JE MONDEJAR COMPUTER COLLEGE

Brgy. 71, Naga-Naga, Tacloban City

International Trade & Agreement

1st Semester (Prelims)
S.Y. 2021-2022

Module 1: World Trade Organization

I. Lesson
 1.1 Why countries trade
 1.2 WTO means

II. Objectives
To understand why countries trade and WTO’s importance in trading between countries

III. Discussion
1.1 Why countries trade
There are two basic types of trade between countries:
1. The first in which the receiving country itself cannot produce the goods or provide the services in
question, or where they do not have enough.
The rationale for the first kind of trade is very clear. So long as the importing country can afford to buy
the products or services they are able to acquire things which, otherwise they would have to do without.
Examples of differing significance are the import of bananas into the UK, in response to consumer demand, or
copper to China, an essential for Chinese manufacturing industry.
2. The second, in which they have the capability of producing the goods or supplying the services, but
still import them.
The second kind of trade is of greater interest because it accounts for a majority of world trade today and
the rationale is more complex. The UK imports motor cars, coal, oil, TV sets, domestic appliances and white
goods, IT equipment, clothing and many more products which it was well able to produce domestically until it
either transferred production abroad or ceased production as local industries became uncompetitive. At first
sight, it would seem a waste of resources to import goods from all over the world in which a country could
perfectly well be self-sufficient.
However, the reasons for importing this category of product generally fall into three classifications:
• the imported goods may be cheaper than those produced domestically;
• a greater variety of goods may be made available through imports;
• the imported goods may offer advantages other than lower prices over domestic production – better
quality or design, higher status (ex. prestige labelling), technical features, etc

1.2 WTO means

World Trade Organization (WTO)

 The WTO began operations on January 1, 1995

 The successor to the General Agreement on Tariffs and Trade (GATT)
 International organization established to supervise and liberalize world trade. Oversees global
trade rules among nations.
 The main focus of the WTO is to provide open lines of communication concerning trade among
its members
 As of 2021, the WTO has 164 member countries, with Liberia and Afghanistan the most recent
members, having joined in July 2016, and 25 “observer” countries and governments
IV. Evaluation
Instruction: Write your answer in a long bond paper together with your name, year & section, subject/course
and what module you are answering. (You can use the back of your paper for answering)

1. Origin of World Trade Organization (WTO).

2. Advantages and Disadvantages of the World Trade Organization (WTO).
3. Evolution of World Trade.
4. What is the importance of trading in Philippines?

Prepared by:
Kathleen C. Davocol
Instructor