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为什么说世贸组织是正确的选择？
这篇文章将对世界贸易组织及其形成进行描述，还将分析古典经济学家，如亚当·斯密,里卡多以及新古典经济学家J巴格瓦蒂,保罗·萨缪尔森关于自由贸易的观点。之后将讨论世贸组织以及世贸组织多哈回合谈判所面临的挑战。
引言
二战之后,由美国和其他国家领导为首的世界各国都期望形成一个非歧视性的、开放的贸易体系,其目的是增加全球国家的经济福利。他们有意识地造成的贸易壁垒加重了19世纪30年代的经济萧条,紧随其后的就是军事侵略，这使得消极情绪更加浓郁。因此各国聚集在一起，开会讨论新的交易系统，将开放贸易视为和平和经济稳定的重要因素。
谈判的目的是形成一个国际贸易组织(ITO)，它不仅能够分配贸易壁垒,而且还负责其他与贸易间接相关的问题,包括就业、投资、商品协定和限制性商业协议。
Why Wto Is A Good Idea Economics Essay
The essay will be upon the World Trade Organization and its formation. The essay will analyse the view of classical economist like Adam Smith, Ricardo and neo classical economist like J Bhagwati, Paul Samuelson on free trade. It then discuss the challenges faced by the WTO and also the negotiations made in the Doha Round of the WTO.
Introduction
After World War II, nations all over the world, led by the United States and various other countries desired to form a non-discriminatory and open trading system with the aim of increasing the economic well-being of all the countries. As they were conscious of the role played by the trade barriers adding to the economic depression in the 1930s’, followed by the military aggression which rose after depression. So the countries met to talk over the new trading system considered open trade as important for peace and economic stability.
The aim of the negotiators was to form an International Trade Organization (ITO) which would allocate not only barriers to trade but also other issues which are indirectly related to trade which includes employment, investment, commodity agreements and restrictive business agreements. The ITO was to be a specialized agency of the United Nations but the ITO treaty was not accepted by the United States and other signatories and never went into operations. Alternatively, a provisional agreement on trade rules and tariffs come into effect in 1948, called the General Agreement on Tariffs and Trade (GATT). The most important among the principles of the GATT was non-discrimination with respect to the handling of trade in goods among countries. In addition, the other rule of non- discrimination was that the goods imported from other country and the domestic goods should be treated evenly. Although, non-discrimination is a vital element of the GATT but there were some exceptions such as free trade areas, customs unions and certain treatment for countries were allowed.
Another principle was the open and fair application of any trade barriers. When the GATT was formed, tariffs was the most general and visible type of the trade barrier. Tariffs are ‘confined’, set at maximum level which cannot be increased above the negotiated level. The GATT also covers conference and process to adopt to resolve the disputes. (Fergusson, 2007)
One of the GATTs’ prime purpose was the cutting down of the barrier to trade. Keeping this aim in mind, GATT contracting parties met annually to negotiate more reductions of tariffs and other trade barriers and changes to GATT rules. These negotiations were known as rounds. Earlier rounds was concerned only with the tariff reduction but later rounds included nontariff barrier to trade. The Uruguay Round included broad sets of negotiations in the history of the GATT which started from 1986 to 1994. On the plan was reform of the GATT system as well as extension of rules to cover new areas like patents, copyrights, trademarks and services trade. One of the important transition came from the Uruguay Round was the formation of a new trade structure, the World Trade Organization (WTO) which integrated the many alteration during the Uruguay Round: bodies were formed to oversee the new trade agreements, powerful dispute solving procedure, a regular review of member’s trade policies, bodies to manage the new trade agreements. In contradiction to the GATT, the WTO was formed as a permanent system, with “members” rather than “contracting parties.” (Sek, 2001)
The World Trade Organization was effective from January 1, 1995. The WTO is located in Geneva, Switzerland. Countries afford according to their share in the world trade based on trade in goods, services. There are 157 members of the World Trade Organization, which represents 95 per cent of international trade. All decisions are made by the member countries and everything the WTO does is the outcome of the negotiations. The main aim of the WTO was to promote free trade by abolishing trade barriers and to promote transparency in international trade. This transparency will help in ensuring the individuals, companies and government know about the trade rule around the world and there will be no sudden changes in the policies, providing them the confidence. Thus, helping in providing economic peace and well-being. It settles trade disputes between governments and arrange trade negotiations and also provides free trade agreements. The important part of the WTO is agreements which are negotiated and signed by the aggregate trading nations. They are important contracts which binds the countries to keep their trade policies within limits agreed. (Hoekman and Kostecki, 2001)
The WTO has a much wide scope than the GATT. Whereas, GATT only dealt trade in merchandise goods, the WTO also deals with trade in services like telecommunication, banking other issues like intellectual property rights.
