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Opening up International markets; vital for economic growth Essay Example

  • Category:
    Law
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    3
  • Words:
    2006

Opening up International markets; vital for global economic growth
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Opening up International markets; vital for economic growth

Opening up International markets; vital for global economic growth

Opening up International markets; vital for global economic growth

INTRODUCTION

Recent studies have indicated that the World Trade Organization (W.T.O) plays a major role in International Public Policy. Winham (2008) argues that just like its antecedent, General Agreement on Tariffs and Trade (G.A.T.T), W.T.O maintains the roles once played by G.A.T.T. Among these roles include parleying and implementing rules for the access of markets for industrial products, present regulations for market access for agricultural goods, textile among others. W.T.O. also negotiates contracts on property fortification, coverage of trade measures like discussions on subsidies, trade barriers and tariffs, licensing and customs appraisal among others.

Hoekman and Kostecki (2005) argue that unlike G.A.T.T, the W.T.O. has a strong dispute settlement system. This assists a great mile in trade consultations for the benefit of its member countries. The rules set by W.T.O are followed to the letter and no chance for whatsoever alteration is allowed. Diplomacy is also a virtue undertaken by this organization. As stipulated in the Ministerial Conference held in Qatar, 2001, Hoekman and Kostecki (2005) continue to state that W.T.O. has the legal right to deal with competition related issues, investments and environmental concerned guiding philosophies. From this, it is evident that the W.T.O. is a much stronger association as compared to the G.AT.T. The W.T.O. is credited for being the blue-print of global governance of the world in terms of trade, globalization among others (Winham 2008).

Though others may associate, W.T.O. with a lot of mystery it is evident that over the years now, it is continually playing a vital role in the international front. Debates keep raging on its ability to handle other issues other than those related to trade and economic growth.

On the other hand, some other people claim that though a dispute settlement system has been put in place, they still do not have faith in the organization and other factors that relate to the development of the third world states to the development process.

In relation to global economic growth, G.A.T.T and WTO are inescapable to the discussion. These two organizations have been credited to ensuring that the international markets always remain open and accessible to all stakeholders and others who want to join in global trade. Blistering debates have been held over the years on whether keeping the International markets contributes chiefly in the economic growth globally.

According to Hoekman and Kostecki (2005), the major concern of the W.T.O. has always been centred on the provision of free conduction of trade by its member states. To proceed with the tasks of G.A.T.T, W.T.O has been on the frontline on advocating for the removal of trade barriers that hinder smooth conduction of member states. W.T.O believes that this is one of the major hindrances to global economic growth. These tariffs deform the ability to trade on a global level. If these barriers are remove, movement of goods and services to and from member states in the globe would be reduced to no uphill task by the members (Winham 2008).It is evident that that these barriers others in form of tariffs are very difficult to be paid by all states.

W.T.O. believes that over the decades the major illness to global economic growth is these tariffs. If the internal markets are opened up, more and more better employment opportunities will be created (Henderson 2008). In response to this fact, economic expansion and development finds a way of creeping into the society. Studies have indicated that all countries that have opened up their countries to this form of trade have recorded a great improvement in terms of economic growth. These countries are in a position to specialize in goods they are best in producing and even claim a large percentage of the market share. They are in a better position to market their products and from the acquisition of huge profits as a result of high demand for the goods they produce, these profits are diverted to their countries for development purposes. If this process takes place in all countries of the world, then the development process will be predicament to any country.

Secondly, opening up international markets is fundamental to economic growth globally since countries that take part in this process are able to be acquainted with their abilities as a state and how to maximize their strengths. From participation of International trade, W.T.O. holds the view that a country is able to get together with a million more others and share ideas in relation to economic development (Henderson 2008). Once they become aware of their strengths as a country, they are in a better position to rectify unlike countries that prefer being self-reliant in all their undertakings. Recent research conducted on this matter has indicated that the growth rates of countries that participate in international trade have registered an incredibly high economic growth rate and are in a better position to produce better growth in terms of economy unlike the ones which have been labelling themselves over the years as ‘self-sufficient’ states (Hoekman and Kostecki 2005). These self-sufficient states are still in the misery of soaring trade blockades and are doing nothing to uncover themselves from this desolation.

In another view point, economic growth is not achievable worldwide if peace does not prevail. In his journal of World Trade, Werner (2008), argues that trade is a major ingredient towards peace and stability in a region. Prior to conduction of trade there must be an established relationship between the two parties or more involved. With International trade, W.T.O. has endeavoured to make the world a peaceful place to inhabit in. Just like indicated earlier if there is no peace, there is no economic growth. This trade can be attributed to reduction of poverty of member states by creating employment to the youth, and also creation of stability not only in the grassroots levels but also worldwide. From this therefore, we can argue that opening up international markets by W.T.O. has enhanced economic growth by the virtue of peace provision to the stakeholders of the international trade.

