International Economics Part 2 - The World Trade Organization

The world trade organization (WTO), is an organization that sets the rules for global trading and resolves dispute between its members.

All WTO members are required to grant "most favored nation" status to one another, meaning that trade allowances granted by one country to another must be granted to all other members of the WTO.

The WTO attempts to promote free trade, which is a very difficult task, with varying success.

It aims to increase international trade by providing a place for negotiations and by attempting to lower trade barriers. The main functions of the WTO include:

1. be a forum for trade negotiations
2. handle trade disputes among its members
3. administer WTO agreements
4. providing technical assistance and trading for developing countries
5. coorporate with other national organizations
6. monitor national trade policies

Trade liberalization clearly brings many economic and political benefits, but many argue that the WTO has had limited success in certain areas. The main criticisms are:

1. Failure to confront ethical issues
2. Failure to confront environmental pollution
3. Favors the powerful
4. Low number of agreements
5. Takes too long to process and settle dispute etc.