World Trade Organization Benefits - Assignment Example

?World Trade Organization Benefits The World trade Organization as its implies is an international organization that specializes in dealings pertaining to trade and other mutual exchange. The scope of W.T.O is very broad and it enables the trade and exchange between the neighboring countries as well as those that are million miles away in different continents. The past history has seen many wars that erupted due to the hostile feeling for each other that existed between the nations, the element of hostility in the trade and exchange was one of those reasons. After the Second World War, when there was a slight realization of avoiding the atmosphere of trade tension, an international level organization was brought into play which was called General Agreement on Tariffs and Trade (GATT). W.T.O is a platform that has bridged various nations of the world onto a single platform, it has been in action since 1995, through which they achieve exchange of goods, and material and benefit their own economies as well as the regional economies. It has a pre defined set of rules that are created in the most suitable manner with focus on international peace and trade promotion. The modern world and its citizens have benefited in a considerable amount from this body and it has provided innumerable benefits to the modern industrial era, few of those advantages and benefits are as follows: Element of peace: The incumbent body in place has made many things possible which would otherwise be not possible. It has given hope for a better world which would be dominated by the peaceful exchange of goods and material, since trade always enables the exchange of good feeling between the two parties, therefore W.T.O in a subsided manner plays the role of peacekeeping and relationship building as well. Trade and exchange opens routes for exploration and harmony. W.T.O while being a very large scale entity has the privilege of bringing about various nations which were long engulfed in chains of hatred and distances. While it was evident in past that many countries could not engage in a bi lateral trade amongst each other due to various reasons, the W.T.O has wiped off that excuse and has engaged many nations in trade relations through means of third party trade and multi lateral exchange on a large scale. The W.T.O provides a platform which in a gentle manner obliges various nations to start trade which each other regardless of their previous history of disputes and tussles that may have existed in past. History can be dug to find out that many disputes over trade resulted in large scale wars, however on the contrary to that perception; world trade organization provides a platform for resolving all disputed issues pertaining to the trade and exchange. Inclusion of Saudi Arabia: The inclusion of Saudi Arabia is believed to benefit the organization, its partner companies as well as Saudi Arabia itself. For this reason, Saudi Arabia has under gone number of steps that would further ease its process towards the entry into the large international block. Abiding by these laws, it would benefit the Saudi local market and would improve the standard of living and benefit the government, local investors and the citizens. Role of Third party mediator: While some critics may argue that trade and exchange may engulf various nations into disputes and disagreements, this fear is grounded through the presence of a centralized body in form of W.T.O. It plays the role of mediator and ensures that no party violates the rules or reaches to a level which is unacceptable and beyond the manifesto of the W.T.O accord. W.T.O obliges nations to bring their disputes to the table and strictly prohibits each member from taking any individual action which is against the rules specified. Definition of Rules: An undeniable fact of every business of the world is existence of rules, be it small scale exchange or large scale exchange between two nations or two groups of nations, rules are must for any exchange. The advantage of W.T.O is the fact that it has enabled defining rules for each party that is involved in the trade and exchange. Standardized working mechanism is available for various kinds of trade exchange that takes place between different parties. Hence it is another added feature of W.T.O which gives it an edge over various other similar concepts that may exist in the surroundings. Under the umbrella of W.T.O rules are defined for every nation and no country enjoys immunity over the implication of bans, fines and other undue favors. Pre defined set of rules are in place which have made the task easier both for the weaker nations and the mighty ones. Free Trade: One of the salient features of W.T.O is its free trade policy and promotion. It provides platform that is free of hurdles and glitches. It provides a carpet that is best suited for extended cooperation between various countries and regions. For this purpose W.T.O aims at reducing the barriers that may exist amongst various nations. The first tip towards this hurdle is in form of recommendation of elimination of discrimination. A direct benefit achieved from the free trade includes reduction in the production prices incurred over services and other manufacturing elements. Free trade allows expansion in many ways and it improves the living standards on either side of the trading parties and hence provides more opportunities for growth and development of citizens of the respective countries. The free trade policy allows foreign investors to barge into the local industries which directly reduce the prices of various products and services. A prime