International Organizations

International Labor Organization (ILO)

• The ILO is an international organization founded by the Treaty of Versailles and it aims to provide equal opportunities for safe and fair-pay labor to all women and men around the world.
• They decide on policies with their member countries to ensure equality and fair treatment of workers while still satisfying governments and employers.

World Trade Organization (WTO)

• An international body that sets the rules for global trading and resolves disputes between its member countries.
• It also hosts negotiations concerning the reduction of trade barriers between its member nations.
• Their objective is to help trade flow smoothly, freely and predictably.

WTO Functions

• Administering and archiving WTO trade agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring trading policies
• Technical assistance and training for developing economies
• Cooperation with other international organizations

WTO Principles

• Non-discrimination
• Openness of trade: lowering all trade barriers among nations
• Predictability and transparency
  • Prevents unexpected rising of trade barriers.
• Promotion of fair competition
  • This principle attempts to assess the fairness of trade transactions and responses.
• Privileging less developed countries
  • More time to adhere, flexibility and other special privileges
  • This is aimed at improving equity between more developed countries and lesser developed countries who don't have the resources to participate effectively all the time.
• Protecting the environment, sustainability

Factors Influencing the WTO

Unequal Bargaining Power

• More developed countries (MDCs) are able to send highly-trained delegates and representatives o the WTO regularly, leading to them potentially receiving preferential treatment.
  • Lesser developed countries (LDCs) might not have the resources to do this, which is why they are given support and privileges.

• World trade leaders like the EU, USA and China have significantly more power when negotiating due to their influence and impact.
• Smaller or lesser developed countries might not have the funds to send delegates and representatives, especially more educated or better trained ones.

Disputes Over Primary Products

• Disputes over agricultural goods are frequent at the WTO.
• Developed countries offer large subsidies in agriculture, driving down price while developing countries lack subsidies and cannot compete in the international agricultural market.

• MDCs also prefer to receive raw materials rather than processed materials, leading to difficulties for countries that are trying to develop as they have little incentive to improve industries to offer processed goods.
• This is because MDCs have a greater margin when it comes to processing materials and manufacturing rather than extracting raw materials.