The World Trade Organisation.

The WTO exists the encourage and facilitate the liberalisation of trade between countries. The WTO deals with the rules of trade between nations at a global or near-global level.

Key Points on the WTO

• The World Trade Organisation (WTO) is a multi-lateral organisation based in Geneva, Switzerland
• The WTO was established in 1995 and was preceded by the General Agreement on Tariffs and Trade (GATT).
• It helps to promote free trade by persuading countries to lower their import tariffs and other barriers to open markets including widespread use of import licences, export subsidies and other non-tariff barriers
• Membership of the WTO has expanded with the successful admission of China, India and latterly, Russia to the WTO as events of global significance.
• WTO membership accounts for 98 per cent of world trade in 2014 compared with 91 per cent in 1995

Key Challenges Facing the WTO

Complexity of production:

Countries and producers increasingly specialise in certain stages of production depending on their competitive advantage. This incentivises countries to pursue bi-lateral trade agreements (between two countries) rather than agree multi-lateral (between many countres) trade deals

Shifting global economic power:

A big challenge for the WTO is to help meet the aspirations of emerging economies and overcome strains in trade relationships with developed nations

Fragmentation of the global trading system

A big risk for the WTO is that regional trading blocs are by passing attempts to secure a new global trade deal.