WTO was set up on 1st Jan 1995. It was
established to replace General Agreement on Trade and Tariff (GATT) set up in
1948 by 23 countries.
The WTO agreement covers trade in goods as well as
services, to facilitate international trade.
All member countries are required to adopt laws and
policies framed under WTO rules.
Some major functions of the WTO are:
-
To facilitate international trade (both
bilateral and multilateral) through removal of tariff as well as non tariff
barriers.
-
To establish a rule based trading regime,
in which nations cannot place arbitrary restrictions on trade
-
To provide technical assistance and
training for developing countries.
-
To ensure optimum utilization of world
resources
Bilateral trade – trade between two countries
Multilateral trade – trade between more than two
countries
Tariff barriers – barriers which are imposed on
imports to make them relatively costly, to protect domestic production. E.g.
custom duty
Non tariff barriers – barriers which are imposed on
the amount of imports and exports. (restrictions on goods not allowed to be
imported or exported)
ROLE OF WTO
WTO oversees the implementation of the significant
tariff cuts and reduction on non tariff measures agreed in trade negotiations
It acts as a watch dog of international trade and
regularly examines the trade of individual members.
It provides several reconciliation mechanisms for
finding an amicable solution to trade conflicts that arise among members.
Trade disputes that cannot be solved through bilateral
talks are adjudicated under the WTO Dispute Settlement Court.
WTO is a management consultant for world trade. Its
economists keep a watch on the global economy and provide studies on the main
trade issues of the day.
No comments:
Post a Comment