World Trade Organization (English World Trade Organization - WTO)- an international economic organization that creates certain conditions for trade on the territory of the participating countries.

History of the WTO

The WTO was established on January 1, 1995 to regulate trade and political relations between member countries. It was formed on the basis of the General Agreement on Tariffs and Trade (GATT), concluded in 1947. The very historical fact of the creation of the World Trade Organization took place in the city of Marrakech (Morocco country) in April 1994. As a result, the agreement of countries on the creation of uniform rules for trade is called the "Marrakesh Agreement". However, the start date of the organization is January 01, 1995, so this date is recognized as the date of creation. At the date of commencement of the functioning of the WTO, 76 countries were members.

The main goal of creating a world trade organization was to introduce common principles of trade on the world stage for all participating countries. However, each of the participants in this association has the right to introduce additional control measures for goods entering their markets.

The application of additional conditions for goods is introduced, to a greater extent, if there is a crisis situation in the country in any sphere of production. And also this principle is applied in case of violation of the WTO partnership principles themselves.

Despite more than twenty years of experience, the WTO has not found favor in a number of countries. The main reason for this was the complexity of the system and structure of the world trade organization itself.

Many enterprises do not see all the possible benefits, and also cannot fully appreciate the global position of the system as a whole. At the same time, for the participating countries, this system provides not only a single market on common rules, but also a considerable list of rights for each participant in trade relations.

To date, the headquarters of the WTO is located in Geneva (country - Switzerland). WTO Director General - Roberto Azevedo (Brazilian economist).

Principles of the World Trade Organization

• No matter how difficult the WTO rules may seem, in fact, they have three basic principles on which the entire single trade system is built, the most favored nation principle (MFN). This principle says that there can be no discrimination between participating countries.

For example, if goods are imported from the Gambia (serial number 125 in the unified register of WTO member countries) and France (serial number 69 in the unified register of WTO member countries) to Poland (serial number 99 in the unified register of WTO member countries), then the conditions for the import and registration of these goods will be exactly the same;

• The principle of nationalism. The most controversial principle It assumes that the conditions for foreign goods, provided that they are imported by WTO members, will be the same as for goods produced in the territory of the host country. However, the terms of participation in the WTO does not prohibit the introduction of procedures that simplify the system of selling national goods. But such rules, most often, apply only to their own manufacturing enterprises. Thereby confirming that this principle of the world trade organization is not perfect;
• The principle of transparency. This principle is the basis of all legal agreements of WTO members. He says that each participating country must ensure the full accessibility of other participants to its regulatory and legislative framework in the context of trade in its territory. The participating countries are obliged to create information centers where, in an accessible form, each interested party could explain to itself all aspects of the legislative regulation of trade relations that are of interest to it.

In order to join the WTO, the country's leadership needs to go through a very lengthy and scrupulous procedure, on average it lasts about five years. The main requirement for potential participating countries is to bring international trade to the standards prescribed in the agreement signed at the Uruguay Round.

At the first stage, the economy and trade policy of the country as a whole are assessed, after which lengthy negotiations take place on the potential benefits of the parties from joining the new market to the common trading system.

In conclusion, if the parties have come to a mutual agreement, the new participating country signs an agreement on the proposed terms of trade, and it is also assigned an individual unchanging number. Also, a new member country is obliged to pay for membership in this organization in accordance with the current tariffs.

In order to withdraw from the WTO, it is necessary to send a written notification to the Director General of the World Trade Organization, in which it is necessary to indicate your desire to leave this association. After six months, membership will be considered terminated. It is worth noting that in the history of the existence of the WTO there was not a single statement with such a petition.

Functions and tasks of the WTO

The main functions of the WTO are as follows:

• monitoring the commercial policies of the participating states;
• control over compliance with all contractual conditions and relations concluded under the auspices of the WTO;
• organization of negotiations between WTO member countries;
• provision of member countries with information aids within the framework of the WTO program;
• maintaining diplomatic relations with other countries and commonwealths for the development of trade relations;
• resolution of disputes.

