The World Trade Organization (WTO) is a global organization that is concerned with rules governing trade among nations. The world economy is trending towards globalization. As a result, it is pertinent to form laws that will regulate business activities among all the nations trading internationally. The primary objective of the WTO is to support and assist manufacturing companies in various nations, as well as exporters and importers as they carry out their business activities (Kuiper & Barker, 2006).
Since the beginning of the 20th century, globalization is a word that has hit most parts of the world. The need to integrate the world’s economy is increasing. Internationalization is one of the factors that can be very effective in ensuring a globalized world. This essay is a case study that evaluates the advantages and disadvantages of a country joining the WTO. The evaluation will be based on Newlands’ urge to join foreign trade.
Effects of WTO law on Newlands Courts
Any country that joins WTO has to agree with the rules that govern the body. These rules are debated in the country’s parliament, where they are agreed upon and signed. A country that joins WTO is obliged to abide by the organization’s laws. Therefore, the laws will have to be included in the country’s constitution to ensure that they are followed by the letter. In the case of Newlands, the WTO agreement will have to be included in its constitution and will be part of the country’s laws (Macrory, Appleton & Plummer, 2005). The WTO laws have several effects on the country’s constitution and courts. Therefore, if Newlands joins WTO, the organization’s laws will have effects on the country’s courts. Newlands will be required to navigate its legal system to incorporate the WTO laws and adhere to them.
To begin with, Newlands will have to hire professionals who are experts in WTO law and who can organize information related to trading barriers, as well as the opportunities and challenges associated with these barriers. For instance, the WTO laws are said to have some effects on the human rights of member nations, laws related to dispute settlement, as well as laws that are related to international relations.
One of the factors that will result in WTO laws affecting the courts of Newlands is the need for bureaucracy and the challenge to private and public sectors’ coordination. This will challenge the internal capacity of Newlands. Newlands will be required to review the measures and mechanisms it uses to perceive injuries to business prospects. In addition, it will be required to identify who is responsible for the trading prospects and ensure the availability of resources that can be used to negotiate and settle a legal claim (Wang, 2011).
The country’s courts will be required to develop cost effective way of identifying WTO claims. In addition, the courts will be required to hire lawyers who can identify the claims and defend them. Developed countries such as the United States of America have both formal and informal legal systems used to identify international trade barriers and then prioritize those barriers depending on their impacts. In turn, they avail resources for World Trade Organization complaints. Developing nations such as Newlands will be required to adjust their courts and court systems to incorporate similar legal mechanisms. WTO laws will have an impact on the rule of law in Newlands since the courts will have to adjust to ensure the implementation of the WTO laws in the country (Hoekman et al. 2002).
The full impact of WTO membership
WTO membership is beneficial since it will open up many business opportunities for organizations through expanding their markets internationally (Fung, Pei & Zhang, 2006). The following are some of the impacts that are likely to be experienced by Newlands if it joins the WTO.
Newlands’ WTO membership will enhance trade opportunities for Newlands. The country has an export-oriented toy industry. In addition, it has an upcoming steel industry. This creates the urgency of joining the international market to maximize the sales for those industries and enhance their development. For instance, China is a third-world nation that has benefited from international trade. Today, its economy is one of the best in the world. Unfortunately, most of the developing countries have a low share of the international market. It is not easy for them to join the international market due to the costs involved and the regulations for joining the market (Lynch, 2003).
This makes their export industries lag since they do not find enough market for their goods. The Republic of Newlands will be in a better position to expand its market for toys and steel. It is worth noting that many of the industries in the Republic of Newlands are struggling to compete in the international market, even though some, like the toy industry, are export-oriented. India is another nation that has been able to compete in the international market after joining the WTO.
Developing countries are assisted in joining the international market by the Doha Development Agenda that was launched in November of the year 2001. This agenda was aimed at lowering trade barriers that prevent countries from joining the international trade. This would in turn result in increased international trade by countries, especially the developing nations. With the help of this program, the Republic of Newlands will be able to expand its economic growth (Cottier, 2007).
The WTO is said to have an impact on the human rights of a country. WTO policies are said to have negative effects on the citizens of member countries. Such effects have been experienced in China. One of the many divisive issues in WTO concerns its role in enforcing human rights in member states by employing trade measures and restrictions to non-compliant members.
This is said to harm the citizens rather than help them. If the Republic of Newlands joins WTO, this will have effects on the human rights position in Newlands. The free trade policy of WTO is also likely to lead to harmful products entering the nation, thus harming consumers. There are, however, measures put in place by the WTO to protect the trade of harmful products, but the measures are not always effective (Zagel, 2005).
