ANALYSIS OF THE DISPUTE SETTLEMENT BODY OF THE WORLD TRADE ORGANISATION

ANALYSIS OF THE DISPUTE SETTLEMENT BODY OF THE WORLD TRADE ORGANISATION

International Trade has been of immense importance in the existence of the nations of the world and its economy because no nation is completely self-reliant or sufficient. Also, the needs and wants of people in all parts of the world are better served by exchanging goods and services.1 Trade increases the standard of living for all modern countries. For some, foreign market takes a third to a half of the total output and the standard of living depends crucially on the international division of labour that foreign trade permits.2 However, there are opinions to the effect that international trade has negative effects on the standard of living of the nations of the world and consequently, trade barriers are necessary to protect the earth‘s natural environment, reduce domestic unemployment and also prevent the exploitation of the world‘s impoverished workers.3

International trade has played and continues to play critical role in the ability of countries to grow, develop and be economically powerful throughout history. International transactions are becoming increasingly important in recent years as countries seek to obtain the more benefits that accompany increased exchange of goods, services and factors. It is worthy to note that little is known about the earliest trade. However, English flint used to make primitive tools, which was widely traded in Europe thousands of years before Christ, and so was the salt from the mines in Central Europe. Moreover, the Egyptians as far back as 3000 B.C. ranked far in Africa in search of gold, antimony and slaves. By 1700 B.C., the Cretans traded extensively by sea.4

Every sovereign nation is free to establish laws, taxes and regulations governing its foreign trade. Initially, these nations used certain policy instruments to protect their country and citizens that are players at the international market against certain consequences that might arise as a result of unrestricted trade practices and thereby interfere with free trade. Some of these

instruments include: import tariffs, export taxes, and subsidies, import quotas, voluntary export restraint, government procurement provisions, domestic content provisions, trade related investment measures, etc.5 These measures to a great extent interfere with free trade.

However, in the 19th century, there was an important change in government6 policies towards trade, away from mercantile protectionism, all brands freer trade – fewer prohibitions and lower duties on foreign trade. Furthermore, after World War II, various circumstances combined to obstruct world trade. The nations found it convenient to agree to rules that limit their own freedom of action in trade matters, and generally to work towards removal of artificial and often arbitrary barriers to trade. Thus, in 1947, the major trading countries, initiated comprehensive multilateral negotiations in an effort to prevent a post war contraction of world trade similar to the tariff war of the 1930‘s.7 The negotiations resolved in the formation of the General Agreement on Tariff and Trade (GATT).

The agreement (GATT) incorporated a code of international trade rules, made provisions for multilateral trade negotiations, established a procedure for adjudicating trade grievances among member states and provided for the continuing review of actions by member countries. The implementation of GATT resulted in the reductions in tariffs, coupled with improvements in transportation and communication at the time, foreign trade for instance grew and by the dawn of 1970 and early 1980‘s the value of total world goods and trade reached an almost $300 billion a year and $56 billion to $60 billion for annual services.8

TOPIC: ANALYSIS OF THE DISPUTE SETTLEMENT BODY OF THE WORLD TRADE ORGANISATION

Chapters: 1 - 5
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Number of Pages: 75

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