Following the interest that your highly reputable firm has expressed regarding setting foot in overseas markets, it is prudent that we bring to your attention the organizations that govern international trade. In this respect, we hope to help you understand some of the unacceptable business malpractices in foreign markets.
Moreover, we aim at enlightening you on how business conflicts can be resolved amicable through the assistance of global bodies (Bines & Thel, 2004). The world body mandated with the duty of overseeing peaceful operations of international businesses in the world is the World Trade Organization.
Geneva is the headquarter of this organization that took over the roles of its predecessor, General Agreement on Tariffs and Trades, which had become obsolete by the end of the Second World War.
The organization tries to liberalize international trade by making foreign firms access markets in countries of interest. There are discriminations and negative perceptions that a foreign company may face in a new market. The organization ensures that all players get an equal opportunity in terms of selling products (Krugman, Obstfeld & Melitz, 2012).
The organization provides advisory services to new companies regarding policies on business operations. Moreover, the organization offers mechanisms through which conflicts could be resolved. However, it does not have its own terms and conditions but simply implements already existing laws in the covered regions.
These agreements are signed to make the trade process smoother. Such agreements are aimed at creating bilateral trade agreements between countries. Currently, Europe is a single market economy, also referred to as a free trade area. Due to the single market economy, states accepted to use a single currency as a means of exchange. Therefore, goods from any country within the continent can find markets in any part of the region indiscriminately (Dicey, 1993).
Speaking of the WTO trade disputes, one must mention the latest case was between Coca Cola Company and governments in the East and Central African states. There were claims that the soft drinks manufacturer was using excessive carbon in the preservation of drinks. The amounts of carbon and other preservatives in these drinks, including caffeine were in excess levels.
Consumers claimed that excess carbon could encourage the growth of cancerous cells in human bodies. WTO handled the situation, and a series of lab tests were carried out (Krugman, Obstfeld & Melitz, 2012). Although the levels of preservatives found in the drinks were a little higher, there was no cause of alarm as the claims that these components could encourage the reproduction of cancerous cells were invalid. However, the company later continued operating after proving credible.
WTO has stated that one of its prior goals since the day the organization was established was offering coherent trade rules and regulations (WTO Ministerial Conference, n.d.). However, it is necessary to take into account that WTO has never portrayed itself as the organization that is trying to take over the entire world market and control all the economics-related events that take place on the world scale.
Hence, the fact that the WTO does not have the influence to affect the current world market is quite understandable and does not signify that the organization has failed. However, another related issue must be considered as well. According to Krugman, Obstfeld & Melitz,
One recurrent theme in the anti-globalization movement is that the drive for free trade and free flow of capital has undermined national sovereignty. In the extreme versions of this complaint, the World Trade Organization is characterized as a supranational power able to prevent national governments from pursuing policies in their own interests. (Krugman, Obstfeld & Melitz, 2012, 284)
The above-mentioned issue could be considered as a major failure of the WTO if the latter ever wanted to control national policies. However, according to the members of the WTO, the WTO code does not presuppose any measures of the kind. As Krugman, Obstfeld & Melitz claim, “The short answer is that the WTO does not look anything like a world government” (Krugman, Obstfeld & Melitz, 2012, 284).
Therefore, it can be considered that WTO has achieved its primary goals, which were the provision of basic trade laws and regulations, has been achieved. However, according to the WTO Ministerial Conference, there is a possibility to do more and “launch a new round of trade negotiations that will help all countries, especially developing countries, to expand their economies” (WTO Ministerial Conference, n.d.).
Given the performance record of the organization in offering assistance to foreign businesses, it has so far been effective. It is therefore advisable to register your new business with the organization and make certain that your trade decisions follow WTO basic trade principles.
References
Bines, H., & Thel, S. (2004). Investment Management Law and Regulation. London: Aspen.
Dicey, M. (1993). The conflict of laws. London: Sweet and Maxwell Ltd.
Krugman, P., Obstfeld, M., & Melitz, M. J. (2012). International Economics: Theory and Policy (9th ed.). New York: Pearson.
WTO Ministerial Conference, n.d. The WTO: why it matters. Retrieved from https://www.wto.org/english/thewto_e/minist_e/min01_e/wto_matters_e.pdf