Frequently Asked Questions about the World System

Article excerpt

Over the past four years, ITC's World Tr@de Net programme (previously the Uruguay Round Follow-up programme) has delivered nearly 200 seminars in 70 developing and transition economies to brief business and government leaders about the world trading system. Below is a sample of questions posed most frequently by seminar participants.

The questions reflect real concerns of seminar participants and, as such, represent perspectives of the business community in developing countries. For answers to your frequently asked questions, see the World Tr@de Net web site (http://www.intracen.org/worldtradenet).

Business implications

Q. How do I find out which WTO Agreements concern my business?

A. Practically all products and markets are affected by one or several of the WTO Agreements, at least for WTO member countries. Progressive liberalization of trade through successive negotiations has led to lower (or zero) import duties, and thus increased export opportunities, especially in developed country markets. It has also created greater predictability of market access by "binding" reduced (or zero) tariff rates.

Most governments impose technical regulations or standards on (domestic and imported) products to protect human, animal or plant life or health, as well as the environment. The Agreements on Technical Barriers to Trade and on Sanitary and Phytosanitary Measures ensure that such requirements do not create unnecessary obstacles to international trade and provide certain rights to exporters. It is up to each exporter to find out about such requirements in the relevant foreign markets.

National enquiry points, which WTO members are required to set up in their countries under certain WTO Agreements, can provide information on national laws and regulations that affect your business. Enquiry points are usually ministries of trade, agriculture or national standardization institutes.

Business role

Q. Private-sector participation in multilateral trade negotiations is essential to safeguard its interests. What can business communities do?

A. In a number of WTO member countries, mechanisms exist for business and industry associations to be regularly consulted and put their point of view to the governmental policy-makers and negotiators during multilateral trade rounds. In other countries, contact points have been established to which enquiries relating to trade policy matters can be addressed. Experience has shown that the establishment of such links has been most beneficial to both the private sector and the governments of the respective countries. Similar mechanisms could be put into place in other countries where they do not yet exist.

WTO membership

Q. What are the advantages and disadvantages for my country to join the World Trade Organization?

A. WTO membership gives a country the legal right not to be discriminated against in its trade with the other members of the organization. The principle of non-discrimination, which is especially important for a country's exports, is laid down in the most favoured nation (MFN) clause and the national treatment clause. In addition, every WTO member is entitled to seek redress against any impairment of its rights by another country through the dispute settlement mechanism. Another important element of WTO membership is the right to take part in the decision-making process of the organization and in the conduct of future multilateral trade negotiations.

On the other hand, WTO members must respect the general rules and obligations contained in the various WTO Agreements, in particular the GATT 1994 (goods), the GATS (services) and the TRIPs (intellectual property) Agreements. A flexible application is foreseen in many of these Agreements for developing and least developed countries, as well as for countries moving from a centrally-planned to a market, free-enterprise economy. …