2. The system allows disputes to be handled constructively

As trade expands in volume, in the number of products traded, and in

the numbers of countries and companies trading, there is a greater

chance that disputes will arise. The WTO system helps resolve these

disputes peacefully and constructively.

There could be a down side to trade

liberalization and expansion. More

trade means more possibilities for

disputes to arise. Left to themselves,

those disputes could lead to serious

conflict. But in reality, a lot of

international trade tension is reduced

because countries can turn to

organizations, in particular the WTO,

Countries in dispute always

to settle their trade disputes.

aim to conform with the

not available.agreementsthe war, the world’s community of trading nations

negotiated trade rules which are now entrusted to the WTO. Those

rules include an obligation for members to bring their disputes to the

WTO and not to act unilaterally.

When they bring disputes to the WTO, the WTO’s procedure focuses

their attention on the rules. Once a ruling has been made, countries

concentrate on trying to comply with the rules, and perhaps later

renegotiating the rules – not on declaring war on each other.

Around 300 disputes have been brought to the WTO since it was set up

in 1995. Without a means of tackling these constructively and

harmoniously, some could have led to more serious political conflict.

The fact that the disputes are based on WTO agreements means that

there is a clear basis for judging who is right or wrong. Once the

judgement has been made, the agreements provide the focus for any

further actions that need to be taken.

The increasing number of disputes brought to GATT and its successor,

the WTO, does not reflect increasing tension in the world. Rather, it

43

Before World War 2 that option was

After

reflects the closer economic ties throughout the world, the

GATT/WTO’s expanding membership and the fact that countries have

faith in the system to solve their differences.

Sometimes the exchanges between the countries in conflict can be

acrimonious, but they always aim to conform with the agreements and

commitments that they themselves negotiated.

3. A system based on rules rather than power

makes life easier for all

The WTO cannot claim to make all countries equal. But it does reduce

some inequalities, giving smaller countries more voice, and at the same

time freeing the major powers from the complexity of having to

negotiate trade agreements with each of their numerous trading

partners.

Decisions in the WTO are made by consensus. The WTO agreements

were negotiated by all members, were approved by consensus and were

ratified in all members’ parliaments. The agreements apply to

everyone. Rich and poor countries alike have an equal right to

challenge each other in the WTO’s dispute settlement procedures.

This makes life easier for all, in several different ways. Smaller

countries can enjoy some increased bargaining power. Without a

multilateral regime such as the WTO’s system, the more powerful

countries would be freer to impose their will unilaterally on their

smaller trading partners. Smaller countries would have to deal with

each of the major economic powers individually, and would be much

less able to resist unwanted pressure.

In addition, smaller countries can perform more effectively if they

make use of the opportunities to form alliances and to pool resources.

Several are already doing this.

There are matching benefits for larger countries. The major economic

powers can use the single forum of the WTO to negotiate with all or

44

most of their trading partners at the same time. This makes life much

simpler for the bigger trading countries. The alternative would be

continuous and complicated bilateral negotiations with dozens of

countries simultaneously. And each country could end up with different

conditions for trading with each of its trading partners, making life

extremely complicated for its importers and exporters.

The principle of non-discrimination built into the WTO agreements

avoids that complexity. The fact that there is a single set of rules

applying to all members greatly simplifies the entire trade regime. And

these agreed rules give governments a clearer view of which trade

policies are acceptable.

TASKS

Task 1. Transcribe:

Liberalization, unilaterally, procedure, harmoniously, successor,

acrimonious, inequalities, bargaining, regime, alliances,

simultaneously, entire.

Task 2. Make up word partnerships. Turn to the text if you need

contextual support.

1.

2.

3.

4.

5.

6.

7.

8.

increasing

the world’s

trading

trade

single

numerous

equal

bargaining

a) community

b) nations

c) tension

d) regime

e) partners

f) rights

g) forum

h) power

Task 3. Explain the words below and recall situations with them from

the text:









to entrust

an obligation

unilateral (compare:

bilateral, multilateral)

to comply with sth









successor

to ratify

consensus

alliance

45

Task 4. Find two close in meaning words in the text according to the

example: E.g.: to tackle (a dispute) – to resolve, to settle.















dispute

to centre (attention)

quietly

to follow (rules)

responsibility (in a contract)

possibility

choice

Task 5. Give English equivalents for the following phrases. Think of

short situations where you can use them.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

Разрешать споры мирно

Либерализация и расширение торговли

Урегулировать торговые споры

Действовать в одностороннем порядке

Объявлять войну друг другу

Средство решения споров

Отражать более тесные экономические связи

Единогласно одобрить соглашение и подписать его

Иметь право вести торг на более выгодных условиях

Навязывать свою волю кому-либо

Противостоять нежелательному давлению

Формировать союзы и объединять ресурсы

Продолжительные и сложные двусторонние переговоры

Task 6. Insert the right prepositions and articles where necessary.

Consult the text if you doubt your memory.

1. As __ trade expands in __ volume, in __ numbers __ products

traded, and in __ numbers __ countries and companies trading,

there is __ greater chance that disputes will arise.

2. __ world’s community of __ trading nations negotiated __ trade

rules which are entrusted __ the WTO.

3. __ WTO focuses member-states’ attention __ the rules.

4. Countries concentrate __ trying to comply __ __ rules.

5. __ countries in __ conflict always aim to conform __ the

agreements and commitments.

46

6. __ Decisions in __ WTO are made __ consensus.

7. The WTO agreements apply __ all member-countries.

8. __ __ multilateral regime, __ more powerful countries would

impose their __ will unilaterally __ their smaller trading partners

which would hardly be able to resist __ unwanted pressure.

Task 7. Translate in writing the first paragraph of Benefit 3.

Task 8. Answer the questions on Benefits 2, 3.

1.

2.

3.

4.

5.

6.

7.

8.

9.

What is the chief function of the WTO?

What is the downside of trade liberalization?

What obligation is included in trade rules of the WTO?

What does the process of settling disputes between members

by the WTO look like?

Is there any connection between the increasing number of

disputes brought to the WTO and growing tension in the

world?

How does the WTO system reduce inequalities between

countries?

What is the main principle of the WTO in decision-making?

What benefits does equality in the international scene provide

for smaller and larger countries?

What consequences would small countries experience without

the WTO’s multilateral regime?

10. What does the principle of non-discrimination presuppose?

Task 9. In pairs discuss difficulties you are going to have when

establishing your own business (a cafe, a hairdresser's saloon). Use

as many phrases given in ex. 2-5 as possible.

Task 10. Write a letter to a bank explaining why they should grant

you a credit for your business.

Grammar Review

Exercises