World Trade Organization in Telecommunication Sector

Abstract

The World Trade Organization has affected global trade since it was formed in 1995. Trade liberalization that has been initiated by the World Trade Organization has helped remove all barriers to trade and thus different countries can trade easily between themselves. Moreover, trade liberalization has also allowed countries to concentrate much on manufacturing and service proving in their countries and later export and import goods from other countries. World trade organization has also assisted in settling disputes that may arise from bad trade or differences in goals and objectives of different countries.

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By so doing, countries have been at ease while trading with member countries. The world trade organization has been involved in various sectors of economy and these include; agricultural sector where they regulate the prices of agricultural products in the world market, business sector where they are involved in regulating the currency trading, telecommunication sector where they are involved in provision of better and efficient telecommunication services among others. This paper focuses on the mission, objectives and role of World Trade Organization and its impact on Telecommunication sector in the developing world.

Introduction

World Trade Organization (WTO) is an international organization that was formed so as to administer and open up international trade. The organization started its operation in the year 1995 when it replaced the 1947 General Agreement on Tariff and Trade and has 123 member states. The organization provides an opportunity for negotiating an accord aimed at reducing the obstacles to Global Trade and ensuring an equal field for all the member countries thus adding to fiscal enlargement and advancement (David & Petros, 2004).

The organization provides a lawful and institutional structure for the realization and monitoring all agreements formed between the countries or states. Moreover, the organization provides a forum for solving disputes that may arise between the member countries resulting from interruptions and application of the agreements. The organization has formulated 16 bilateral agreements where all its members are signatories and other two plurilateral where only a few members are signatories.

The organization has helped in creating sturdy and flourishing trading systems thus contributing to rapid economical growth. The main role of the organization is to develop rules of trade and provide a forum for trade dispute resolution between the member states- countries (World Trade Organization, 2005). The World Trade Organization has six key objectives that govern its operation and they include; to set and enforce rules for international trade, the World Trade Organization committee formulates rules that will govern trade between the member states- countries and has formed enforcement procedure for the rules.

The committee has set incentives and sanctions to member states-countries who adhere to and to those who do not adhere to the set rules and regulations consecutively. The second objective for World Trade Organization is to provide a forum for negotiating and monitoring trade liberalization. The World Trade Organization committee negotiates and opens up trading areas on behalf of member states and countries and also performs follow up for the direction of the trade.

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The third objective of the World Trade Organization is to resolve trade clashes. When different state –countries are trading, problems and clashes are inevitable. The World Trade Organization provides a table for resolving these disputes or clashes within the member states (Fatoumata, 2003).

The fourth objective for the organization is to increase the transparency in decision making. World Trade Organization call for forums and meeting with its member countries when making decisions; all member countries are involved in decision making process and thus increase transparency in decision making process. The fifth objective of WTO is to cooperate with other major international economic institutions dealing with global economy. The WTO has collaborated with various organizations dealing with global trade so as to provide a global market that promote trade between countries. One of these organizations is the World Bank which controls circulation of money in the world.

The sixth and final objective of World Trade Organization is to assist member countries in the developing world to benefit fully from trading system (Phillipa & Micheal, 2005). The WTO committee provides advice to the member countries in the developing world on when to sell and buy product, especially when the world market is favorable to them. However, fair market access provided by the WTO can not alone ensure fairness in global trading system and should not be viewed as an end in its self but a means to achieve the overall objectives such as high and sustainable growth, full employment and reduction in poverty.

The role of World Trade Organization is to regulate international trade in goods, services and academic property. In the beginning, the international trade laws and regulations were viewed in the line of trade in goods only without regard to trade in services, however, due to the increased trading in services the service trade was included in international trade laws (Asif, 1998). Moreover, the World Trade organization assists in the promotion of liberalized trade and economic advancement.

This has been achieved through promoting good trade relationships between different countries. In liberalizing the market, the WTO has developed a global currency that is used in the global market and by so doing the problem associated with money exchange was reduced. This promoted more trade between different countries with different currencies.

The WTO also offers forum for solving disputes within member countries and between member countries and non-member countries. This service s very important as it helps promote good relations between different countries and also increases trade between them (World Trade Organization, 2005).

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The World Trade Organization (WTO) has helped in negotiations dealing with Trade Facilitation. Trade facilitation can be termed as “simplification and harmonization of international trade and association international flow” and deals with the relation, interaction and cooperation of the various participants in global trade.

Regulatory powers

Trade disputes are embedded in the goal of liberalization and other goal set by trading countries. These disputes may involve conflict in trade values and other social values such as environmental protection, labour laws among others, for instance, conflict in WTO in regard to European Community imports bans on asbestos roofing material. Trade liberalization involves removal of all trade barriers that may impede international trade and thus allowing countries to specialize in manufacturing and service providing and import the goods and services required easily (David & Petros, 2004).

