International Trade Organisations

I. Read and learn the following words and word combinations. Translate the examples:

sign v – підписувати, підписуватись

signatory n – особа, що підписала документ; signatory to a contract/treaty – сторона, що підписала контракт/угоду

signature n – підпис; authorized signature – підпис уповноваженої особи; signature by procuration /proxy – підпис по довіреності

e.g. The General Agreement on Tariffs and Trade was originally signed by 40 countries.

multilateral adj– багатосторонній; multilateral/bilateral agreement – бага­тостороння/двостороння угода

multilateralism n – багатосторонність; opp. unilateral - односторонній

e.g. Multilateralism is one of the basic principles of the GATT.

the Most-Favoured Nation Principle – принцип найбільшого сприяння сторонам; згідно комерційних угод надаються наступні статуси: national treatment/parity status – національний режим/статус паритету; reciprocal treatment – взаємний режим; the most-favoured nation treatment – режим найбільшого сприяння

unconditional reciprocity – безумовна взаємність

reciprocal adj – взаємний; syn. mutual

e.g. Unconditional reciprocity means the granting of privileges in return for similar privileges.

negotiate v – 1) вести переговори, домовлятися, обговорювати (умови); 2) отримувати (договір, контракт); 3) продавати, реалізовувати

negotiations n – переговори, обговорення умов; syn. talks; negotiator – 1) учасник переговорів; 2) посередник; round of negotiations – раунд переговорів/цикл переговорів

e.g. The WTO rules – the agreements – are the result of negotiations between the members.

commitment n – зобов’язання; syn. promise, duty, agreement; в тексті: ре­жим, регламент; syn. schedule

e.g. Individual members of the WTO make separate commitments called schedules.

review v – 1) розглядати, переглядати; 2) перевіряти, проглядати

review n – 1) перегляд; 2) огляд; 3) рецензія, відгук; to be subject to review – підлягати перегляду; Trade Policy Review Body – орган по пере­гляду торгівельної політики

e.g. The General Council also meets as the Trade Policy Review Body.

settle v – 1) вирішувати; 2) домовлятись, дійти згоди; 3) розрахуватись; 4) владнати, врегулювати

settlement n – 1) розрахунок, погашення (боргу); 2) врегулювання; clearing settlement – безготівковий розрахунок; settlement in cash – готів­ковий розрахунок; settlement in foreign/national currency – розраху­нок в іноземній/національній валюті; full/partial settlement – повний/частковий розрахунок; settlement of dispute/problem – врегулю­вання конфлікту/проблеми; Dispute Settlement Body – орган з врегулювання конфліктів

e.g. The General Council also meets as the Dispute Settlement Body.

arrange v – 1) систематизувати, впорядковувати; 2) досягти угоди

arranged adj – впорядкований

arrangement n – 1) розміщення в певному порядку, організація, система­тизація; 2) домовленість, угода; 3) pl. заходи; syn. measures

e.g. There are many arrangements to promote free trade.

II. Read and translate the text:

International Trade Organisations

The GATT system

The General Agreement on Tariffs and Trade (GATT) was established in 1948. It provided the basis for trade negotiations since the end of the World War II. The original agreement was signed by more than 40 countries. Later the number of signatories increased to about 100, which together accounted for more than 80 per cent of the world trade. The GATT had a secretariat and headquarters in Geneva.

The fundamental purpose of the GATT was to achieve free and fair trade through reduction of tariffs and elimination of other trade barriers. GATT operated on the basis of three principles: 1) non-discrimination, multilateralism and the application of the Most-Favoured Nation Principle to all signatories; 2) expansion of trade through the reduction of trade barriers; 3) unconditional recipro­city among all signatories. GATT's goal was to establish a world trade regime or universal rules for the conduct of commercial policy.

GATT was not only a set of rules, it was also a forum in which countries could discuss their trade problems. GATT’s most important activity was in the rounds of talks held since 1948. Trade negotiations within the framework of the GATT led to considerable decline of tariff barriers and growth in world trade. The Kennedy Round (May 1964 – June 1967) was of major importance in the movement toward trade liberalization. It employed a new method of tariff negotiations which resulted in tariff reduction of 35 per cent on 60.000 products.