Based on the listed functions of the WTO, we can safely say that the main task of the World Trade Organization is to organize the interaction of member countries among themselves, as a result of which there are controversial issues that may arise at the stage of interaction between several parties.

The legal basis of all documents issued by the WTO are sixty agreements that prescribe the three basic principles of the WTO in various forms and sections.

Structure of the WTO

Since already in 2015 there were 162 participating countries, while the countries are united by one single criterion - trade, while these are countries with different national languages, religions, economic levels, etc.

Therefore, it is so important that all decisions are made purely in order to achieve material well-being, without the use of any targeting.

In order to make this or that decision, large meetings are held in which all participants try to reach a common denominator. The method of open (or closed) voting is also allowed, by means of determining the majority. But this method has never been used in the history of the WTO.

Members of the Ministerial Conference have the greatest number of rights in the World Trade Organization, while members of this structural unit are required to convene meetings at least once every two years.

1. For the first time this conference was held in 1996 in Singapore (country - Singapore). The agenda of the meeting was the approval of the planned goals and objectives, as well as the confirmation of the basic principles of the WTO.
2. The second time the conference was held in 1998 in Geneva and was dedicated to the fiftieth anniversary of the GATT (the community on the basis of which the World Trade Organization was organized).
3. The third conference was held in 1999 in Seattle (USA) and was called upon to form new goals to determine a new direction for trade, but these negotiations remained fruitless.

The next link in the structure of the WTO, after the Ministerial Conference, is the General Council, which is engaged in daily work on the preparation of standard documents and solving current problems.

The General Council includes ambassadors and heads of delegations of the participating countries, and the frequency of meetings of this structural unit is several times a year. In turn, the General Council is subject to several substructures, between which the main functions of the WTO are divided:

• Commodity Trade Council. Its main function is to ensure that the principles of the WTO are respected at every level of trade among member countries. Also, the described principles must be observed in all documents concluded under the auspices of the WTO;
• Council for Trade in Services. This control unit monitors compliance with the GATS rules, which were spelled out in the relevant agreement. The Council for Trade in Services is subdivided into two main divisions, the Committee on Trade in Financial Services and the Working Group on Professional Services. The staff of this council is expanding every year, and the requirements for WTO member countries are becoming stricter;
• Council on Trade Aspects of Intellectual Property Rights. In this WTO council, the greatest disputes and conflicts arise, since it is intellectual property that becomes the most controversial object. As in the whole world, in the WTO rules the issue of intellectual property rights has not been fully disclosed, and every time new disputes arise.

If we talk about which of the divisions of the World Trade Organization works directly with all applications from member countries and the public, then this is the WTO secretariat. Several hundred people work in this division. The head of the secretariat is the director general

The responsibility of the secretariat is to organize all the technical aspects that accompany important meetings and meetings, as well as the Ministerial Conference.

Technical support is also provided to countries at the development stage. In addition, specialists of this department analyze the world economy, as well as hold conferences with the media.

Russia in the WTO

In 1995, the authorities of the Russian Federation made a formal request for the right to join the World Trade Organization.

The most difficult stage was the negotiations with the USA, China and the EU countries. However, after Russia supported the countries of Europe in upholding the positions of the Kyoto Protocol, the United States remained the only dissenting member of the WTO.

Negotiations continued with this country for six years. However, after numerous meetings and reforms in the agricultural sector of the Russian economy, a protocol on Russia's accession to the WTO was signed on November 20, 2006.

The signing took place within the framework of the session of the Asia-Pacific Forum in Hanoi (country - Vietnam).

But despite all the work done since 1995, the official entry of the Russian Federation into the WTO was constantly postponed for various reasons, the main of which was the unstable economic situation of the participating countries, which could become even worse after the accession of the Russian market, the assessment of which was extremely low and not stable.

