international trade today

INTERNATIONAL TRADE TODAY
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International Trade Today
The Organization is a worldwide organization that ensures various countries producing various goods and services conduct their businesses smoothly and fairly across international borders. This action is made possible through the World Trade Organisation agreement which is signed by many countries which conduct trading activities globally. Indeed, the World Trade Organization agreement acts as a license that provides a legal framework for various nations to conduct trading activities globally.
The Organization was initially created in1995, and it replaced the former organization which was involved in trading activities. The trade organization was indeed created under the Marrakesh Agreement which was signed by a total of 123 countries on 15 April 1994 (Riasi & Amiri, 2013). However, before the World Trade Organization was created, a similar body known as International Trade Organization had also been proposed to be formed. Unfortunately, the idea of forming the body was not approved by many countries such as the United States of America.
Indeed most of the leading economies in the world began trading globally in the 1980’s. Due to this reason the former trading organization was considered not to have the capability to address the arising challenges that these countries faced while trading. This reason resulted to one of the largest trade negotiating event which occurred in 1986.

Indeed one of the achievements of these negotiations was the creation of the leading trading organization today. Moreover, this organization has been currently working on accomplishing new agreements and negotiations known as the Doha Development Agenda which took off in the year 2001. These negotiations took place in Doha, Qatar, and its main agenda is to make global trade more effective and also to help the emerging countries conduct trade by cutting off taxes and providing them with various subsidies.
The organization consists of about 153 members from all over the world. Moreover, decisions in the organization are made by all members through consensus. However, it’s also possible to use the majority vote in making decisions in the organization, but it has never been used in the trading organization. The majority vote was also rarely used in passing decisions in the former organization which was responsible for trading activities in the world. The body which has the major responsibilities in the trading organization is the Ministerial conferences which hold meetings once in every two years. The body indeed unites all members of the organizations who might be either nations or customs unions. Indeed the body can make any decision on all matters under the trading agreement in the World Trade Organization.
Below the ministerial conference there comes another body is known as the general council. The general council has indeed other auxiliary bodies which manage various committees in various areas. One of the bodies is the council for trade in goods which is made up of 11 committees each with its function. Indeed all members of the organization participate in each committee so as to make decision making easier. However, the textile monitoring body is not included in the 11 committees, but it’s usually still under the Council of goods body (Liendemann, 2014). The body is represented by its chairman and is made up of 10 members.
The general council also has another auxiliary body which deals with intellectual rights among members. This body holds information on the intellectual property rights of the organization and also other activities that the trading organization has been involved with other international bodies. The general council also has another body which deals with the trade for services. The main function of this body is to oversee that the agreement made on trading of services is full filled. Any member of the organization has the right to join this body at any time they wish to join it. This council also has other auxiliary bodies known as the domestic regulation, financial services and the General Agreement on Trade and Services. The service council also has various committees based on trade and environment, committees that check the balance of payment is full filled, the committee on development of trade, Budget Committee and Finance and Administration Committee. The general council committee is also comprised of the Trade negotiations committee whose main function is to deal with the current trade talks among member countries.
The trading organization also has the secretariat whose headquarters are found in Geneva. The Secretariat body has a staff of about six hundred employees who are headed by a Director-General. The Secretariat has a yearly budget of about 200 million dollars, and it doesn’t have any other branch except the one in Geneva. Moreover, since the decision in the World Trade Organization is made by the members alone, the secretariat in the organization does not have any power to make decisions as in other international organizations.
However, the main responsibility of the secretariat is to provide the required support to the ministerial conference, general council and various committees in the organization. The secretariat also provides assistance to developing countries, analyze the events occurring in the trading world and finally to explain the activities of the World Trade Organization to the public through various channels such as the media. Moreover, the Secretariat also provide legal assistance during settling disputes among member countries in the organization, and it also advises other countries wishing to join the organization on the procedures required to join. Therefore, the Secretariat is an important body in the World Trade Organization although it’s not involved in decision-making matters in the organization.
