World Trade Organisation

The World Trade Organisation is responsible for trying to promote and regulate free trade agreements between countries. All almost countries are a member of the WTO.

Ideal Trade

According to the WTO, ideal trade would be:

• Non-discriminatory
  • Countries are not allowed to have informally have free trade with one country but strong protections against another
  • Everything agreed between countries should be formal
• Free from barriers - no protectionism
• Predictable
  • So that countries can foster investment and job creation and businesses can flourish
• Promoting fair competition
  • The WTO will allow for "fair" competition, e.g allow Infant Industries to grow
  • Protectionism only when needed then taken away
• For trade to be beneficial to developing countries
  • Allow special provisions for developing countries

Roles & Functions of the WTO

• Set and enforce rules on international trade
• Resolve Trade Disputes
  • WTO steps in instead of countries retaliating against eachother i.e tariff war
• Provide a forum for negotiating trade liberisation
  • Gives a way for multi-country agreements to simultaneous reducing of protectionism
    • Negotiations take place in Geneva
• Monitor trade liberalisation
  • Make sure free trade agreements are honored
• Increase transparency of the decision making process
  • Member states understand how the decision has come about
  • Member states can critique the WTO for their decisions
• To help developing countries fully benefit from global trade
• Cooperate with other major economic institutions e.g I.M.F

Criticism

The WTO has been criticised for benefitting developed countries more as Free Trade benefits developed countries much more than LDCs.