Second, it settles trade disputes. Most conflicts occur when one member accuses another of dumping. That’s when it exports goods at a lower price than it costs to produce it. The WTO staff investigates, and if a violation has occurred, the WTO will levy sanctions. Third, it manages ongoing negotiations for new trade agreements. The biggest would have been the Doha round in 2006. That would have eased trade among all members. It emphasized expanding growth for developing countries. Since then, countries have negotiated their own trade agreements. The two largest are:
Nairobi Package
The success of these deals reinvigorated WTO efforts for a deal for all its members. On December 19, 2015, the WTO took steps to help its poorest members. Members agreed to end agricultural export subsidies. Developed countries will do so immediately, emerging markets will do so by 2018, and poor nations will have much longer. Countries that subsidize their farming industries undercut local farmers in underdeveloped countries. When trade deals are signed, the local farmers are put out of business. That happened in Mexico after NAFTA. Member governments are allowed to stockpile food in case of famine. This issue came up because India refused to give up its food security program. India wants to continue paying its farmers above-market prices so it can sell subsidized food to its poor. They agreed to find a solution in 2017. But these food security programs violate the WTO’s membership agreement. Major information technology exporters agreed to eliminate tariffs on 201 IT products valued at over $1.3 trillion per year. The next step is to work on a schedule.
Bali Package
On December 7, 2013, WTO negotiators concluded a four-day meeting in Bali, Indonesia. They agreed to streamline customs for all members. Once ratified, the Bali package would add $1 trillion to global trade and create 18 million jobs. Below are the deal’s five components: Agriculture: The WTO generally aims to reduce export subsidies and obstacles to trade. The Bali package has been inserted into the WTO Membership Protocol. More than 50 members have ratified it, but that’s nowhere near the two-thirds needed.
WTO History
The WTO’s origins began with trade negotiations after World War II. In 1948, the General Agreement on Tariffs and Trade focused on reducing tariffs, anti-dumping, and non-tariff measures. From 1986 to 1994, the Uruguay round of negotiations led to the formal creation of the WTO. In 1997, the WTO brokered agreements promoting trade in telecommunications services among 69 countries. It also removed tariffs on information technology products among 40 members. It improved trade of banking, insurance, securities, and financial information among 70 countries. The Doha round began in 2000. It focused on improving trade in agriculture and services and expanded to include emerging mark, including countries at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001. Unfortunately, the Doha talks collapsed in Cancun, Mexico, in 2003. A second attempt also failed in 2008 at Geneva, Switzerland.
