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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.
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