In the context of W.T.O. an international markets promoting worldwide economic growth as well as sustains it, we can argue that it is from opening up international markets that more and more liberation of trade is taking place. According to a recent research by Rodrik (2002), opening up markets has led to a tremendous technological advancement by member states. The needs of the consumer are changing with time and they can only be met through competitive trade on the international arena. W.T.O. believes in the perception that the stiff competition taking place in the international arena has pushed many member states to change their existing systems to pave way for development (Rodrik 2002). If this does not sustain economic growth thanks to W.T.O. then how else do we expect it to be? Domestic manufacturers are always on the move to gain knowledge of new systems and mode of production and upgrade existing ones. It is this that results into economic growth of countries and also maintaining them.

It is important to note that W.T.O. provides adequate time for member states to adapt to trade liberalization measures. Negotiations are constantly held by these countries in order to come up with the best possible measure to joining the path to economic growth sustainability. Member states have the freedom to confer on what terms work for them and what needs to be altered (Madison 2006). This leaves no country with an excuse of not being in a position to take part in international trade lest they want to hinder their own economic growth and development which again turns down to hindering global economic expansion.

The world’s economic growth has been sustained thanks to the W.T.O and G.A.T.T. thanks to the security member states enjoy simply because they are members of these organizations. These countries are open up to high influx of imports into the country and exports to other countries. The concerned producing industries enjoy lasting security as well as the entire state for the reason that they have to secure the source of trade goods and markets of finished goods from other countries. This sure source of security provides a good environment for investments, trade which attracts a large number of people into this particular country. If all the states enjoy peace and security, then economic growth in these countries is likely to prevail as there is good environment for trade and investments. The move, therefore, by W.T.O. to attract more members into the organization is the best move if global economic growth has to be sustained. Saying that W.T.O.is only keen to economic development and pays no attention to other matters of security is a mere understatement.

However, many arguments have been put forward on the legibility of W.T.O and GATT, on the ability to develop the third world countries and the question of involving them in sustainability of global economic growth. These countries have constantly been complaining on the issue of removal of restrictions on textiles. With no timely changeovers schedules, they are not able to debate on issues affecting them at length. They also hope that the W.T.O changes some of the terms of operation to improve their situation and not make it more difficult if they have to contribute to global economic sustainability. It is unfortunate that them being sole producers of some goods and even being the owners of their natural resources, barriers are still put on them (Rodrik 2001).

Other scholars have also put forward arguments that the developed countries are being overlooked and are slowly joining the trend of the developing countries. The rule of special treatment to these third world countries is jeopardizing the efforts of economic sustainability. They claim that continuous preferences to these countries who at times drown into problems willingly may make the global situation worse in terms of economic growth than it is at the moment.

Conclusion

Despite the varying opinions by various analysts, W.T.O. and G.A.T.T have played a recognizable role in the promotion of economic sustainability in the world. This can be attributed to the removal of trade barriers which has been a menace for a long period of time. Trade has promoted growth by creating numerous employment opportunities for the populace of a country. As a result the rates of poverty in these countries are in turn reduced on a high rate. Countries are in a better position to trade effectively with their partners thanks to W.T.O and G.A.T.T. as they are more open to the outside world to conduct trade. Import and export trade has continuously supported economic growth by always being in the dire need to know the existing product and how to improve it to match the current consumer needs (Hoekman and Kostecki 2005). Countries are exposed to the outside world and are able to compete and even declare a market space in the international forum, all these in the effort of sustenance of global growth of the economy.

The W.T.O is what the world needs now to sustain its economy.

References

Henderson, D. (2008). International economic integration: progress, prospects and implications. International Affairs 68, 4, 2008, p. 635.

Hoekman, B. and Kostecki, M. (2005). The Political Economy of the World Trading System: From GATT to WTO. Oxford University Press: Oxford.

Madison, G. (2006). The World Economy: A Millennial Perspective. OECD Development Centre: Paris.

Rodrik, A. (2002). The limits of trade policy reform in developing countries. Journal of Economic Perspectives 6, 1, winter 2002, pp. 87-105.

Rodrik, D. (2001). Trading in illusions. The new Global Economy and Developing Countries: Makes openness work. Overseas Development Council: Washington DC.

Werner, J. (2008). Journal of world trade. Volume 37, Issues 1-2. Werner Pub Publishers: California.

Winham, G. (2008). “The World Trade Organization: Institution-building in the multilateral trading system”, The World Economy 21, 3, May 2008