(The WTO sets the global rules of trade, but what exactly does it do and why do so many oppose it?
(The WTO sets the global rules of trade, but what exactly does it do and why do so many oppose it?Tags: Financial Plans For Small BusinessEssay Writing For AdvertisingMentorship In Nursing Practice EssayJournal Critical ThinkingShort Essay Gender EqualityEconomics Homework Help FreeMis CourseworkMeaning Of A Business PlanUk Essay CompetitionsFra Americanism Essay Contest
The WTO rules allow a nation to protect certain industries if the removal of tariffs would have undesirable side effects, which include the loss of vital domestic industries.
Food production is one of the most common, but steel production, auto production and many others can be added at the discretion of the nation.
More worrisome is a push by developed nations to have labor effects – job loss, reduced hours or wages – added to the list of reasons for justified tariffs.
(For everything you need to know - from the different types of tariffs to their effects on the local economy - check out The War on Tariffs A tariffs is a general tax levied upon all purchasers of a particular product and it can have negative side effects.
However, the resulting high price of foreign goods allows domestic makers to raise their prices as well.
As a result, a tariff may also work as a wealth transfer tax that uses public money to support a domestic industry that is producing an uncompetitive product.Its predecessor, the General Agreement on Tariffs and Trade (GATT), shared its lineage with Bretton Woods-inspired bodies like the International Monetary Fund (IMF) and the World Bank.The idea behind these organizations is that impartial politicians could create a more efficient global economy than the chaotic interaction of free market forces.While the WTO can boast that the number of international tariffs has fallen since its inception, many reductions have been balanced by the introduction of these "stealth tariffs".(Everyone's talking about globalization, but what is it and why do some oppose it?Rather than making complicated and heavily politicized agreements between nations on what they can and can't protect, free market thinking suggests that trade should be left to companies to work out on a deal-by-deal basis.They believe if the WTO were really designed to encourage trade, it would force member nations to drop all protective measures and allow true free trade, rather than facilitating tariff negotiations.The World Trade Organization (WTO) was created January 1, 1995, and it has been a source of controversy ever since.The birth of the WTO was more of a continuation than a truly new creation.While it's debatable whether the organization is useful economically, the WTO is very important politically.Subsequently, governments - with or without citizen support - will likely continue to support the organization.