WORLD TRADE ORGANISATION

World Trade Organisation

World Trade Organisation

Introduction

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

The World Trade Organization (WTO) was founded in 1995 by the members of the General Agreement on Tariffs and Trade (GATT). The WTO is the world's only international organization that supervises 95% of the world's global trade. It assists trade related issues of its member nations that produce, export and import goods and services in a smooth manner. Comprising 153 member nations, the agreements pertaining to the WTO have been signed and confirmed by respective member nations.

The predecessor of WTO is General Agreement on Tariffs and Trade (GATT). WTO is an International body dealing with the rules of trade among states and separate customs territories. The agreements in WTO provide the legal ground-rules for international trade and commerce. They are mainly contracts, binding governments to conduct their trade and trade policies according to principles and rules. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters and importers over the Globe and bringing them under one roof.

The International body has over 148 members as on October 13,2004 accounting for 90% of the world trade and around 30 others are negotiating membership and are WTO observers.



Why was WTO established?

The WTO was founded with the purpose of liberalizing international trade. Its aim was to help member nations reach cordial solutions to their trade-related problems.

The main principles of WTO are:

To promote fair competition

To encourage economic and development reforms

To increase predictability through transparency

To lower trade barriers for freer trade

To ensure fair treatment to locals and foreigners

Objectives of the WTO

With manifold objectives like helping trade flow smoothly, freely, fairly and predictably it has become capable of organizing trade and commerce over the Globe through the mantra of liberalization, privatization and globalization. It is stepping forward with objectives like:

1) Rejecting all forms of protectionism.

2) Removing trade barriers and eliminating discriminatory treatment in international trade through successive multilateral trade negotiations.

3) Providing a fair, predictable and open rule-based trading system through overseeing the implementation of multilateral trade rules and enforcing legally binding obligations.

4) Providing a mechanism for settling trade disputes.

5) Integrates developing and least developed economies into the world trading system.

How the WTO Works

All important decisions are made by the Ministerial Committee which meets every two years. Trade disputes are resolved by the WTO through negotiations. In case any nation puts up trade barriers in the guise of customs duty against another country or for a specific good, the WTO can issue trade related sanctions against the violating country.(Chang,2001)

Two basic functions of the WTO are:

To confirm whether the agreements that have been covered are implemented, administrated and ...