World Trade Organization WTO Can Facilitate Trading Essay
- Length: 6 pages
- Sources: 4
- Subject: Economics
- Type: Essay
- Paper: #93701019
Excerpt from Essay :
World Trade Organization (WTO)) can facilitate trading opportunities of your two chosen countries
The WTO through the GATT tries to help nations continue trade. This is done through 'The Doha Round' where the latest round of trade negotiations that seeks to redefine the international trading system with lower trade barriers and revised trade rules. It covers about twenty areas of trade. Also called the Doha Development Agenda it is focused on developing countries. This is an ideal activity for countries to see that their trade requirements and negotiations get under way. Launched at Doha, Qatar, in November 2001 the mandate sets up processes for the negotiations for specific industries and also services including the intellectual property. (WTO, 2012c) The second function is to eliminate tariffs, including the 'reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries.' (WTO, 2012a)
The projects provide for complete product coverage with the negotiations based on the interests of developing and least-developed country participants, and the other nations, each mutually being able to agree on the modalities of exchange using the GATT. This can be achieved using the provisions of Article XXVIII of GATT 1994 and other provisions. Nations can thus use the offices of GATT for technical assistance and support for capacity building and market access. (WTO, 2012a)
One of the major emphases is on the liberalization of markets that allow barrier less trades. In the EU this would benefit France and Germany while China may be forced to enter the market and become liberal. Thus market conditions for trade in services are conducted with this view by GATT using a "request-offer" procedure. The member countries send requests directly to each other with their initial offers and their binding commitments in response to these requests. (WTO, 2012b) This is the best forum to facilitate trade.
1. Germany and Automobiles: Trade to France
The measurement strategies for the seller and the buying countries will differ. In the case of the selling country the more important measures deal with sustainability and the shape of the labor in the country and the overall development policies with regard to the infrastructure. On the other hand the buying countries GDP and the economic power to create demand, the market structure and current competition must be focused. Germany and France's individual economy have become secondary with the formation of the European Union with the jeopardizing of national sovereignty in modern times. The clause that established 'circles of intergovernmental cooperation' changed the countries economic architecture and the modes of economic cooperation. (Hall; Soskice, 2001) The financial soundness of Germany is the yard stick or the measure and the German banking market and the German financial system is especially orderly, but as of now" German banks are suffering the same fate as their peers around the world." (Krahnen; Schmidt, 2000)
Other than the financial position and the labor position along with the GDP, it is necessary to consider the level of foreign investments both in Germany and France. Especially in the Automobile Industry in each country, one can find vast differences. This will show the way the market of the industry operates in both countries. Thus, the analysis of foreign direct investment -- FDI is the basis of globalization. It brings about financial deregulation and liberalization, defining individual country's position in the world economy, and forcing government policies in the area of trade and competitiveness. (Chesnais; Grazia; Simonetti, 2000)
Thus the impact of FDI must be taken into account as being the change in the process of competition, changes in technological knowledge, and a host of other market issues including building of institutional structure and changes in the employment and social patterns. There are now multinational corporations that have more reach than the governments of the countries between each other. These corporations act on profitability basis and the presence of one such corporation heralds a stiff competition. The question then is 'are there such competitors in France'? In answer to the question the role of FDI in France would have to be examined. (Chesnais; Grazia; Simonetti, 2000)
The Industrial policies for automobiles are also critical indicators. "In the EU automotive trade policy is dominated by the issue of reciprocal trade with Japan in terms of both trade flows and market access." (Mclaughlin; Maloney, 1999) This shows that there is the presence of a competitor for Germany in France with Japan already holding the market. So even though the EU tried to stop the free flow of finished vehicles from Japan, and the European automotive trade policy was made common to all national trade policies in a highly sensitive area. (Mclaughlin; Maloney, 1999) Thus the requirement to remove restrictions on the movement of goods within the EU recreated the market for Japanese imports. After 1992 Japanese cars entered the protected market. The presence of the Japanese both in France and Germany may be a contentious issue. (Boyer; Charron; Jurgens; Tolliday, 1998)
France would benefit from the transfer of productive models to France and develop its automotive industry without any help from Germany. On the other hand the hybridization may be useful to Germany in its domestic production. Thus there are more than one parameters that have to be specifically considered. Further the predictabilities of the market is vague because the markets may not always adapt to the demands of a" reified lean production system. Instead it is the capacity of these systems to sustain high productivity within various social contexts" is important. (Boyer; Charron; Jurgens; Tolliday, 1998) Basically the study would concentrate on the GDP of the countries, the FDI and the industrial structure most of which can be found in the national income report as shown in Table 1 below for Germany.
Table 1: Key figures can be obtained from the Federal Government's annual projection GDP expenditure approach is a good measure. The table shows the result. The table is from the Germany National Reform Program. (European Council, 2011)
The growth for Germany thus can be seen to be based on consumer spending of roughly 0.4% that is expected to rise to over +1.6%. The second indicator the investment is expected to grow at a rate of roughly 1.5% per annum. Thus the GDP is to grow at an average rate of 1.5% each year between 2013 and 2015. Employment could rise in the medium term in the long-term. (European Council, 2011) This result must match the data for France that must be expanding in consumer spending thus making a market of German cars.
2) Brazil and Water: Trade to China
Measurement strategies for economic development of Brazil and China are seen in a different light because of their polity. Both are semi-developed countries and are dictatorships. The issue of water and resources has been studied by the Secretary General of the WTO and makes the macroeconomic policies and financial markets as the major indicator, especially for economic resources like water and climate changes. (OECD, 2011) The issues become complicated with the type of the Brazilian economy. From 1949 the state has a lot of underdeveloped resources; Brazil's economic progress has been very slow with a per capita national income and investment rate very low. This is because of the later change in the polity while in the last century "Brazil was economically the most advanced South American nation and Rio de Janeiro was the largest city on the continent." (Chaffee, 1998)
However it was left behind by other countries especially in the realm of foreign trade. The basic production in the country is "dyewoods, sugar, tobacco, gold, diamonds, cotton, rubber, cacao and coffee," and now the market lies in the coffee. (Chaffee, 1998) As of late the poor performance of the government and the low economic cycle, coupled with unscrupulous politicians who are the cause of the failure of the economy now plagued with inflation, and the private misuse of government fiscal resources and the succession of many military governments, the country is in a bad shape. (Mengkui; Bingwen, 2006)
The question is if it can sell water to China. The first question then is Does china needs water. The answer could be Yes and No. With a vast population and very few water sources China may one day be forced to buy water from other countries. The proximity of India and other Asian countries that can supply water over the supply from Brazil is a market indicator. Secondly the cost of transporting water The State of China has its own peculiarities. China has a vast population base and ethnic diversity that could bring about a change in the cultural and political setup of the country with the autonomy of the state and a federal structure. The current problem in China is the ruling class of political communists who have ensured that no reform shall make china democratic and the perpetual rule of the communist party shall exist. There cannot be…