Perception And Misperception In International Trade: An Essay On Trade Dynamics.

The World Trade Organization and its Objectives

Discuss About The Perception Misperception In International?

The United States had identified and introduced a legislation that regulated the composition of petrol to make things around better. The members of the GATT cannot block the establishment of a panel in the dispute settlement of WTO. The aim and objective of the WTO is to monitor the rules of international trade rules, settle disputes and decrease the level of trade barriers. It includes provisions for monitoring compliance and review. It also consists of the remedies that have approved counter measures. The contracting parties should be the members of the International Trade Organization that will not invoke the provisions of the agreement. The WTO replaced the General Agreement of Tariffs and Trade.

As per the rulings and requirements of WTO, the dispute settlement body is the central pillar of the trading system. The World Trade Organization has an unique contribution to the global economy. Then the legislative efforts took time, the White House enacted the board to alter the government policies and practice. Despite knowing the international repercussions, President Trump took drastic steps by imposing tariff on steel and aluminum[1]. In this regard, President Trump imposed 25% tariffs on steel and 10% tariffs on aluminum. Therefore, these lead to the demise of the WTO and the International Trade. The new President, Donald Trump assured the biggest tax revolution since it was difficult to unleash the economic growth by cutting the taxes across the board. According to Trump, no business of America will pay more than 15 percent of its profit in tax as compared to the present majority of 35 percent. However, it was concluded that this concept was still not clear as to how the tax cuts will be paid[2].  In this regard, it is worth noting that according to Donald Trump the imposition of tariffs on steel and aluminum would safeguard American employment opportunities in future. However, modern economists stated that with the imposition of tariffs it will create huge impact on the large scale users of steel and aluminum which includes oil and automobile industries. In such process more job opportunities will e destroyed. Donald Trump had introduced the foreign policy by increasing the alterations in the spectra of a major change in policy of China by ensuring them full support from the United States for the policy of China that has been in existence for a period of four decades. The General Agreement on Tariffs and Trade contracts the parties and its former territories. The panels of GATT overruled the popular United States protection laws that sparked the trade and started an argument on it. It restricts the contracting parties on any importation of any products. The impact of trade of trade rules on the controversies affects and targets the products depending on the process and production methods. The increased authority of dispute settlement referred to the situation when the trade disputes carried more weight. It used to bind the parties and attracted non-compliance sanctions. The provisions of this Agreement will be applicable to all the metropolitan customs territories of the contracting parties and to other customs. However, for years, the United States was considered to be as the biggest driving force behind the moves to inspire the international trade more[3]. The work of WTO is to regulate more than 98 percent of the global trade among all the member countries involved in it. The aim and objective of the WTO is to monitor the rules of international trade rules, settle disputes and decrease the level of trade barriers. o

Dispute Settlement Body of WTO

Some of the principles of governance of WTO are no longer significant to the modern day need of the nation. Firstly, under the World Trade Organization, the countries cannot differentiate between the trading partners. This was a common principle of WTO that cannot be relevant to the modern demands of the nation states as it is known to every individual. This principle is known as the most favored nation treatment[4]. Countries are allowed to set up free trade agreement that are only applicable to the goods traded in the group by differentiating against the group from outside. Every time a country lowers down a trade barrier for opening a market that has a relation with the same goods or services from all the existing trading partners. Secondly, the locally and imported produced goods should be treated equally in regard to the foreign goods present in the market. The same is applicable in the domestic and foreign services and also to the local, patents, copyright and foreign markets. The modern day is already aware of these principles and hence it should not be kept registered under the principles of WTO[5]. The theory of national treatment stated that it can be applied once a product of the intellectual property has arrived at the market. Charging the duty of customs on an import is not treated to be as a violation of national treatment even when the products produced locally are not charged an equivalent tax. Thirdly, Lowering the trade barriers was one the most observable means of encouraging the trade. These barriers were distressed exclusive of the custom tariffs and measures such as the ban on import and quotas that prohibit the quantities selectively. Promising not to increase a trade barrier can be as significant as lowering one since the promise gave the businesses a proper view of the future opportunities. Investment is encouraged and jobs are formed for so that consumers can enjoy the merits of the competition and go for lower prices. Countries had agreed to open their markets for the services and goods. These goods got binded on customs and tariff rate. The tax imports of the countries have lowered the rates of the bound. In case of the developed countries, the rates charged and the bound rates are similar. However, this system has been trying to improve its stability in various ways. These are no longer relevant to the modern day needs of the United States. The agreements of WTO needs the governments to clearly state their policies and practices within the country by informing the WTO. However, the system of WTO does contribute to the process of development. The developing countries need to be flexible in certain time so that they can recruit the agreement of the system[6].

President Donald Trump had confirmed the news of exempting Australia from the steel and alumunium tariffs. Mr. Trump’s plan was to impose such an idea across the world. The United States had granted Australia an exemption from the new tariffs. Australia is said to be a small global exporter of steel despite being considered as one of the world’s largest supplier of raw commodity and iron ore. Both the countries, Australia and United States had agreed upon the choice of words[7]. President Trump highlighted the relationships of trade and military. Australia bought 60 percent of the military assets from the United States and allowed the marines of United States to revolve. The Prime Minister also stressed on the fact that Australia had the closest possible military and security alliance with the United States. Australia will not provide anything in return for the exemption as stated by Mr. Donald Trump. Previously Mr. Trump used praise the commitment to a fair and reciprocal trade and military relationship[8]. Australia will always be considered as one of the biggest losers from the US inspired rise in the global protectionism. Australia was not affected by the decision of President Trump since it is considered as a big threat to other countries and United States that must get redirected at a lower cost price. Jobs also got threatened in the local companies of Australia that made steel and aluminium. According to the Australian Industry Group Chief Executive, the exemption was treated to be a positive step but he was more inclined and interested towards applying steel and aluminium from Australia and not the Australian companies that produce overseas.

However, the trade tariffs will have a less effect on Australia economically[9]. Australia had paid a heavy amount for getting free trade agreements with the United States The investment of United States in Australia is evident since the trade of United States is less. Therefore, Australia is associating itself constructively with other countries for better future[10]. Without the leadership and assistance of the United States, Australia and Japan were able to revive that. Trading with the United States will cause harm to the economies that are allied to the United States. From the above discussion it can be concluded that Australia will not e affected much if they are exempted from the tariff[11]. President Trump will be governing all the spheres of International Trade with the other countries. There will not be plenty of implications if the country is exempted.

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