Introduction
The term International business refers to companies having business operations in different nations across the globe. Globalization has made it possible for many countries particularly the developing and the underdeveloped nations to expand and receive foreign investments in their countries.
The WTO alongside the General Agreement on Tariffs and Trade (GATT) among other trade negotiations has largely contributed to reductions of barriers in many nations globally (Ezeani, 2011, p. 120). The World Trade Organization (WTO) has played a significant role in the globalization by ensuring that different nations irrespective of their classes trade with each other without difficulties. Since its inception, the World Trade Organizationās primary focus has been promoting the development of economies and trade across the world.
It has achieved this by developing policies to govern the system of the world trade. The organization also ensures that the countries involved in world trade adhere or follow the rules of trade treaties that the members of the World Trade Organization sign. These rules focus on liberalization. This encourages and guides economic globalization. This paper critically evaluates how the World Trade Organization (WTO) has been successful in achieving its objectives in Jordan.
Literature review
The World Trade Organization has been successful in achieving its objectives in many countries across the world. According to researchers, there is no other global organization that is involved in rules of international trade apart from the WTO (Bossche, 2008, p. 59). As aforementioned, the organization ensures that barriers to international trade are liberalized to ensure free and easy trade between nations all over the world.
For instance, the trade agreements signed by WTO member countries confirm some of the efforts of the World Trade Organization in its attempts to promote the development of economies and international trade between nations (Langhammer & LuĢcke, 2000, p. 10).
The organizationās primary responsibility is policing the system of international trade and ensuring that nations follow the rules signed by the organization regulations is very vital in globalization and international trade. Five years ago, more than a hundred and fifty countries across the globe, which accounted for approximately 97%, were members of the World Trade organization (Hoekman, English, Mattoo & World Bank, 2002, p. 78).
The World Trade Organization has continued to reduce barriers to both international trade and foreign direct investments. Many companies can invest in foreign countries without difficulties due to reduced barriers of foreign direct investments. This way, these companies view the whole world as their market, and not a single nation as the outlet of their commodities.
Going international is part of the core competencies of many organizations in gaining a competitive advantage over their competitors (Wolfrum, Stoll, Koebele & Max-Planck-Institut fuĢr AuslaĢndisches OĢffentliches Recht und VoĢlkerrecht, 2008, p. 53). Most multinationals easily access technology, skilled labor and gaining different techniques among other resources for their businesses.
Initially, the developed countries dominated the power of negotiation, but due to the support of the WTO, the underdeveloped and the developing countries have taken an active part in the negotiations. More than 75% of both the underdeveloped and the developing world are members of the World Trade organization.
There are very many achievements that the World Trade Organization has attained since its inception. The organization has eroded both the non-trade and trade barriers (Stoll, Schorkopf & Wolfrum, 2006, p. 24). Many countries and multinationals operate their businesses without facing severe challenges like they did before its establishment.
The WTO has out-performed the General Agreement on Tariffs and Trade (GATT), considering that it has a wider frontier in governing trade than the GATT (Koul, 2005, p. 104). The world trade organization has added an intellectual property system to its operations, making it overtake the General Agreement on Tariffs and Trade.
It has developed policies that enhance economic and international trade development (Wolfrum, 2006, p. 29). The WTO has and is still making the trading environment of its member countries more sustainable than before. Unlike the GATT, the WTO has shown competency of dealing with trade disputes through its rules that govern all operations across the borders (Bown, & Pauwelyn, 2010, p. 220).
Jordan and the World Trade organization
The World Trade Organization (WTO) has a significant role to accomplish in changing the economic status and trade in Jordan. In this country, the public sector dominates the economy. However, there have been changes lately, considering that the free market agenda has been introduced by the World Trade Organization (WTO), which reduces the involvement of governments in matters of trade (Hoekman, English, Mattoo & World Bank, 2002, p. 55).
The policies of globalization outlined by the WTO have ensured that the role of the public sector is reduced, and hence creates an opportunity for direct foreign investments. Despite the fact that globalization awareness is still low in Jordan, the efforts of the WTO have increased the economic growth of the country. Globalization institutions have emerged, and their role is to mentor the economic course of Jordan (Chaudhary & Ahmed, 2004, p. 120).
This country has had several problems in the past which have impacted it negatively in terms of trade and economy. For instance, the September 11 attacks, recession, political instability, and war with India, among other problems contributed to a decline or slowed economic growth.
The Jordan government took several initiatives to curb these problems. It for example, introduced programs of alleviating poverty, allowed private investors in the country and introduced tax and financial reforms in the country. These were aimed at improving the economy (Herdin, Hofbauer, Lang & Conference, 2005, p. 59). The primary economic sectors in Jordan include textiles and agriculture (Ingco, 2003, p. 27).