In June 2009, the Russian Federation took a very unusual decision. In the face of Prime Minister Putin V.V. A statement was made that negotiations on Russia's accession to the WTO had been terminated. The initiator of stopping consideration of the issue of joining the Russian Federation was the Russian authorities themselves. However, they also decided to start negotiations on Russia's accession to the WTO as part of a single Customs Union of Russia, Belarus and Kazakhstan.

By that time, the Georgian authorities had become anti-supporters of Russia.

In October 2011, with the assistance of the Swiss authorities, an agreement was formulated between Russia and Georgia to resolve disputes, which ensured the support of the Russian Federation even from this opponent. The official date of the accession of the Russian Federation to the World Trade Organization is August 22, 2012 with the assignment of a permanent serial number - 156.

This was not a simple story of Russia's accession to the WTO.

However, it is impossible not to notice that WTO membership did not help in settling trade sanctions against the Russian Federation.

The World Trade Organization (WTO) is now clearly in crisis. However, history shows that international trade agreements have always been difficult: too often personal ambition is put at the forefront at the expense of common sense.

SERGEY MINAEV

October 30, 2017 marks the 70th anniversary of the predecessor of the modern WTO - the General Agreement on Tariffs and Trade (GATT). In 1947, when the agreement was signed, a press release stated that "the most grandiose negotiations in the history of world trade have been held." The British weekly The Economist remarked: "This is the longest and most complex document ever published - a document that is the hardest to understand on a record." And the British newspaper The Daily Express put it this way: "A big bad deal has been made."

The complexity of the agreement was quite in line with the level of problems in global trade at the time, generated by the protectionist policies of the 1930s, which prevented the Great Depression from being overcome.

The scale of the GATT was impressive: the agreement was signed by 23 countries, which accounted for 70% of world trade. They agreed to reduce existing customs tariffs and refrain from introducing new ones. So it was a multilateral foreign trade system based on at least some rules.

This sweet freedom of trade

For 48 years, the GATT was a preliminary agreement; in 1995, the WTO was formed on its basis. However, many GATT issues have not lost their significance to this day. The main one is the contradiction between ambition and practicality. In 1947, American negotiators had in mind the possibility of an International Trade Organization (ITO) with more members and more commitments. This plan collapsed just under the weight of personal ambitions.

Another problem is the contradiction between control and cooperation. For example, today Brexit supporters believe that Britain needs to regain control of its own economy. Donald Trump speaks in the sense that the existing US foreign trade agreements do not provide the country with the main positions in this area. When the GATT negotiations were in progress, the famous British economist John Keynes expressed doubt that the UK should give up the possibility of using customs tariffs to stimulate employment, although he admitted that a general reduction in tariffs in the world would do more good than harm.

The American negotiator at the conclusion of the GATT, Undersecretary of State for Economic Affairs Will Clayton, believed that the agreement should primarily help American manufacturers. He offered to break off negotiations with Great Britain after the latter refused to eliminate the reduced tariffs for its dominions and colonies. However, Clayton was instructed to continue negotiations. The White House believed that GATT would help the post-war reconstruction of Europe and strengthen the geopolitical influence of the United States. Thus, he made it clear that GATT is something more than just an agreement on the size of customs tariffs.

American negotiator at the conclusion of the GATT, Will Clayton, listened to the opinion of the White House on the need to strengthen the geopolitical influence of the United States

In a famous speech at Baylor University in March 1947, President Harry Truman declared, “We are the giant of the economic world. And whether we like it or not, the future of international economic relations depends on us.” He also stated that he was “not an advocate of free trade, but of freer trade” and that this very demand would be put forward at the first multilateral foreign trade negotiations, which were just beginning in Geneva. The outcome of the negotiations must be consistent with "our spirit of free enterprise - the very essence of everything that we call American," said President Truman.

Will Clayton, the head of the US delegation in Geneva, who was considered the most prominent proponent of free trade in the State Department, in truth believed that it was not so much trade negotiations that mattered as the implementation of the Marshall Plan to overcome the post-war economic crisis in Europe. As Clayton stated at a meeting at the State Department in May 1947, “In general, the initiative to implement this plan should come from European countries. But America has to run the show. And you should start right now.”

