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What Is The Function Of The World Trade Organization

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This essay will focus on the World Trade Organization (WTO) and will address several attempts by this organization to achieve trade liberalization. Some attempts that will be discusses are: The Doha Round, the Bali Package, the Environmental Goods Agreement, and Aid for trade. The function of the WTO is to promote international trade liberalization by eliminating trade barriers. It is believed that if countries are freely available to trade there will be more wealth and efficiency as each country will specialize on its forte. However, developed countries want trade barriers in order to protect their economies. Types of barriers include: tariffs, non-tariff, discriminatory barriers, and reciprocity. The following hypothetical will be…show more content…
Does this mean the freer the trade, the more peace we will have? Maybe so, but this agreement involves only three countries. What happens when many countries are involved in one agreement? The Doha round is the latest attempt to improve the economy of developing countries by lowering trade barriers. Many countries were involved and each country wanted different things, so it was not easy to come to an agreement. Also, if trade barriers are reduced, there would be an incentive to compete and developed countries would have a higher competitive advantage as they would be able to offer cheaper prices through exploitation of workers. Moreover, in order for the agreement to be in action all of the WTO countries would have to agree. The agreement was almost impossible as developing countries wanted to reduce trade barriers while developed countries wanted to increase them. Agriculture was the main problem. Developed countries were asked to reduce their agricultural subsidies, but these countries refused to do so as that action would make production costs more expensive, thus, increasing the price of their agriculture goods. If there are no trade barriers, the developing country will take a substantial part of the developed countries’ economy. One can argue also that the developed country will be dependent upon the developing country’s
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