Looking at the world globalization, trade would definitely be part of the prominent factors to alter the world function. Today we would be determining whether the world trade regimes are based more on dominance or reciprocity. There are two aspects to this question, whether it is determining dominance or reciprocity of the trading regulating infrastructure to the world or determining dominance or reciprocity within the trading regulation infrastructure. The prior question’s answer would be obvious where the forming of a trading regulation infrastructure would be of an advantage by making a comparison to the original world trade regulation, therefore creating dominance of the economic growth over other country. So the following paper would focus entirely on the second question-- determining dominance or reciprocity within the trading regulation infrastructure. In other words, we are determining whether the formation of a trading regulation infrastructure is based on reciprocity, the cooperation of several states, or dominance, forced to be formed due to a stronger states command.
The world trade regimes are based more on reciprocity. There are many trading regulation infrastructure. Starting with WTO, the WTO framework rests on the principle of reciprocity by implementing the most-favored nation concept. MFN concept is where a country would lower its trade barriers to every state equally in WTO. Another proof of reciprocity in WTO is the failure of Doha Round. At the 2003 meeting in Cancun, Mexico, global south countries walked out of the conference after the MEDCs would not agree to lift their agricultural subsidies. Although it was a failure, it proves to the world that even the global south countries have power in WTO, therefore not oppressed by the larger state and not based on dominance. But there is also a sense of dominance in WTO although it is not based on dominance. The MEDCs doesn't necessarily have to make agreements with the LEDCs although the LEDCs desperately need it, because it wouldn't be in the MEDCs’ interest, as seen in the 2003 meeting in Cancun. The MEDCs could gain more incentives with bilateral agreements and therefore WTO is proven ineffective to have this common goods problem. It also proven that although WTO is build based on reciprocity, it is functioning based on dominance.
Although WTO provides one of the largest multilateral trade framework, there are also bilateral and regional agreements, both based on reciprocity. Bilateral agreements are reciprocal arrangements formed between two states to lower the trade barriers. Another international political agreements would be regional free trade areas. Regional free trade areas are areas in which groups of states agree to remove most or all trade barriers. It would be based mostly on reciprocity where country could decide on removing itself from the free trade areas. But having the similar problem with WTO, bilateral and region free trade areas also encounters the problem that the MEDCs might not want to sign with the LEDCs because it is usually out of their interest. The LEDCs labor wage are usually lower, thus cheap foreign products might overflow the MEDCs and devastate the economy.
The next trading infrastructure would be cartels. Cartels are association of usually producers, sometimes consumers, of a certain product form an agreement to manipulate its price on the world market. Cartel is based on reciprocity although dominance is also involved. One of the most prominent cartels in the world would be the Organization of Petroleum Exporting Countries. OPEC alters the price of oil petroleum limiting the supply of petroleum to the world, where around 40% of petroleum comes from OPEC, and increases the demand thereby increasing price. Although some could argue that OPEC’s structure where Saudi Arabia, the largest export of the other OPEC countries, have the largest power and therefore forms dominance, it would also be true that the other states also have the power in the organization.
In conclusion, although the world is based mostly on reciprocity, they are functioning on a sense of dominance. Before any consent were to be given to create any agreement in WTO and bilateral and region free trade area, the MEDCs would want to protect their own domestic product, and therefore won’t be as likely to sign with the LEDCs as the framework of WTO and agreements suggested. However, the idea of WTO, bilateral agreement, and region free trade are based on reciprocity, where countries are to cooperate and come up with an agreement not being forced.
The world trade regimes are based more on reciprocity. There are many trading regulation infrastructure. Starting with WTO, the WTO framework rests on the principle of reciprocity by implementing the most-favored nation concept. MFN concept is where a country would lower its trade barriers to every state equally in WTO. Another proof of reciprocity in WTO is the failure of Doha Round. At the 2003 meeting in Cancun, Mexico, global south countries walked out of the conference after the MEDCs would not agree to lift their agricultural subsidies. Although it was a failure, it proves to the world that even the global south countries have power in WTO, therefore not oppressed by the larger state and not based on dominance. But there is also a sense of dominance in WTO although it is not based on dominance. The MEDCs doesn't necessarily have to make agreements with the LEDCs although the LEDCs desperately need it, because it wouldn't be in the MEDCs’ interest, as seen in the 2003 meeting in Cancun. The MEDCs could gain more incentives with bilateral agreements and therefore WTO is proven ineffective to have this common goods problem. It also proven that although WTO is build based on reciprocity, it is functioning based on dominance.
Although WTO provides one of the largest multilateral trade framework, there are also bilateral and regional agreements, both based on reciprocity. Bilateral agreements are reciprocal arrangements formed between two states to lower the trade barriers. Another international political agreements would be regional free trade areas. Regional free trade areas are areas in which groups of states agree to remove most or all trade barriers. It would be based mostly on reciprocity where country could decide on removing itself from the free trade areas. But having the similar problem with WTO, bilateral and region free trade areas also encounters the problem that the MEDCs might not want to sign with the LEDCs because it is usually out of their interest. The LEDCs labor wage are usually lower, thus cheap foreign products might overflow the MEDCs and devastate the economy.
The next trading infrastructure would be cartels. Cartels are association of usually producers, sometimes consumers, of a certain product form an agreement to manipulate its price on the world market. Cartel is based on reciprocity although dominance is also involved. One of the most prominent cartels in the world would be the Organization of Petroleum Exporting Countries. OPEC alters the price of oil petroleum limiting the supply of petroleum to the world, where around 40% of petroleum comes from OPEC, and increases the demand thereby increasing price. Although some could argue that OPEC’s structure where Saudi Arabia, the largest export of the other OPEC countries, have the largest power and therefore forms dominance, it would also be true that the other states also have the power in the organization.
In conclusion, although the world is based mostly on reciprocity, they are functioning on a sense of dominance. Before any consent were to be given to create any agreement in WTO and bilateral and region free trade area, the MEDCs would want to protect their own domestic product, and therefore won’t be as likely to sign with the LEDCs as the framework of WTO and agreements suggested. However, the idea of WTO, bilateral agreement, and region free trade are based on reciprocity, where countries are to cooperate and come up with an agreement not being forced.