The "Marshall Plan" symbolized the US bet on foreign trade, although not all Europeans were delighted with this.

As Clayton's biographer points out, GATT "became an unprecedented treaty in terms of the amount of tariff cuts and the number of goods and countries involved in the history of the industrial world.

Moreover, it became the basis of flexible bilateral and multilateral trade negotiations, and the very procedure of these negotiations ensured the political supremacy of rich countries and US global dominance.

The agreement created the conditions for the subsequent liberalization of the world economy and equal treatment of national and foreign investors. Although it allowed to maintain temporary mutual foreign trade restrictions, which the United States and Great Britain agreed on in the summer of 1947.

After that, American foreign trade strategy was no longer called an open door policy and, as before, was determined by what was called domestic influence. But this influence more and more required the expansion of the American model of capitalism to the whole world (primarily to ensure the free movement of capital), so the following presidential administrations moved along the path of foreign trade liberalization (with the exception of special cases that came under the jurisdiction of Congress, which took into account individual interests some branches of the American economy).

All of this meant gradually opening up the American market even to those countries that protected their markets with tariffs, subsidies, or undervalued national currencies. The American economic strategy relied on foreign trade - first in relation to Europe (under the Marshall Plan), and then in various forms in relation to Japan, South Korea and Taiwan.

The Kennedy administration, in the face of freer trade, paid special attention to stimulating American exports. In 1962, Congress passed a trade law that allowed the administration to reduce import tariffs by 50% in connection with a new round of GATT negotiations that began in 1963 (and lasted until 1967) (it was called the Kennedy Round).

In addition, the law emphasized that food aid to developing countries should be treated as loans, for which the recipients must pay in dollars.

The share of such assistance in American food exports, which was 35% in the early 1960s, dropped to 5% in 1975. Be that as it may, developing countries have been signaled to move towards a policy of stimulating foreign direct investment and developing export industries - just to have the dollars needed to pay food aid payments.

Regarding the mentioned International Trade Organization, whose functions were taken over by the GATT, it should be said that its history is in some way connected with the IMF and the World Bank, in the creation of which the USSR took an active part. The American press reported that at a conference in American Bretton Woods on July 22, 1944, it was announced that the IMF would amount to $8.8 billion, including $1.2 billion from the USSR.

The same amount, according to the press, expressed the alleged Soviet share in the capital of the International Bank for Reconstruction and Development (a total of $ 9.1 billion), created to stimulate long-term investment. As a result, the USSR backed down.

The Bretton Woods Conference of 1944 came up with not only the IMF and IBRD, but also the International Trade Organization

The role of the third pillar of the post-war world order was proposed by the International Trade Organization, designed to revive world trade. Negotiations in Geneva in 1947 were supposed to go just about the creation of the MTO. However, the US administration has shown a rare lack of enthusiasm in this matter. However, when Truman decided that it was not necessary to ask Congress to ratify the ITO charter, he took into account not only the position of the administration and not only the sharp opposition in Congress from the opposition (which advocated a policy of protectionism), but also the mood of the largest American capitalists - so to speak, internationally. oriented.

The American Council of the International Chamber of Commerce has determined: "The Charter of the ITO is a dangerous document that considers as a long-term goal the provision of economic development and employment throughout the world."

In essence, the complaints about the WTO charter were that it did not contain provisions that would talk about opening the markets of other countries for American direct investment, as well as about protecting these investments. That is, what became the basis of American bilateral agreements with other countries in the 1950s.

Fighting disappointment

Already in the 1970s, the GATT ceased to suit the United States. The report of the Commission on Foreign Trade and Investment (the chairman of the commission was the head of IBM), addressed to the president, said:

"The US has not been rewarded for tariff concessions to other countries - they are finding ways to block access to their markets other than customs tariffs."

