Understanding the World Trade and the International Labor Organization

Answer

Understanding the World Trade and the International Labor Organization

Introduction

The primary focus of any trade union is to ensure smooth running of trade between member countries. The International labor organization (ILO) and the world trade organization (WTO) are the largest international economic trade organizations in the world. The organizations are responsible for formulating and administering trade agreements between member countries. As Büthe and Mattli (2013) contend, efficient trade operations between or among countries requires a set of laws that govern the trade activities.

Admittance of China into the WTO

China is among the many countries who are members of the world trade organization. It became a member of WTO in December 11, 2001 after a ministerial conference in Geneva. Being a communist country, it had to make various reforms such as reducing trade tariffs, opening its markets, and adjusting its industrial policies so as to fit in the WTO requirements. These changes adversely affected the Chinese economy as the country was forced to open up its economies to the rest of the world (Rittberger et al., 2019). Initially, China’s aim was to be included as a founding member of WTO, although this was not achieved because the United States, Japan and some European countries objected claiming that Chinahad not yet complied with the rules that governed the union.

Pros and Cons of the WTO

The key objective of WTO, as a global economy union, is to facilitate trade between the participating countries. The organization has various pros and cons as outlined below.

            Pros

1. Promotes Peace between the Member Countries

Being a global union, the WTO conducts many meetings and conventions that are attended by representatives from member states across the world. This diversity means that conflicts are inevitable in cross-border trade activities as Wilkinson (2014) asserts. As such, whenever conflicts arise among the member countries, the WTO rules are applied to ensure the disagreement is resolved more effectively. This ensures that confidence and cooperation is maintained.

1. Reduced Trading Costs

The cost of importing products from other countries is normally high depending on the trade restrictions imposed by the country. Being a member of the WTO allows a country to enjoy more cost-effective or free trade activities with other member countries, thereby increasing their revenue earnings (Boxall, 2014).

• Increased Variety of Products to Choose From

Since many countries are members of the WTO, members enjoy a variety of products from different countries, which means that they have the discretion to purchase commodities from different countries depending on the preference and budget (Knill et al., 2019)

            Cons of the WTO

1. Discrimination to developing countries

The WTO has been criticized for focusing more on benefiting the developed countries in terms of infant industry protection. As Brown (2011) establish, for example, developing countries are not able to impose tariffs for new industries, and this reduces their rates of growth and development.

1. Lengthy and Slow Decision-Making Process

Rules and policies of the WTO require that an agreement cannot be established until it has been accepted and signed by all the members states. According to Routh (2013), this is usually a slow process as some nations might take to decide whether to accept the new regulations or not.

The role of ILO and its impacts on CRS

The main aim of ILO is to enhance social and economic progress in enterprises. The organization plays a significant role in improving working conditions of workers. Consequently, the CSR is a voluntary business model that enables an organization to be socially accountable both to itself internally to the the external forces and or requirements (Deranty & MacMillan, 2012). Most of the CRS principles, such as codes of conduct, are derived from international labor organizations.

Pros and Cons of the ILO

The ILO plays a pivotal role when it comes to faciliting dialogues between organizations, government and their stakeholders to clarify and share views (Visel, 2013). The organization also collects and disseminates information that aid in understanding what constitute the CSR dimension. Despites these enforcement measures, however, hostile work conditions and mistreatment of vulnerable workers continue to exist in many workplaces. As such, the ILO needs to be more aggressive in enforcing their standards in order to ensure protection of all workers as Thomas and Turnbull (2018) maintain.