The top level body in the WTO is the Ministerial Conference which comprises political representatives of each member countries. It check the current programs and plans the agenda for future work and meets every two years and also looks the work of the General Council. It also setting for negotiating global trade deals also called as trade rounds which focus on reducing barriers to free trade.
The General Council administers day to day working of the World Trade Organization and is formed of the ambassadors from member countries who also works as special committees. In between there is the Dispute Settlement Panel which guide individual country against country disputes on trade.
World Trade Organization was established to facilitate free trade amongst countries by removing trade barriers. “The term free trade refers generally to the free movement of goods, services, labour, and capital across national borders without the interference of government-imposed economic or regulatory barriers.” It also indicates to the work of the World Trade Organization and different international agreement to liberalize trade by reducing tariffs and discarding nontariff barriers all over. Free trade also indicates to the bilateral and regional agreements that modify trade between trading partners. Since the 1980s, countries have shown interest in the relationship between trade and sustainable development. Despite the fact that trade-sustainability relationship is widely indirect, the WTO debates that free trade guides to environmental sustainability by the means of economic development, institutional stability, increasing innovation, efficient resource allocation an increase income. However, trade liberalization has not had a positive effect completely on sustainability (economic, social and environmental). When bilateral and multilateral trade liberalization raised, the industrialization sometime lead to environmental degradation in the mid-1990s. Additionally, the income gap between the rich and the poor also widened during this period. Despite this, many policy makers consider gradual bilateral and multilateral trade agreements as building blocks to accomplish the promised benefits of the implemented free trade. Majority of the countries consider market access given by the free trade as the profit to their citizens. Market access comprises capital, intellectual property, access to goods and cross-border services. However, plans that encourage market access for one country may depress it for another. Even free trade implemented fully cannot enhance every person’s or country’s welfare. (Irwin, 2009)
Economists agree that the free trade in general has a positive impact on trade flows. It will be beneficial for consumers as they can buy things at cheaper rate as well as for workers as they can get jobs that offers high wages. In the second half of the 17 century, Adam Smith developed his theory of international trade in support of free trade. In his book “The Wealth of Nations” he criticized and demonstrated the mercantilism policy which believed that country should have trade surplus. Adam Smith opposed this theory as he think that mercantilist favoured producers and it hampered the interest of the consumers. He stressed on the advantages on the division of labour. He argue that division of labour is beneficial in production, free international trade is attractive as it promotes international division of labour, because it causes every country to specialise in those goods which is appropriate suites to produce more cheaply. He believed that free trade between countries carry out optimum proportion of the productive resources of the world, leading to an increase in real income of the trading country. In this reference, Adam Smith developed the law of absolute advantage of cost for international trade. The importance of Adam Smith theory is that the rule that accompany the exchanges from any market, internal or external, is to conclude the amount of goods by measuring the labour joined in them. Smith proposed theory of absolute advantage which states that under free trade, each nations achieve by specializing in economic activities in which nation has an absolute advantage. Absolute advantage is the economic advantage that one nation relish which is absolutely superior to other nation. Thus, he suggested that trade arise between two countries if one of them has an absolute advantage in producing one goods and the other country has absolute advantage in producing other goods. For example, Portugal has an absolute advantage over England in the production of grapes and wine because of land and soil whereas England has an absolute advantage over Portugal in the production of sheep and wool. Smith suggested that Portugal and England should specialise in the production of grape and wine and sheep and wool respectively, and they should trade with each other. The outcome will be they can produce more and by trading they can earn more profits. Smith’s theory states that export is profitable if a country can import goods that could please better the requirements of consumers instead producing them internally. Out of this perception of the Smith’s arose the need and importance for the development of free trade, that over period of time any nation might achieve absolute cost advantages in the production of certain goods through specialization and labour division and that all nations will gain from the international trade. He believed in the policy of laissez faire would lead to high levels of well beings in all countries. (Peng, 2010
