What are the ‘principles’ of the international trading system and how well are they served by the WTO system?
The basic principle on which international trade is based is fairness and non-discrimination. This is expressed through the notion of MFN (most-favored-nation). This notion does not permit a country to treat some of its partners differently. It cannot even discriminate by favoring certain domestic, or foreign, products over others.
Another principle is that of treating national and foreign businesses alike without preferences. The goods produced locally and those coming from import should be treated equally. And the final, and most important principle, is that of free fair trade and the promotion of economic and social development. Countries should promote freer trade among each other and with the legal bind that they will not raise barriers arbitrarily to anyone, being that a local or foreign business.
All of these principles are served very well from the WTO system. The WTO is primarily a forum of discussions and negotiations where countries agree freely to achieve certain agreements (Sachs, 2005, pg. xviii).
Throughout the years the WTO system has achieved many agreements. It has helped the business world be able to have new potential markets and has helped countries to benefit from the products and services these businesses offer. The overall goal has been to lower trade barriers in order that everyone can benefit. This has been done on the belief that free trade will bring more development and wellbeing to the society. This will help both businesses achieve more profits and the societies of the countries where the businesses operate be more free, democratic and prosperous. And many think the WTO has achieved that goal.
Is the argument that ‘The WTO system contributes to development’ borne out by what you have seen in your region or in countries where your company operates?
Qatar is an early member of the WTO system. During the last two decades Qatar has had an explosive economic growth. Many authors believe it has benefited from the free trade agreements mainly achieved through the WTO system. This is because free trade principles help to strengthen competition among participating actors; they strongly motivate innovation and breed success. This is what has happened in Qatar. The “opening” of the country to foreign companies and businesses offering them the same treatment as local businesses has sharpened competition and innovation.
This has also allowed local businesses to expand their capabilities and be able to compete freely and without restrictions on other WTO system member countries. By doing this these companies have re-organized themselves. First, they have re-structured themselves to internal competition from foreign businesses and then have reshaped their policies in order to be able to properly compete in foreign countries (Gallagher, 2005, pg. 6-7).
The entire Qatar economy has reshaped because of growing competition and changing innovation. Most important the people has benefited from this because employment was rising and the necessity for high professionals also. This has led to a continuous growth of per capita GDP of the population and a steady growth, development, of the country as a whole. The company where I work for has been “forced” to invest in innovation and raise of quality for its services in order to override competition. This has ultimately benefited the Qatari people who receive a high quality service. And this is the same for all the other companies in the different segments of the market.
References
Sachs, Jeffrey. The End of Poverty. New York: The Penguin Press. 2005, pg. XVIII.
Gallagher, Peter. The First Ten Years of the WTO: 1995-2005. Cambridge: Cambridge University Press, 2005. Pg. 6-7.
“Understanding the WTO: What is the World Trade Organization?”. Mission Statement by the Director-General. The WTO official website.