Whether It Really Helped Less-Developed Nations To Get Its Share In The International Trade - Essay Example

? GATTS AND WTO- Whether it really helped less-developed nations to get its share in the international trade? Introduction ‘The World Trade Organisation (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) “was mainly established to promote international commerce without any barriers. It has been estimated that both the GATT and WTO have encouraged international trade and it has increased world imports about US3 trillion in 2000 alone or by about 44% It is claimed that WTO has been successful in trimming down the barriers to trade and especially in clothing ,textiles, and agricultural sectors . Further there has been substantial reduction in average tariffs as evidenced by industrial nations under the auspices of the GATT that has minimised their average tariff to just 4.5% as of today from that of 15% in 1947.( Subramanian & Wei 2003:3). WTO is regarded to be an international organisation and not just an association of Western trading countries. It is a genuine multilateral organisation with official legal standing as a global institution and official diplomatic standing for its secretariat. Its exhaustive rules and its binding nature and automatic dispute settlement system that would confer it as one of the most lawful global organisations in the globe. WTO’s rules were flaunted as covering “international commerce” interpreted more widely than in the past, and it is not only dealing in trade in goods unlike its predecessor GATT but also covers the trade in services , investment , intellectual property , environmental and other economic issues now. WTO rules were chiefly of laissez-faire, assuring to enhance social welfare, standards of living and gross domestic product internationally and in each member nation. (Barton et al. 2006). According to Kee et al (2009), concrete evidence is available that there is a surge in national income through international trade. Many earlier research studies have found that nations that are more open seem to be prosperous. Romer (1999) study found that between 105 nations in 1985, there had been increased trade over GDP ratio that augments income per capita. Recent research by Chang et al, (2009) and Freund & Bolaky (2009) also confirm the earlier findings that trade liberalisation enhance the income of nations. (Vijil 2011:2). However, developing countries are vehemently denying that their economies never enjoyed any benefits due to trade liberalisation. Despite of WTO liberalisation, rich nations are still dominating the trade by offering subsidiaries to their farmers and for certain products. Thus ,this research essay will study in detail whether GATTS AND WTO- really helped less-developed nations to get its share in the international trade or not. WTO AND ITS IMPACT ON INTERNATIONAL TRADE Immediately, after the Second World War, there had been rapid development of international commerce due to industrial revolution, and this has been a chief instrument to the ever increasing internationalisation of global economy. In the post-1945 era, international commerce has attained a rapid growth which is estimated at more than twice the rate of economic growth especially from the 1980s onwards, pushed by multilateral relaxation under consecutive General Agreement on Tariffs and Trade, which is famously known as GATT Rounds of trade negotiations. (Perdikis & Read 2005:1). A significant outcome to ever increasing freeing of international trade is that it is carried over as per the acknowledged rules framed under the aegis of the GATT and later the WTO (the World Trade Organisations). Both GATTS and WTO have a built in system to deal with international business disputes emanating between Member nations and to implement the accepted rules in an unbiased manner. (Perdikis & Read 2005:1). International trade was at its puppetry stage in the late 1980s due to the absence of dispute settlement mechanisms to find solutions to trade disputes. Further, liberalisation of trade is possible due to the extension of most-favoured nations (MFN) status to all member nations without any partiality and the extension of non-discrimination to all member nations. Absence of such advantages like DSM, MFN and ND would result in coming back to unilateralism favouring politically and economically mighty nations to influence over weaker and smaller nations, especially the developing nations. However, GATT attempted to offer some benefits whereas WTO offered almost all the above said advantages to its member nations on a reciprocal basis. Thus, the multilateral implementation of law concerning the administration of international trade, now enshrined in the WTO Dispute Settlement Understanding (DSU) that makes sure that unbiased treatment shall be given to all Member nations while resolving disputes between member nations. (Perdikis & Read 2005:1). Though the liberalisation of international trade is the main objective of the WTO but in some scenarios, its rules support administering trade barriers like to avert spreading of diseases, to safeguard the interest of its consumers or to safeguard the environment which has been famously known as “ non-tariff” barriers.