The Impact of Trade Disputes on Global Trade

WTO was established to promote trade liberalization as part of the globalization process, but its founders gradually changed mind in XXI century by questioning commitments achieved in the Uruguay Round and Doha Ministerial Conference. President Trump reshaped US trade policy by adopting protectionist measures and starting trade wars with its trade partners. This article intends to respond to the question “What are the causes of trade wars and what would be their implications for the multilateral trading system?” The hypothesis is that trade wars happen either for inequality concerns in trade relations or in the sake of more profits with optimal tariffs. The findings of the research are that even stronger economies face difficulties in winning a trade war and thus will have little options other than seeking solutions in the multilateral trading system and its institutions, reason for what the world can be optimistic about the future of the multilateral trading system International trade policy makers and business community leaders were preached in the XX century that trade liberalization could serve an effective mean to achieve economic growth and prosperity. Industrial countries encouraged developing nations that to become competitive in the global trade, to gradually remove trade barriers and encourage foreign investors to enter their markets, bring fresh funds and create new employment opportunities.

Keywords:

Global trade , Optimal tariffs , Trade discrepancies , Trade wars , WTO