By the late 1970s several changes started to erode the GATT system of trade liberalization. As tariff barriers within the GATT fell, non-tariff barriers appeared. Barter or counter-trade, especially in respect of the less developed countries, increased from 2-3 to 25-30% of the world trade. Government inter­vention in trade relations to protect home economy became a norm.

In the 1980s it became evident that the era of successive rounds of multilateral trade negotiations ended. Transformations of the global pattern of international trade stimulated the development of a new international trading regime.

World Trade Organization (WTO)

The successor to the GATT is the World Trade Organization (WTO). It has more than 130 members which account for over 90 per cent of the world trade. Over 30 others are negotiating membership.

The WTO’s objective is to help trade flow smoothly, freely, fairly and predic­tably. This is achieved by: 1) administering trade agreements; 2) acting as a forum for trade negotiations 3) settling trade disputes; 4) reviewing national trade policies; 5) assisting developing countries in trade policy issues through tech­nical assistance and training programmes; 6) cooperating with other international organizations.

Decisions are made by the entire membership. This is typically by consensus. The WTO agreements have been ratified in all members’ parliaments. The WTO top-level decision making body is the Ministerial Conference which meets at least once every two years. Below this is the General Council which meets several times a year in the Geneva Headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. At the next level the Goods Council, Services Council and Intellectual Property Council report to the General Council.

The WTO rules – the agreements – are the result of negotiations between the members. The current agreements are the result of the 1986-94 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATT).

GATT is now the WTO’s principal rule-book for trade in goods. The Uruguay Round also created new rules for dealing with trade in services, relevant aspects of intellectual property, dispute settlement, and trade policy reviews The complete set consists of about 60 agreements and separate commitments (called schedules), made by individual members in specific areas such as lower customs duty rates and services market-opening.

Through these agreements, WTO members operate a non-discriminatory trading system that establishes their rights and their obligations. Each country receives guarantees that its exports will be treated fairly in other countries’ markets. Each promises to do the same for imports into its own market. The system also gives developing countries some flexibility in implementing their commitments.

Some countries feel that their economies will be strengthened if they estab­lish trade agreements with other countries in the same region. Some of these agreements involve forming producers’ cartels and common markets.

Producers’ cartels are organizations of commodity-producing countries. They are formed to stabilize or increase prices, optimizing overall profits in the long run. The most obvious example today is OPEC (Organization of Petroleum Exporting Countries).

A Common Market is a regional group of countries that have no internal tariffs. Common markets have a common external tariff and a coordination of laws to facilitate exchange. Vivid examples are the European Economic Community (EEC), the Central American Common Market (CACM) and the Caribbean Common Market (CCM).

There are many more such arrangements including negotiating groups that join together to negotiate trade agreements, commodity associations that bring together countries concerned with specific commodities, commodity agreements which are multilateral agreements among buyers and sellers to stabilize prices and more.

III. Answer the following questions:

1. With what purpose was the GATT established?

2. What are the basic principles of the GATT?

3. What kind of activity did the GATT conduct?

4. Why did the GATT system become inefficient by the late 1970s?

5. Why was the Kennedy Round so important for trade liberalization?

6. What organization became the successor to the GATT?

7. How is the WTO arranged?

8. What is the main objective of the WTO and how is it achieved?

9. How did the WTO expand its activity? What new spheres were included?

10. How is the principle of unconditional reciprocity achieved?

11. With what aim are producers’ cartels organized?

12. How do common markets work?

13. What other arrangements to promote fair trade do you know?

14. With what aims are they established?

IV. Give Ukrainian equivalents of the following:

to provide the basis for smth; free and fair trade; a set of rules; to employ a new method; in respect of…; successive rounds of negotiations; the successor to the GATT; by the entire membership; by consensus; rule-book; flexibility in implementing commitments; to optimize overall profits; vivid example.

V. Give English equivalents of the following:

початкова угода; штаб-квартира; світовий торгівельний режим; в ме­жах структури; поступово руйнувати систему; втручання уряду; сві­това структура міжнародної торгівлі; вести переговори щодо вступу (членства); вищий орган, що приймає рішення; основний перегляд почат­кової угоди; в довгостроковій перспективі.

