World Trade Organization

The World Trade Organization or WTO was formed in the year 1995. 153 countries are the members
of 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 goal is to help
producers of goods and services, exporters, and importers conduct their business. There are a number
of ways of looking at the World Trade Organization. It is an organization for trade opening, a forum
for governments to negotiate trade agreements, a place for them to settle trade disputes and it
operates a system of trade rules.

WTO acts as the administrator. If there are unfair trade practices or dumping and there is
complain filed, the staff of WTO are expected to investigate and check if there are violations
based on the multi-lateral agreements

Essentially, the WTO is a place where member governments try to sort out the trade problems they
face with each other. The WTO is run by its member governments. All major decisions are made by
the membership as a whole, either by ministers (who usually meet at least once every two years) or
by their ambassadors or delegates (who meet regularly in Geneva). WTO oversees the following:

 Trade Negotiations

 Implementation and monitoring

 Dispute Settlements

 Building trade capacity

 Outreach (awareness about WTO)

The WTO agreements are lengthy and complex because they are legal texts covering a wide
range of activities. But a number of simple, fundamental principles run throughout all of these
documents. These principles are the foundation of the multilateral trading system.

 Non-discrimination
 More open
 Predictable and transparent
 More competitive
 More beneficial for less developed countries.
 Protect the environment

 Budget: 158 million US dollars

 Key players: US, the EU, Japan

Being a member:

To become a member of WTO is very important. It only means that a member country
automatically becomes part of the "Most Favored Nations." Having the status of being one of the
"Most Favored Nation" gives access to discounted tariffs and lesser trade barriers, excessive
regulations and import quotas that are all the privileges of WTO's members. These privileges
pave way to bigger market for the members' products which results to more sales, more jobs and
better economic growth.

More than 75% of the members are ranked as developing countries. Through their membership
with WTO, they can easily penetrate the market of developed countries at lower tariffs.

Four Steps to Become a WTO Member

1. The interested country should submit an application to become a member. A committee of any
member country can review this application.

2. The interested country then makes negotiations on bilateral agreements on trade with any
country it prefers. The content of these agreements will apply automatically to all members of
WTO.

3. The review committee of WTO creates a draft of the terms and conditions of membership
which takes account of the necessary changes in its current trade policies.

4. Two-thirds of the member nations should vote that the interested country can become a part of
WTO. After the voting, the new member must ratify the membership agreement.

If a country is not yet a member of WTO, they can opt to become the "observers" where they
must apply for membership within five years of being an observer.

86 Organizations that have requested or have been accorded observer status

in one or more WTO committees or bodies
36 government appearing as observer.

criticism
The WTO has been the focal point of criticism from people who are worried about the effects
of free trade and economic globalisation. Opposition to the WTO centres on four main
points:
 WTO is too powerful, in that it can in effect compel sovereign states to change laws
and regulations by declaring these to be in violation of free trade rules.
 WTO is run by the rich for the rich and does not give significant weight to the
problems of developing countries. For example, rich countries have not fully opened their
markets to products from poor countries.
 WTO is indifferent to the impact of free trade on workers' rights, child labour, the
environment and health.
 WTO lacks democratic accountability, in that its hearings on trade disputes are
closed to the public and the media.
Supporters of the WTO argue that it is democratic, in that its rules were written by its
member states, many of whom are democracies, who also select its leadership.
They also argue that, by expanding world trade, the WTO in fact helps to raise living
standards around the world.