Question

How does World Trade Organisation facilitate free trade for all countries​

Answer 1

Trade facilitation has become an important subject in the Doha Round negotiations. The saving from streamlining procedures could be 2%–15% of the value of the goods traded, according to estimates by the Organisation for Economic Cooperation and Development (OECD). The World Bank says that for every dollar of assistance provided to support trade facilitation reform in developing countries, there is a return of up to US$ 70 in economic benefits.

Currently, there are high levels of bureaucracy and unnecessary costs, due to:

vast amounts of “red tape”

document requirements that lack transparency and involve duplication

lack of cooperation between traders and customs agencies

lack of automatic data submission.

At some border crossings, cargo can take up to 30 days to be cleared. The introduction of simpler procedures and greater transparency could help to significantly improve trade flows.

According to some estimates, the average customs transaction involves 20-30 parties, 40 documents, 200 data elements (30 of which are repeated at least 30 times) and the re-keying of 60-70 per cent of all data at least once. With the lowering of tariffs, the cost of complying with customs formalities exceeds in many instances the cost of duties to be paid.

The OECD estimates that up to 7 per cent of the US$ 12,000 billion value of international trade each year is swallowed up by the cost of documentation.

The objective of the WTO's trade facilitation negotiations is to clarify and improve three articles of the General Agreement on Tariffs and Trade (GATT) concerning:

the transit of goods

fees and formalities (documentation and procedures)

the transparency of laws and regulations.

The aim is to ease border procedures and to facilitate the movement, release and clearance of goods.

A successful conclusion to the negotiations would:

allow governments to apply and conduct border controls more efficiently

allow traders to move their goods across borders more quickly and easily

reduce transaction costs and hence reduce prices for consumers and producers

reduce transit costs in landlocked countries

reduce bureaucracy and corruption

facilitate trade for small and medium-sized businesses burdened with excessive bureaucracy and red tape

add to members' GDP by making trade less costly.

Answer 2

Explanation:

The WTO's main aim is to promote free trade by lowering tariffs and other barriers. It does this through agreements negotiated and signed by most of the world's trading nations. ... And when member countries don't play by the agreed rules, the WTO can impose trade sanctions against them.......

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