Every country has its own laws related to everything from buying and selling to dealing with employees. Several trade related laws and regulations are also implemented by the governments. Additionally, several international organizations, like the OECD and the WTO, are also working in this regard.
So, why should there be trade laws and regulations? Simply because they are very important. Highlighted below are some of the reasons why one cannot have a world without such rules and regulations in place.
- If there are no trade laws and regulations, the gap between developed and developing countries will widen as the more powerful countries will not let the weaker countries have any share of the cake. For example: Without trade rules and regulations, a bigger country, such as the US, will be in a position to flood all markets with its products without having to answer to any organization. Such a move may stop any smaller country to make its products accessible to others, thus destroying its chances of increasing exports that are very important for a country’s growth. This way the US would continue to grow with its products reaching far and beyond and the smaller country will have to fight even harder to get its products sold in the international markets.
- One of the biggest advantages of having rules and regulations is that they help maintain peace in the world and also help in the settlement of trade related disputes. It is very common for countries to be at loggerheads due to trade related issues. Without rules and regulations in place they may get into trouble with their relationships souring. However, thanks to laws and regulations they know which route to go in case such a problem arises. They can simply file a dispute with the WTO and then let the experts decide on the case in the light of facts. Countries have to respect the decision that is announced so that there is no need for either of the parties to sour their relationship.
- Laws and regulations not only help individual nations but help the people of the world as a whole as well. Due to these regulations, there is peace in the world and every country is working toward improving its conditions allowing it to achieve a better living standard and provide more facilities to its residents. Due to such trade rules and regulations, people all around the world can enjoy international products and improve their living style.
The importance of trade laws and regulations is clear from the above mentioned point. The main purpose of any law is to give people a framework that has to be followed in relevant actions. Laws also highlight the punishment or reward of not obeying the regulations.
Trade organizations are performing their jobs by creating laws and regulations and monitoring countries for implementation of the laws. It is their duty to create laws that benefit all the countries and are not biased towards anyone. Additionally, they also need to make sure that all the rules and regulations are implemented.