The organization also has various policies which it uses to govern its activities and various enforcement mechanism in which are used to make sure that the member countries adhere to the policies. One of the governing policy of the organization is that of non-discrimination. This policy indeed ensures that discrimination among member countries does not occur while carrying out various trading activities. This policy indeed constitutes of two major rules which are the most favored nation rule and the national treatment rule which all countries in the organization must exercise them. These two rules are also applied to the organization’s rules on services, intellectual property rights, and goods, but they are applied differently among them.
The Most favored rule indeed indicates that a World Trade Organization member must apply the same conditions to all its trading partners in the organization. For example, if a member decides to apply a favorable trading condition to one of its products it must apply that favorable condition to all members of the organization. National treatment, on the other hand, means that all the imported goods imported by a member of the organization should be treated equally as the domestic goods in a certain member country. This rule was introduced to solve barriers which are not involved with taxes such as discrimination of imported goods. Various countries have the tendency of discriminating against imported goods such as Japan, and this rule helps solve this issue.
The organization also requires its members to maintain high levels of transparency while conducting their trading activities globally. Indeed transparency ensures that trade activities run smoothly and fairly which is the major goal of the organization. The World Trade Organization members are required to provide any information that another member country may require from them. The member nations are also required to inform other members of any changes in trading policies that may occur in their nation such as an increase in taxes or various policies on goods and services. Moreover, the members of the organization are also required to provide publications on their trade rules and regulations and also to maintain various institutions that review various decisions that may affect trading activities in the country. Indeed, transparency among member countries is checked through the countries providing specific reports to the organizations on the ongoing trading activities in the country.
The organization also uses various policies to govern its activities such as the policy to ensure safety values among member countries. Indeed, various governments can restrict trading activities that are unsafe in their country. The World Trade Organization agreement also protects member countries from dumping of goods and services which might be unsafe to their citizens (Bechtel & Sattler, 2016). The World Trade Organization takes various measures to protect member countries from unsafe goods that might affect their environment. They also protect member nations from goods that may affect the public health of residents of a certain country and also those that may affect the plant health and also the animal health in a certain country. Indeed the World Trade Organization is very strict in ensuring that safety values are highly maintained among members of the organization.
The organization also uses the governing policy of reciprocity which indeed helps solve the problem of free-riding among member countries. Free riding is indeed a situation where some members enjoy various goods and services but they are indeed not paying for them, or they are paying less for them. This case may be indeed be brought about by the Most favored rule, and therefore various members may decide to free ride due to this policy. However, for this problem of free riding to be resolved the World Trade Organization allows for countries to negotiate and come to an agreement with each other to make sure that no country benefit a lot than the other. Indeed this a very effective governing policy adopted by the organization.
Bilateral trade agreements refer to trade agreement between two countries at a given time and thus providing them with favorable trading terms with each other. Indeed, the major aim of the bilateral trade agreement is to make sure that each country can access the other trading partner markets effectively and also ensure economic growth in both countries. Indeed we are going to check out some of the major bilateral trade agreement among various nations.
The United States indeed had a bilateral trade agreement with Bahrain in the year 2006. The bilateral agreement led to the removal of tariffs burden between both countries and thus making trade between both countries easier and effective. Indeed this action led to the increase in United States exports of agriculture, telecommunications, and financial services. America also signed another agreement with Chile in January 2004 (Nguyen, 2016). This agreement indeed led to the elimination of tax burden among both countries, provision of intellectual property, provision of effective labor and also environmental safety measures were taken. However, since the signing of the agreement trade between the United States and Chile declined causing a decrease in both exports and imports among both countries.
