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Impact of Climate Change and Trade Conflict on World Trade Organization (WTO)


The research study is designed to evaluate the reasons behind the disputes within WTO. Additionally, the paper tries to address the transition in trading activities. This research addresses the impact of climate change over the trade in services and goods between nations. With the help of reliable data, graphs, charts and statistics, this paper will evaluate the individual factor’s impact on the international governmental organisation. Furthermore, the study will incorporate the responsiveness of WTO regarding the ongoing crisis and impact on the world trade operations. Therefore, the research study will help estimating the depth of the crisis that the World Trade Organisation is currently witnessing.

Several events and factors are affecting the smooth flow trade among world economies. Climate change and disputes or conflicts top the list. Firstly, climate change is affecting world agricultural production and various service sector in the world. Climate change is a growing concern for all the economies because it is affecting the domestic as well as the world economy (, 2019). Similar to this, disputes over trade are affecting world trade operations, leading to war, and reducing free trade. The most significant are the war between China and the United States. Apart from this, US-Canada trade conflict and the conflict created by Brexit are disrupting world trade operations. Additionally, there is a transition from trade in goods to trade in services. 

The function of the World Trade Organisation (WTO) is to monitor international trade. The organisation administers free trade agreements signed between nations, handling conflicts and disputes, control illegal activities in trade and ensures cooperation in trade (Baldwin 2016). Overall, the WTO monitors and supervises free flow of goods with legality in trade movements (Matsushita et al., 2015). Moreover, WTO is a type of intergovernmental organisation that concentrates in maintaining legalised trading activities. In the current generation, several ongoing events and factors are reducing world trade and creating conflict within WTO. However, the WTO is continuously planning, designing ad directing policies to address the issues created by climate change and trade conflict.

Therefore, this paper will analyse the impact of climate and trade conflict in the international organisation maintaining and supervising trade. In addition to this, the paper will focus on the transition of trade over goods to trade on services. Furthermore, the study will incorporate the various policies designed by the WTO to overcome the negative consequences and crisis witnessed by the WTO and world trade. 

Literature Review

Literature Review 
Several issues together are leading and pushing the WTO under a recessionary situation. Researches have provided evidences regarding the filling of compliant against economies regarding international flow of goods and services. Both the developing and developed nations are filing cases against the tariff structure of countries. According to WTO, members under trade agreement should foster free flow of goods and services and contribute to the world market. However, in the recent times countries are filing cases against one another that is hampering their relation as well as trade. WTO is facing issues in maintaining the balance between trading nations. The US-China trade conflict is one of the major reason behind the crisis in WTO. The US has filed against China regarding patent theft. Both the United States and China are recording a fall in trade volume as well as loss in economic wealth (Ciuriak, 2019). Moreover, the fall in trade between two dominant and large economies is causing trade disruptions. In addition to this, countries like Turkey are filling complaints and cases against the administration of the United States. The reason being the 50 percent tariff imposed on the exports of Turkey to the US. Other than this, the conflict between the US and Canada is a serious concern for WTO as well (Lawrence, 2018).

Several research study provides evidences regarding the dispute in the WTO regarding the subsidies on renewable energy. This dispute is continuously enlarging and widening the crisis faced by the WTO. Japan has initiated a case against Canada in the WTO regarding the Feed in Tariff (FIT) program (De Bièvre, Espa & Poletti, 2017). The FIT program initially began in the year 2010 in Canada for increasing investment in renewable energy sources. This tariff leads to discrepancy between nations and violation of the obligations mentioned under GATT and TRIM. On the other hand, subsidies on fossil fuels targets consumers and are discriminatory as per SCM agreement. These subsidies are readily challenged and is a major concern for the WTO. Thus, manufacturing industries can influence government’s decision and can lead to dispute against energy subsidies (Asmelash, 2015). This is one of the major reason behind the dispute in WTO. 

Another dispute faced by the WTO is from the rapid change in climate. There is a transition in trade practices from goods to services. This is because residents or countries as a whole are trading more in services than in goods. This increased trade in services are helping people to consume wide varieties of services and increase welfare. However, several service sectors are affected by the change in global environment. Specifically, the tourism industry is affected by the change in climatic conditions. A change in atmospheric as well as ocean temperatures are changing the scenic beauty of tourist destinations (Ciuriak & Ciuriak, 2016). This is reducing the inflow or movement of tourist in such destinations and hampering the wealth of the country. Thus, there is a fall in tourism services and affecting international trade. Other than affecting the tourism industry, a change in world climatic conditions are affecting the productivity of agriculture. Several developed as well developing nations depends on agricultural exports to earn revenue for the economic growth. However, widespread drought and changing climate are reducing the total productivity in agriculture. The meat industry is heavily affected by the change in climate and the revenue of the firms are continuously declining (Bähr, 2015). Consequently, there is a fall in export as well as revenue, leading to fall in the contribution of these countries in the global market.

The WTO has designed several environment agreements collaborating with UNEP. The collaboration aims at reducing carbon dioxide emissions but fails to address the issue effectively. This provision of gas emissions over importers are also settled using international treaties (Zhang, 2016). Apart from addressing change in climatic conditions, WTO has dispute settlement bodies to design agreements and curtail the effects caused by conflicts. However, despite this consideration the effectiveness of this policies and organisations are limited to paperwork. Therefore, the research will help in addressing the areas of concern for WTO that requires prompt action and support to stabilize instability in world trade. 

Method and analysis 
The research will use both quantitative and qualitative data to execute the process. Moreover, for performing this research, we will use secondary data from government websites, reputed journals and statistical database. The research will theoretically describe the present situation of WTO disputes. Additionally, how change in global climate and trading pattern is affecting the organisation. With the help of graphical representations, statistical tables and data, the research will try to justify the findings and yield appropriate outcomes. The diagram below represents data and charts that can be used to support the research study. 

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