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World Trade Negotiations

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The body that meets to discuss and regulate world trade is the World Trade Organisation (WTO). Its members account for approximately 95% of all world trade.

It was set up in 1995 to replace the original body known as GATT (General Agreement on Tariffs and Trade) which had been responsible for global trading issues since the end of the Second World War. The WTO is the only world body responsible for world trade and that includes the resolution of trading disputes as well as moving towards liberalizing world trade.

Since its inception, the WTO has been involved in a succession of talks with the general aim of promoting free trade. Obviously, almost every country in the world is in support of the principle of free trade but there is a great deal of disagreement about how to get there. What is necessary protection of a domestic industry is called politics by one country and protectionism by another. Since the decisions at the WTO are made by the member countries operating on the idea of a consensus rather than a vote and the issues involved are so complex, it is not surprising that the process is often criticized for being slow moving and unwieldy.

The major issues discussed are how to persuade certain countries to liberalise their trade policy in return for lessening the negative impact this may have on their economies with other measures. As each country has its own economic strengths and weaknesses, negotiating political solutions within a limited time period is particularly difficult. That is why many countries have begun negotiating bilateral treaties with individual countries, regions or trade blocks rather than spending time trying to please everyone at the WTO. Whilst these agreements might be more effective in the short term, it is open to question whether this approach favours developing countries or international trade as it can add considerably to the complications of doing business between different countries.

If the WTO can be made to work, there is very little disagreement that multi-lateral negotiations (ie between all parties) would be the most desirable outcome. Yet since the most powerful economies in the world are key members of the WTO, many people in developing countries and some activists in the rich nations believe that the WTO is biased against developing countries. The claim leveled against the rich nations is that they try to obtain the best possible deal from any negotiation and can use their economic and political power as leverage against the poor, developing nations. Whatever the truth of these assertions, the countries that have signed up to be part of the WTO (a democratic organization), all recognize the ultimate benefits of a free trade system, the difficulty is implementing it fairly for everyone.

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