Non-tariff barriers primarily concerned American financial services, and the American authorities pinned special hopes on their exports in solving problems of the current balance of payments. The US has had to contend with thousands of laws, regulations, and regulations in other countries, including those related to price controls or subsidies. In general, with everything that was defined as "dishonest foreign trade practice."

In contrast to the area of ​​customs tariffs, agreements relating to financial services, foreign investment and the protection of intellectual property rights required a major review of legislation and enforcement.

During the negotiations of the so-called Tokyo Round of GATT in the 1970s, the United States emphasized non-tariff barriers, but did not succeed due to the opposition of Japan and European countries. However, in the 1980s it was overcome. Protectionist statements have become louder and louder in the US Congress, cases of US anti-dumping duties have become more frequent - and the Japanese and Europeans are worried. In the end, Ronald Reagan managed to convince Japan to impose "voluntary export restrictions" on cars and increase their production in the United States itself.

Japan's willingness to pursue a free trade strategy ensured the success of the Uruguay round of GATT negotiations, which began in 1986 (according to the plan, it was supposed to start in 1982). This success was expressed, in particular, in the Free Trade Agreement between the United States and Canada, concluded in 1989. In 1911, Canada refused to sign such an agreement, because a significant part of the country's citizens feared "annexation by the United States." This time, Canadian capitalists played a decisive role in the fate of the document, fearing that their goods and investments would be considered foreign by American congressmen, who were clearly in the grip of protectionist sentiments.

The North American Free Trade Agreement between the United States, Canada and Mexico was an example in the creation of the WTO

It is worth saying that this document became the basis for the 1994 North American Free Trade Agreement between the United States, Canada and Mexico. American business associations spent $50 million to lobby Congress, the most expensive foreign trade policy project in US history.

American verdict

The mechanism for resolving foreign trade disputes within the framework of the North American Agreement has become in many ways a model for the WTO, the creation of which in 1995 can be attributed to the merits of the Uruguay Round of negotiations within the framework of the GATT. The basis of success here was the position of the US and European countries, which simply threatened to close the two largest markets in the world for countries that do not sign multilateral agreements, primarily on financial services and the protection of intellectual property rights. (You can, of course, note that the developing countries agreed to join the WTO also because of the huge debt owed to the industrial countries.)

The most important significance of the WTO lies in the fact that it was the first to propose a judicial mechanism for resolving foreign trade disputes.

Of course, the US itself was now forced to abandon the selective application of foreign trade measures that it had practiced under GATT. Nevertheless, the share of foreign trade (exports plus imports) in US GDP rose from 11% in 1970 to 23% in the second half of the 1990s.

One way or another, we can say that the creation of the WTO has become the most important event in the history of the formation of global capitalism since the time of the failed WTO.

Now the situation with the WTO leaves much to be desired. The organization is called upon to resolve disputes, as well as to develop agreements, and all 164 members of the WTO must support the new development. Such unanimity seems unattainable. If WTO members cannot agree on new rules, they must follow the existing ones - as interpreted by the organization's judges. Even if the members do not like the rules, others are not yet in sight.

The legal function of the WTO is under threat. The organization's appellate court shall consist of seven judges. By 2018, four remained (three had expired), but the Americans are slowing down the procedure for electing new judges, citing “systemic difficulties.”

The problem is exacerbated by the fact that in recent years, trade disputes have increased dramatically in number and are becoming increasingly complex. The Court of Appeal deals with many cases at the same time, and each takes a lot of time. For example, what the European Union initiated in relation to the Airbus concern was considered for a year. By the end of 2019, the terms of three more judges will expire. Will be alone. And it takes three to make decisions, and if the vacancies are not filled, the WTO legal system will collapse.

In September 2017, US Trade Representative Robert Lighthizer complained that WTO judges were biased (interpreting the rules against the US) and that the WTO imposes obligations on the country that it did not assume when joining the organization. Back in 1996, Lighthizer, as an adviser to presidential candidate Bob Dole, said that WTO claims against the United States should be considered in independent American courts. Robert Lighthizer now speaks with praise of the pre-WTO system in which countries could disobey dispute decisions.

