FATIMA JINNAH WOMEN UNIVERSITY

INTERNATIONAL TRADE LAW

SUBMITTED TO: Ma’am Munazza Razzaq

SUBMITTED BY: Mahnoor Paracha

( LLB-IX)

Submission Date: 3-Nov-2020

Written Submission

Critical evaluate World Trade Organization (WTO) and its impact on

International Trade and impact of WTO on Pakistan’s Trade and its policies.

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 CRITICAL EVALUATION OF WORLD TRADE ORGANISATION
(WTO):
The WTO stands designed to benefit the developing countries, yet it has reflected several

disturbing trends.

Even before the new WTO agreements became operational, there was pressure on the developing

countries to dis-invoke Article XVII-B of GATT. This meant that they should give up their right

to take import control measures for balance of payments (BoP) reasons. This stands located in

the contractual part of GATT, and not in Part IV which contains best Endeavour provisions for

differential and more favourable treatment of developing countries. To pressurize the developing

countries to give up their contractual right is highly iniquitous. Effective security of the BoP

measures in the appropriate forum of the WTO is very much in order. But it is extremely unfair

to ask a developing country to announce that it will not exercise this right.

Developing countries wishing to join the WTO have, in several cases, been denied the benefits of

developing country status at the time of their acceding to the WTO. For example, Ecuador was

denied the status. By no stretch of imagination can this country be considered anything but a

developing country. And yet at the time of accession, it was pressurized to give up its claim to be

treated as a developing country. Later, when it did not have a proper domestic law on intellectual

property rights within one year (which is an obligation on developed countries), it was threatened
with trade actions by a major developed country.

Developing countries had expected that threats of unilateral action by developed countries would

vanish with the new agreements of the WTO in operation. In fact, during 1994, the supporters of

the agreements were citing the protection against unilateral actions as an important benefit to the

developing countries flowing out of the new agreements. But subsequent events belied these

hopes and assurances.

The manner of implementation by developed countries of their obligations of progressive

liberalisation in the textiles sector puts a serious question-mark on their intentions in the

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sector. In fact, several developing countries had considered the provision of progressive

liberalisation in this sector a major positive factor while formulating their position on the

Uruguay Round results in 1994. They are now gravely disappointed. In actual practice, the

developed countries did not cover any restricted textile item (except a solitary item by Canada)

in the first phase of liberalisation which was to take place on January 1, 1995.

They liberalized only items that had never been under restraint in the Multi -Fiber Arrangement.

Now the same disappointing practice is going to be repeated in the second stage of liberalisation

which will take place on January 1, 1998. The developed countries have announced the list of

items to be liberalized in this phase, and it appears that for the US, EU and Canada, the

liberalisation will respectively account for only 1.30, 3.15 and 0.70 per cent of the volume of

import of restricted items.

Persistent failure of the major developed countries to display adequate political will to liberalize

their textiles imports gives cause for grave concern as to whether they will really abide their

commitment to bring this sector back under normal GATT rules in the beginning of 2005.

Immediately after the new agreements came into force, the U.S. took a number of new import

restraint measures against textiles of some developing countries.

The enabling provisions of the transitional safeguards in the agreement on textiles and clothing

were enthusiastically applied; totally ignoring the cautionary provision that such steps should be

only sparingly taken. Some of these measures have been removed, following the findings of

panels that these were not legal.

Another major trading partner, the EU, has been liberally resorting to antidumping actions

against the textile imports from some developing countries. With slight changes in the

descriptions, they have sometimes been initiating repeated actions against almost the same

products. This results in harassment of the exporters of developing countries. Besides, it

generates uncertainty in the minds of the importers and they start switching away to other

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sources of supply. It is clear that the onset of the so-called rule-based system in the WTO has not

stopped the major developed countries from using anti-dumping measures as an instrument of

protectionism.

The aggressive transitional safeguard actions and anti- dumping actions of these major developed

countries indicate that these have not yet got reconciled to the prospect of the textiles sector

finally being covered by the normal GATT disciplines in 2005.

When the results of the Uruguay Round were being finalized in Marrakech, decisions on
pursuing some service sectors were taken by the ministers. Three sectors need particular

mention, namely, financial services, telecommunications and movement of labour. The first two

are of deep interest to the developed countries and the third is of special interest to developing

countries. In the process of the follow up in the WTO, the movement of labour has been handled

very superficially and the negotiations have been concluded with insignificant results, whereas a

fast track approach was adopted to get deep commitments on liberalisation in the other two

sectors. There are now comprehensive agreements in the financial services and

telecommunications, whereas the liberalisation of the movement of labor has been left practically

unattended

The reason given for a rejection of this review is that there is a lack of experience on this subject

and no notification has been submitted. Concerted efforts were made to collect information and

conduct analytical studies on these subjects. Like the consideration of the movement of labour,

this is another subject which would not have been favoured by developed countries for a detailed

scrutiny; and it has consequently been put in cold storage.