Although, Smith’s theory is expressed clearly it does not convince fully. The theory is based on the assumption that international trade needed a producer of exports to have an absolute advantage, which means, an exporting industry must be capable to produce with a provided amount of capital and labour, more output than any competitor. But if the country having no such superiority in any line of production how it can export. It may be the case of a comparably backward country whose factors of production as compared with those of any other developed nation are incompetent. There is no absolute advantage for such a backward country and Adam Smith’s theory fails to analyse this kind of situation. Thus it is evident that international trade cannot always adopt the theory of absolute cost advantage.
In response to the Adam Smith’s theory of absolute advantage, British economist David Ricardo elaborated a theory of comparative advantage in 1817, which includes countries that do not have absolute advantages in international trade. According to Ricardo’s framework the countries can still gain from free trade. He believed that the efficiency of resource utilization leads to more productivity. According to the Ricardo theory, each country will produce their goods for the production of which it is most appropriate in terms of its natural endowments. The countries will produce these goods in excess of its own requirement and will exchange the surplus with the imports of goods from other countries fir the goods which is not suited or which it cannot produce at all. Thus all countries produce and export those goods in which they have cost advantage and import those goods which have cost disadvantage. David Ricardo stated a theory that “other things being equal a country tends to specialise in and exports those commodities in the production of which it has maximum comparative cost advantage or minimum comparative disadvantage”. To explain his theory, Ricardo has taken some assumptions. There are two countries and two commodities. There is a perfect competition both in commodity and factor market. Cost of production is expressed in terms of labour i.e. hours per days required to produce. Commodities are also exchanged on the basis of labour content of each good. Labour is the only factor of production other than natural resources and it is homogenous and perfectly mobile within country and perfectly immobile between countries. He also assumed that the movement of goods between countries is not blocked by any restriction. Trade between two countries takes place on barter system and full employment exists and no transport.
Portugal has benefit of low cost of production for both wine and cloth. However, comparative advantage in the production of wine is greater (1.57-0.63= 0.94) than in production of cloth (1.12-0.88= 0.24)
Even in the terms of absolute number of days of labour, Portugal has a huge comparative advantage in wine that is 40 as compared to cloth where the difference is 10 only. So, Portugal specialises in the production of wine as it has large comparative advantage and England should specialises in the production of cloth as it has less comparative disadvantage than wine.
For substantial period the theory of comparative advantage by David Ricardo was accepted for international trade. However there was criticism of the Ricardo’s theory. Ricardo’s theory is based only on 2 countries and 2 commodities but international trade is among many countries with different countries. To explain trade, Ricardo use the assumption of full employment but the reality is far from full employment. Another loophole in the theory was it does not consider transport cost in determining comparative cost difference. The Ricardo’s theory concentrates on supply of goods. The theory consider international trade in terms of supply of goods but ignores demand for goods. Ricardo’s theory assumes free trade but it is unrealistic because the real world consists of tariffs and non-tariffs barriers to trade.
In the 20th century the theory of International trade was revolutionised by Swedish economists Eli Heckscher and his student Bertil Ohlin. Both Heckscher and Ohlin illustrated that trade promotes the convergence of factor prices in the trading nations.