Advantages of Joining WTO
Joining the WTO is beneficial to a nation. Firstly, disputes are resolved constructively. The WTO helps nations in solving their disputes, especially those related to trade issues. Secondly, the WTO allows for free trade, which can cut the cost of living. Citizens can trade more goods and services without many regulations, making it easier to trade and make more money. Thirdly, the increased trade as a result of joining WTO raises the level of income for both individuals and the nation at large. Joining the international market helps organizations expand their market for goods and services.
Fourthly, the country can access more choices of goods and services, as well as more quality choices on joining the WTO. Lastly, the WTO system is known to encourage good governance. The system ensures that there are good governments in member countries that will ensure smooth learning of the international trade (Keyzer et al. 2000).
Disadvantages of Joining WTO
To begin with, the WTO is criticized on many occasions for ignoring the developing nations. The WTO policies are said to only favor the developed countries and ignore the developing nations. This makes trade difficult for developing nations. Secondly, the benefits of the WTO accrue more to the developed nations. Developing nations might not get many benefits from WTO, especially at this time when the Doha Development Agenda is yet to be passed. Thirdly, free trade increases the level of competition for multinationals and hinders the development of local industries in developing countries. The developing nations also find it hard to diversify their economies, especially because the WTO tends to ignore their plight (Keyzer et al. 2000).
The traditional notion of state sovereignty
Sovereignty is the state of having authority over a certain geographical area or a certain territory. The notion of sovereignty has two levels of interpretation; namely, internal sovereignty and external sovereignty. The meaning of external sovereignty is that the territorial integrity of a nation is inviolate. On the other hand, the internal sovereignty of a nation refers to its supreme jurisdiction over resources, people, as well as authorities within a given geographical area or territory (Hall, 2010).
There are sovereignty issues that are associated with WTO. First, the WTO organization is said to control partially the trade policies of a nation. A member nation is supposed to adhere to the WTO rules. As a result, the country is not in a position to make its own rules related to international trade. In addition, the WTO rules will also affect the country’s exports. Globalization has facilitated the development of international bodies such as WTO. The development of multinationals has a significant influence on the national policies in the nations where they are established. It is important to note that globalization is crucial for the development of national and international economies, thus countries need to embrace globalization. This will initiate the need to rethink the notion of sovereignty.
For Newlands to be a member of WTO, it will have to accept the influence the organization will have on the country. Societies across the globe have become increasingly interdependent as a result of globalization. For these reasons, the sovereign power of nations no longer exists. Some of the powers have been transferred to other global entities like the WTO (Sigmarsson, 2008). Newlands, therefore, stands to compromise on its sovereignty by joining the WTO.
Nations that are members of the World Trade Organization are advantaged over the non-members in terms of international trade and have a higher probability of flourishing economically. On the other hand, there are possibilities of WTO having negative influences on the human rights of the member nation. In the case of the Republic of Newlands, I would advocate that it join WTO since its upcoming industries will have a high chance of flourishing.
The toy manufacturing industry will have a better chance of competing in the foreign market. There are measures to improve the position of developing nations in the WTO, thus Newlands being a developing nation will have a better chance of doing well. The income will receive can be used to finance other projects and build its economy.
Cottier, T 2007, The challenge of WTO law: Collected essays, Cameron May Ltd, London.
Fung, H-G, Pei, C & Zhang, KH 2006, China and the challenge of economic globalization: The impact of WTO membership, Sharpe, Armonk, NY.
Hoekman, B, English, P, Mattoo, A & World Bank 2002, Development, trade, and the WTO: A handbook, World Bank, Washington, DC.
Keyzer, M., Merbis, M., Overbosch, G., Food and Agriculture Organization of the United Nations., & Centre for World Food Studies (Amsterdam, Netherlands). (2000). WTO, agriculture, and developing countries: The case of Ethiopia. Rome: Food and Agriculture Organization of the United Nations.
Kuiper, E & Barker, DK 2006, Feminist economics and the World Bank: History, theory, and policy, Routledge, London.
Lynch, K 2003, The forces of economic globalization: Challenges to the regime of international commercial arbitration, Kluwer Law International, The Hague.
Macrory, PFJ, Appleton, AE, & Plummer, MG 2005, The World Trade Organization: Legal, economic and political analysis, Springer, New York, NY.
Sigmarsson, DA 2008, ‘Globalization vs. State sovereignty constitutional rights in a crisis’, BA Thesis in Law at the Faculty of Law and Social Science. Web.
Wang, G 2011, Radiating impact of WTO on its members’ legal system: the Chinese perspective, Hague Academy of International Law, The Hague.
Zagel, GM 2005, ‘WTO & human rights: examining linkages and suggesting convergence’, International Development Law Organization, vol. 2 no. 2, pp. 1-36.