What is the World Trade Organisation (WTO)?
The World Trade Organisation (WTO) is an international organisation formed to promote free trade. It advocates for the reduction and/or removal of both tariff and non-tariff barriers to trade. Headquartered in Geneva (Switzerland), the WTO came into existence in January 1995.
Over 100 member countries of the WTO are committed to cutting tariffs and ensuring that foreign products compete in domestic economies without discrimination.
Functions of the World Trade Organisation (WTO)
Promotion of free trade
The WTO ensures that trade barriers are lowered or eliminated to facilitate the free flow of goods among countries. Member countries have agreed among themselves to do this. When trade flows freely, jobs are created, competition is allowed and living standards are improved.
Settlement of trade disputes
It mediates between countries having disagreements on quotas, tariffs and other things in international trade. WTO listens to complaints from the parties, investigates and issues recommendations. Every trade dispute is referred to its panel of experts for thorough and unbiased investigation and consideration. The party at fault could be required to compensate the other party or alter its offensive policies.
Facilitating trade negotiations
The WTO provides an avenue for negotiating trade agreements between countries. Countries that are trying to reach trade agreements with each other can work with the WTO’s committee, which would hold meetings with the parties and help them conclude mutually beneficial trade agreements.
Reviewing the trade policies of member countries
The WTO monitors members’ trade policies from time to time and offers recommendations whenever any country’s policies are detrimental to the free flow of products across the world or give undue advantage to domestic products over foreign ones.
Technical assistance and training for developing countries
The WTO organises courses, seminars and workshops to help developing countries develop the capacity to formulate trade policies and derive more benefits from international trade.