(WTO 2008:8). What is GATT? “General Agreement on Tariffs and Trade (GATT) “was established in 1948, which can be said to be the pioneer institution which had provided the rules for the international trade system. In May 1998, 50th anniversary of GATTs was celebrated in the second WTO ministerial meeting which was held in Geneva. Like WTO, GATT also evolved through many rounds of trade negotiations from 1986 to 1994. The largest and last GATT rounds were held, which was christened as Uruguay Round. The main difference between GATT and WTO is that GATT had mainly concerned with trade in goods whereas the WTO and its rules now cover not only goods but also trade in services and in traded intellectual creations, inventions and designs. (WTO 2008:10). Unlike WTO, GATT is comprised of many-sided trade agreements, which were entered among autonomous organisations or entities and not necessarily by states, which intended at enlarging international commerce. Though originally GATT was signed in 1947 as a provisional agreement, but it later turned to be the major international accord and institution pertaining to international trade. The GATT 1947 was substituted in 1995 with the GATT 1994 which is considerably matching, but a legally diverse instrument and then WTO was established as a global entity to manage the GATT and associated trade agreements. Even after the substitution of GATT with WTO, the principles and rules of the GATTs regime – which are the founding principles and rules that administer the international trading setup –remain largely unaltered or unchanged. (Barton et al. 2006). GATT facilitated member nations to open up their domestic market to all its member nations. Further, under GATT, the system of regulations made it possible for member nations to join preferential provincial trading groups like establishing free -trade zones, free trade agreements, etc. Article XXIV of GATT authorises the setting up of customs unions and free trade areas despite their discrepancy with the GATTs most –favoured nations (MFN) touching stone. The founding member nations of GATT viewed regionalism as an analogous to an “assurance policy “for lesser developed or smaller countries. In the GATT, ambiguity in the “law” facilitated space for nations to appease vibrant domestic groups wherever it is felt necessary without jeopardising their general obligations to the system. (Barton et al. 2006). What is WTO? There are many ways to presume what is WTO? It is an international organisation engaged in the freedom of trade or liberalisation of trade. WTO is attempting to create a border less world. WTO is a place where Member nations can try to find a solution to their trade disputes. WTO functions on a system of trade rules. .Many multilateral negotiations have established the WTO and WTO’s rules, and regulations emanate as a result of trade negotiations. The major portions of WTO rules originate from the various trade negotiations that were held between 1986 and 1994, which were called as the “ Uruguay Round “ and from earlier trade discussion under the GATT. The current negotiations were launched in 2001 and are named as “Doha Development Agenda.” (WTO 2008:9). The majority of member nations of WTO have enacted WTO agreements through negotiations and signing the same. These agreements offer the legal background for international trade. WTO agreements are mere contracts, compelling various member nation governments to maintain their trade policies within established limits. Though, WTO agreements are being negotiated and signed by member nation’s governments, its main objective is to assist the manufacturer of products and service providers, importers and exporters to engage in international business in an orderly manner while permitting the respective governments to meet environmental and social goals. (WTO 2008:10). How DSM Came into Effect? The initial Dispute Settlement System was embodied in GATT 1947 and it was an ad -hoc measure, then such DSS having been implemented from Havana Charter of the International Trade Organisation (ITO). Later, the DSS system developed through case law established through precedent and interpretation. However, the main drawback of the DSS under GATTs is that it offered veto facility to its members which resulted in a situation that no decision was arrived at all. In 1995, the WTO DSU came into force as a direct outcome of the Uruguay Round deliberations with an intention to establish a more efficient system of implementing the laws and rules for the smooth administration of international trade. (Perdikis & Read 2005:2). As compared to GATTs DSS, WTO DSU is significantly more broad containing 27 Articles and 4 Appendices and has a wider range in its application. The salient feature of WTO DSU is that member nations cannot veto the outcome of the WTO dispute panels and the decision of the WTO DSU’s will be binding and final on the member nations. (Perdikis & Read 2005:2). A major volume of international trade is carried between 153 members of the WTO thereby augmenting potential occurrence of trade disputes budding between the Member nations. Due to this, the efficacy of the new DSU in implementing the rules on international trade is significant to the trustworthiness of WTO as an organisation and the future of supplementary trade relaxations in an epoch of ever increasing globalisation. (Perdikis & Read 2005:2). The WTOs DSU is more dependable