World Trade Organization (WTO)

World Trade Organization (WTO)By: Naseer AhmedUniversity of Balochistan Quetta.

5/19/20151

Establishment and History:World trade Organization (WTO): World trade organization is an international organization that deals with the global rules of trade among nations and ensures that trade flows as smoothly, surely and freely as possible.he roots of the World Trade Organization (WTO) lie in the General Agreement on Tariffs and Trade (GATT) which was established in 1948 by 23 original founders. The 8th round of talks under GATT, known as the Uruguay Round, led to the birth of the WTO on 1st January 1995. In the Uruguay Round, new agreements such as the General Agreement on Trade in Services (GATS) and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and Trade Related Investment Management System (TRIMS) were negotiated. All the three major agreements along with their associate agreements now rest under the umbrella organization, namely the WTO. 5/19/20152Members:-Till 26th April, 2015 WTO has 161 member countries.5/19/20153Headquarter Of WTO:-WTO has its headquarter in Geneva, Switzerland.5/19/20154Objectives Of WTO:-The main objective of WTO is to support its member countries to extend their trade across national borders and providing them with a framework of different agreements to abide for peaceful international business activities..5/19/20155Functions of wto:-The former GATT was not really an organization; it was merely a legal arrangement. On the other hand, the WTO is a new international organization set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc.1. To look after the administration of agreements signed at the Uruguay Round. 2. To keep checks on the implementation of tariff cuts and reduction of non-tariff measures. 3. To examine foreign trade policies of the member nations, and to see that such policies are in tune with WTOs guidelines. 4. To lay down methods for arriving at a harmonious solution in case of trade conflicts. 5. To provide necessary consultancy to the member nations on the development in the World economy. 6. To provide a global platform where member nations continuously negotiate the exchange.

5/19/20156Role of WTO in international business:WTO plays an important role in promoting and protecting international trade. Its role can be understood by the following points.Helps to run smooth and fair operations: The main goal of WTO is to help the countries involved in international trade to run their operations fairly and smoothly.Helps to solve trade disputes: As trade expands in volume, in the numbers of products traded, and in the numbers of countries and companies trading, there is a greater chance that disputes will arise. The WTO system helps resolve these disputes peacefully and constructively.Trade without discrimination: Under the WTO agreements, countries engage in international trade cannot normally discriminate between their trading partners. Grant someone a special favor such as a lower customs duty rate for one of their products that practice is considered unfair so you have to do the same for all other WTO members.

5/19/2015774.Lowering trade barriers through negotiation: Lowering trade barriers allows trade to increase, which adds to increase national incomes and personal incomes. WTO tries to minimize these barriers so as to enhance free trade. 5. Promoting fair competition: Although WTO is described as a free trade institution, but on the other hand it is also a system of rules and regulations for international trade to promote fair competition.6. Stimulate economic growth and employment: WTO system motivates the member countries to produce high quality goods by using latest technology and skilled labor. These results in high profits for the Countries engaged in international trade which ultimately improves their economy and creates new employment opportunities.

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