Lighthizer expressed doubts that the WTO will objectively consider a complaint about China's violation of the rules of the organization or introduce any rules to ensure the fairness of decisions at a ministerial conference in Buenos Aires in December 2017.

US Trade Representative Robert Lighthizer Recorded the Failure of the Ministerial Conference in Buenos Aires in December 2017

The WTO conference in Buenos Aires (already the 11th in a row) really ended in failure. The delegates could not even agree on the text of a joint statement - let alone the conclusion of trade agreements.

In fact, before the conference, there were almost no hopes for its success, and in the course of the event, these expectations disappeared altogether.

Robert Lighthizer represented the US view that multilateral trade negotiations are useless and the WTO legal system is deeply flawed.

Delegates from many countries complained that the United States, having lost its former leadership in the WTO, would only be happy about the failure of the negotiations, they say, this is another proof of the senselessness of the organization.

The delegates arrived in Buenos Aires with a weight of deep divisions and never got over them. For example, India complained about restrictions on the right to distribute food supplies among the population. The United States objected, India threatened to retaliate by withdrawing from the agreement banning subsidies for illegal fishing. European Trade Commissioner Cecilia Malmström called the move "monstrous".

In general, the WTO repeats the difficult path of its predecessors. At first, states create a global trading system with pomp, and then refuse to give up a bit of self-interest for the sake of its prosperity.

Two of the three remaining judges of the World Trade Organization (WTO) Court of Appeal will expire in 2019. The appointment of new ones can be prevented by the Americans: Donald Trump has repeatedly threatened to withdraw the United States from the WTO if it does not dance to his tune. Other countries, including those from the EU, do not support the American president. What awaits the main international trade association and how it will affect Russia - in the material of RIA Novosti.

What did you fight for

The WTO, which arose in 1995 on the basis of the General Agreement on Tariffs and Trade (GATT), concluded in 1947, is essentially an analogue of the UN, designed to regulate international trade and promote the development of trade relations throughout the world.

Russia spent 18 years negotiating to join the organization. For a country intending to take a leading position in the world export of goods and services, bringing tariffs and trade rules in line with all international standards was vital.

“In the course of a difficult and lengthy negotiation process, we agreed and brought hundreds of our tariff positions, domestic legislation into line with WTO rules. We have actually used WTO norms and standards for quite a long time. And the fact that all WTO members approved Russia’s joining the organization , is a recognition of the full readiness of the Russian economy for new conditions," Vladimir Putin noted in an interview with RIA Novosti in 2013.

However, in reality, it turned out that the WTO itself was not ready for the new economic realities. In particular, it turned out that the key problem of the main world platform, designed to discuss and resolve the contradictions that have accumulated between its participants, is the lack of real tools for resolving disputes.

In addition, the WTO is characterized by extreme sluggishness in making specific decisions. The organization clearly needs urgent reform.

In late November, China, India, the EU, Norway, Canada, Switzerland, Australia, New Zealand, Iceland, Mexico and Singapore made joint proposals for changes to the WTO Court of Appeal.

Trump vs.

Now in this body of the World Trade Organization there are only three judges out of seven. Over the past year, the court issued only three decisions - the remaining eleven, in fact, hung.

This suits Donald Trump quite well: because of the trade war he unleashed against the whole world, many countries affected by US protectionist policies, including China, Russia, and even US NAFTA allies Canada and Mexico, have applied to the WTO.

American politicians are accustomed to using international organizations solely as puppets to push through their own interests. Therefore, a strong WTO, capable of calling to account for actions aimed at slowing down world trade, and as a result, economic growth, is simply not needed by the current US president.

Back in July, the Trump administration drafted a bill allowing WTO decisions to be ignored if they are not in the public interest. The owner of the White House himself, in an interview with Bloomberg, said that the United States is ready to leave the organization if it "does not improve its work."