The developing countries are further handicapped as they do not give adequate technical

resources either in their missions in Geneva or in their capitals. The issues are diverse and

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extremely complicated, it is difficult for them to be prepared adequately to safeguard their

interests and to take initiatives from their side.

The major developed countries, on the other hand, have abundant resources at their disposal and

their objectives are also very clear. They want to use the framework of the WTO to expand the

space for their manufacturers, traders, service providers, investors and high technology

monopolies.

If the developing countries ignore this oncoming well organised and massive thrust, they will be
exposing themselves to the risk of being total losers in this one-sided game. They should gear

themselves up, individually and in groups, and reverse the adverse trends that are being set in

motion.

They must unite to prevent the attempts being made by some developed countries to dominate

WTO and to orient it towards their needs and interests. The developing countries should muster

and use their collective bargaining power for securing their due rights and interests under the

WTO regime. Fortunately, the developing countries have started demonstrating their ability to

get united in an organised way for successfully preventing the domination of the WTO by the

developed countries.1

IMPACT OF WTO ON INTERNATIONAL TRADE:

To sum up, WTO has a great influence on the rules of globalization trade and WTO has made a

series of efforts to protect the real income and effective demand; the goal of sustainable

development based on rational use of world resources, and expand production of goods and

services; to reach mutually beneficial agreements, a substantial reduction and elimination of

tariffs and other trade barriers and the elimination of discriminatory treatment in international

1
https://www.yourarticlelibrary.com/international-politics/world-trade-organisation-structure-role-operations.
Article shared by DINESH.

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 trade. Through those influences on international trade, it gradually expanded the scope of market

access for all countries. The trade policies could contribute a lot to create more favorable

conditions for regions to expand the international market, which greatly speed up the process of

trade liberalization. But it is still needed improvement to refine the trade policy and reduce

negative actions, such as the green trade barriers.2

IMPACT OF WTO ON PAISTAN’S TRADE AND ITS POLICIES

The impact of the WTO regime on our agriculture sector, which absorbs 42.3% of the large labor
force, contributes to 19.8 % of the GDP [2], forms foundation of agro-based exports and in-fact

the back bone of the economy of Pakistan. The agricultural sector was covered under the old

GATT (GATT, 1947) system, but there were many loopholes in the system.

The WTO is a fact of life. Like any other dispensation, it causes threats of loss and offers
opportunities for gain particularly in agriculture sector. Therefore, there will be both loser and
achiever hence it is necessary, among other things, to develop effective mechanism to convert
the challenges into opportunities. Pakistan has to drop a sound and comprehensive strategy for
sustainable accelerated growth in agriculture sector. There is dire need to update Pakistan in
agriculture in the light of global requirements. “We have to make our agriculture region fit for
the 21st century”. We can optimize opportunities, among other things, through
increasing/attracting investment, rationalizing “public expenditure, reforming market regulations,
expanding market infrastructure, developing agricultural infrastructure, improving market
information system, establishing new laboratories and their proper certification”. Government
should take a step to educate the farmers by adopting the following strategies for strengthen of
the agriculture sector.
i. Development and equal access of local market opportunities to poor peoples.
ii. Planting of those crops with high economic returns.
iii. Government sector must supportive to the farmers for increasing the economy and
agricultural crops of the country.
iv. Preparing strategic plans to achieve maximum goals for increasing the yield of the crop.
v. Government must supply pure and healthy seed to the farmers for the production of
quality crops.
2
All Answers Ltd. (November 2018). Impact of WTO on Globalization Trade Policy. Retrieved from
https://www.lawteacher.net/free-law-essays/international-law/impact-of-wto-on-globalization-law-essays.php?
vref=1.

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vi. Evaluation and determination of import export ratio of goods per annum.
Educate the farmers with the proper utilization of the new agricultural techniques.3

3
All Answers Ltd. (November 2018). What is the World Trade Organization?. Retrieved from
https://www.lawteacher.net/free-law-essays/international-law/what-is-the-world-trade-organization-
international-law-essay.php?

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Bibliography

Articles:
https://www.yourarticlelibrary.com/international-politics/world-trade-organisation-structure-role-
operations. Article shared by DINESH.

Websites:

(November 2018). Impact of WTO on Globalization Trade Policy. Retrieved from

https://www.lawteacher.net/free-law-essays/international-law/impact-of-wto-on-globalization-law-
essays.php?vref=1.
(November 2018). What is the World Trade Organization?. Retrieved from
https://www.lawteacher.net/free-law-essays/international-law/what-is-the-world-trade-organization-
international-law-essay.php?

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