By Crystal Cristin

"Navigating Global and Regional Trade: WTO and SAFTA Insights"

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WTO(World Trade Organization): It is the international organization which deals with global rules of trade between nations. It was established in 1995 in january. The main root of WTO is GATT which was established in 1947, with a view to liberalize and expand world trade.

OBJECTIVES WTO:

  1. Raising the standard of living and income, promoting full employment, expanding trade and production.
  2. Sustainable development was introduced. A concept which envisages tha development.
  3. Taking positive steps to ensure that developing countries secure a better share of growth in trade.

PRINCIPLES OF WTO:

  1. Free trade: The member countries WTO adopt free trade policy by reducing custom duties etc in their business transactions.
  2. Promotion of fair competition: Emphasis should be given for open, fair, healthy competition among the countries.
  3. Trade with discrimination: The member countries of WTO can have total freedom to carry out international trade among them as most favoured nations.

ADVANTAGES OF WTO:

  1. Nepali products have gained worldwide market access.
  2. Nepal has gained a global forum to discuss trade disputes.
  3. The right to consumers to choose goods and services has been established.

DISADVANTAGES OF WTO: 

  1. Traditional knowledge, skills and technologies might be difficult.
  2. Meeting international standards can be difficult.

SAFTA(South Asian Free Trade Area): The SAFTA is an agreement among the SAARC member countries for development of regional trade and cooperation in South Asia. SAARC is the organization of South Asian Countries founded in 1985.

OBJECTIVES OF SAFTA:

  1. Eliminating trade barriers.
  2. Promote fair competition.
  3. Create effective mechanisms.
  4. Establish a framework for further regional cooperation.

PRINCIPLES OF SAFTA:

  1. trade facilitation
  2. special preference to least developed  countries.
  3. free movement of goods between countries.
  4. reciprocity and mutuality of advantage.
  5. compatibility with WTO and other treaties.

ADVANTAGES OF SAFTA:

  1. It promotes mutual trade.
  2. It promotes free competition.
  3. It helps in wider market access.
  4. It helps in technology, knowledge and skill transfer.

DISADVANTAGES OF SAFTA:

  1. Nepal may lose revenge due custom being cut down.
  2. Nepal industries may lose market inside the country.
  3. Nepal entrepreneurs may get demotivated due to large competition.
  4. Meeting standards of other SAFTA member nations can be difficult.