What Does the WTO do?

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The World Trade Organization (WTO) is the only international body dealing with the rules of trade between nations.  At the core of the WTO are agreements, negotiated and signed by most of the world’s trading nations.  These documents provide legal ground rules for international commerce.  Their goal is to help the producers of goods and services, exporters, and importers conduct business in the global marketplace.

The WTO supplanted the General Agreement on Tariffs and Trade (GATT) in early 1995.  The WTO has three main purposes:
1. To help trade flow as freely as possible as long as there are no undesirable side effects.  In part, this means removing obstacles to trade.  It also means making rules transparent and predictable so that individuals, companies, and governments know their scope of influence.

2. To serve as a forum for trade negotiations among the community of trading nations.

3. To settle trade disputes among member nations.

The GATT and now the WTO have made significant contributions to improved trade and investment flows around the world.  Their successes have resulted in improvements in the economic well-being of nations around the world.

I have written before about the importance of free trade in economic development and recovery. Tariffs, quotas, and restrictions adversely effect the world economy.  During this current economic crisis we are seeing a return to protectionism that endangers the economic recovery we need.  Organizations like the WTO need to make sure that the global economy does not suffer from this new trend.

Related international organizations:

112 thoughts on “What Does the WTO do?”

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