The WTO aims to improve living standards, ensure full employment and production, and foster sustainable global trade. It operates as an intergovernmental institution responsible for handling international trade between nations. The WTO seeks to encourage trade liberalization by reducing barriers and negotiating binding trade agreements. It has principles of non-discrimination and national treatment to provide stability, fairness, and undistorted competition between member countries. The WTO shows special consideration for developing countries and requires market access commitments on a reciprocal basis between members.
2. WHAT IS WTO
The Universe Commerce Organization's (WTO) role in fostering global trade and investment is
examined in this essay.
WTO acts as a replacement for GATT (General Agreement on Tariffs and Trade).
GATT was enacted after World War 2 solely to establish global economic cooperation.
It operates as an intergovernmental institution (international organization) responsible for handling
foreign trade between two or more nations.
Negotiations have slowed down due to distrust and governments' inability to allot their economic disparities.
The disagreements between developed and developing member states have given rise to a number of regional
economic groupings, some of whose goals conflict with those of the WTO.
3. OBJECTIVE OF WTO
WTO aims to improve the standard of living of every individual belonging to its member nations.
WTO aims to ensure a hundred percent employment and a rise in demand for goods and services.
WTO aims to enlarge the production and trading of products and services.
WTO also aims to ensure the full utilization of national and international resources.
WTO even aims to safeguard the environment from depletion due to human interference.
WTO aims to ensure that all companies accept and abide by the concept of sustainable development.
4. WTO also aims to implement a new foreign trade mechanism as provided in the Agreement.
WTO aims to promote international trade that can certainly benefit all countries.
To remove the existing obstacles present in an open global trading system.
WTO even aims to take certain steps towards developing the poorest and underdeveloped countries.
WTO even aims to enhance competitiveness between all the member countries to benefit the
maximum number of customers.
5. ROLE OF WTO
The WTO is a multilateral organization that regulates trade relations between states.
It has a unique tripod purpose.
First, it seeks to encourage the progressive trade liberalization and remove restrictive barriers states
place on importation and exportation of goods and services which distort trade flows and decrease
general economic wellbeing and development.
Second, it is a negotiating forum referred to as “rounds,” wherein member states meet to negotiate
terms of trade liberalization treaties which become binding on all members.
6. The WTO has underlining principles that defines and determines its policies and agreement.
The most prominent of these principles are the MFN and the national treatment principle.
The MFN clause is the foundational principle of WTO which provides for nondiscrimination among
states as it requires members to accord all other members of the Agreement similar treatment
concerning any tariff or concession in respect of a particular product, as they would have done to any
other country
Also under the national treatment principle, once goods pass through the borders of member states,
members are obliged to give equal treatment to those goods as though it is of their national origin.
7. FEATURE OF WTO
This is the most important principle on which WTO has been founded.
The principle of non-discrimination means two things.
No discrimination will be done by a member of state between different trading states who are also
members of WTO.
For this purpose WTO has to work for progressive liberalization of trade through reduction in tariffs
and removal of quantitative restrictions on imports by member countries.
8. Under WTO agreements member states are committed not to raise tariff and non-tariff trade barriers
arbitrarily.
This provides stability and predictability to the trading system.
WTO system of multilateral trading system provides for transparent, fair and undistorted competition
among the various countries.
Rules such as Most Favored Nation (MFN) treatment to all trading parties, equal treatment to foreign
goods, patents and copyrights as with nationals ensure fair competition among trading countries.
9. WTO has shown special concern for the developing countries as it has given them more time to adjust
to agreements under it and also some special privileges.
WTO agreements which seek to establish multilateral trading system require the member countries to
undertake market access commitment on reciprocity basis.
In fact, market access is ensured by abolishing non-tariff barriers as well as by reducing tariffs.
Another feature of WTO agreement is that it has upgraded decision-making at the ministerial level.
Important decisions regarding trade related matters are to be taken at the Ministerial level meetings.
Editor's Notes
J Langille, ‘Neither Constitution nor Contract: Understanding the WTO by Examining the Legal Limits on Contracting out through Regional Trade Agreements’ (2011) 86 New York University Law Review, p. 1507.
World Trade Organization. ‘Understanding the WTO’ 5th ed. (2015) World Trade Organization: Geneva, accessed 21 February 2018.
Hoekman, B. M., & Kostecki, M. M. (2009). The political economy of the world trading system: the WTO and beyond. Oxford University Press.
Subramanian, A., & Wei, S. J. (2007). The WTO promotes trade, strongly but unevenly. Journal of international Economics, 72(1), 151-175.
Einstein, A., B. Podolsky, and N. Rosen, 1935, “Can quantum-mechanical description of physical reality be considered complete?”, Phys. Rev. 47, 777-780.
