters under any of the
multilateral trade agreements. Some meetings, such as the inaugural ministerial conference in
Singapore and the Cancun conference in 2003 involved arguments between developed and
developing economies referred to as the "Singapore issues" such as agricultural subsidies; while
others such as the Seattle conference in 1999 provoked large demonstrations. Sarah; Joseph,
Louise (2011) had the view that the fourth ministerial conference in Doha in 2001 approved
China's entry to the WTO and launched the Doha Development Round which was supplemented
by the sixth WTO ministerial conference (in Hong Kong) which agreed to phase out agricultural
export subsidies and to adopt the European Union's Everything but Arms initiative to phase out
tariffs for goods from the least developed countries. At the sixth WTO Ministerial Conference of
2005 in December, WTO launched the Aid for Trade initiative and it is specifically to assist
developing countries in trade as included in the Sustainable Development Goal 8 which is to
increase aid for trade support and economic growth.

The WTO launched the current round of negotiations, the Doha Development Round, at the
fourth ministerial conference in Doha, Qatar in November 2001. This was to be an ambitious
effort to make globalization more inclusive and help the world's poor, particularly by slashing
barriers and subsidies in farming. The initial agenda comprised both further trade liberalization
and new rule-making, underpinned by commitments to strengthen substantial assistance to
developing countries. Progress stalled over differences between developed nations and the major
developing countries on issues such as industrial tariffs and non-tariff barriers to trade
particularly against and between the EU and the US over their maintenance of agricultural
subsidies seen to operate effectively as trade barriers. Repeated attempts to revive the talks
proved unsuccessful, though the adoption of the Bali Ministerial Declaration in 2013 addressed
bureaucratic barriers to commerce.

As of June 2012, the future of the Doha Round remained uncertain: the work programme lists 21
subjects in which the original deadline of 1 January 2005 was missed, and the round remains
incomplete. The conflict between free trade on industrial goods and services but retention of
protectionism on farm subsidies to domestic agricultural sectors (requested by developed
countries) and the substantiation of fair trade on agricultural products (requested by developing
countries) remain the major obstacles. This impasse has made it impossible to launch new WTO
negotiations beyond the Doha Development Round. As a result, there have been an increasing
number of bilateral free trade agreements between governments. As of July 2012 there were
various negotiation groups in the WTO system for the current stalemated agricultural trade
negotiation.

Additionally, it is 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. 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. The WTO shall facilitate the implementation, administration, and
operation and further the objectives of this Agreement and the Multilateral Trade Agreements,
and shall also provide the framework for the implementation, administration, and operation of
the multilateral Trade Agreements. The WTO shall provide the forum for negotiations among its
members concerning their multilateral trade relations in matters dealt with under the Agreement
in the Annexes to this Agreement.

The above five listings are the additional functions of the World Trade Organization. As
globalization proceeds in today's society, the necessity of an International Organization to
manage the trading systems has been of vital importance. As the trade volume increases, issues
such as protectionism, trade barriers, subsidies, violation of intellectual property arise due to the
differences in the trading rules of every nation. The World Trade Organization serves as the
mediator between the nations when such problems arise. WTO could be referred to as the
product of globalization and also as one of the most important organizations in today's globalized
society. 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. Finally, the WTO cooperates closely with the two other
components of the Bretton Woods system, the IMF and the World Bank. 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 "trade policy." Five principles are of particular importance in understanding
both the pre-1994 GATT and the WTO.

The Non-discrimination clause 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. WTO member has to grant the most favorable conditions under which it allows trade
in a certain product type to all other WTO members. Grant someone a special favor and you have
to do the same for all other WTO members. National treatment means that imported goods
should be treated no less favorably than domestically produced goods and was introduced to
tackle non-tariff barriers to trade.

Reciprocity 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 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. Binding and enforceable commitments. The tariff commitments made by WTO
members in multilateral trade negotiation and on accession are enumerated in a legal instrument
known as a schedule of concessions. These schedules establish ceiling bindings, a country can
change its bindings, but only after negotiating with its trading partners, which could mean
compensating them for loss of trade. If satisfaction is not obtained, the complaining country may
invoke the WTO dispute settlement procedures.