The neo classical economists think that World Trade Organization aim of trade liberalization will benefit countries both developed and developing and free trade will help in compensating the losers. One of the important neo classical economist Jagdish Bhagwati who has given his services to World Trade Organization encourages free trade. He believes that free trade has more benefits than consequences.
According to him, free trade makes the world more internationalized in which we live. It raises movements beyond countries of investment, money, ideas and goods. In addition, flows could be seen as free trade devices which can never be recognized in a protectionist approach to any country’s approach. He adds that if the government of any country adopted the approach which blocks free trade, then there could be a number of clash arising over the availability and locality of the necessary resources. There is a further point for location that affects through international trade. Scarce of free trade has a custom of creating jobs in varied economy sectors of a particular country. This is based on the fact that there is a little chance of obtaining the required products anywhere else. A country which does not participate in free trade is therefore enforced to produce goods on its own. This results in higher rates of employment regardless of the region. This was believed by the protectionist economist who think that exports harm the jobs and protectionism may save thousands of jobs but, Bhagwati contradicted by saying that when retaliation kicks in the country can lose hundreds of thousands jobs instead. More fascinating is the dramatic improvement in the GDP growth rates in India and China after they turned completely towards demolishing trade barriers in the late 1980s. In fact, developed countries also helped from trade’s effect on poverty. Since China entered WTO it has become the world’s largest exporter and second-largest trader. Its foreign trade rose up to 2.97 trillion U.S. dollars last year, almost six times the amount in 2001. Flourished by trade, its gross domestic product expanded at an annual rate of more than 10 percent during the period, reaching nearly 40 trillion Yuan last year. (Boudreaux, 2011)
Many environmentalist fear that the rules of free trade embodied in the GATT and extended in the Uruguay round will prohibit their freedom to seek even purely domestic environmental objectives, with GATT tribunal prohibiting disputed regulation. WTO even permits rules that discriminates against trade for the purposed of safety and health. So, WTO is concerned with the safety and health issues and works for the betterment of that. (Schott, 2000) Bhagwati praises unilateral and multilateral liberalisation and believes that the multilateral trade negotiations by the WTO are constant with better unilateralism. They emphasize the advantage of import liberalization at home by commencing up markets abroad, thus increasing economic gains and accompanying domestic exporters into the free trade association. However, Bhagwati infer sharp differentiation between non-discriminatory multilateral agreements and preferential trade agreements such as North American Free Trade Agreement, the European Union. These PTAs lowers barriers between members but discriminate against exporters from non-members. Few countries have took important commitments on services and also overtakes rich countries in the number of anti-dumping filings. (Bhagwati, 2010)
Another Economist Paul Samuelson believed that international trade make some society better off as compared to if restricted to autarky. According to him, free trade could be used to provide maximum world production as well as maximal world utility frontier to all individual. He believed that free trade is better than no trade. (Samuelson, 1939)
Domestic market opening forced in the WTO offer a commitment to assure foreign and domestic investors that government will not impose detrimental trade policies in the future. Trade liberalisation also influence domestic income distribution by reducing domestic inequality and thus salary by increasing wages for low quality labour. Developing countries generally are labour intensive countries they import capital intensive goods and export labour intensive goods resulting increase in the labour demand. (Milner and Read, 2002)
The information technology boom in the United States and rising of China as an economic power and the implementation of the North American Free Trade Agreement (NAFTA) are because of the little contribution by the World Trade Organization.
Economists like Chang and Samuelson believed that over the span of 50 years suitable environment for trade and reduction in the barriers to trade helped countries to become economically prosperous. According to WTO reports, world exports increased to 126 times in 2003 from 1948, while world gross domestic product (GDP) was 7 times high in 2003 as compared to 1950. It shows that the growth of world exports was higher than GDP growth during the period. Such growth in the world exports is due to the reduction of the barriers to trade caused by the successive rounds of GATT/WTO.
