In recent years, the WTO has also made assistance to developing countries a priority when they are covered by WTO regulations. Many developing and emerging countries lack the experience and technical know-how to deal with large and comprehensive trade agreements. The WTO provides them with important training and support and thus ensures that the WTO is inclusive and fair, both to the richest nations and to the poorest nations in the world. Kohl, T., Brakman, S., &Garretsen, H. 2016. Do trade agreements stimulate international trade differently? Evidence of 296 trade agreements. World Economy, 39(1): 97-131. Before you begin your reading on the World Trade Organization (WTO), take a few minutes to watch the following video, which gives you some background information about the General Agreement on Tariffs and Trade (GATT) and explains how it became the WTO we know today. Remember that the world is much smaller today than when your parents and grandparents grew up, and international trade hasn`t always been the norm.
After watching the video, think about how impossible global trade would be without some kind of agreement between nations. The following video explains and compares the different types of trade agreements: as you saw in the video, what started with an agreement (GATT) eventually became the WTO. Indeed, from 1946 to 1995, GATT was the only multilateral instrument to govern world trade. Given the difficulty of regulating trade between more than a hundred nations according to a single document, it is easy to understand why the WTO was created. The participating nations understood that gatt was not able to adapt to an increasingly globalized world economy. When the Uruguay Round of GATT negotiations began in September 1986, it was the largest global effort to structure trade in history. Today, GATT still exists as the WTO`s single treaty for trade in goods, but it is no longer the only legally binding global trade agreement. The euro must contribute to the construction of an internal market by facilitating the movement of citizens and goods, eliminating exchange rate problems, creating a single financial market, stabilising prices, keeping interest rates low and providing an international currency protected against shocks caused by much of the euro area`s internal trade. It is also conceived as a political symbol of integration.
The euro and the monetary policy of those who adopted it in agreement with the EU are under the control of the European Central Bank (ECB). The ECB is the central bank of the euro area and therefore controls monetary policy in this area with an agenda to maintain price stability. It is at the centre of the European System of Central Banks, which brings together all the EU`s national central banks and is controlled by its General Council, composed of the President of the ECB appointed by the European Council, the Vice-President of the ECB and the Governors of the national central banks of the 27 EU Member States. The monetary union has been shaken by the European sovereign debt crisis since 2009. Customs unions are agreements between countries for which the parties agree to allow free trade in products within the customs union and agree on a common external law (TEC) on imports from the rest of the world. It is this TEC that distinguishes a customs union from a regional trade agreement. It is important to note that, although trade within the Union is comprehensive, customs unions do not allow the free movement of capital and labour between Member States. The customs union of Russia, Belarus and Kazakhstan, founded in 2010, is an example of this. These countries have eliminated trade barriers between them, but have also agreed on certain common policies on relations with third countries. Long, A., &Leeds, B.
2006. Trade for Security: Military Alliances and Economic Agreements. . . .