Amity Business School

Amity Business School

MBA 2013, 3rd Semester IEP Amanpreet Kang

Amity Business School

Principles of Multilateral Trading System

Principles of Multilateral Trading System

Amity Business School

Agreements based on negotiations between members Lengthy Complex Legal texts Basic principles of WTO (1) Trade without Discrimination 2 aspects (1) No discrimination between trading partners and countrys own and foreign products and services
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Principles of Multilateral Trading System

Amity Business School

(1) Trade without Discrimination 2 aspects (2) Most-favored-nation (MFN) Treatment First article of GATT which governs trade in goods Priority in GATS, TRIPS In each of these agreements the principle is handled slightly differently

Principles of Multilateral Trading System

Amity Business School

Most-favored-nation (MFN) Treatment Some exceptions include: Countries can set up free trade agreement Special access extended by some to the developing countries Barriers against products that are considered to be traded unfairly from specific countries GATS, countries allowed to discriminate in limited circumstances

Principles of Multilateral Trading System

Amity Business School

National Treatment Imported and locally produced goods should be treated equally It applies to foreign and domestic services, trademarks, copyrights and patents Applies only when a good, service or IP has entered the market Case of customs applicable to imports In all 3 main agreements of WTO Art. 3 of GATT, Art. 17 of GATS and Art. 3 of TRIPS Handled slightly differently in each.
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Principles of Multilateral Trading System

Amity Business School

(2) Gradual Move towards Freer Markets Through Negotiations Encouraging international trade Lower trade barriers Barriers are tariffs, customs duty, import bans, quotas Main objective of GATT Tariffs fell from 40% to 3-4% NTBs, Services, IP Progressive liberalisation Developing countries given longer period to fulfill obligations
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Principles of Multilateral Trading System

Amity Business School

(3) Increasing Predictability of International Marketing Environment Promise not to raise trade barriers Clear view of future market opportunities Stability Predictability Increase trade under binding commitments Binding commitments (bound tariffs) Case of agricultural goods Higher degree of market security for traders and investors Removing quotas
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Principles of Multilateral Trading System

Amity Business School

(3) Increasing Predictability of International Marketing Environment Making trade rules clear and transparent Public disclosure of policies and practices Notification in WTO Trade policy review

Principles of Multilateral Trading System

Amity Business School

(4) Promoting Fair Competition in International Markets Not entirely free trade institution Allows tariffs and protection in limited circumstances Fair trade is important It is a system of rules dedicated to OPEN, FAIR and UNDISTORTED COMPETITION Non-discrimination rules? Rules on dumping and subsidies

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Amity Business School

Thanks

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