Developments in european & pacific rim trade Essay

Developments in european & pacific rim trade - Essay Example However we there can be several exceptions to this first rule - which is the first article of the General Agreements on Tariffs and Trade (GATT) - such as for example giving developing countries special access to a market or raising barriers against products being produced unfairly in other countries. The second part is the National treatment: treating foreigners and locals equally meaning that locally-produced goods should be treated equally when compared to imported goods once the imported goods have entered the national market. The same thing has also to be applied for services, trademarks, copyrights and patents. The second principle of WTO favors the lowering of trade barriers meaning customs duties and tariffs and measures such as import bans or quotas that restrict quantities selectively. Since the creation of the GATT, there have been eight rounds of trade negotiations to progressively abolish these barriers, the undergoing ninth round being the Doha Development Agenda. The predictability of international trade will guarantee a continuous stability. Therefore WTO encourages its members not only to lower trade barriers but also not to raise new barriers. When a country opens its market for products or services, it is considered as binding its commitment. However a country can change its bindings but only after a round of negotiation. With this principle WTO insists on the point that the organization i... WTO allows tariffs and some form of protectionism. Its true aim is to establish an environment with the help of specific rules to favor fair trade. These rules are for example the rule of most favored nation, national treatment or rules on dumping and subsidies. Encouraging development and economic reform Finally, WTO's last principle encourages development through flexibility for developing countries to implement WTO rules and special assistance and trade concessions in favor of these developing countries. (World Trade Organization, Principles of the Trading System) However as much as we can consider these principles being the best ground for efficient and fair trade, the reality is otherwise as we can see through the example of the Multi Fibre Agreement On January 1st, 2005, the Multi Fibre Agreement (MFA) expired. The MFA was a measure taken regarding the world trade of textiles and garment from 1974 to 2004 which imposed quotas on the amount that developing countries could export to developed countries. The WTO admitted that the MFA was a special regime outside the GATT rules and that WTO members have committed to remove those quotas by 1st January 2005 When the quotas from a country like China was reached, importers turned to less competitive suppliers located in countries that had spare export quotas and whose only advantage was low wage. Today, the less competitive developing countries are not called as back up because countries willing to import textile can only be supplied by one and only exporter, the most competitive: China. The importance of China in the textile market has not its boundaries set within developing countries. Since the beginning of 2005,