The World Trade Organization or, WTO, is an international organization that deals with the trade between nations and the rules to do so. Its goal is to aid producers of goods and services, importers, and exporters to conduct their business. However, that is just the surface level of information of the WTO. What exactly is it and how does it work to help these producers conduct their business successfully?
According to the official website of the WTO, they are a “forum for governments to negotiate trade agreements. It is a place for them to settle trade disputes. It operates a system of trade rules” (What is the WTO). Basically, it’s a place where an individual or member of a government goes to sort out any issues with their trade with other places. It not only covers trade in goods, but “also covers cross-border trade in service and ideas, and the movement of personnel” (World Trade).
It has full-time representatives from the countries and functions on the basis of the one member-one vote, “which is not weighted by the countries position in global trade” (World Trade). It’s designed to have the members contribute to costs of the organization to the proportion to share in global trade which is a very smart way to go since it is a larger topic.
It is run by members from different governments and all the decision are made by them as a whole. There are actually up to 164-member countries that deal with the rules of trade (Heakal). There are ministers, who are those that meet at least once every two years or there are ambassadors who meet regularly in Geneva (What is the WTO). The agreements are usually complex and long because of the legal texts that cover a range of length activities. “But a number of simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system” (What is the WTO).
The WTO is actually a successor to the GATT, or General Agreement on Tariffs and Trade, that was created in 1947. The GATT was turned into “an enforceable global commerce agency with 800 pages of one-size-fits-all binding rules to which every signatory country is required to conform its domestic policies” (World). Then, it was expected to be replaced by the United Nations and then called the International Trade Organization (ITO). However, that never came to light because the GATT proved remarkable in success “in liberalizing world trade over the next five decades” (World Trade Organization). Then, in the 80’s, they needed a stronger monitoring system for trade and to resolve trade issues. “Following the completion of the Uruguay Round (1986-94) of multilateral trade negotiations, the WTO began operation on January 1, 1995” (Anderson). It’s interesting to see that it didn’t happen overnight, it became what it is today, from years of history and from something else.
Furthermore, the WTO has six main objectives. The first is to set and enforce rules for international trade. The second is to provide a forum for negotiating and monitoring further trade. The third is to resolve trade arguments. The fourth is to increase transparency of the decisions. The fifth is to cooperate with other major international economic institutions involved and finally, the sixth objective is to help developing countries benefit fully from the global trading system (Anderson).
The set of rules that the WTO has, is bulked with efficiency. The documents that are the agreements and negotiations have the legal ground-rules for the international commerce. “They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business” (What is). It’s all about the business and keeping it level within other countries.
The WTO was opposed by the civil society organizations since it affected daily lives to unaccountable and closed-door venues. However, corporations that did help the WTO, wanted to see it expand its scope and powers through more negotiations.
Within the area of finding a solution for trade disputes, the “members are committed not to take unilateral action against other members. Instead, they are expected to seek recourse through the WTO’s dispute-settlement system and to abide by its rules and findings” (Anderson). If other members start arguing and taking preventive action, then that will not lead you to a solution. The rule is there for a reason.
The importance of settling disputes is a side of the WTO with high purpose. Since trade relations often don’t go as easy as it should, agreements and negotiating happens often. Interpreting is also needed since it involves different countries. It’s a huge and important job to have at the WTO, at any position. “The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation” and that is the purpose behind the dispute settlement process that the WTO has in their written agreements (What is).
To conclude, the World Trade Organization, WTO, is often overlooked since it’s not constantly on the news or isn’t mentioned that often unless you are directly involved or have an actual interest in trade. However, it’s interesting to learn about the trade organizations that lead this world because without many of these corporations, we would not have the products that we have access to right now.
It started out as the General Agreement on Tariffs and Trade (GATT) and then moved to be the International Trade Organization (ITO). It’s important to understand that this did not happen overnight – it was something different and moved up to being what it is now because people wanted a better way dispute and find a solution to these trade differences. When it did become the WTO, it was met with disagreement with civil organizations, but is now met with privilege and confidence as it does help with the world’s trade issues.
“What Is the WTO?” WTO | What Is the WTO?, www.wto.org/english/thewto_e/whatis_e/whatis_e.htm.
Anderson, Kym. “World Trade Organization.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., 9 Aug. 2018, www.britannica.com/topic/World-Trade-Organization.
Heakal, Reem. “What Is the World Trade Organization?” Investopedia, Investopedia, 29 June 2018, www.investopedia.com/investing/what-is-the-world-trade-organization
“World Trade Organization (WTO).” World Trade Organization (WTO) | Public Citizen, www.citizen.org/world-trade-organization-wto.
“WORLD TRADE ORGANIZATION.” WTO | Understanding the WTO – What Is the World Trade Organization?, www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm.
“World Trade Organisation: Structure, Role, Operations and Critical Evaluation.” Your Article Library, 11 Apr. 2015, www.yourarticlelibrary.com/international-politics/world-trade-organisation-structure-role-operations-and-critical-evaluation/48531.