It is significant that even when the European Union does not admit defeat in the dispute over the pork embargo (the EU illegally demands compensation of 1.39 billion euros annually for Russia's ban on European pork imports), Moscow prefers to resolve all issues according to the rules of the organization and is set to dialogue with Brussels.

Alexander Lesnykh.

Growth in global merchandise trade is expected to recover this year from the "cool" levels of 2016, but only if the global economy recovers and with the right combination of policy and economic measures by governments.

The World Trade Organization (WTO) predicts that world trade will grow by 2.4 percent in 2017, however, as deep uncertainty in the short term in economic and political events increases the risk of forecasting, this indicator can range from 1.8 percent to 3.6 percent. In 2018, the WTO forecasts trade growth between 2.1 percent and 4.0 percent.

The unpredictable direction of the global economy in the near future, as well as the lack of clarity about government actions on monetary, fiscal and trade policies, increase the risk that trade activity will be stifled. A surge in inflation will push up interest rates, tightening fiscal policy and imposing trade restrictive measures could undermine the ever-strong growth in trade over the next two years.

“Weak growth in international trade in recent years largely reflects continued weakness in the global economy. Trade has the potential to bolster global growth if the movement of goods and services across borders continues to be largely free. However, if policymakers try to address domestic job losses with severe import restrictions, trade cannot help spur growth and could even represent resistance to a recovery,” said WTO Director-General Roberto Azevedo.

“While trade does cause some economic disruption in some communities, its side effects should not be overestimated. They should not obscure the benefits, in terms of growth, development and job creation, we should see trade as part of the solution to economic hardships, not part of the problem.

“In fact, innovation, automation and new technologies are responsible for about 80 percent of manufacturing jobs that have been lost, and there is no question that technological advances are beneficial to most people most of the time. The answer, therefore, is to pursue policies, reap the benefits of trade, and apply horizontal solutions in terms of combating unemployment, which includes ever-higher levels of education and training, and social programs that can quickly help get jobs and a willingness to compete. for the jobs of the future," he said.

More forward WTO forecasts for 2017 and 2018 are based on certain assumptions, but there is a significant risk that expansion will lag these estimates. Achieving these growth rates depends largely on global GDP growth, which is projected to be 2.7 percent this year and 2.8 percent next year. While there are reasonable grounds to believe that such growth can be achieved, expansion along these lines would represent a significant improvement on GDP growth of 2.3 percent in 2016.

In 2016, trade growth was weakest at just 1.3 percent due in part to cyclical factors such as a slowdown in economic activity across the board, but it also reflects deep structural changes in the relationship between trade and economic production. Most resource-intensive trade components of global demand were particularly weak last year. Investment spending has fallen in the US, and China continues to struggle to rebalance the economy from investment to consumption, reducing demand for imports.

Global economic growth has been unbalanced since the financial crisis, but for the first time in several years, all regions of the world economy should experience a synchronized recovery in 2017. This could boost growth and provide additional momentum for trade, the WTO forecast says.

Forecasts, including the WTO World Trade Outlook Indicator, point to stronger trade growth in the first half of 2017, but political turmoil could easily undermine recent positive trends. Unexpected inflation could force central banks to tighten monetary policy faster than they would like, undermining economic growth and trade in the short term.

Other factors, such as the uncertainty surrounding the UK's exit from the European Union, could potentially have an effect. At the same time, the possibility of increased use of restrictive trade policies could affect demand and investment flows and reduce economic growth in the medium to long term. These factors point to a significant risk that trade growth in 2017 will fall to the lower end of the range.

Historically, world merchandise trade has tended to grow about 1.5 times faster than world GDP, although it grew more than twice as fast in the 1990s. However, since the financial crisis, the ratio of trade growth to GDP growth has fallen to about 1:1. Last year was the first time since 2001 that the ratio fell below 1, at a ratio of 0.6:1. The ratio is expected to partially recover in 2017.

