WTO Full Form: Unraveling the World Trade Organization

Introduction: WTO Full Form

WTO full form is World Trade Organization. Trade is a key engine to keep a competitive global economy and increase the quality of goods/ services at lowered costs. Countries that are open to international economic cooperation tend to innovate and improve productivity and create better career opportunities for their people. Integrating with the world economy through the WTO will drive economic growth – both locally and globally.

WTO represents the largest multilateral trade organization that regulates trade among nations. The core goal of the WTO is to ensure a seamless and steady trade flow. So, one has to understand the WTO full form and its role in the global economy.

What is WTO?

World Trade Organization (WTO) is an international organization. It creates rules and regulations to govern trade between nations. The trade includes services, goods (industrial and agricultural), and intellectual property. It is the place for member governments to resolve the disagreements between their trade services.

Overview of WTO

WTO plays a vital role in promoting, regulating, and monitoring global trade. The purpose of WTO is to encourage independence in trade by eliminating barriers for better economic growth.

Significance of global trade and economic cooperation

Global trade refers to the sale/buying of goods/ services across every international border. It is regulated by the WTO entity to foster economic cooperation and prevent any trade barriers. It also opens up various opportunities in the market with a robust structure to promote global trade.

History and WTO established

The WTO established its roots in the 20th century. The brief history includes,

• Precursor – Before WTO, most countries were a part of the General Agreement of Tariffs and Trade (GATT). It began in 1947 as a home to several trade negotiations. In the late 1970s, GATT was struggling to match the globalization economy. Then, they agreed to a final trade round, referred to as the Uruguay Round.
• Formation – The Uruguay Round undergo reformation into a new organization called World Trade Organization. At the time of signing, there were 123 WTO members in the organization.
• Consistent development – WTO uses the format of ‘ Ministerial Conferences’ every two years. As the WTO continues to function at its peak, more continue to apply for membership.

Where is the WTO headquarters located?

WTO headquarters is in Geneva, Switzerland. The current director of WTO is Roberto Azevedo, a diplomat of Brazilian origin. It acts as the major point for diplomats and secretaries to resolve disputes in international trade law.

Objectives and mission of WTO

The key objectives and mission of WTO are,

• Establishing and enforcing rules – The enforcement of rules by WTO obligates members to honor and adhere to the agreement.
• Increasing transparency – WTO promotes transparency in the decision-making process and consensus rule.
• Protecting the trading interest – Relevant regulation policies to safeguard the trading interests of WTO member countries.
• Collaboration between international institutions – WTO enables cooperation between international economic institutions. They are the World Bank, International Monetary Fund, and the United National Conference on Trade and Development.

Roles and Functions of WTO

The functions of WTO can be widely classified into the following categories.

Facilitation of global trade

 Facilitating global trade is one of the primary functions of WTO. They oversee agreements between the trading partners to ensure the trade flow meets the established rules of the system. It includes non-discrimination, binding, reciprocity, enforceable commitments, safety values, and transparency.

Dispute settlement mechanism

WTO acts as a dispute settlement stage when there is a conflict among members. WTO members can make complaints against other members whenever there are any issues with the commitments. There will be formal hearings by the WTO until they settle.

Negotiation and policy making

WTO simplifies the trade negotiation among WTO members. It provides a framework to arrange the elements and ensure a seamless exchange of goods and services. The members will also add and examine trade policy reviews. It will make sure the trade agreements will match the evolving economic landscape.

Structure and Membership of WTO

Governing bodies of WTO

Ministerial conference handles important decisions in the WTO. It meets once every two years to address every issue. They have three different bodies –

• General council – It comprises representatives of all members and carries out monitoring functions
• Dispute settlement body –  It resolves the dispute between WTO members.
• Trade policy review body –  It ensures the trade policies of member governments are made based on the rules of WTO.

Becoming a WTO Member

Most WTO members are GATT members. A state or territory with autonomous trade policies can become a WTO member. The applicant government has to provide the WTO with a memorandum. It should cover all aspects of the trade and economic policies with the agreement to the WTO.

Principles and Agreements of WTO

WTO’s agreements focus on lowering trade barriers and applying non-discriminatory rules. These ideas are preserved in their basic principles as below.

Most-Favored-Nation (MFN) principle

Article I, GATT focuses on tariffs on exports and imports. When the most favorable treatment is given to the product of one country, it should be the same for the products for all other members, immediately.

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

TRIPS is effective from January 1, 1995. The comprehensive agreement protects intellectual property in regions. The framework includes specific clauses that address every aspect of intellectual property for standard protection.

Agreement on Agriculture

Agreement on Agriculture (AoA) aims to provide a framework to reform the aspects of agricultural trade. It will make domestic policies more market-oriented and achieve open trade. Agricultural trade reform is the priority for the Doha Development Round. For instance, members agreed to remove all the export subsidies in agriculture.

WTO and Global Trade Issues

Tariffs and non-tariff barriers

In the Uruguay round of WTO, members agreed to end the use of import quotas and non-tariff barriers to favor tariff quotas. Over time, trade will have a lower tax rate and increase trade flow. At present, the US is a net exporter of various agricultural commodities. Hence tariff and TRQ barriers have to be reduced.

Market access and trade facilitation

Trade facilitation and market access are the core aspects of the WTO agreements. The sensitive data of market access and bilateral trade relationships create the current economic crisis.

Sustainable development and environmental considerations

The pressure due to climatic change increases the efforts to align trade and a sustainable environment. The WTO is struggling to tackle climate change and achieve the UN’s Sustainable Development Goals (SDGs). However, the multilateral system contributes to various pressing 21st-century skills.

WTO’s Relationship with Other Organizations

Collaboration with United Nations and other international bodies

The WTO and United Nations relations are governed by the arrangements for effective collaboration with other International bodies. It was signed on 15 November 1995.

Cooperation with regional trade agreements and organizations

WTO members clarify and improve the disciplines of Regional Trade Agreements (RTA). A provisional transparency mechanism will assess whether RTAs meet the rules of WTO.

Role of WTO in Economic Development

• Promotion of inclusive and sustainable growth – Trade is considered an engine for overall economic growth and reducing poverty. The World Trade Organization contributes to sustainable economic growth with its 2030 agenda and sustainable development goals. 
• Integration of developing countries into global trade – The participation rate of developing countries has been low in the past decade. WTO allows easy integration of developing countries into global trade. It facilitates the enhanced flow of trade, capital, energy, and ideas.

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Conclusion

Trading is a powerful weapon for any developing and developed country to secure the prosperity of their landscape. When one uses it adequately and accurately, it is possible to foster economic coordination between nations. World Health Organization (WTO full form) governs trade between several countries. With the rules and limitations, WTO settles disputes and equates the progress of trade flow between nations. It will ultimately increase the per capita income and maintain harmony, and peace in the country.

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