America also came into agreements with Colombia which led to a reduction in tax barriers and thus leading to an increase in United States exports earnings from Colombia. The United States also signed a bilateral trade agreement with Israel leading to a reduction of trade barriers among them and also creating transparency in their trading activities. America also signed a bilateral treaty with Jordan leading to a reduction of various barriers that occur during trading activities. Moreover, the treaty led to the exemption of various barriers on the United States meat and poultry exports and also led to the increase of agricultural imports from Jordan.
The United States also signed bilateral trade agreements with Peru in February 2009. The treaty was indeed the first to ensure that there were labor and environment protection between both countries. The trade agreement removed all the trading tariffs between both countries, ensured that all investors were offered legal protection in both countries and also led to the provision of property rights. Indeed trade between Peru and United States was at 8.8 billion dollars with 4.8 billion dollars of United States exports after the signing of the agreement (Aggarwal & Urata 2103). The United States is also having bilateral trade discussions with Oman to agree on the labor standards between the two countries. The United States also had bilateral trade agreements with Korea leading to a cutoff of about 80% of the entire tariff burden and thus leading to an increase in export earnings for the United States. America also signed a bilateral treaty with Morocco in January 2006 leading to an increase in the surplus of the goods traded between the two countries.
The Bilateral trade agreements have indeed brought major benefits to the United States since they were signed between its major partners such as Panama, Peru, Morocco, and Colombia. This situation is because the agreements have led to the creation of standardized rules and regulations, improved labor standards and also environmental protection in countries which the United States holds a bilateral agreement. The bilateral agreements have also led to the elimination of various tariffs and other trading taxes between the two countries. This action indeed has led to the increase in exports and imports for both countries and thus making them earn a lot of revenue from their trading activities. The bilateral treaties are also easier to come to terms with than other agreements and thus making it much effective. Indeed Bilateral trade agreements are accomplished after a short period, and thus countries start trading faster and thus yielding more benefits. Moreover, if multilateral trade agreement fails between various countries most countries settle for various bilateral trade agreements.
The United States has also experienced various disadvantages in the bilateral trade agreement such as the one between Chile which led to dropping of both exports and imports in both countries. One of the disadvantages is that bilateral trade agreements may lead to environmental destruction in the United States. The reason behind this situation is because some of the countries that the United States has come to an agreement with may shift their manufacturing activities to States in which there are weak environmental regulations. The signing of bilateral trade agreement may also lead to some of the countries exploiting others natural resources such as trees for timber and thus leading to environmental degradation. The agreement has also led to the damage of the United States domestic industry from the dumping of cheap goods from foreign countries that produce their goods at cheaper costs. Therefore the American citizens shift from buying their expensive domestic products and opt for the cheap goods from the foreign countries.
In conclusion, all countries in the World should be involved in the World Trade Organization, and also they should sign bilateral trade agreements with other countries. This situation is due to being involved in both the World Trade Organization and also the signing of bilateral trade treaties may lead to the economic growth of various nations all over the world. This situation is because they ensure that major trade barriers are eliminated among countries, and also the environment and labor protection are enhanced.
References
Aggarwal, V., & Urata, S. (2013). Bilateral Trade Agreements in the Asia-Pacific: Origins, Evolution, and Implications. Routledge.Bechtel, M. M., & Sattler, T. (2015). What is litigation in the world trade organization worth?. International Organization, 69(02), 375-403.
Lindemann, B. A. (2014). Case Study 1: The World Trade Organization (WTO). In Cross-Strait Relations and International Organizations (pp. 95-160). Springer Fachmedien Wiesbaden.Nguyen, M. T. (2016, November). Trade Liberalization and Investment in Children’s Human Capital: Evidence from the US-Vietnam Bilateral Trade Agreement. In 2016 Fall Conference: The Role of Research in Making Government More Effective. Appam.Riasi, A., & Amiri Aghdaie, S. F. (2013). Effects of a hypothetical Iranian accession to the world trade organization on Iran’s flower industry. Consilience: The Journal of Sustainable Development, 10(1), 99-110.