More information about trading events in 2016

The unusually low growth of 1.3 percent in global merchandise trade in 2016 was the result of several risk factors converging during the year. Developing countries suffered a sharp 3 percent decline in imports in the first quarter, equivalent to an 11.6 percent annual fall, growth resumed in the second quarter and losses were reversed by the end of the year.

At the same time, imports of developed economies continued to grow, but at a slower pace. Weakness in imports was reflected on the export side with slow growth in shipments from both developed and developing countries.

Over the year, imports of developed countries increased by 2.0 percent, while in developing countries it froze at the level of 0.2 percent. Exports recorded modest growth in developed and developing countries - 1.4 percent in the former and 1.3 percent in the latter.

Trade outlook in 2017 and 2018

Leading indicators of real trade growth rose in the first months of 2017, indicating an increase in trade earlier this year. Container traffic at major ports has recovered from the 2015-16 decline. and reached an all-time high, with an annualized growth of 5.2 percent during the first two months of 2017.

Balancing against positive indicators are clear and significant risks. The rise of anti-globalization sentiment and populist political movements has increased the likelihood that restrictive trade measures will be applied more widely. Narrow measures are unlikely to have a significant impact on global trade and production, but restrictive measures or the abandonment of existing trade agreements could damage consumer and business confidence and undermine international trade and investment.

With inflationary pressures mounting in advanced economies, central banks may also accelerate the pace of monetary tightening, with negative implications for economic growth and trade in the short term. Changes in fiscal policy may also have unpredictable international repercussions that could dampen global economic activity and trade.

In Europe, complex negotiations between the United Kingdom and the rest of the European Union will increase uncertainty about the shape of the trade relationship going forward. Public debt in highly indebted EU countries is still an unresolved issue that could come to the fore again within the next two years.

Source - maritime-executive.com

An association of participating countries interested in the liberalization of international trade, the elimination of market barriers, and the creation of a favorable trade and political climate.

The WTO was founded in 1995 and is the legal successor of the General Agreement on Trade and Tariffs, founded in 1947. The World Trade Organization pursues the goal of liberalizing world trade, regulates it by tariff methods by reducing existing barriers, restrictions, import duties.

The WTO monitors the implementation of trade agreements between the members of the organization, ensures the conduct of negotiations between them, resolves disputes that arise, and monitors the situation on the international market. The head office of the WTO is based in Geneva, the staff exceeds 630 people.

WTO members today are 164 countries, 161 of them are recognized states. Russia joined the World Trade Organization on August 22, 2012, becoming the 156th member. Earlier, other countries of the post-Soviet space were included in the list of participants - Kyrgyzstan, Latvia, Estonia, Georgia, Lithuania, Armenia, Ukraine.

Principles and rules

The task of creating and functioning of the World Trade Organization is free trade at the international level. The work of the WTO is guided by the following principles:

• all participating countries have the same rights. Preferences set for one WTO member apply to other members;
• the activities of the participants are transparent, countries must prepare and print reports to familiarize other WTO members with the rules they have established;
• Members must comply with trade tariff commitments set by the organization and not self-developed.

The WTO Agreement allows the members of the organization to take measures aimed at preserving the flora and fauna, protecting health and the environment. When establishing trade restrictions, the disadvantaged party may insist on commensurate compensation in another sector of the economy, for example, on special concessions.

Structure

The WTO has a branched structure, due to a number of tasks that need to be addressed in the international market:

• The Ministerial Conference is the supreme body of the association, convened at least once every 2 years.
• The General Council of the WTO - performs a leadership role, controls the work of other departments.
• GATT Council - determines the relationship of participants in the field of trade in goods.
• Trade Services Council.
• Advice on legal matters and the protection of individual property.
• Dispute Resolution Authority - Provides fair and impartial conflict resolution at the international level.

The WTO includes representative bodies of countries with developing economies, a committee on budget policy and information, which are subordinate to the General Council.