and reliant as it is evidenced from the high profile trade disputes between the United States and the EU, the two largest economies of the globe as they are accounting for more than 60% of the international commerce. Further, since the inception of WTO, both EU and USA accounts for about 40% of all trade dispute cases. The success of the WTO can be discerned from the keenness of world -leading economies to follow to the rules concerning the administration of international trade, and this can be considered to be a good pointer of the health of international economic system and the efficacy of the WTO DSU. (Perdikis & Read 2005:2). Whether WTO has succeeded in its efforts? Despite the fact that the national leaders established the system to extinguish any barriers to trade, their readiness to acknowledge the rules that facilitated the system to make authoritative decisions has changed over period of time. In some phases of time, the system attempted to enlarge its authority and countries actively involved in the process of liberalisation of trade and at other sectors, the regime was not active to make behavioural transformations among members. (Barton et al. 2006). It is argued that there exists “authoritative gap “which mirrors the system’s incapability to reframe its regulations and standards of behaviour in line with the transforming authority and interests of its members. Though, WTO has not been standstill and, in reality, it faced a massive reinstitutionalisation in 1995. It is argued that the system’s “contract” often not in line with the member’s interest and the background of international trade. WTO has been alleged that it fine-tuned its nature of interests with dominant nations as other affected member nations may invalid the “cooperative solutions “and then it would be difficult to remain in unity. (Barton et al. 2006). Negative Sides of WTO In 1999, in Seattle, antiglobalisation groups vented their protest at the third WTO ministerial meeting. In Seattle, environmentalist from the USA, Europe, and Australia and from other parts protested in the streets opposing to WTO and its rules. Labour unions around the world complained that WTO disregarded their welfare and was establishing a “race towards the bottom” for labour welfare measures. WTO is strongly criticised by the members of the U.S. Congress together with the academics and activists as they insisted an answer to the “democratic deficit” in Geneva. Delegates from developing nations ramped a WTO ministerial caucus that was dictated by developed –nations delegates and raised their voice that the WTO legislative process was not only unfair but also non-transparent. “ The Group 77” which represented more than 100 developing nations protested of an “inequity “in WTO regulations that sided with the best interest of economically advanced countries. (Barton et al. 2006). The Group 77” which represented more than 100 developing nations protested of an “inequity “in WTO regulations that sided with the best interest of economically advanced countries. (Barton et al. 2006). It was complained in 2002 that both USA and EU were failed to apply some important WTO dispute settlement awards. In 2002, during the U.S. Congressional hearings, it was complained by members of the Congress that there existed “judicial activism” in the dispute settlement setup of WTO. Though WTO Doha round trade discussions were fruitfully initiated, the trade discussions were stalemated along North –South stands. Due to the above happenings, we can assume that WTO institutions have failed to function as it was envisaged. (Barton et al. 2006). GATTS AND WTO- Whether it really helped less-developed nations to get its share in the international trade? In their research study, Winters et al. (2004) found that for fuelling the economic growth and to reduce poverty, international trade is the real powerful engine and acts as catalyst in this regard. Thus, statistics reveal that WTO has, in fact, kindled world economy to reach to pinnacle stage. Nonetheless, Brun et al. (2005) found that there has been sufficient evidence that poor nations have been relegated due to globalisation process. (Vijil 2011:1). Agriculture is the main source of living for the world’s majority of the population, and it is the farmers who have been hit badly due to trade liberalisation. Since the restriction on imports has been removed under globalisation process, poor farmers have found difficulty to sell their produce in the local market as such markets are flooded with subsidised agricultural imports. Research has demonstrated that as compared to exports, import is expected to rise faster due to trade liberalisation and of all the products, the import of consumer goods like food is expected to increase rapidly. Further , these poor farmers are not in a position to export their produce due to high cost without subsidies from government of developing countries and finally , the agricultural industry in developing countries will be at stake due to flooding of food products due to liberalisation.