26 December 2013

World Trade Organization (WTO)- An American Perspective

Good-paying American jobs, higher living standards, and the continued growth of the U.S economy depend on the ability to sell its goods and services to consumers everywhere. The World Trade Organization (WTO) helps the U.S achieve this goal. As a leading force in establishing the WTO as an international institution, the U.S negotiates trade agreements to reduce barriers to trade with 144 other members today, allowing American businesses, farmers and working people to find new opportunities, create new jobs, and raise family living
standards. The WTO agreements are thus seen by the U.S to help American families by opening up foreign markets to American products, lowering the prices of business inputs and of everyday goods purchased in grocery and department stores, and establishing fair trade rules that safeguard American companies and workers.

“Economic growth is essential in poor societies – but even more is its structure and distribution” Dr. Mahbub ul Haq (Late)

A developing country like Pakistan that does not have ample resources or expertise about the subject of WTO rules and references, usually is trapped to pay hefty foreign exchange to international lawyers that are almost unaffordable. An ideal example is of Basmati Rice that was initially patented by a U.S firm, has been challenged by India where the Dispute Settlement Body favored India. Now, India has the sole patents that refrains all Pakistani rice exports to be referred as “Basmati” until the patents rights are paid for, Take any industry or sector of economy i.e., textile, fertilizer, pharmaceutical, oil & gas, shipbuilding, sugar, banks, insurance, leasing, and agriculture- WTO directly effects the local industry both at the import and export ends from the beginning to end focusing more on quality standards, hygienic conditions, and the very existence of a product or service through intellectual property clauses.

The Art of Economic Diplomacy:

“To win a war one must be ready for the enemy”

For the negotiation ground of WTO, between government to government, we must be ready and fully prepared with complete set of briefings on impacts of WTO agreements and its agenda on all sectors of Pakistani economy and industry. Moreover, there should be broad future vision that what are the tactical gains Pakistan world like to achieve from other nations before reciprocating market access to respective countries. Like all other relations, trade relations are friend and foe-oriented and are fluid with the broader national goals of the country. Trade relations have become so influential that they have become either a source of normalization of other diplomatic relationships, or creating more belligerent associations with other countries. If Pakistan has to choose between the options, international trade relationship can work wonders for Pakistan, making it possible for Pakistan to normalize relationships with countries where the advantage is.

In additions, exports are functions of domestic production and strength as it has been emphasized from the beginning. Pakistan should also develop an indigenous model of economic development, based on local stakeholders rather than following blindly the policies and guidelines of WTO, WB and IMF. Bangladesh is a key example in this respect that has achieved formidable success in developing socio-economic strategies and focusing the Small and Medium Enterprises (SMEs) of the country. Grameen Bank and Grameen Telecom of Dr. Younus are an epic story of mobilizing the poorest fraction of the country, especially women by providing credit loans to them to invest in local self-employment and business opportunities, and accessing market information using communication facilities. 

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