World Trade Organization || Objectives And Operation Of WTO || Function Of WTO

 

World Trade Organization

World Trade Organization (WTO) is Created in 1995. The WTO officially commenced on 1st January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994. The World Trade Organization (WTO) is an international institution that oversees the global trade rules among nations. The WTO is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947.The WTO is based on agreements signed by the majority of the world’s trading nations. The main function of the organization is to help producers of goods and services, exporters, and importers protect and manage their businesses by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments.. The GATT proved remarkably successful in liberalizing world trade over the next five decades. By the late 1980s there were calls for a stronger multilateral organization to monitor trade and resolve trade disputes. Following  negotiations, the WTO began operations on January 1, 1995. Till the 2020, the WTO has 164 member countries, with Liberia and Afghanistan the most recent members, having joined in July 2016, and 23 “observer” countries.

The WTO's current Director-General is Roberto Azevedo, who leads a staff of over 600 people in Geneva, Switzerland

Objectives And Operation

The WTO has six key objectives:

1.      to set and enforce rules for international trade,

2.      to provide a forum for negotiating and monitoring further trade liberalization,

3.      to resolve trade disputes,

4.      to increase the transparency of decision-making processes,

5.      to cooperate with other major international economic institutions involved in global economic management, and

The rules embodied in both the GATT and the WTO serve at least three purposes.

First, they attempt to protect the interests of small and weak countries against discriminatory trade practices of large and powerful countries. The WTO’s most-favored-nation and national-treatment articles stipulate that each WTO member must grant equal market access to all other members and that both domestic and foreign suppliers must be treated equally.

 Second, the rules require members to limit trade only through tariffs and to provide market access not less favorable than that specified in their schedules (i.e., the commitments that they agreed to when they were granted WTO membership or subsequently).

Third, the rules are designed to help governments resist lobbying efforts by domestic interest groups seeking special favors. Although some exceptions to the rules have been made, their presence and replication in the core WTO agreements were intended to ensure that the worst excesses would be avoided. By thus bringing greater certainty and predictability to international markets, it was thought, the WTO would enhance economic welfare and reduce political tension

Function the WTO

The main functions of WTO are discussed below:

1. To implement rules and provisions related to trade policy review mechanism.

2. To provide a platform to member countries to decide future strategies related to trade and tariff.

3. To provide facilities for implementation, administration and operation of multilateral and bilateral agreements of the world trade.

4. To administer the rules and processes related to dispute settlement.

5. To ensure the optimum use of world resources.