World Trade Organization – Objectives, Functions,Structure,Benefits and Drawbacks
World Trade Organization
Unlike GATT, World Trade Organization is a permanent organisation which has been established on the basis of an international treaty approved by participating countries. WTO has a total of 157 member countries accounting for over 97% of the world trade.
Objectives of World Trade Organization
To accept the concept of sustainable development
To protect the environment
To ensure optimum utilization of world resources
To enlarge production and trade of goods
To ensure full employment and increase in effective demand
To improve the standard of living of people of member countries
Functions of World Trade Organization
To deal with regulation of trade between participating countries
To provide a framework for negotiations and formalization of trade agreements
It is responsible for enforcing trade laws and agreements
It monitors trade services and trade related aspects at intellectual property rights
To assist international organisations such as IMF and IBRD
To provide a framework for dispute settlement
Structure of World Trade Organization
World Trade Organization is supervised by a highest authority called Ministerial Conference which consist of representatives of all WTO members. It meets at least once in two years to take decisions on all matters of multilateral trade.
WTO consists of a general body called general council which directly reports to the ministerial conference. It delegates responsibilities to 3 bodies –
(a) Council for Trade in Goods
(b) Council for Trade in Services
(c) Council for Trade-related aspects of intellectual property rights
Benefits of World Trade Organization
The system helps promote peace
Disputes are handles constructively
Free trade cuts the cost of living
Provides more choice of products and quality
Trade raises incomes and stimulates economic growth
Governments are shielded from lobbying
The system encourages good governance
Trade liberalization has helped in economic growth
It provides a platform for multilateral discussions
It has helped in reducing various tariff and non-tariff barriers
It reviews economic policies and formulate new ones through trade reviews
Drawbacks of World Trade Organization
Industrialization and decision making are dominated by developed countries.
Developing nations do not have financial resources to participate in WTO discussions on negotiations
Very less attention is given to the development of under developed countries
Rules and regulations cannot be strictly enforced on developed countries who are members of WTO
#ObjectivesofWorldTradeOrganization #StructureofofWorldTradeOrganization #DrawbacksofofWorldTradeOrganization #FunctionsofWorldTradeOrganization #BenefitsofofWorldTradeOrganization #WorldTradeOrganization