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Tanima Dutta, Lovely Professional University Unit 24 : Multilateralism and WTO

Unit 24 : Multilateralism and WTO Notes

CONTENTS
Objectives
Introduction
24.1 WTO (World Trade Organization)
24.2 Principles of the Multilateral Trading System Under the WTO
24.3 WTO Agreements : An Overview
24.4 Ministerial Conferences and Emerging Issues

24.5 Summary
24.6 Key-Words
24.7 Review Questions
24.8 Further Readings

Objectives

After reading this Unit students will be able to:
• Elucidate the Significance of WTO.
• Describe the Principles of the Multilateral Trading System under the WTO.
• Provide An Overview of WTO Agreements.
Introduction

The World Trade Organization (WTO) is the only international organization that deals with global
rules of trade between nations. It provides a framework for conduct of international trade in goods
and services. It lays down the rights and obligations of governments in the set of multilateral
agreements discussed later in this chapter. In addition to goods and services, it also covers a wide
range of issues related to international trade, such as protection of intellectual property rights and
dispute settlement, and prescribes disciplines for governments in formulation of rules, procedures,
and practices in these areas. Moreover, it also imposes discipline at the firm level in certain areas,
such as export pricing at unusually low prices.
The basic objective of the rule-based system of international trade under the WTO is to ensure that
international markets remain open and their access is not disrupted by the sudden and arbitrary
imposition of import restrictions. Under the Uruguay Round, the national governments of all the
member countries have negotiated improved access to the markets of the member countries so as to
enable business enterprises to convert trade concessions into new business opportunities. The emerging
legal systems not only confer benefits on manufacturing industries and business enterprises but also
create rights in their favour. The WTO also covers areas of interest to international business firms,
such as customs valuation, pre-shipment inspection services, and import licensing procedures, wherein
the emphasis has been laid on transparency of the procedures so as to restrain their use as non-tariff
barriers. The agreements also stipulate rights of exporters and domestic procedures to initiate actions
against dumping of foreign goods. An international business manager needs to develop a thorough
understanding of the new opportunities and challenges of the multilateral trading system under the
WTO.

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