WTO- an introduction

In this section all you need to know is the objectives and functions of the WTO.

Evaluation of the successes and failures of the WTO is looked at again in the Development Unit.

The World Trade Organisation (WTO) is an international organisation dealing with the global rules of trade between nations. It seeks to encourage multi­national trade in goods and services by liberalising world trade for member countries by reducing tariffs and quotas and opening domestic markets to foreign competition. It is both a forum for talks and a court which can rule on trade disputes between countries The WTO has more than 140 members, accounting for over 97% of world trade.

The WTO oversees the rules of international trade

• It provides a forum for settling trade disputes between governments

• It has the power to levy fines when breaches of global trade agreements have occurred

• It seeks to make trade between countries transparent

Countries that join the WTO are required to achieve sustained reductions in average import tariffs. After WTO entry in July 2012 Russia’s average import tariffs will decline from 9.4% to 6.4% on industrial goods and from 15.6% to 11.3% for agricultural goods.

Is the influence of the WTO reducing? There has been rapid growth of bi-lateral trade agreements between countries rather than through multi-lateral trade agreements. Non-tariff barriers proliferate and the WTO does not seem to have been effective in curbing these types of protectionism. The WTO has found it hard to make progress in dismantling entrenched systems of agricultural protection / financial support especially farm policies in advanced nations. This has led many critics of the WTO to argue that the WTO is run in the interests of manufacturers and farmers in the developed world - there are strong protectionist interests within the WTO framework.