International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
The definition of ‘trade’ has steadily expanded and now includes intellectual
protection, investment, trade in services and agriculture as well as trade in
manufactured goods.
In its short life the WTO has already become the focus of intense
controversy. Heralded by the richer nations as the ticket to world prosperity,
to many others it’s looking more and more like another Trojan horse in the
citadel of international development.
‘Freeing up’ trade- GATT’s Uruguay Round concluded at the end of 1993,
basically ‘freed up’ world trade. This meant doing away with barriers which
had prevented developing countries from exporting their goods to the richer
countries of the North. It also opened up all countries to foreign penetration
in completely new areas, such as service industries and intellectual property
rights. This offered richer nations and multinational corporations a golden
opportunity to take over new sectors in countries that were previously able
to protect their own smaller industries.
The WTO has the task of policing this new world order, and is beginning to
make its presence felt. Fairer trading provisions, which guarantee protection
to producers in the developing world, have already come under fire. The
USA, on behalf of the American MNC Chiquita, has challenged
arrangements whereby bananas from the Windward Islands are marketed in
Europe under the protection of the European Union’s Lome Treaty.
Dismantling such arrangements would bring Chiquita greater profits, but
would prove disastrous to the farmers and the economies of the Eastern
Caribbean. The WTO has upheld the US complaint.
It was perceived that the WTO is controlled by the industrialized nations,
just as they control the World Bank and the IMF. At the conference held in
Singapore in December 1996, delegates from developing countries
complained at being excluded from ‘behind the scenes’ discussions. The
charge was accepted by Renato Ruggier, who was the WTO’s Director
General at that time. While the WTO claims that its rules-based system is a
means of protecting smaller nations from the larger trading powers, many of
those smaller nations have complained of being bullied by the very
countries, which set the rules in the first place.
International resistance - While some developing countries, particularly
Latin America and East Asia, may be able to compete in the world trade, the
world’s least developed countries are predicted to lose out. Even in richer
countries, the expansion of MNCs has a negative impact on smaller
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