Evidently, Hon Phil Goff speech to OECD Forum 2007 held in Paris, states that growth of membership in WTO to 150 nations is an indication that there are larger benefits with trade liberalization and multilateralism is contributing excessively, to world economy. According to World Bank, if tariffs and subsidies are lifted there is an estimated net benefit of $290 billion per year to the world economy. Multilateralism is the best and only available fair method to trade globally which provides guidelines and rules of trade, protects small and big nations respectively each according to the trade system.
Global trading system and models of trade development have to be constantly on the incrementive area, instead of giving rise to disputes proving futile efforts of WTO. The most important point to be noted here is, in order to continue and develop multilateral trade system, it must be taken into consideration, the benefits of trade growth and inter-regional trade per year, and MTS satisfactory contribution , advantages and disadvantages are some of the key areas to continue with MTS.
Alternatively, WTO is satisfied with the productive and progressive results of WTO as MTS is enhancing to the growth of poor nations which would stabilize the economy in all aspects and the achievement of goals of WTO in expanding and strengthening of world economy are also met with MTS in spite of the fact, multilateral trading system involves different inter-cultural and multifarious trade activities among nations bringing a global trade system to a single platform which is WTO for controlling, monitoring, coordinating and to revolutionize new arenas of global trading system.
From the period 2005-2007, APEC region is increasingly being benefited with RTAs and leaders of APEC recognize the role of RTAs in building MTS and trade liberalization. APEC Economic Leaders meet in several countries at annual events have been developing models of measures for RTAs, making several recommendations for current working progress. According to World Bank Report (2000) 194 RTAs were notified to GATT and 87 were notified in 1990s.
Between the period 1995-1998, 45 RTAs were notified. The success of NAFTA and customs union (EU) have enabled lower trade costs among neighbor countries, leaving a marginal flexibility over all industrial and agriculture sectors to liberalize through RTAs. There are162 RTAs which came into effect in 2002, half of which were initially introduced after 1995. The WTO states that another 300 RTAs would come into effect by 2007.
RTAs involving EU, Latin America, United States and South East Asian Nations, are working towards trade liberalization which are outside the purview of regional trade frontiers. This once again reiterates that small and big nations are drawing the benefit and advantage of RTAs although slowly whereas steadily there is an improvement for strengthening respective economies. Both WTO and GATT have been encouraging RTAs which is building free global trade and is further helping under-developed nations to take advantage of goods and services of developed nations.
Political disturbances although leave an impact for RTAs, the connectivity of MTS and RTAs once made strong in global arena, no hindrance of either political pressure or economic collapse can cause harm to the progressive global free trade as WTO and GATT are supporting RTAs and MTS. The aim of WTO is to strengthen world trade economy on one side and on the other side, WTO is playing an intermediary role as a multilateral trading organization to lift trade subsidies and limitations of trade costs, to promote an access of goods and services to poor nations.
WTO has grown to a membership of 150 nations and all of these nations are in want of great development of free trade in order to boost the global business of respective nations which further strengthens each nation’s economy. In other words, open market policy enhances free marketing and trading of goods between two countries which is otherwise called as MTS. United States strongly supports MTS with the fact that tariffs and trade cutting costs enables imports of huge amount of goods to the consumer market.
In a way, global open trade policies, offer variety of quality goods and services to people, to choose according to the financial capacity of consumers. US, EU, OECD, APEC are endeavoring a collective effort to further strengthen MTS for the present and future global trade open policies. It is not an easy task to lift tariffs and requires much harder work in terms of fixing EXIM policies whereas with the present stance of success in MTS, much can be predicted in a positive manner about Multilateral Trading System.
The world economy as a whole, must be prospective and keeping this in view, a set of business turnover per hour / per day must be achieved which must be monitored by WTO on regular basis. It was stated in Winconference 2001 held in Switzerland, that the present world has a population of 6 billion and as a matter of fact 1. 2 billion people are living on less than $1 a day and 1. 6 billion people are living on less than $ 2 a day.
The discussion and propagation of MTS or the goals of WTO are in reality to improve the standard of living of people around the world. In other words, clothes, homes, food and education are the minimum sources for living. Global trading must provide access to those nations where there are no access to goods and services. This task can be undertaken by developed nations, to successfully carry on for instance current trade
There are many challenges for Multilateral Trading System as stated by Hon Phil Goff whereas these can be worked only with the collective efforts of WTO member nations with the fact that global trading is in the interest of every member nation to take advantage of WTO open market policies and to drive overseas consumer market for goods and services. It is also important for WTO to exercise its trade policies such that both developed countries are benefited with business and poor nations redressals are attended both economically and in boosting global trade.
In 1996, according to WTO Director-General, Renato Ruggiero, there were three major challenges for Multilateral Trading System. The first challenge was to arrive at a conclusion of Uruguary Round settling disputes with the launch of a new system which was legally and politically accepted, which was very well assured by WTO, served by seven-member Appellate Body which would function as World Trade Court for settlement of disputes between nations.
The second challenge for WTO was to complete the negotiations in the field of financial services, telecommunications and logistic services. The third challenge was to launch focus on future trade policy which was the main motive of WTO and OECD. “The world economy, which was already in a slow down, if not in a major recession, faced great economic uncertainities after the terrorist attacks on the World Trading Center in New York on September 11, 2001, and the hostilities in Afghanistan that they spawned.
Unlike past episodes, the current slow down is affecting all major economies of the world at the same time. It is well known, that in periods of economic weakness, protectionist forces gather strength everywhere. By launching a new round, and thereby creating a reasonable presumption of further multilateral reductions in barriers to trade and investment flows, the ministers have provided incentives for exporting interests everywhere to counter protectionists threats”. (T. N. Srinivasan, 2002)