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Essay on World Trade Organization: Effectiveness
The United States was a leading force in establishing the World Trade Organization (WTO) in 1995. The WTO is an international institution in which we negotiate agreements to reduce barriers to trade with 134 other members, allowing American businesses, farmers and working people to find new opportunities, create new jobs, and raise family living standards. The WTO is also a forum for countries to enforce trade agreements and continue negotiations toward expanding world trade opportunities. Under WTO rules, foreign nations assure us greater access to their markets, and are constrained from giving their workers and firms unfair advantages through subsidies and protectionist domestic policies (Bernard, 2002). At the same time, WTO rules recognize and respect governments’ right to maintain high standards for the environment, labor, health, and safety. The trade gains that the United States has won through the WTO Agreements and other trade policies have been a major contributing factor to our thriving economy.
Trade allows a division of labor between countries. It allows resources to be used more appropriately and effectively for production (Kim, 2002). But the WTO’s trading system offers more than that. It helps to increase efficiency and to cut costs even more because of important principles enshrined in the system.
Imagine a situation where each country sets different rules and different customs duty rates for imports coming from different trading partners. Imagine that a company in one country wants to import raw materials or components — copper for wiring or printed circuit boards for electrical goods, for example — for its own production.
It would not be enough for this company to look at the prices offered by suppliers around the world. The company would also have to make separate calculations about the different duty rates it would be charged on the imports (which would depend on where the imports came from), and it would have to study each of the regulations that apply to products from each country......
