THE ROLE OF THE WORLD TRADE ORGANISATION IN RESOLVING TRADE DISPUTES UNDER INTERNATIONAL LAW
Abstract
This paper investigates the World Trade Organization’s (WTO) role in promoting international trade and investment. It provides a brief historical overview of the constraints and limitations of international trade prior to the establishment of the WTO.
The establishment of the WTO heralded the birth of a global multilateral international institution. The WTO’s existence has resulted in the liberalization of international trade and investment.
The WTO also has well-structured institutions to ensure economic globalization and trade regime enforcement among member states. However, mistrust and a lack of ability on the part of states to put aside their economic differences has stalled trade negotiation rounds.
Polemics between developed and developing member states have resulted in the proliferation of regional economic organizations, some of whose policies conflict with those of the WTO. This has the potential to erode the WTO’s influence.
It is thus concluded that, in order for the WTO to remain effective and relevant, it must continue to assure its member countries, particularly developing countries, that it has their best interests at heart by promoting not just free but fair trade.
World Trade Organization, International Trade, General Agreement on Tariffs and Trade, Most Favored Nation, National Treatment
1. introduction
International law generally recognizes states’ sovereignty over their internal affairs. States also have complete control over their domestic jurisdiction. These principles are so important and widely accepted in international law that they have been elevated to the level of international customary law significance. As a result, through the exercise of territorial sovereignty, states take complete control and determine what happens within their borders.
The strict application of the aforementioned principles of international law would make it impossible to achieve what is known as an international committee of nations. As a result, in order for things to work, states must give up a portion of their sovereign rights.
1 This is even more important because no state exists in isolation. This compromise is required for the formation of international organizations such as the United Nations and others. In fact, the failure of the League of Nations was largely due to the lack of this compromise.
To focus on trade, states exercise economic sovereignty by determining and controlling trade within their borders. States control the types of goods that enter and exit their borders. A state may decide to seal its borders in order to prevent goods from entering or leaving its territory.
This had been China’s and many communist nations’ economic stance, as they saw the importation of foreign goods into their territory as an alien incursion, infiltration, and adulteration of their uniqueness. As a result, there was a trade barrier between nations.
The disadvantage of this is that states are unable to capitalize on their comparative advantage. Certain commodities were scarce and unavailability in the state market.
The removal of trade barriers between states was required as a result of these challenges.
Initially, states entered into bilateral trade treaties with one another. This helped to improve the situation by establishing international trade. However, in order for international trade to flourish on a large scale, international organizations such as plurilateral and multilateral treaties had to be established.
Attempts in this regard after World War II failed due to the failure of states to agree on terms for the formation of the International Trade Organization (ITO). Despite this, a group of states was able to reach a General Agreement on Tariffs and Trade (GATT) in 1947.
GATT served as a placeholder and template for regulating international trade among signatory parties until the World Trade Organization (WTO) was established in 19942 during the Uruguay Rounds to replace GATT.
According to the WTO-commissioned Sutherland Report of 2004, governments are regaining a degree of “sovereignty” lost during the globalization process by committing to the WTO and its procedures and disciplines.
If governments are losing their ability to meaningfully regulate at home, they are regaining some control over their economic destinies at the multilateral level. 3
Without a doubt, the establishment of the WTO was a significant achievement for international trade because it resulted in trade liberalization and the removal of trade barriers and tariffs. However, this has not been without difficulties.
As important as the WTO has been in promoting international trade and investment and establishing globalization, there is still much to be desired. The purpose of this work is to assess the WTO’s effectiveness in promoting international trade and investment.
The existing roadblocks to the WTO’s role and dominance in this area will also be examined. Finally, any necessary recommendations will be made.
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THE ROLE OF THE WORLD TRADE ORGANISATION IN RESOLVING TRADE DISPUTES UNDER INTERNATIONAL LAW
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