WTO & Trade

Question 1

4 core principles of WTO

Answer 1

1) most favoured nation
2) national treatment principle
3) negotiates reductions in maximum tariff
4) always has single undertaking each round

Question 2

what is most favoured nation principle

Answer 2

no country can be treated worse off than this country (e.g. set higher tariffs) but can be treated better

Question 3

what is national treatment principle

Answer 3

products from other countries should be treated same as domestic products

Question 4

problems with WTO

Answer 4

1) cant respect interests of all countries
2) asymmetry in influence, access and ability to benefit
3) with lots of participants, unanimity is difficult
4) rules only apply to governments when it is companies doing most trade

Question 5

benefits of WTO membership

Answer 5

1) enhanced market access
2) no discrimination
3) party to negotiations and dispute settlement mechanism
4) access to technical assistance
5) attracting foreign investment

Question 6

costs of WTO membership

Answer 6

1) restricted policy discretion
2) legal and administrative costs
3) adjustment costs to import competition
4) participation costs and access