( House of Commons UK 2006:71). To provide relief to their farmers, some developing nations’ governments are offering protection to their farmers during some times of the year thereby making imports provisional on some quantum of domestic buying. For instance, farmers in India, Mozambique and Honduras are enjoying the advantage of protection. Nonetheless, if deliberations on agricultural end in a consensus which allows high level of liberalisation in the agricultural sector in the near future, then selective protectionism may not be available for developing nations, and it is the poor farmers of these nations are going to be impacted gravely. (House of Commons UK 2006:71). In the Doha Development of Agenda (DDA) of the WTO which failed in mid -2006 and in the process of its restart, has an obvious authorisation to enhance welfare and to minimise the poverty, especially in developing nations. The major portion of the international gains is from merchandise trade transformation originate from agricultural reforms, and the lion’s share of these gains are estimated to amass by rich nations as they minimise the expenditure on farm programmes and minimise the protection for their agricultural produces. As per International NGOs which involved in a research on difficulties to minimise the underdevelopment and poverty has found that being a member of WTO did not assist the preponderance of poor nations to enhance their exports and market access as envisaged. As per World Bank’s statistics, the percentage of in global exports by Africa declined to just 2.6% in 2007 from that of 4.5% in 1980. It is to be observed that oil exports to occupy a major share in the exports’ figures of Africa else it would be still drastic. It has been alleged that though WTO has been considered to be successful by achieving increased market access, mainly through reduction in tariffs but these advantages have been counterbalanced by enhancement in non-tariff barriers and the infringement of anti-dumping rules chiefly against the import of goods from developing nations like textiles.(Scholz 2011:1). Both IMF and the World Bank have developed a policy in the last two decades, mainly to encourage developed nations to remove the barriers to trade and to open up their economy fastly and to minimise radically government involvement and spending. The measures introduced by WTO together with the above measures introduced by IMF and World Bank went in hand-in-glove and there is a finding that this move could have destabilised considerably the manufacturing and production capacity of the majority of the developing nations as well as the regional and national markets. It is to be noted that without enough “ aid for trade” plans, the majority of developing nations were not prepared to establish , maintain or rebuild either the needed infrastructure like railways , ports or roads nor to nourish skilled labour, professional and academic, which is essential to derive advantage from the so-called globalised international economy. (Scholz 2011:2). There is a necessity for the developing nations to derive advantage from differential and special treatment (SDT), and this is inclusive of permitting them to turn down to open up their economy in tandem with that of developed ones and extending a quota free and duty –fee market access, especially to all OECD nations and a pair of developing major economies. The poorest developing nations wishes to retain their right to safeguard their farmer’s interest, and they want that defining a cluster of “ special merchandises” which such nations would protect and by employing a special safeguard instrument that they could employ to protect their products from augmented imports. It is proposed to include lower tariff reduction, especially for developing nations on all agricultural products they produce. If trade barriers are liberalised, then the poor nations that have been benefiting out of trade preferences (an unique admission to rich nations’ markets). Poor nations demand that liberalisation should be introduced at slow phase so as to safeguard their preferences as long as possible. (House of Commons UK 2006: 71). Raw materials occupy about 59% of exports from low –income nations whereas it is just 20% of their exports for developed nations. A perennial issue for developing nations is that the prices of their chief merchandises like sugar, cocoa, coffee and rubber oscillate more frequently than the prices of finished merchandises as the agricultural produce volatile with the weather. Developing nations are always raising their concerns against industrial nations’ trade barriers like quotas and tariffs which frequently prejudice their primary products. For instance, United States restricts sugar imports for more than five decades. Developing nations vehemently protested against protectionism by USA, and this was the main reason for the failure of Doha Round. (McEachern 2010:474). Understanding the woes of poor and developing nations, in Doha Round, there is an attempt to re-balance the trade regulations to the needs of the developing nations, to strengthen their contribution in the globalisation and to make them to reap the maximum benefits from trade liberalisation. (Vijil 2011:2). To derive maximum benefits from the globalisation process, it is suggested that developing nations should be accorded sufficient financial aid for trade and preferential trade schemes to be offered by advanced nations. As per research study carried over by Huchet –Bourdon et al. 2009? there has been no sufficient market access to poor nations due to their internal barriers to trade