The World Trade Organization (WTO) has played a significant role in shaping the Jordanās economy and improving international trade. The WTO has abolished trade barriers in Jordan and hence allowing foreign direct investors in the country. The policies of the World Trade Organization require countries to have an MFN status (Stoll, Schorkopf & Wolfrum, 2006, p. 39).
Through the provision of a Most Favored Nation (MFN) status, countries cannot discriminate others on trade related issues. Jordan is a member of the WTO countries and therefore, has to follow the rules it signed together with the other member countries. There are very many multinationals currently operating in Jordan.
This has been instrumented by the efforts of the World Trade Organization (WTO) which ensures that there are no barriers or non-barriers of trading in this country. The WTOās rules are the primary factors influencing Jordan to reduce its import duties to by more than 50% (Vermulst & Graafsma, 2002, p. 336).
As aforementioned, Jordan depends on its two principal economic sectors, which are textiles and agriculture. These two account for more than 60% of the countryās export earnings. Settling trade disputes is one of the significant roles that the World Trade Organization plays. This organization ensures that all the member countries enjoy or benefit from a fair and non-discriminative trade. Jordan is a good example to attest this.
The WTO ensures that the developed world, the underdeveloped, and the developing world exchange goods and services in a fair and equitable manner. For instance, the influence of the developed nations such as the US on World Trade Policies (WTP) that devastate the underdeveloped and the developing world was abolished (BuĢrca, 2002, p. 34).
The developed nations used to influence the WTO policies to favor them. Jordan faced devastating times when the US led policies that promoted making food available by trading (Hufbauer, Burki & Peter, Peterson Institute for International Economics, 2006, p. 74). This made it impossible for Jordan to be self-sufficient in terms of food availability. Compared to developed countries, Jordan lacked enough resources or knowledge on the rules of World Trade Organization.
This made it possible for Jordan to incur huge costs paying international lawyers. The case of Basmitti Rice between the United States and India where the DSB of the World Trade Organization favored India confirms this (Wolfrum, 2006, p. 185). With the sole patents, India ensured that the rice exported from Jordan used Basmitti till the patent rights were settled.
This clearly shows how trade disputes affect the developing nations. With the support of the Dispute Settlement Body (DSB) of WTO, Jordan, a developing country is now able to access food from the global market without any barriers (Shaffer & MeleĢndez-Ortiz, 2010, p. 184). It can also actively negotiate and have itsā complaints or suggestions considered by the World Health Organization.
The WTO also uses Trade Related Intellectual Property Rights Agreement (TRIPS) in promoting fair and equal trading among the member countries (Babu, 2012, p. 300). The TRIPS also help other corporations in Jordan by protecting their rights. It allows knowledge sharing by both the foreigners and the indigenous people. Jordan has gained a lot from WTO basing on knowledge sharing (Perdikis & Read, 2007, p. 100).
After eroding barriers of international trade, Jordan has seen a lot of foreign direct investors come into the country with new technologies and ideas. The foreign investors come with finance, technologies, and expert knowledge and experience. The multinationals in Jordan have also in various ways influenced the way people perceive things, and hence enhanced cross-cultural practices. The foreign nationals also learn a lot from the indigenous population.
These exchanges also contribute to the growth of the Jordan economy. Competition of domestic and foreign corporations in Jordan is high due to reduced or abolished barriers of trade by the WTO. This is very significant for the nation, particularly in improving its economy.
For instance, it has led to improved infrastructure in the country, the introduction of different goods and services, creation of employment, and improved living standards among others. All these confirm how multinational companies have directly impacted on the Jordanās poverty level (Macrory, Appleton & Plummer, 2005, p. 161). The World Trade organization has been the key facilitator to these achievements.
Recommendations and conclusion
The WTO plays a significant role in ensuring that all countries’ trade within the global market without barriers, and hence increases the opportunities of trade across borders. It is recommendable for the WTO to provide ways and connect with all countries irrespective of their status in providing information and supporting them as they trade internationally.
This will help some countries particularly the underdeveloped, and the developing to be treated fairly and equitably in the global market. This will ensure that the strong economies are not the only ones benefiting from the WTO. For instance, the WTO should continue to handle trade disputes to make international trade a success, it should develop laws to govern the international trade and ensure that the developed countries are not the only ones benefiting in the trade.
However, it should not only focus on trade; the WTO should include economies so that the whole world can become one in terms of economic development instead of being divided into states. It should attract non-governmental organizations to participate in the trade. Most importantly, the WTO should establish more secretariats than the current ones as this will help the organization monitor all activities pertaining to international trade and globalization.
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