The World Trade Organization (WTO) is a permanent international organization established in 1995 to oversee global trade rules between nations. It succeeded the General Agreement on Tariffs and Trade (GATT) established after World War II. The WTO aims to improve living standards, ensure full employment, enlarge production and trade, and ensure optimal use of resources through negotiating trade agreements, monitoring compliance, settling disputes, and building trade capacity for developing countries.

1. World Trade
Organisation
(WTO)

2. World Trade Organisation (WTO) is a permanent international
organisation dealing with global rules of trade between nations.
It came into existence in 1995.
It is the successor of General Agreement on Tariffs and Trade
(GATT) established aftermath of Second World War.
The last round 1986-94 Uruguay round led to creation of WTO.
At the heart of WTO is multilateral trading system.
It consists of WTO agreements negotiated and signed by
majority world’s trading nations and their parliaments. One of
important functions of WTO is smooth trade flow between
nations.

3. Objectives:
1. To improve the standard of living of people in the
member countries.
2. To ensure full employment and broad increase in
effective demand.
3. To enlarge production and trade of goods.
4. To increase the trade of services.
5. To ensure optimum utilization of world resources.
6. To protect the environment.
7. To accept the concept of sustainable development.

4. Functions of the WTO
The WTO’s functions can be broadly divided into the following categories:
1. Trade Negotiations
The WTO facilitates trade negotiations among countries by providing a framework to
structure the agreements, as well as providing dispute resolution mechanisms. It creates an
international legal framework that ensures the smooth exchange of goods and services among
the member countries.
2. Implementation and Monitoring
Once the agreements are negotiated, the job of the WTO is to ensure that the signatory
countries adhere to their commitments in practice. It also produces research based on the
impact of the agreements on the economies of the countries involved.

5. 3. Dispute Settlement
The WTO also acts as a dispute settlement body when there is a trade conflict between its
member states. The members of the WTO can file complaints against other member states if
they feel the trade and economic policies of a country are divergent from their commitments
under one of the agreements of the WTO. Following the complaint, there are formal hearings
like a court until a settlement is reached.
4. Building Trade Capacity
The WTO runs special programs to support developing countries by helping them build the
capacity to participate in free trade with more developed countries. It also gives concessions
under certain agreements to low-development countries to ease them into free trade with other
countries.
5. Outreach
Finally, the WTO carries out lobbying and outreach across the world as a part of its larger
objectives to promote free trade. They try to persuade governments to reduce barriers to trade
to free, fair, and open markets around the world.

6. Other functions
 Administering trade agreements
 Acts as forum for trade negotiations
 Settling trade disputes
 Reviewing national trade policies
 Assisting developing countries in trade policy issues,
through technical assistance and training programmes
 Cooperating with other international organisations

7. How WTO is different from GATT? (General Agreement on
Trade and Tariffs)
 GATT was agreement between contracting parties and was not
an international organisation dealing in global trade
 GATT deals with trade in good only while WTO covers trading
of services as well as Intellectual Property (IP)