World Trade Organization

The World Trade Organization (WTO) was established in 1995, following the

Uruguay Round of negotiations under the General Agreement on Tariffs and Trade

(GATT). The WTO is responsible for monitoring national trading policies, handling trade disputes, and enforcing the GATT agreements, which are designed to reduce tariffs and other barriers to international trade and to eliminate discriminatory treatment in international commerce. The WTO is also in charge of policing member countries’ adherence to all WTO agreements, signed by the bulk of the world’s trading nations.

The WTO is governed by a Ministerial Conference, which meets every two years; a General Council, which implements the conference's policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the Ministerial Conference. The WTO's headquarters are in Geneva, Switzerland.

Firms are becoming increasingly aware of the impact of the WTO system has on their activities in foreign markets. They certainly know that access to markets is dependent to a large degree on the trade liberalization process that takes place at the WTO. They are, however, generally less knowledgable about the WTO rules that affect their international marketing decisions such as the choice of an entry mode or the pricing of products. The purpose of this paper is to extract out of the 500 pages of printed text that represent the 30 legal documents that make up the WTO system. The rules of the system have a direct bearing on these decisions.

Licensing:

Licensing is often chosen as a means of entry when firms cannot export or proceed through foreign direct investment either because of entry barriers or because the firm’s resources are limited. Firms that consider entering a market through licensing are often afraid that they might not be able to protect their technological know-how from unfair practices in foreign markets. As a result, they may refrain from...