VI. Match the definition on the right with the word on the left. Learn the definitions:

cartel	useful thing, especially an article of trade
discrimination	things owned, possessions
negotiations	giving special or different treatment to certain people, countries, etc.
property	a group of firms that gets together and makes joint price and output decisions in order to maximize joint profits
commodity	discussions in order to come to an agreement

VII. Fill in the gaps with the words from the list below:

liberalization, common market, negotiations, the most-favoured nation treatment, counter-trade

1. … can be used to force importers to accept the country’s export.

2. European Community has become a powerful force in trade … .

3. A true … … is impossible without free movement of labour force within its borders.

4. During the … the partners discussed the questions concerning intellectual property.

5. … ensures that the parties concerned grant to each other in the future the same treatment as they grant to the most favoured nation they are dealing with.

VIII. Match the following prefixes with their corresponding definitions:

1. inter- 2. post- 3. bi- 4. pre- 5. multi- 6. ex- 7. co- 8. counter

1. more than one; many

2. before; in preparation

3. later than; after

4. together; jointly; equally

5. former and still living

6. between; among a group

7. two; twice; double

8. opposite in direction; against

IX. Match the prefixes from ex. VIII with the words below. Use your dictionary to help you. Add one more word to each group:

1. … national, … personal,

2. … lateral, …, lingual,

3. … director, … president,

4. … operation,… education,

5. … date, … graduate,

6. … purpose, … storey,

7. … arrange, … election,

8. … balance, … revolution,

X. Match the synonyms. Use any 5 words in the sentences of your own:

arrangements	countertrade
barter	duty
commitment	measures
goal	decline
reduction	purpose

XI. Match the words with opposite meaning. Use any 5 words in the sentences of your own:

successor	restore
in the long run	hardness
flexibility	internal
erode	predecessor
external	in the short run

XII. Translate into English:

1. Мета переговорів – переглянути деякі питання торговельної полі­тики між країнами спільного ринку.

2. Протекціонізм – це інструмент урядового втручання в торговельні відносини.

3. Сторони зустрілися, щоб владнати торговельний конфлікт.

4. В рамках Уругвайського Раунду Загальна Угода з Тарифів та Торгі­влі була переглянута і розширена.

5. Ця домовленість зміцнить взаємну торгівлю між країнами півден­ного регіону.

6. Багато країн ведуть переговори щодо вступу у Всесвітню Організа­цію Торгівлі.

XIII. Topics for discussion:

1. Speak about the GATT, its principles and activity.

2. Speak about the WTO as the successor to the GATT.

3. Speak on the spheres of the WTO’s activity.

4. Describe the role of the WTO in assisting the developing countries.

5. Dwell on the specific and regional arrangements to promote international trade.

XIV. Skills practice:

A negotiation is a business discussion between people who have different interests. During a negotiation they try to solve a problem or to reach an agreement. Here are three pieces of advice for people who are entering a negotiation.

1. If you can’t agree, try approaching the problem from a different angle.

2. Don’t get emotional. Be objective.

3. Prepare carefully beforehand.

Do you agree with them? Which tip is the least/the most useful?

Assignment 1. Think of three more useful tips for negotiating. Write them down on 3 separate pieces of paper. Now get together with your group mates and discuss the tips you have all written. As a group, select the three you think are the most useful. Explain your choice.

Assignment 2. Work with a partner. You are interested in doing business with one another. Decide 1) what companies you represent; 2) who is the customer/client and who is the supplier; 3) what goods and services you are buying and selling.

Assignment 3. Set the agenda for a meeting to discuss the deal. Here are some points you may need to discuss. Think of some more and add them to the list.

The goods/services: - exactly what they are quantities guarantees

Delivery: - timing method of transport insurance who will pay what

Payment: price credit period discounts penalties for late payment/late delivery/cancellation/etc.

Assignment 4. Consider the different positions of the supplier and client/customer. What problems will you each have to solve at the meeting? What concessions could each side want? For example,

• long credit period (customer)

• payment on delivery (supplier)

• 5-year warranty (customer)

Assignment 5. Hold your meeting and try to strike a deal.

Useful language:

Our position (on the price, etc.) is …

My understanding is …

My impression is …

That is how we use it …

Is that agreeable to you?

Is that all right for you?

What can we do about it together?

We can readily agree on …

Unit Fifteen