The World Trade Organization is founded on the principle of comparative advantage, well recognized by the Modern economists, that different countries enjoy absolute advantage in the production of different goods, since they are differently gifted by the nature: it may be expensive to produce certain goods and cheaper to import. A country may have greater comparative advantage in the production of certain goods over the others.
This classical theory of economics took its practical shape in the manifesto of W.T.O which transcends all barriers imposed by the nations and emphasizes the functioning of free trade amongst the nations. Then why the feeling of unease and protests against the W.T.O which are not based on unfounded fears, but some facts of the underdeveloped nations manifest the circumstances apparent in the economic scene of their lives. The disagreements do not arise by the global trade but by the resultant affects of the globalization and the very rule of the body governing the W.T.O. if we understand the arguments of the both sides we can solve maladies believed to be caused by the W.T.O.
W.T.O is very powerful; it can compel sovereign states to change their laws if it feels that laws are hindrance with the agreements made. It is by the rich for the rich. It does not give the proper weight to the problems of the developing world, in practice, if not in theory. It is indifferent to the negative fallout of free trade; its commercial interests take over every thing from child labor to workers rights, and environment to health. It lacks democratic accountability. Its trade disputes hearings are closed to public and the media, while free trade concept presupposes open debates and transparency. The W.T.O has clauses to protect the environment, but they do not contain minimum standard to protect the environment, labor rights, social programs and cultural diversity. what makes it so powerful is that it can intervene in the everyday administration, of any member country and force it to change its laws if the W.T.O feels that they are detrimental to free trade because the member countries have given both legislative and judiciary authority to W.T.O to challenge laws, policies and programs of countries which do not conform to its rules. The member countries are required to bring its laws in conformity with W.T.O’s laws.
Some of the realistic concerns of the developing nations on crucial issues on subsidies granted by the
So far as protection to local industries is concerned W.T.O has provided safeguards to grow , in case of surge of imports. The agreement on safeguards authorizes importing member countries to restrict imports for temporary period, if after investigations carried out by the competent authorities it is established that:
- Imports are taking in such increased quantities as to cause serious injury to domestic industry that produces like or directly competitive products and,
- The increased imports should be the result of unforeseen developments. It provides the impositions of quantitative restrictions on such imports and increase on import tariffs.
If you need a custom essay, research paper, dissertation, thesis, term paper on Economics, Business or other discipline – feel free to contact our professional custom writing service.