like excessive red tape , lack of knowledge , poor infrastructure and insufficient financing. (Vijil 2011:2). In Doha Round of Trade Negotiations that was held on 14 November 2011, efforts at WTO were made to cater the developing nation requirements. In response to the anti-globalisation riots that occurred in the 1990s, WTO Doha Negotiation made various attempts to redress the grievances of developing nations to get their pie from the international trade. Ten years have passed, but the promises made at Doha Round were yet to be implemented for the betterment of economies of developing nations. Both the political and economic interest of advanced economies of the world has completely sidelined the economic growth that had been envisaged in the Doha Round. It is true that less -developed nations are yet to get its share in the international trade despite the fact that trade has been liberalised. The following instances will support the claim that poor countries have been pushed back by the global super economic powers despite WTO and its trade liberalisation process. Trade Accords: The existence of more ambiguous rules in the WTO system has facilitated the rich nations to manipulate the poor nations. For instance , the African states while entering trade accord with EU have been compelled to abolish tariffs even up to the maximum of ninety percent of the trade as there has no crystal clear rules exists under WTO system to safeguard their interest. Subsidies for Agricultural Sector: Rich nations are paying large- volume subsidies to their agricultural sector other than the cotton. These subsidies to rich nation’s farmers result in excess production, which prolongs to destabilise the source of revenue for farmers from developing nations. Both EU and the US have heavily subsidised their agricultural produce hence the developing nations have found it arduous to push in to US and EU market. Due to the heavy subsidy for agricultural products by rich nations has made them cheaper and has facilitated to enter into lucrative markets in developing nations thereby destabilising the farmers of poor nations and by pushing them out of business. In “United States – Subsidies on Upload Cotton in 2002” , a case submitted to WTO DSU, US subsidies programs were held to infringe the WTO laws, and the Appellate Body of WTO confirmed this finding in 2005. Till 2009, US failed to adhere with the findings and hence, an arbitrator sanctioned $US295 million worth of disciplinary initiatives to Brazil. (Joseph 2011:160). Subsidy for Cotton: As per research study carried over by the Fairtrade Foundation, in the last one decade alone, rich nations have paid more than $47 billion as subsidy to their cotton farmers. This has a devastating effect on about 15 million cotton growing farmers from West Africa as they could not compete with farmers from rich nations as their export of cotton was not competitive. Further, due to these unwarranted subsidies by the rich nations to the cotton farmers, more than 5 million cotton growing farmers from the globe’s poorest nations have been thrown out of business, and they landed into worst poverty due to cotton subsidies offered by rich nations to their farmers. (Walker 2011). The following “C4” nations from West Africa namely Mali, Benin, Burkina Faso and Chad produce cotton at nearly fifty percent less cost as compared to US or EU but yet the US tops the list of cotton exports as of even today. C4 nations made a complaint to WTO in 2003 that in 2001 alone, the US cotton subsidies were estimated at 60%, and US cotton subsidies have found to be exceeded the Burkina Faso’s the entire GDP. It is alleged by the C4 nations that cotton subsidies by US benefited a few thousand farmers from US but driven out of agriculture business about a million farmers in Africa. It is estimated that total loss due to the American cotton subsidies to the world’s poorest nations amounted to $1 billion per annum. For instance, World Bank in its report had alleged that both EU and US through their cotton subsidies had brought down the cotton prices by about seventy percent in 2000-2001 alone, which had destabilised the livelihood poor cotton farmers from Central Asia and Africa. (Joseph 2011:160). Intellectual Property Rights and Pharmaceutical Sector: For treatment of diseases like AIDS, Malaria, Cancer, etc costly drugs are needed and poor countries are unable to pay for the same. There is a volley of battle between rich and poor nations over drug patents. Doha Agreement made a consensus to accord permission to developing nations to obtain “special licences “to manufacture costly medicines in case of health emergencies. In such a situation, a compulsory license needs drug manufacturer’s to part their inventions with other drug manufacturers. Under compulsory licenses, other drug manufacturing companies are allowed to manufacture inexpensive basic drugs. This is just imitation of costly drugs patented by giant drug manufacturing companies. However, the international drug companies in EU and US have vehemently opposed Doha agreement. They allege that Doha agreement’s special licences would prevent giant drug manufacturing companies from finding new drugs for deadly diseases that impact poor. (White 2004: 5). Various research studies have found that present trade liberalisation policies