Which international organizations founded in 1995 facilitate trade disputes between nations quizlet?

The General Agreement on Tariffs and Trade (GATT) was established in 1947 by twenty-three nations as a multilateral agreement whose objective was to abolish quotas and reduce tariffs.
1. Trade without Discrimination. The fundamental principle of "trade without discrimination" was embedded in the most-favored-nation (MFN) clause, i.e., the principle that each member nation must open its markets equally to every other member nation. Several major rounds of negotiations from 1947 to 1993 led to a wide variety of multilateral reductions in both tariff and nontariff barriers. At the conclusion of the Uruguay Round in 1994, the World Trade Organization was created in 1995 for the purpose of institutionalizing the GATT.
A. What Does the WTO Do?
The World Trade Organization (WTO) was founded in 1995 as a permanent world trade body for the purposes of (i) facilitating reciprocal trade negotiations and (ii) enforcing trade agreements between or among member nations. The WTO adopted the principles and agreements reached under the auspices of the GATT, but it expanded its mission to include trade in services, investment, intellectual property, sanitary measures, plant health, agriculture, textiles, and technical barriers to trade. Currently the 153 member countries of the WTO collectively account for more than 97 percent of the value of world trade. Major decision-making units include: the Ministerial Conference, the General Council, the Council for Trade in Goods, the Council for Trade in Services, and the Council for Trade-Related Intellectual Property Rights (TRIPS).
Most Favored Nation. The WTO continued the MFN clause of GATT which suggests that member countries trade without discrimination giving foreign products "national treatment." With the following exceptions, it restricts this privilege to official members:
• Developing countries' manufactured products have been given preferential treatment over those from industrial countries.
Concessions granted to members • within a regional trading alliance, such as the EU, have not been extended to countries outside the alliance.
• Countries can raise barriers against other member countries if they feel they are trading unfairly. Exceptions can be made in times of war or international tension.
Dispute Settlement. Under the WTO there is now a clearly defined mechanism for the settlement of disputes. Countries may bring charges of unfair trade practices to a WTO panel; accused countries may appeal; WTO rulings are binding. If an offending country fails to comply with a judgment, the rights to compensation and countervailing sanctions will follow. The Doha Round began in Doha, Qatar in 2001 to address disputes between developed and developing nations. Issues surrounding agricultural subsidies were particularly difficult. As of 2009, the Doha agenda is on hold until the economic crisis is resolved. There is still hope that the Doha agenda is not dead and can be used to reduce trade barriers and increase world trade.

Static effects represent the shifting of resources from inefficient to efficient firms as trade barriers fall. Dynamic effects represent the gains from overall market growth, the expansion of production, the realization of greater economies of scale and scope, and the increasingly competitive nature of the market. Static effects may occur when either of two conditions occurs.
a. Trade creation. Trade creation occurs when production shifts from less efficient domestic producers to more efficient regional producers for reasons of absolute or comparative advantage.
b. Trade diversion. Trade diversion occurs when, as a result of the imposition of common external barriers, trade shifts from more efficient external sources to less efficient suppliers within the group. (When lower cost, externally-sourced products are suddenly confronted by trade barriers, the effective delivered cost of those products increases; thus, the quantity that can be purchased for a given amount of money is reduced.)
Dynamic effects of integration occur when trade barriers come down and the size of the market increases. Because of the larger size of the market,
competitors are able to reduce their unit costs by capturing economies of
scale. As a result, customers gain access to a wider variety of lower cost, higher quality products. Another important effect of the FTA is the increase in efficiency due to increased competition.

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