World Trade Organization and Free Trade Flashcards
What did the World Trade Organization (WTO) evolve from?
The General Agreement on Tariffs and Trade (GATT)
GATT was established to create a framework for international trade and was later replaced by the WTO in 1995.
What year was the WTO established?
1995
The WTO was established after the Uruguay Round negotiations, which took place from 1986 to 1994.
How many countries agreed to GATT in 1995?
125 countries
This agreement led to the formation of the WTO.
What are two major differences between GATT and the WTO?
- GATT is not legally binding, while the WTO is legally binding.
- The WTO has the power to intervene in trade disputes between countries.
What is one impact of the WTO’s dispute resolution system?
It provides a mechanism for resolving conflicts between countries over trade rules
This system is essential for maintaining international trade relations.
What controversy surrounds the WTO regarding country development status?
The self-reporting of country development status
This can lead to discrepancies and challenges in trade negotiations.
Has the WTO been successful in achieving its objectives?
Opinions vary; some argue it has promoted fair trade, while others believe it has not adequately supported developing countries.
What was the impact of China joining the WTO?
It opened global markets for China, leading to massive economic growth and job creation.
What challenges does Ghana face in international trade?
- High tariffs on cocoa exports
- Struggles to protect cocoa farmers from international price drops.
What has been a significant benefit for consumers in the USA due to the WTO?
Lower prices for imported goods like electronics and clothing.
What is one criticism of the WTO regarding trade benefits?
Wealthier countries benefit more from WTO policies than poorer nations.
What principle requires that any advantage given to one country be extended to all WTO members?
Most-Favored-Nation (MFN) principle.
What effect has the global shift had on poverty reduction?
Since 1990, 1 billion people have been lifted out of extreme poverty.
What is a major disadvantage of the global shift related to land use?
Loss of productive land due to construction of factories and infrastructure.
What environmental issue arises from industrial activity?
Air and water pollution can render agricultural land unusable.
What is a consequence of rapid urban population growth?
Formation of unplanned settlements or slums.
What is one way TNCs contribute to workforce education?
TNCs invest in training and skills development to improve workforce productivity.
What infrastructure investment is necessary to attract manufacturing FDI?
Basic infrastructure such as roads, ports, and power supply.
What is one effect of the global shift on wages over time?
Wages may rise as education levels increase and the supply of rural labor decreases.
Fill in the blank: The WTO aims to promote free trade by lowering __________.
barriers (like tariffs and quotas).
True or False: The WTO’s focus on trade liberalization can lead to environmental degradation.
True.