The WTO members are required to publish their trade regulations, to maintain institutions
allowing for the review of administrative decisions affecting trade, to respond to requests for
information by other members, and to notify changes in trade policies to the WTO. Silva, Peri
Agostinho, Nicita, Alessandro; Olarreaga, Marcelo (2018) opined that these internal
transparency requirements are supplemented and facilitated by periodic country-specific reports
(trade policy reviews) through the Trade Policy Review Mechanism (TPRM). The WTO system
tries also to improve predictability and stability, discouraging the use of quotas and other
measures used to set limits on quantities of imports. In specific circumstances, governments are
able to restrict trade. The WTO's agreements permit members to take measures to protect not
only the environment but also public health, animal health and plant health.

There are 11 committees under the jurisdiction of the Goods Council each with a specific task.
All members of the WTO participate in the committees. The Textiles Monitoring Body is
separate from the other committees but still under the jurisdiction of the Goods Council. The
body has its chairman and only 10 members. The body also has several groups relating to
textiles. The Trade Negotiations Committee (TNC) is the committee that deals with the current
trade talks round. The chair is WTO's director-general. As of June 2012 the committee was
tasked with the Doha Development Round. The Service Council has three subsidiary bodies’
financial services, domestic regulations, GATS rules, and specific commitments. The council has
several different committees, working groups, and working parties. There are committees on the
following Trade and Environment Trade and Development (Subcommittee on Least-Developed
Countries) Regional Trade Agreements; Balance of Payments Restrictions; and Budget, Finance
and Administration. There are working parties on the following: Accession. There are working
groups on the following: Trade, debt and finance; and Trade and technology transfer.

The WTO describes itself as a rules-based, member-driven organization all decisions are made
by the member governments, and the rules are the outcome of negotiations among members. The
WTO Agreement foresees votes where consensus cannot be reached, but the practice of
consensus dominates the process of decision-making. Richard Harold Steinberg (2002) argues
that although the WTO's consensus governance model provides law-based initial bargaining,
trading rounds close through power-based bargaining favoring Europe and the U.S., and may not
lead to Pareto improvement.

The WTO's dispute-settlement system is the result of the evolution of rules, procedures and
practices developed over almost half a century under the GATT 1947. In 1994, the WTO
members agreed on the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU) annexed to the "Final Act" signed in Marrakesh in 1994. Dispute settlement is
regarded by the WTO as the central pillar of the multilateral trading system, and as a "unique
contribution to the stability of the global economy". WTO members have agreed that, if they
believe fellow-members are violating trade rule that they will use the multilateral system of
settling disputes instead of taking action unilaterally.
References

Broda, C.; Limão, N.; Weinstein, D. E. (2008). "Optimal Tariffs and Market Power: The
Evidence". American Economic Review.

Goldstein, Judith L.; Rivers, Douglas; Tomz, Michael (2007). "Institutions in International
Relations: Understanding the Effects of the GATT and the WTO on World Trade". International
Organization.

Tomz, Michael; Goldstein, Judith L; Rivers, Douglas (2007). "Do We Really Know That the
WTO Increases Trade? Comment". American Economic Review.

Silva, Peri Agostinho; Nicita, Alessandro; Olarreaga, Marcelo (2018). "Cooperation in WTO's
Tariff Waters?" (PDF). Journal of Political Economy.

Allee, Todd; Elsig, Manfred; Lugg, Andrew (2017). "The Ties between the World Trade
Organization and Preferential Trade Agreements: A Textual Analysis". Journal of International
Economic Law.

"Goal 10 targets". UNDP. Archived from the original on 27 November 2020.

Joseph, Sarah; Joseph, Sarah Louise (2011). Blame it on the WTO?: A Human Rights Critique.
OUP Oxford. .

Wilkinson, Rorden (2014). What's wrong with the WTO and how to fix it. Cambridge, UK.