The Impact of Global Governance on International Trade Practices

This essay delves into the multifaceted nature of global trade, examining how it has evolved into a critical global issue. It explores the attempts made by global governance bodies, such as the WTO, to regulate and manage international trade, analyzing their effectiveness and limitations. The essay identifies significant governance gaps, including income disparities, natural resource management challenges, and exchange rate discrepancies, which hinder the resolution of trade-related problems. Furthermore, it offers specific recommendations, supported by case studies and examples, to address these issues. These recommendations focus on fostering fair trade practices, promoting transparency, and encouraging international cooperation to create a more equitable and sustainable global trade environment. The essay emphasizes the need for adaptive regulatory frameworks and the importance of aligning trade policies with environmental and social considerations.

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Contents
Trade as global issue..................................................................................................................1
Attempts of global governance to address the issue..................................................................1
Governance gaps........................................................................................................................2
Recommendations......................................................................................................................2
References..................................................................................................................................4

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The trade is the vital driver of economic growth. It is the buying and selling of goods and
services between different countries. Trade occurs when a country does not have enough raw
materials. The global trade is made possible through the globalization. This paper defines the
how trade has become a global issue and how governance is making efforts to address this
issue. The governance gaps are also identified and how the solutions are hindered. Finally,
the recommendations are made with the supporting examples to address trade issues.
Trade as a global issue
The economy is changing dramatically due to trading. The global issue comprises trade as it
protects employees and the environment (Ruggie and John Gerard 371). The trade is either
destroyer of communities and environment or rescuer of all the above. There is no modest
relationship between trade, environment, and development. The trade issues comprise import
policies, quotas, import licensing and the customs practices, standards, labeling, different
types of certification, lack of copyright protection, restrictions on franchising, licensing,
foreign direct investment and technology transfer (Baral 58). The government makes use of
the provisions of GATT tackles the trade issues by export subsidies, import quotas and tariffs.
The GATT does not use export subsidies except the agricultural products. The GATT does
not impose autonomous quotas on imports except the market disruption which puts domestic
sector out of business. An increase in one tariff is offset by the reductions in other in order to
compensate the affected exporting countries.
Attempts of global governance to address the issue
According to the report by WTO, the growth of trade is at it’s lowest since the financial crisis
of 2008. The potential of future trade growth lies in the hand of regulations made by the
government. The global governance is the way in which global affairs are managed
(Finkelstein and Lawrence 367). The world trade is affected by the regulation made by the
global governance that is non-tariff measure or NTM. It means meeting these rules requires
financial and technical resources which cause to small and vulnerable companies and
countries to pay the heaviest price. The global governance has taken the following actions to
address the trade issue:
 The transparency of the existing trade regulations required to be increased. UNCTAD
is a leading international effort to gather and freely broadcast comprehensive data on
the currently imposed non-tariff measures.

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 The regulatory measures affect the trade in developing countries, so the government
strengthens the participation in the international standard deciding bodies.
 The government takes steps to avoid unnecessary red tape for the trade in the
regulatory processes. The effective and efficient application of principles is practiced
by the government (Talley et al. 409).
 The government addresses the trade issues by embracing the international standards.
It simplifies the unnecessary regulatory burdens.
Governance gaps
The trade issue has been a significant problem for many years. It sells products below the
legal price and contributes to higher consumption and mortality. There are various gaps in the
global governance systems. There is an income gap between the countries which is a part of
governance gaps. It can be can be closed by 50% if the trade barriers are removed. The
natural resources are also the governance gap. The natural resources have a role in the
economic and social development (Kander et al. 431). There is a lack of efficient global trade
system which encourages efficient natural resource governance. Still, the economic
interdependence is continued to build but the governance is not keeping pace. There is also a
difference in exchange rates between the countries. The varied exchange rates create the
governance gaps. It has been the contentious issue between the economies.
The international trade is the significant driver of the economic growth. The size of the world
economy has changed significantly. The trading patterns ensure that the regulatory
framework keeps up.
Recommendations
China has constrained access to foreign companies in the sectors such as energy, cars,
telecommunication and more. In order to narrow the governance gap, it is recommended for
China to allow entry to the foreign firms to settle franchises and form joint ventures with
local companies. It provides extra benefit to the companies in the form of technology being
transferred.
The U.S is a leader of G7 countries which have decided to impose tariffs on steel and
aluminum producers in Europe, Canada, and Japan. As per the trade policy of Trump, the
global economy is unfairly engineered against the U.S. The U.S. has launched investigations

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like anti-dumping and anti-subsidy against the Chinese products which are used rarely
(Handley et al. 141). China commended the U.S. to fulfill the international obligations and
take necessary steps to improve the wrong practice. China itself is going to take measure to
protect the legal rights of it’s local companies (Barlow et al.13).
The free and open Indo Pacific is an effort made to keep free and open theme held in
Singapore 2018. There was unease regarding the investments made in China. This investment
was featured in the Belt and Road Initiative. It reveals the emerging consent concerning the
troubling nature of the China actions throughout the Indo-pacific region.
It is the fundamental goal of WTO to protect and preserve the environment. It is the
objective of WTO to reduce trade barriers and eradicate the discriminatory treatment in the
international trade. It is visible in the success and opportunities for the international trade.
The WTO contributes through the trade-related measures and by avoiding misuse of the
environment. It also contributes through the policies like trade openness and the rules and
enforcement mechanism. The body of WTO like the Doha Developmental Agenda specifies
the negotiations on trade and the regular trade and environmental committee. The discipline
in the Uruguay Round Technical Barriers to the trade agreement provision, various trade
barriers like non-tariff should be reduced or eliminated. The standard and the assessment
systems should represent a significant challenge to the trade issues. It is also an opportunity
in the global markets (Walls et al. 100). The global trade systems also set up in such a way
that it should not limit the developing countries in supplying extractive operations.

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References
Ruggie, John Gerard. "global-governance. net: The Global Compact as learning
network." Global Governance 7 (2001): 371.
Baral, S. K. "Impact of European Economic Integration in Global Trade-A Case Study of
Vietnam." Splint International Journal of Professionals 4.4 (2017): 58.
Finkelstein, Lawrence S. "What is global governance." Global governance 1 (1995): 367.
Talley, Wayne K., and Sara Russell Riggs. "13. Trade logistics and seaborne
transportation." Handbook of International Trade and Transportation (2018): 409.
Kander, Astrid, et al. "National greenhouse-gas accounting for effective climate policy on
international trade." Nature Climate Change 5.5 (2015): 431.
Handley, Kyle, and Nuno Limão. "13 Trade under TRUMP policies." Economics and Policy
in the Age of Trump (2017): 141.
Barlow, Pepita, et al. "The health impact of trade and investment agreements: a quantitative
systematic review and network co-citation analysis." Globalization and health 13.1
(2017): 13.
Walls, Helen, et al. "Trade and global health." Globalisation And Health (2015): 100.