The World Trade Organization
It all begin in Latin
American resort town of punta del est, Uruguay and it seemingly ended in
Marrakesh in April 1994. Seemingly, because now is the real beginning of the
outcome of the talks that commenced in Uruguay in 1986 .
On January 1995,a new
organization came in to existence the World Trade Organization (WTO).This new organization
replaces the general agreement on tariffs and Trade (GATT)and will supervise
oversee the most ambitious global trade accord over .
The Uruguay round of
trade talks ended with the signing of an accord that is about 500 pages long
which contains revolutions that affect a wide variety of subjects both directly
and indirectly.
The signing of this
accord could allow city bank to open more branches in Pakistan .it could result
in the closing up of thousands of the factories across the country because of occupations
of environmental pollution .it could reverse our efforts to make Pakistanis
computer literate .it could threaten our carpet exports because of social
dumping .it could rake in profits for our garments and footwear exporters .the
list goes on ,
The WTO Agreement has
its loopholes and provisos, its qualifications and conditions and its schedule
of commitment which can help protect infant industries and restrict market
access.
So, did Marrakesh
agreement achieve nothing more than a new and improved label? The answer depend
on how the world implements the accord
Objectives 0f the WTO
Agreement
Recognizing that their
relations in the field of trade and economic endeavour should be conducted with a view to raising
standards of living ,ensuring full employment and large and steadily growing volume
of real income and effective demand ,and expanding the production of and trade
goods and services ,while allowing for the optimal use of the world’s resources
in accordance with the objective of sustainable development ,seeking both to
preserve the environment and to enhance the means for doing so in a manner
consistent with their respective needs and concerns at different levels of
economical development ,
Recognizing further
that there is need for positive efforts designed to ensure that developing countries
,and especially the least developed among them ,secure a share in the growth in
international trade commensurate with the needs of their economic development
,being desirous of contributing to these objectives by entering into reciprocal
and mutually advantageous arrangements directed to the substantial reduction of
tariffs and other barriers of trade and to the elimination of discriminatory
treatment in international trade relations .
A group of 117
countries agreed on April 1994to setup a World Trade Organization to implement administer
,operate and further the objectives of the multilateral trade accord .
The basis of the World
Trade Organization agreement is the premise that free trade is good for all .By
lowering tariffs and quotes the playing field will be leveled and every one
will have the opportunity to compete in a free world market.
Studies have estimated
that by removing restrictions ,world income is likely to grow by over 200 billions
a year by the year 2002 .this growth
will be shared by all countries are likely to experience slower growth in their
income .
Salient Features of WTO Agreement
The GATT accord is
expected to reduce tariffs around world by an average of about 40 percent .this
will make consumers happy because prices of imported goods will decrease .it
will make exporters glad because
reduced prices will stimulate increase demand for their exports. However,
developing country industrialists with large excess capacity or inefficient
plant and management who were previously protected by prohibitive import duties
will have to face price as well as qualify competition .
According to the WTO agreement ,developed nations which
were restricting the import of textiles and clothing have to phase out the
Multi-Fibre Arrangement(MFA)-quantitative restrictions on the import of fibre
,textiles and apparel .Quotas are to be totally lifted over a staggered period
of ten years .this will mean that Pakistani apparel exporters can sell as many
tea-shirts in America as US buyers wants .However ,restrictions on importing
T-shirts from India , Bangladesh and Hong kong
will also be removed and Pakistani shirt exporters will have to be
competitively priced .
This agreement has also
introduced new patent and copy right protection laws for intellectual property
.We will now have to pay top dollars for computer software .Pirated software
will be confiscated and destroyed .the computer revolution that is sweeping
across developing countries may come to grinding halt-unless software manufacturers
West adopt IDC user –friendly pricing policies.
WTO and Tariff Reduction
The results of the
market access negotiations of the Uruguay round of talks have been the
agreement to reduce tariff rates on non agriculture goods by about 40%. These rates
have been annexed to the agreement in the form of national schedule of
concessions.
The tariff reduction
program agreed upon is to be implemented in five equal rate reductions unless
otherwise specifies by the county.
Tariff Reduction and Government Revenue
Every government
heavily relies on indirect taxation for government revenue. Import duties and
sale taxes on import account for over 40% of total government revenue and a
reduction in tariff is expected to cut heavily into this source of funds. This may
exacerbate the budget deficit.
The WTO Agreement and Agriculture
The Uruguay round talks
have deliberated on various aspects of the agriculture sector. This is heavily
protected not only in developing countries but also in developing countries.
Tariffs on agriculture products are to be reduced by 36% in the developed
countries. 24% in developing countries. This reduction is to be undertaken over
a period of 6 years for a developed countries and over 10 years for developing
nations. Least develop countries are not required to reduced their tariffs.
0 comments:
Post a Comment