and rules have resulted in an increase of inequality and poverty and have corroded democratic norms, with inconsistently huge negative impact on the poorest nations. As per World Bank Global Economic Outlook 2000, since 1980, the number of people who are living just less than $2 per day has increased by almost fifty percent to 2.8 billion, which is nearly half of the globe’s population. It is to be observed that this is the exact period where liberalisation of trade was introduced. The opponents of WTO allege that WTO is a destructive mechanism of globalisation that injures the development chances of third-world nations, annihilates culture and sustains poverty. As per article published in Economist it has been alleged that there is no longer available evidence that corroborates that the WTO has indeed kindled international trade growth. (The Economist 2005). Andrew K.Rose (2004) , in their recent article in the American Economic Review has found that both GATT and WTO member nations made successful international trade which was not more than what non-member states did. Rose’s revelation is remarkable as he culls out a large volume of dataset, carryout a countless of investigations and put forth evidence that both WTO and the GATT had any effect on international trade. (Tomz et al. 2007:2005). Members of WTO raise the disputes in the areas of intellectual property rights protection or agriculture, which prolong to create a chain of trade conflicts among member nations. In such instances, if Dispute Settlement Mechanism is employed to resolve the issues, objections in support of national sovereignty may compel member nations to depart from the WTO whenever a nation fails to succeed in a trade dispute. Further, some of the WTO members are trying to introduce non-tariff barriers like social causes into trade decisions. It is arguable whether the WTO should include in its agenda with issues like competition, labour law and emigration liberty. Other issues like provision of healthcare, freedom of religion, the safety of animals has been dealt as well. It will be a difficult task for the WTO to prolong as a viable institution if large non-trade associated issues is added into its investment and trade mission. If non-trade barrier issues are also added, then it would really impact the economies of developing and poor nations. (Czinkota et al.2008: 57). Table 1: World Poor Countries – Export of Goods and Services (% of GDP) S. No Country’s name 2006 2007 2008 2009 2010 1 Zimbabwe 38 40 41 35 37 2 DRC of Congo 84 77 73 72 82 3 Burundi 11 - - - - 4 Mozambique 38 35 32 25 25 5 Chad 63 55 53 42 44 6 Liberia 29 28 31 - - 7 Burkina Faso 12 - - - - 8 Mali 32 36 - - - 9 Central African Republic 14 15 11 15 - 10 Sierra Leone 25 21 16 16 17 11 Ethiopia 14 13 11 11 11 12 Guinea 39 30 33 40 35 13 Afghanistan 24 18 16 - - 14 Sudan 17 20 22 15 20 15 Malawi 23 27 30 30 26 16 Rwanda 11 11 14 12 - 17 Gambia 40 33 30 30 29 18 Zambia 38 42 36 36 44 19 Cote d Ivoire 53 48 47 42 41 Source: World Bank National Accounts Data and OECD National Accounts Data-http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS/countries?display=default Hong Kong exports were 221% of its GDP in 2010 , Singapore’s exports were 211% of their GDP in 2010 and the above mentioned poor nations as detailed in Table 1 exports’ were very meagre as a percentage of their GDP and this also corroborates that trade liberalisation has not kindled the exports in poor countries of the world. Table 2 World Poor Countries – Details of external public debt – In Million US Dollars S. No Country’s name 2006 2007 2008 2009 1 Afghanistan 91.08 189.38 198.46 220.25 2 Burkina Faso 99.87 125.71 151.78 172.48 4 Central African Republic 86.84 84.9 81.71 25.03 5 Chad 162.75 171.24 170.48 171.11 6 Cote d Ivoire 1082.27 1164.6 1062.2 1097.9 7 DRC of Congo 989.08 1092.8 1087.2 1078.8 8 Ethiopia 220.09 257.14 282.9 481.23 9 Gambia 69.25 69.86 42.1 44.92 10 Guinea 282.15 293.94 283.09 282.72 11 Liberia 120.38 103.35 86.5 67.68 12 Malawi 78.89 80.48 83.47 89.93 13 Mali 161.79 197.32 207.76 259.16 14 Mozambique 210.93 242.41 284.47 335.43 15 Rwanda 38.01 54.27 62.73 72.54 16 Sierra Leone 121.99 27.03 33.64 37.08 17 Sudan 1166.23 1235.7 1238.6 1299.8 18 Zambia 96.72 111.58 116.67 121 19 Zimbabwe 338.67 371.25 366.13 374.18 Source: World Bank, Global Development Finance -http://data.worldbank.org/indicator/DT.DOD.DPPG.CD/countries?display=default It is to be noted that countries like USA, UK, Kuwait, Oman, Norway, Qatar, Switzerland, UAE and Israel do not have any public at all or with negligible debt whereas the poor countries as mentioned above are tightly saddled with heavy debt. This also corroborates that liberalisation of trade has not freed the poor nations from the yoke of debt. Findings Labour unions around the world complained that WTO disregarded their welfare and was establishing a “race towards the bottom” for labour welfare measures. It is alleged that there exists “democratic deficit” in Geneva. Developing nations are complaining that the “WTO legislative process was not only unfair but also non-transparent. “Brun et al. (2005) found that there has been sufficient evidence that poor nations have been relegated due to globalisation process. (Vijil 2011:1). . As per World Bank’s statistics, the percentage of in global exports by Africa