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13th April
2021
written by Tellus

The failure of Doha has enabled China to reach a global level of trade. It has signed bilateral trade agreements with dozens of countries in Africa, Asia and Latin America. Chinese companies have the right to develop the country`s oil and other raw materials. In return, China provides loans and technical or commercial assistance. Part of the WTO`s non-discrimination mandate is the status of the Most Favoured Nation (MFN). The status of the most favoured nation requires that a WTO member apply the same conditions for trade with all other WTO members. In other words, if a country gives a special favour to another country (including a non-WTO member), any other WTO member must receive the same treatment. You probably saw a version of the most favoured child status when an adult told you that if you were taking chewing gum or candy to school, you should bring enough for everyone. In other words, you couldn`t just give chewing gum or candy to your best friends, and if you didn`t have enough for everyone in the class, no one would get it. This is indeed how the nation`s most privileged status works. The Doha Round would have been the world`s largest trade agreement if the United States and the EU had agreed on a reduction in their agricultural subsidies. As a result of its failure, China has gained ground on the world`s economic front through cost-effective bilateral agreements with countries in Asia, Africa and Latin America. Over the past decade, Mexico has been an important test for the free trade/free market development model.

This model has been envied and widely adopted by developing countries throughout Latin America and the world. But the alternative of protectionism and closed doors sometimes hides in the shadows. Unfortunately, in December 1994, a test of the dangers of economic integration emerged in the new world of volatile international capital markets. Capital, which quickly poured in, showed a worrying predilection for getting out even faster when it was shaken by signs of political and economic difficulties. The following video details and compares the different types of trade agreements: although the WTO embodies the principle of non-discrimination in international trade, Article 24 of the GATT authorizes the creation of free trade zones and “customs unions” among WTO members. A free trade area is a group of countries that remove all tariffs on trade with each other, but retain their autonomy in setting their tariffs with non-members. A customs union is a group of countries that remove all tariffs on trade between them, while maintaining a common external tariff for trade with countries outside the EU (which is technically contrary to the MFN). In 1995, GATT became the World Trade Organization (WTO), which now has more than 140 member states. The WTO controls four international trade agreements: the GATT, the General Agreement on Trade in Services (GATS) and the Trade-Related Intellectual Property Rights and Trade Investment Agreement (TRIPS and TRIMS).

The WTO is now the forum for members to negotiate the removal of trade barriers; The most recent forum is the Doha Development Round, launched in 2001. A closer look at some of the existing Latin American trade pacts provides an insight into the proximity of the Western Hemisphere countries to a free trade area of the Americas: for Mexico, the starting point is the 1982 debt crisis, which triggered a period of prolonged economic stagnation. At the time, Mexico imposed many of the same policies as Venezuela today – the nationalization of banks, the introduction of capital controls and the closing of severe trade barriers.

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