Objectives & Functions of World Trade Organization

Objectives & Functions of World Trade Organization

World Trade Organization:

WTO history: world trade organization

Established: 1 Jan 1995

Headquarter: Geneva, Switzerland

Chairman: click here

Purpose: Regulate international trade

Total Member: 164 (as on today),

Last member:

WTO was known as GATT.

Full form of WTO:

World Trade Organization

Full form of GATT :

General Agreement on Tariffs and Trade

The organizational structure of  WTO:

The basic structure of the WTO consists of the following bodies:

Ministerial Council, It consists of international trade ministers of all member countries.  It is responsible for deciding the strategic direction of the organization and making all final decisions on the agreements under its jurisdiction.

General Council: 

It consists of senior representatives (usually ambassador level) of all member countries. It is responsible for the daily business and management of the WTO. For most cases, it is the main organ of deciding the WTO. Many of the bodies described below directly report to the General Council.

The Trade Policy Review Body:

There are also all members of the WTO and it oversees the business policy review mechanism made after the Uruguay Round. It periodically reviews the business policies of all member countries.

Dispute Settlement Body:

In countries where there is a dispute between business, they appeal to this body and demand justice. I also have all members of the WTO. It oversees the implementation and dispensation of the dispute resolution process for all WTO agreements and the implementation of decisions given on WTO disputes.

The Councils on Trade in Goods and Trade in Services:

It works under the mandate of the General Council and includes all member countries. These provide mechanisms for reviewing the details of common and special agreements on commodities (such as textiles and agriculture) and services.

The Secretary and Director General of the WTO reside in Geneva. The secretariat in which only 550 people work and administer administrative tasks to the operation of all facets of the organization. The secretariat has no power to make a legal decision but provides important services and counsel to those who do so.

World Trade Organization purpose:

  1. The WTO agreements are long and complex because their text is legal and covers a wide range of activities. Fundamental theory is the foundation of the multilateral trading system
  2. A country should not discriminate between its business partners and should not discriminate between themselves and foreign products, services and even citizens.
  3. One of the most obvious ways of encouraging business is to reduce trade barriers. These constraints include customs (or tariffs) and import restrictions or quota, anti-dumping fees, which is a selectively restricted quantity
  4. Foreign companies, investors, and governments should ensure that trade barriers are not arbitrarily raised. Investments with stability and predictability are encouraged, job opportunities are created and consumers can take full advantage of competition – choice and low prices.
  5. The WTO agreement not only allows members to take measures to safeguard the health of the health but also the health of the planet but not the environment. However, these measures should be implemented in both national and international trade in the same way.

Objectives of WTO: world trade organization

  1. To improve the standard of living of people in the member countries.
  2. For ensuring full employment and broad increase in effective demand.
  3. To enlarge the production and trade of goods.
  4.  For protecting the environment.
  5. To accept the concept of sustainable development.

Functions of  WTO – World Trade Organization:

  1. Administering trade agreements
  2. Forum for trade negotiations
  3. Handling trade disputes
  4. Monitoring national trade policies
  5. Technical assistance and training for developing countries
  6. Cooperation with other international organizations

Difference between WTO & GATT:

GATT WTO
Full form
  • General Agreement on Tariffs and Trade
  • World Trade Organization
 inaugurated the GATT\WTO inaugurated the system on 1948   inaugurated the system on 1995
Purpose To strengthen international trade. To govern GATT and international trade practices.
Structure No permanent structure. Has a permanent structure.
GATT\WTO Scope Trade in goods. Trade in goods & services.
Director Only one director general More than one, WTO is the largest economic organization.

Note:

WTO (world trade organization) is also known as the third watchman institution of international trade.

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