declined to just 2.6% in 2007 from that of 4.5% in 1980. Due to unwarranted subsidies by the rich nations to the cotton farmers, more than 5 million cotton growing farmers from the globe’s poorest nations have been thrown out of business, and they landed into worst poverty due to cotton subsidies offered by rich nations to their farmers. (Walker 2011). Though WTO Doha round trade discussions were fruitfully initiated, the trade discussions were stalemated along North –South stands. Due to the above happenings, we can assume that WTO institutions have failed to function as it was envisaged. (Barton et al. 2006). WTO Doha Negotiation made various attempts to redress the grievances of developing nations to get their pie from the international trade but unfortunately, Doha Round had been a failure. Due to the above facts, we can arrive at a conclusion that both GATTS AND WTO have not really helped less-developed nations to get its share in the international trade Conclusion & Recommendations Enhanced trade and improved economic growth are essential but not sufficient circumstances to make sure that there are poverty elimination and sustainable development. No doubt, liberalisation of trade, if properly exploited, has the prospective to eliminate poverty and to drive wealth creation, but many more fundamentals like proper functional institutions, apt economic strategies, adequate development aid and fine tuned capacity building also considered to be inevitable elements, particularly, for even distribution of wealth. (Stoler et al. 2009:7). Despite trade liberalisation, the issues like uneven development between and within the member nations remain a major issue both for global and national policy drafters. It is said that Asian tigers namely China and India are the chief benefiters of globalisation. However, if one analyse deeply, the findings are shocking. One in three people in 1990 in China was estimated to live on below than US$1 per day, and current figure shows that one in ten live below than US$1 per day. It is estimated that even as of today, one in two people in China live below than US$2 per day. Due to liberalisation, there has been considerable improvement in the standard of living for the people living in urban areas in India as compared to the rural area. It is estimated by the World Bank that as of date, 903 million people are living in poverty in India. (Stoler et al. 2009:3). Though the countries like Indonesia or Philippines in Asia-Pacific region have embraced globalisation yet they are reeling under poverty. Further, the majority of the Pacific Islands nations have opened up their economy but still on the brink of economic turmoil. Euan MacMillan points out that no doubt that international trade influences wage level, employment opportunities, product prices, income of the government and hence there may be inequality. To reduce such inequalities and poverty, there is a necessity to develop vibrant institutions to control and manage the timing and nature of liberalisation, which can usher a favourable climate for trade-associated poverty elimination. Euan MacMillan suggests the following five major steps as a basic precondition for introducing poverty reduction strategies and for nurturing a positive trading atmosphere. There can be a positive effect on poverty reduction if there is an increased openness to international trade. Openness to international trade coupled with a vibrant and continuous promise to reform the domestic policy on the following two grounds namely a) strategies to control and safeguard susceptible clusters from trade liberalisation; and b) strategies to enhance competitiveness and productivity and to derive the advantages of trade. Private sector should be encouraged and should be supported to participate in the trade liberalisation and it is the responsibility of government to nourish suitable atmosphere for competitiveness and increased productivity as it is the private sector which will ultimately drive the economic growth. FDI should be allowed freely to establish productive employment and to alleviate poverty. Encouraging TNCs (Transnational companies) which will bring technology along with FDI will create employment, revenue to the host nations. In order to engage in poverty reduction and to sustain domestic trade reform, it is essential for implementing policy space for the progression of trade reform, to allow greater market entry and flexible capacity building and timeframes, support from developed nations’ trading associates and support from multilateral institutions like IMF, World Bank. To alleviate poverty, not only unilateral and openness are needed but there should be strong political will to implement the trade reforms despite of opposition. Thus, without strong support and cooperation from national, local, regional and multilateral stages of governments, the majority of trade reforms cannot be reaped fully. (Stoler et al. 2009:7). List of References Barton J H, Goldstein JL, Josling TE & Steinberg R H. (2006). The Evolution of the Trade Regime: Politics, Law and Economics of the GATT and the WTO. Princeton: Princeton University Press Czinkota M, Ronkainen, IA & Moffett, MH. (2008). 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VOA Special English Development Report. Tsinghua: Tsinghua University Press. Read More