World Trade Organization (WTO)

Commerce

The World Trade Organization (WTO) is an international organization whose primary objective is to promote trade between countries to flow as freely as possible. In this way, contributing to economic growth and world development.

The organization, which was born in 1995, is the heir to the General Agreement on Tariffs and Trade (GATT in English). This was the provisional trade and tariff agreement that governed world trade from after World War II until the birth of the WTO. As these provisional agreements did not have any institutional framework or structure, it was necessary to create this international organization.

Objectives of the WTO

As we have already mentioned, the main objective of the organization is to promote free trade in order to raise the standards of living and income of the world population. This was also the main objective of the GATT. However, two new aspects are required in the WTO that were not included in the GATT, which are the following:

  • The concept of sustainable development is introduced. That is, an optimal use of natural resources must be made, while preserving the environment.
  • It is recognized that more efforts are needed to increase the share of the least developed countries in world trade.

Functions of the WTO

To carry out the aforementioned objectives, the WTO performs the following functions:

  • Administration of commercial agreements.
  • It functions as a framework for new multilateral trade negotiations between member countries.
  • Manages the integrated dispute settlement system. In other words, when a member government considers that another member government is in breach of an agreement or commitment it had entered into within the framework of the WTO, the organization works to resolve the trade disagreement and ensure compliance with the rules.
  • Administers the trade policy review mechanism.
  • Cooperate with the IMF and the World Bank. Being its end, the power to achieve greater coherence in world economic policy.

Members of the World Trade Organization (WTO)

As of November 2015, the organization has 162 members. In addition, given that there is the possibility of not being a member, but being an observer of the organization, there have been 22 States as observers since the end of 2015.

The recognition of observer status means that governments or organizations (the IMF, for example, also participates as an observer in some WTO bodies) to be able to follow the deliberations on issues that are of interest to them. In other words, the observer government can attend and participate in meetings, but it does not have the right to vote within the organization.

Instead, members do have the right to vote. The agreements, in case of voting, are taken by simple majority (each country one vote), although a two-thirds majority is required for the admission of new members and for amendments to the agreements.

Tags:  comparisons markets did you know what 

Interesting Articles

add