The purpose of this paper is to outline the theoretical framework of the most popular economic theory approaches and the meaning of trade in general.
As part of globalization nations are moving closer together and the importance and intensity of the cooperation between countries increases continuously. During this development transnational networks are getting an increasingly important role regarding the regulation and control of various areas of life such as economic relations, environmental issues, security and law. These transnational institutions are influencing technical standards and norms, they affect environmental-, consumption- and law standards and their power is gaining in importance.
One of these bodies is the World Trade Organization (WTO) which was founded in the end of the 20th century with the purpose of creating a platform for negotiations about trade standards, regulating institutions in the trade sector and the development of multilateral agreements. The principles which underlain the work of the WTO include amongst others the subject of transparency, non-discrimination, and safety valves. With the evolution of a world ongoing getting more complex in trading subjects the facilitation, standardization and harmonization of global trade procedures get crucial and necessary for successful global growth. The implementation of the Agreement on Trade Facilitation (TFA) as the first multilateral agreement enforced in this context includes the establishment of global standards regarding customs and administrative measures and aims at the reduction of trading barriers and transaction costs in the future.
Table of Contents
1. Introduction
2. Theoretical Background: Different approaches on trade
3. Theoretical Background of the WTO
3.1 Historical development of the WTO
3.2 Structure and parameter of the WTO
3.3 Main purpose and tasks of the WTO
3.4 Principles of the WTO
4. The Agreement on Trade Facilitation
4.1 Background of the Trade Facilitation Agreement
4.1 Content of the Agreement on Trade Facilitation
4. 2 Consequences and Meaning for global trade in future
5. Critical Reflection
5.1 Chances of the Agreement on Trade Facilitation
5.2 Risks of the Agreement on Trade Facilitation
6. Conclusion
Research Objectives & Topics
This term paper examines the role of the World Trade Organization (WTO) in fostering global economic growth and development, specifically analyzing the impact and implementation of the Agreement on Trade Facilitation (TFA) as a modern multilateral instrument.
- Classical and modern economic trade theories
- Organizational structure and core principles of the WTO
- Implementation mechanisms of the Trade Facilitation Agreement
- Socio-economic impact of trade facilitation on developing nations
- Critical assessment of multilateral trade agreements
Excerpt from the Book
3.2 Structure and parameter of the WTO
The Federal Agency for Civic Education stated 164 WTO-members and additional around 22 observers in the beginning of 2017. With the headquarter located in Geneva, Switzerland and currently around 200 million Swiss francs as a budget the organization is striving for an opening in trade, for creating a forum for negotiations between countries as well as a proper handling of disputes concerning worldwide trade issues. “Raising the standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand […] while allowing for the optimal use of the world´s resources in accordance with the objective of sustainable development […]” are named as an aim in the initial preamble of the multilateral trade agreement about the establishment of the WTO.
Based on the three main pillars of GATT (General Agreement on Tariffs and Trade), GATS (General Agreement on Trade in Services) and TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) the system of the WTO is trying to include all possible trade-related issues. There are a few additional agreements Government Procurement and other issues as well but there are not as fundamental as the three previous mentioned agreements.
Certain interests within the WTO are represented by some groups of countries which are building an alliance in fundamental questions. The European Union (EU) as one of the most important and the largest group with 28 member states is an example for this type of group as well as the Association of South East Asian Nations (ASEAN), the Southern Common Market (MERCOSUR) and the North America Free Trade Agreement (NAFTA). Further associations are including African states and the developing countries.
The organization itself is, in contrast to comparable institutions like the IMF and the World Bank, not leaded by one organizational head or a board of directors, instead it is an institution driven by member decisions. The strict rules and policies that need to be kept are designed by the membership itself and decisions are taken by a consensus of 150 members, which can be challenging and time consuming in certain issues.
Summary of Chapters
1. Introduction: Outlines the theoretical framework, the importance of transnational institutions, and the specific focus on the WTO and the Trade Facilitation Agreement.
2. Theoretical Background: Different approaches on trade: Discusses the foundational economic theories of Adam Smith, David Ricardo, and John Maynard Keynes regarding trade, specialization, and government intervention.
3. Theoretical Background of the WTO: Details the history, institutional structure, main purposes, and core operating principles of the World Trade Organization.
4. The Agreement on Trade Facilitation: Examines the background, content, and projected consequences of the TFA on global trade, emphasizing its role as the first multilateral agreement of the WTO.
5. Critical Reflection: Provides a balanced analysis of the potential benefits (chances) and significant risks associated with the TFA, particularly for developing nations.
6. Conclusion: Summarizes the transformation of global trade regulation and reaffirms the importance of multilateral cooperation despite ongoing challenges.
Keywords
World Trade Organization, WTO, Trade Facilitation Agreement, TFA, International Trade, Globalization, Economic Growth, Multilateral Agreement, Customs, Developing Countries, Market Liberalization, Transaction Costs, Trade Policy, Sustainability, Tariff Reduction.
Frequently Asked Questions
What is the core subject of this paper?
The paper explores the role of the World Trade Organization in promoting global economic development, using the Agreement on Trade Facilitation as a primary case study.
What are the central themes discussed?
Key themes include classical and modern trade theories, the structural organization of the WTO, the mechanics of the Trade Facilitation Agreement, and the socio-economic impacts on developing countries.
What is the primary research objective?
The goal is to outline the theoretical framework of trade, describe the WTO's function, and evaluate the effectiveness and potential risks of the TFA in improving global trade efficiency.
Which scientific methods are employed?
The paper utilizes a literature-based analytical approach, synthesizing historical development, theoretical economic perspectives, and contemporary empirical data on trade policy.
What is covered in the main body of the paper?
The main body addresses the evolution of trade theory, the institutional hierarchy of the WTO, the specific articles and goals of the TFA, and a critical evaluation of its implementation.
What are the primary keywords characterizing the work?
The work is characterized by terms such as WTO, Trade Facilitation Agreement, Global Growth, Multilateralism, and Economic Development.
How does the TFA specifically support developing countries?
The TFA provides a flexible implementation system, offering longer timelines for compliance and technical assistance through the Trade Facilitation Agreement Facility (TFAF).
What are the identified risks for smaller or developing nations?
Risks include the financial burden of implementing new administrative systems, potential increases in imports without corresponding export growth, and the challenge of coordinating complex reforms.
- Quote paper
- Anonym (Author), 2018, Theoretical background of the WTO. The agreement on trade facilitation and critical reflection, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/1015125