example can be seen in the telecommunication industry in various parts of the world where the tariffs and call rates have gone down considerably for the mere reason of expansion through the free trade policies. Main theme of W.T.O working: W.T.O aims at promoting mutual exchange between various nations, and improve the life style at respective ends. This is possible only if the economies are strengthened. The benefits provided by the incumbent organization are not just limited to resources utilization and productivity; rather it allows reducing the prices and costs and nurtures the environment for further growth and development. Further features of this body include the uniformity in the labor rates and other custom and duty rates. Under the umbrella of W.T.O, the monopoly does not stand a chance of dominating its self and the rules are manifested in such a manner which is free of monopoly and local politics. The goal of W.T.O is to make the operations simple that provides enough ground for growth and production in respective fields. Equal treatment is largely promoted by W.T.O which gives each part a fair chance of promotion and profit making along with the mutual benefit to the entire project at hand. Multiple options margin: With the ever shrinking concept of trade within the borders only, citizens in modern times have plenty of options up their sleeves to choose from. This along with the top quality of services and brands that are present in local markets. The increase in imports and exports have given more options to the citizens at both ends of exchange. Local production equally benefits from the imports since various components can be manufactured on local scale. Increased Incomes: A basic fruit of business and trade is increased incomes and job opportunities in the local arena. With more capital running into the local markets, the local citizens are bound to benefit from the investments made. Many references can be quoted from past where trade through W.T.O umbrella has increased incomes at local levels. Various other studies have shown that reduction and elimination of certain other barriers can also increase the market profits and hence further increased incomes. Economic Growth: Economic growth is a guaranteed reward of exchange and trade that takes place under this platform. Trade has a direct impact on the economy of a nation. Since it involves participation of various international players in form of investors, local investors, the local employees, and other stake holders, all in all, these elements benefit the economy at the end of the day. On a rough scale it is being stated that over a million people have their jobs courtesy exports. Other few sparkling features of W.T.O involve: Transparency: It is the process of ensuring that everything done under the agreement is in the mutual benefit of the parties involved. It provides a balanced view of various trade entities and also provides an insight into the pros and cons of various trading elements which need to be taken into account while jumping into the accord. It further involves sharing of all the information that needs to be shared amongst the stake holders. The policies, the benefits, the rules and regulations must be clearly defined at the beginning of any contract that is being made between two or more parties and each of the party must be warned about their share of losses and other affiliated reasons. Standardization and Simplification: One of the reasons towards the success of World trade Organization is its simplicity, the manner in which it works and the manner in which it allows exchange and establishment of agreements between different parties. It has a pre defined set of standards which are uniform and apply to every nation and every region regardless of any personal favors and interests. The simplification feature further involves centralized approaches in practice, access to the necessary data bases by the stake holders. Trade Facilitation: Trade facilitation is a core competence that is being provided by the World Trade Organization. Under the trade facilitation policy, each of the party is provided with sufficient enough backing and support to sustain and involve itself in a trade and partnership. IT provides various partners the launching pad that might be needed in the beginning of the trade and exchange. It removes the barriers that may stand in the way of new comers. This feature allows increased profits, removal of fears of unknown and various other elements which are the prime concerns of many players in the industry (W.T.O). Conclusion: Having highlighted the features and packages being offered by the international body. Every country has an opportunity in the name of World Trade organization to make it to the areas of world which promise large amount of profits. The lobbying system is reduced to a great deal and no influences are accepted from the stronger nations, rather a uniform working pattern is in place which ensures equal rights and equal opportunities for the project partners in trade. Many of the policies that are underlined by world trade organization indirectly bring about discipline and good governance in various international governments. If any decision is being taken under the accord of W.T.O, the organization does not allow retrieval from the agreed plans hence binds the nations and governments to the agreements. Therefore any decision that is to be taken must be taken with consideration of various factors and variables which might get affected from the decision. Bibliography: 1-W.T.O. World Trade Organization : 10 Benefits of the World Trading System. Geneva: World Trade Organization, 2008. Read More