UDC 339.52

THE WORLD TRADE ORGANIZATION: AIMS, PRINCIPLES AND ACTIVITIES

Drobot Elena Valerievna1, Ivko Ekaterina Sergeevna2, Veremeeva Anastasia Aleksandrovna3
1Vyborg branch of the Russian Presidential Academy of National Economy and Public Administration, Head of the customs and foreign economic activity department, PhD in economics, assistant professor
2Vyborg branch of the Russian Presidential Academy of National Economy and Public Administration, student, 2th grade, Customs speciality
3Vyborg branch of the Russian Presidential Academy of National Economy and Public Administration, student, 2th grade, Customs speciality

Abstract
The problems of Russia participation in the WTO are discussed in the article. The authors pay particular attention to the advantages and disadvantages of Russia membership in the WTO.

Keywords: free trade, most-favoured-nation principle, rates of customs duties, WTO


Article reference:
Drobot E.V., Ivko E.S., Veremeeva A.A. The World Trade Organization: aims, principles and activities // Politics, State and Law. 2015. № 4 [Electronic journal]. URL: http://politika.snauka.ru/en/2015/04/2691

View this article in Russian

The World Trade Organization is the international organization which primary purpose is open trade for the benefit of all. WTO was established in 1995, it replaced the General Agreement on Tariffs and Trade as the only international agency dealing with the global rules of trade between countries. GATT was signed in 1947 and entered into force in 1948.

The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development.

Over the past 60 years, the WTO and its predecessor organization the GATT have helped to create a strong and prosperous international trading system, thereby contributing to unprecedented global economic growth. The WTO currently has 160 members, of which 117 are developing countries or separate customs territories.

The Secretariat is located in Geneva, Switzerland, and has an annual budget of approximately CHF 200 million ($180 million, €130 million). The three official languages of the WTO are English, French and Spanish. The general director of WTO is Roberto Carvalho de Azevedo.

Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the organization’s business in the intervals between Ministerial Conferences. Both of these bodies comprise all members. Specialised subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, administer and monitor the implementation by members of the various WTO agreements.

 The WTO’s main activities are:

— negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade) and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies, product standards, etc.);

— administering and monitoring the application of the WTO’s agreed rules for trade in goods, trade in services, and trade-related intellectual property rights;

— monitoring and reviewing the trade policies of our members, as well as ensuring transparency of regional and bilateral trade agreements;

— settling disputes among our members regarding the interpretation and application of the agreements;

— building capacity of developing country government officials in international trade matters;

— assisting the process of accession of some 30 countries who are not yet members of the organization;

— conducting economic research and collecting and disseminating trade data in support of the WTO’s other main activities;

— explaining to and educating the public about the WTO, its mission and its activities.

The WTO’s founding and guiding principles remain the pursuit of open borders, the guarantee of most-favoured-nation principle and non-discriminatory treatment by and among members, and a commitment to transparency in the conduct of its activities. The opening of national markets to international trade, with justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable development, raise people’s welfare, reduce poverty, and foster peace and stability. At the same time, such market opening must be accompanied by sound domestic and international policies that contribute to economic growth and development according to each member’s needs and aspirations  [1].

 The ten benefits of WTO:

1. The system helps promote peace.

2. Disputes are handled constructively.

3. Rules make life easier for all.

4. Freer trade cuts the costs of living.

5. It provides more choice of products and qualities.

6. Trade raises incomes.

7. Trade stimulates economic growth.

8. The basic principles make life more efficient.

9. Governments are shielded from lobbying.

10. The system encourages good government [2].

Article XV of the Statute WTO says that any member may leave the organization. The decision enters into force after 6 months from the date of written notice of exit of given by the Director General of the WTO.

Russia and WTO.

Negotiations about Russia’s accession into WTO lasted for 18 years, since 1993 to 2011 year. On August 22, 2012 the general director by Pascal Lamy said that Russia is included in the official list of WTO member-countries with sequence (serial) number 156.

Advantages and disadvantages of accessionRussia’s in WTO are as follows:

Advantages:

  1.  The country’s image in the international arena has increased.
  2. Russiamay take part in the development of international economic legislation.
  3. Non-discrimination attitude towardsRussiaand its producers in international markets.

Disadvantages:

  1.  Reduction of import customs duties led to revenue decrease in state budget.
  2. Reducing the competitiveness of Russian companies, threat of their failure.
  3. The threat of increased unemployment.
  4. The growth of the country’s import dependence.
  5. Russiapays around 200 million francs per in year for membership in the WTO.

Agriculture (pig – breading and rise industries) suffered more than gained fromRussiaparticipation in WTO. Russia lowered the rates of customs duties on products. As a result, cheap import of pig and rice increased sharply. At the same time, the cost of production of pig and rice cultivation inRussiaincreased due to expensive feed and fertilizer.

In October 2014 the European Union filed a lawsuit againstRussiain WTO, including the question of raising tariffs on some agricultural and industrial products. We are talking about paper, cardboard, palm oil, refrigerators and freezers. WTO rules assign participants to the dispute 60 days for the settlement of disputes. Due to the opinion of the European Union, Russian overstates import duties.

For example, the import duty for imported paper products in the country is 15% instead of 5%.

Finally, it should be recommended that due to the fact that Russia’s WTO accession has rather negative character , it is necessary to leave the WTO.


References
  1. Официальный сайт ВТО [Электрон. ресурс]. Режим доступа: World Wide Web. URL:  https://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm
  2. Официальный сайт ВТО [Электрон. ресурс]. Режим доступа: World Wide Web. URL: https://www.wto.org/english/thewto_e/whatis_e/10ben_e/10b00_e.htm


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