Assignment NO: 2

Submitted to: Prof. Ahmad ur rehman Submitted by: Beenish iftikhar L1s09mbam2100

Global Marketing Sec: A Submission date: 21.03.11

WTO:
World trade organization (WTO) is the international organization that setup the rules and regulation of international trade. Its formed in 1995. Its an organization which negotiates agreement between different nations which help them in conducting their businesses. It is specifically a place where the member countries try to resolve their disputes regarding international trade. The basic purpose of WTO is to make trade as free of barriers as possible.

Role of WTO
There are some agreements which are difficult to negotiate but are very important for all the nations involved in those agreements. WTO acts as a bridge between those countries to negotiate the agreements which are beneficial for them. If there are some ambiguity or unfair trade practices, WTO team tries to find out the violations based on agreement and resolve the conflicts. The member countries of WTO can negotiate with each other which help them to deal with trade barriers. Being the member of WTO is of great importance because it gives you the status of "Most Favored Nation" which is a window for discounted trade tariffs, fewer trade barriers and import quotas. These incentives lead to market development which in turns increases sales, jobs and improve economic growth. In WTO more than 75% countries are termed as developing countries. Being the member of WTO they can penetrated in international market that includes developed countries as well at very low tariffs and reduces trade barriers. This helps the developing countries to establish their business practices in more mature markets of developed country to become more competitive to the industry of developed nations.

Implication of WTO in respect of Pakistan

Pakistan is one of the founding members of WTO. There is a significant role of WTO in economic development of Pakistan, particularly, its industry, textile, agriculture and services. In case of some sectors this impact is predictable but most of the time its difficult to predict because of trade complexities. Pakistans major export is textile and textile related products. The Non-textile exports of Pakistan are minor but are increasing at tremendous rate due to WTO. Whereas on import side its getting lower import duties and more import incentives as being the member of WTO. The average tariff in Pakistan is around 17 percent Pakistan being an agrarian country still import huge ratio of agricultural products.. The Agreement on Agriculture (AOA) of WTO has been significant in molding agricultural policies of Pakistan. The trade agreement regarding agricultural export provides rules and regulations regarding export subsidies and access to potential market. Apart from the major crops, Pakistan needs to exploit its comparative advantage in the production and exports of meat, dairy products, fruits, vegetables, horticulture, etc. Services industry is the most important and dynamic component of developing as well as developed countries. No country can prosper without efficient and inexpensive services infrastructure. Pakistans service sector contributes to half of the GDP of the country. Pakistan has made some horizontal commitments that apply across the board, while in six sectors specific commitments have been made. These include Business services, Construction and related engineering services, Tourism and travel related services, Health and related social services, Telecommunication services, and financial services. Being the member of WTO, Pakistan maintained a fair liberal trade regime, where it removed almost all the barriers on import or converted these barriers into tariffs. It has made access to different potential markets and balances the exports vs. imports which play a vital role in sustainability of economy of Pakistan.