The United States was also benefitted from the WTO membership. Its industrial production increased to 35%, its GDP rose 38%, business investment rose 78 % and 17.2 million jobs were created. The imposed tariff rates were declined an average of 40% for developed countries and 25% for developing countries by the Uruguay Round. U.S. exports of goods and services rose 63% from 1994-2004, from $703 billion to$1.1 trillion. U.S. exports rose by 76% to developing countries and 48% to developed countries. Imports of goods and services flew 120%, from $801 billion to $1.764 trillion during the WTO period. It can be believed that World Trade Organization helped countries to improve and achieve gains from trade economically. (Bhagwati, 2005)
However economists Arvind Subramanian and Shang- Jin Wei of the International Monetary Fund with the help of model suggested that the effect of WTO memberships is positively identified for developed countries because the developing countries has been given special and differential treatment provision that has prevented them from WTO obligations. (Subramanian and Wei, 2003)
Developing countries now make up a majority of members, and because of the consensus-based approach to WTO decision-making, they can block policies and negotiations perceived to be against their interests
For developing countries, universalistic approach of narrow market norms symbolizes a slight improvement over the bilateral bullying of develop countries. WTO rules should be rewritten so that the developing countries can also use tariffs and subsidies for industrial development actively. WTO is a powerful body because it is the representation of the world’s major economic power.
Unfair pricing results when foreign importers “dump” their goods onto a market at a price below average cost. One of the reason for the failure of “Millennium Round” was that the major developing countries decided not to pretend consensus. If developing countries decide collectively to fight for something it will be hard for the US and EU and developed countries to ignore their place.
Chang believe that it we turn from theory to practise WTO is classic autocracy. The decisions are made by the consensus but it allows US and other nations to set the agenda. So the WTO has to solve this problem. The WTO is also pressurized by the lobbies which includes NGOs pushing them to introduce trade unrelated preconditions for the market access. (Chang, 2003)
Also, the WTO works by consensus; there is no voting done by financial contribution. In fact, it is the free trade agreements with dominating powers which are the means for the irregular exploitation of the developing countries. All kinds of trade-unrelated demands, directed by lobbies in the dominance power, are forced on the developing countries in one-on-one negotiations, under the doubtful act that these demands are good for them.
Despite the eight rounds of multilateral trade negotiations since World War II, barriers to trade still remain. Government repeatedly demands for further openness in the market even at the expense of extra access to foreign market in the WTO negotiations. Some critiques believe that WTO is undemocratic which does not operates transparently to benefit multinational companies of developed countries.
There is greater tariff protection on manufactures in the poor countries. This has followed from the fact that the poor countries, not the rich ones, have long been given Special & Differential Treatment in trade negotiations. They are also overtaking the rich countries in the number of anti-dumping filings. Moreover, few poor countries have undertaken significant commitments on services. The developing countries also are free not to sign the optional procurement code which all rich nations have signed.
Also the WTO was unable to address issues related to trade such as food security, climate changes and trade imbalances. The one way preference to the developing countries under the Generalized Scheme for Preferences (GSP) is full of problems because the product eligibility is limited, the preferences ends when exports are favourable and reverse preferences for the rich countries are made under this schemes. (Meltzer, 2011)
We have discussed some challenges faced by the WTO. The most important challenges for the WTO is the Doha Development Round- the present round of the multilateral trade negotiations to additionally liberalize trade and reform the WTO.
