This article was published in July 2015 and reflects the regulatory position at that time. For current guidance on this topic, contact Bratby Law or see our latest insights.
Used under a creative commons licence granted by Alejandro Linares Garcia
“Mr. Praline: Look, matey, I know a dead parrot when I see one, and I’m looking at one right now.
Owner: No no he’s not dead, he’s, he’s restin’! Remarkable bird, the Norwegian Blue, idn’it, ay? Beautiful plumage!”
– Monty Python
Based on a press release from the World Trade Organisation, and tweets from its Director-General Roberto Azevedo it would appear that the WTO is about to defy persistent reports of its death and come back to life with its first agreement on tariff elimination in eighteen years.
Covering a wide range of technology and IT products including new generation semi-conductors, GPS navigation equipment and medical equipment, including magnetic resonance imaging products and ultra-sonic scanning apparatus, the proposed agreement will lead to the elimination of import tariffs in a uniform and non-discriminatory manner – the [no WTO member is treated worse than the] ‘most-favoured nation’ principle. The WTO estimates that the value of trade covered by the prospective agreement amounts to USD 1 trillion.
In recent decades, the process required to reach agreement at the WTO has resulted in deadlock and an increased focus on regional trade negotiations such as TPP, in part because these are perceived as being easier to reach agreement by virtue of involving a smaller group of participants amongst whom a common goal can be agreed. Further, whilst students of David Ricardo still extol the virtues of free-trade, in recent years the WTO has come under both attack from populist anti-globalisation movements and domestic anti-trade liberalisation political pressure in many countries against trade liberalisation.
Against this backdrop, why does it now seem likely that the WTO will reach an agreement including the world’s largest trading blocs (US, China and EU) as well as much of SE Asia?The simple answer to this question is that everyone has something to gain. The reason for this is the global spread of technology – almost every country has technology exporters of some sort (bearing in mind that many manufacturing facilities for MNCs are in low wage economies) and/or see clear benefits in importing technology.
It is welcome to see that the global community still sees the benefit of global trade agreements – the next big question is whether this will lead to a wider reinvigoration of the WTO as means of advancing trade negotiations, as opposed to regional negotiations like the TPP?
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