WTO: UPSC Daily Important Topic | 26 March 2022

WTO

✓The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.

✓The WTO has 164 members (including European Union) and 23 observer governments (like Iran, Iraq, Bhutan, Libya etc).

Goals of WTO

✓The WTO’s global system lowers trade barriers through negotiation and operates under the principle of non-discrimination.

✓The result is reduced costs of production (because imports used in production are cheaper), reduced prices of finished goods and services, more choice and ultimately a lower cost of living.

✓The WTO’s system deals with these in two ways.

∆One is by talking: countries negotiate rules that are acceptable to all.

∆The other is by settling disputes about whether countries are playing by those agreed rules.

✓The WTO can stimulate economic growth and employment.

✓The WTO can cut the cost of doing business internationally.

✓The WTO can encourage good governance. Transparency — shared information and knowledge — levels the playing field.

✓Rules reduce arbitrariness and opportunities for corruption.

✓The WTO can help countries develop: Underlying the WTO’s trading system is the fact that more open trade can boost economic growth and help countries develop.