The WTO accord shows an echo of trade liberation goals as a means to realize social and economical objectives. To achieve this, there are a number of regulatory measures that have been imposed on the members of WTO and these include;

General prohibition of quantities restrictions; The WTO has prohibited its members to impose quantities measures of imports and export to and from other member countries. This thus allows the organizations in member countries- states to import or export any amount of material or goods from and to other member countries. However, member countries are allowed to impose customs duties on all the imports and exports.

Tariff Binding; the WTO ensures that the tariff that a country is levying on goods and services from other member country do not exceed the agreed percentage for that particular good. These tariff binding are found in the general Agreement Tariff Trade which it succeeded (Phillipa & Micheal, 2005)

National Treatment; the World Trade Organization do not allow any discrimination of member county’s product and favor the locally produced goods or product as this distort trade and reduces imports. Thus all member countries should treat all imports from member countries as equal in value as the locally produced products. The import and domestic products should have similar internal charges and taxes levied on them.

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Most Favored Nation Treatment; the World Trade Organization prohibit any country to favor product or imports from a certain member country or non-member country rather than importing product from all other member countries. The accord for World Trade Organization is that if a country agrees to extend a favor to a member or non-member country it should do the same to other countries. This ensures that there is no discrimination of products from one member country or from a group of member countries (Asif, 1998).

Impacts of WTO on Telecommunication Sector in Africa

It has been assumed that developing countries make commitment in goods and services so as to achieve an agreement between them and the countries they are trading with and to increase their incorporation into the global economy. This has been also seen in the telecommunication sector where the countries first liberalize trade in telecommunication sectors by making a commitment through the World Trade organization.

By so doing, they increase the chances for trade with other countries and open up domestic investment. Moreover, by signing the agreement, the developing country will increase the rate of domestic sector reform and link these reforms with the international legal framework thus ensuring there is no policy reversal. These reforms also ensure that the country has better telecommunication services to offer to the citizen as compared to a country with the same level of economic development.

The reforms must be implemented at the national level for a country to invest to the telecommunication sector of the developing country (World Trade Organization,2005). If a country fails to implement its commitment to provide the telecommunication services the developing country can call for WTO dispute settlement mechanism to establish the reason why the member country has failed honor the commitment. This ensures that there is no hatred between the member countries stated and encourages togetherness and continuation of trade.

The World Trade Organization has made various commitments to the telecommunication sectors; about 90 countries got committed during the initiations of the negotiations and have about 90 percent of their suppliers’ revenue in telecommunication (Fatoumata et al, 2003).

During the Doha Round negotiations, more member countries of the World Trade Organization improved their offer of telecommunication services to the developing countries and other promised to assist the developing countries to have better telecommunication service.

Countries that opt to liberalize the telecommunication sector for better services must ensure that they liberalize the telecommunication sector as part of their succession service or as a later to succession. This will ensure that the services that the telecommunication sector provides to the citizens is of good quality and that the provision of their provision is not duty derived resulting from market access for telecommunication services but from an accord reach at the World Trade Organization forum. The World Trade Organization also ensures that all member countries who want to provide the telecommunication services do so without looking at the most favored nation thus ensuring equal treatment for all members (David & Petros, 2004).

Conclusion

World Trade Organization is an organization that is very powerful and more often than not affects trade all over the world. The member countries, however, have an added advantage in that they can access to goods and services produced in other member countries at a cheaper and affordable price since most of barriers that impede trade have been removed. The member countries also enjoy the freedom of trading with other countries and thus they can export and import products from member countries easily.

In regard to telecommunication, the World Trade Organization members have assisted the member in the developing countries to achieve their goals of having a better and reliable telecommunication service (World Trade Organization, 2005). The effects and impact of World Trade Organization have also been felt in other areas of the economy, for instance, in the agricultural sector where they regulate the prices of commodities worldwide and these impacting on the agricultural sector. For instance, in case the World oil prices go up the cost of farming increases especially in areas that use machines for agricultural practices.

References

World trade organization (2005), World Trade Organization International Trade Statistics. World Trade Organization.

David Palmeter & Petros C. (2004) Dispute settlement in the World Trade Organization: practice and procedure. 2nd edition Cambridge University Press.

Fatoumata J., Aileen K., & Shefali Sharma (2003), Behind the Scenes at the WTO: World of International Trade Negotiations. Cambridge University Press.

Asif Hasan Qureshi (1998), World Trade Organization: implementing international trade norms Manchester University Press.

Philippa S. Dee & Michael J. Ferrantino (2005), Quantitative methods for assessing the effects of non-tariff measures and trade facilitation. Cambridge university press.

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