To address issues related to agriculture and non-agricultural market access (NAMA) and services WTO launched a new round of multilateral trade negotiations at Doha in 2001. The round is also called ‘development round’ due to the reason to integrate poor countries so that they can be developed was the round’s objective. During the current WTO Doha Round of multilateral trade liberalisation negotiations, agriculture and some labour-intensive products are high on the agenda. Before the start of the Doha Round, developing countries asked to spend some time at the WTO to rebalance the WTO agreements as they think that WTO agreements are biased and are against their interest. At Doha, the developing countries was able to achieve two ‘direct development’ issues into Doha Work Programme which means that these issue will be part of the outcome of the negotiation round. The two issue was ‘implementation issue’ and ‘special and differential treatment.’ However there is little progress on these issues till 2006. Main focus in the Doha work Programme was on the Agriculture. The problem was related to subsidies. There was confusion among the member about the allowed subsidies and the actual subsidies they can exceed and they can pay respectively. The US and EU only wanted to cut water (difference between actual and allowed subsidies). This was one of the reason for reaching to an agreement. The offer was not accepted by the India, Brazil in G6 meeting as they argued that it will not have any effect. The US and EU offers were not sufficient to ensure real cut in the domestic support. On market access, there was agreement on tariff cut according to ‘tiered formula.’ This have negative effect on developing countries as the developed countries domestic subsidies does not really reduced. This make the developed countries to dump their product at low prices into poorer countries that is unable to subsidise. Developing countries firmly stand that there can be overall deal to conclude Doha Work Program if two instruments special product and special safeguard mechanism to protect and promote food security meet their requirement.
The negotiations for NAMA also didn’t work well for developing countries. Members were asked to cut their industrialized tariffs and also unbound tariffs have to be bound at low levels. The developing countries have to cut their tariff at high rates compared to developed countries which goes against the less than full reciprocity mandated by the Doha Declaration. This will worsen in the future rounds of negotiation and it will hamper the objective of industrial development for developing countries. Developing countries does not have to reduce their tariff same as developed countries but less than that not half. As a result it will be hard for the local industries to stand against competition from imports that become cheaper. Government will also lose some part of the revenue as the tariff will be reduced. Asking developing countries to reduce tariffs to low or zero level compared to industrial countries is like reaching on the roof and kicking the ladder when others are climbing (Chang, 2003)
In contrast to that the WTO services agreement, the General Agreement on Trade in Services (GATS) is comparably development friendly as it contains development flexibilities in its provision. But during the Doha Round the developed countries introduced some proposal which poses threat to the GATS. They wanted that developing countries should restrict in the GATS the present level of the liberalisation in each sector. The proposals made by the developed countries was against the principles of GATS and could prevent developing countries from entering into new services sectors like telecom and finance. Also it will affect the small service enterprises as they cannot compete with big international institutions. (Khor, 2006)
In Doha negotiations, the United States has favoured SDT provisions that emphasize longer implementing periods, rather than a general release from commitments. The Doha Round has made the provision of TCB a part of the negotiations through the establishment of a negotiating group on SDT and implementation issues. The developing countries should be encouraged to put their tariffs so that they can extract greater concessions on developed countries tariffs vital to them like agriculture, textiles and other labour intensive products.(Bhagwati, 2001)
So, the Doha Round witnesses differences in the negotiations by developed and developing countries. As the outcome didn’t came but the rights of the developing countries were harmed by the developed countries.
CONCLUSION
In this essay we have discussed the World Trade Organization, its establishment using classical and neo classical theory. The aim of the World Trade Organization was to increase trade by reducing trade barriers and to achieve economic gains. According to the Adam Smith, free trade has an absolute advantage and adding to that Ricardo felt that if a country specialises in a product both the countries will have the comparative advantage on each other and hence both will win. Neo classical economist like Jagdish Bhagwati and Paul Samuelson feel that the WTO aim of trade liberalisation will help countries to get economically prosperous and it will help them to develop. Both feel that the free trade is good for all countries however it is difficult to found free trade. World Trade Organization is working hard to achieve this objectives. WTO helped developing countries to have trade internationally increasing their GDP like China was benefitted from the WTO. However there are some problems in the functioning of the WTO. It is said not transparent in its working. It is inflated towards rich countries and help them to achieve more trade as compared to developing countries. Also the Doha Working Programme was an important part in the WTO as it saw some conflicts in the negotiations between developed and developing countries related to agriculture, services and non-agricultural market access.
It is believed that the WTO is good organization which helps in promoting trade all over the world however there is need of reforms in the WTO so that the developing countries can also be benefitted from the World Trade Organization.
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