Hand in assignment
Week 3
Anne Sofie Lund

Introduction of WTO principle trading system

WTO agreements cover a wide range of business areas such as: agriculture, textiles/clothing, banking, telecommunication, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property etc. The simple and fundamental principles are found in the multilateral trading system.

Trade without discrimination 1. Most-favored –nation (MNF): treating other people equally
MFN trading principals means it is not allowed discriminate other trading partners or to offer special favors such as lowering custom duty rate on one product for a specific country, all members need to have same duty rules for each product.

2. National treatment: Treating foreigners and locals equally
Rules, which needs to be observed is that both locally and imported goods needs to be treated equally. The same rules apply for copyrights, patent and trademarks, for foreign and domestic services. The foreign should have same treatments as the local, which means treat foreign product, as you will treat your local product. National treatment applies only when a product or service or item of intellectual has entered the market. A country is although allowed to charge custom duty and tariffs on import product, which is not in market, and not charge custom on a locally produced market.

WTO Encourages the trade through lowering the trade barriers, which includes custom duties or tariffs and measure quotes and bans on imported quantities.

GATT negations have been focusing on lowering the tariffs duties and tariffs, since the mid 90tities industrial countries tariff rate has steadily fallen with 4%.

The principles are an attempt to make the business environment stable and predictable. Certain promises are made, for example not to raise the trade