Key Study Notes on the World Trade Organisation
- AS, A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 17 Mar 2023
The World Trade Organisation (WTO) is a multi-lateral organisation based in Geneva, Switzerland
What are the main roles of the World Trade Organisation?
- Facilitating international trade: The WTO provides a platform for member countries to negotiate and agree on rules and regulations related to international trade. It seeks to promote free and fair trade by eliminating barriers to trade such as tariffs, quotas, and subsidies.
- Resolving trade disputes: The WTO provides a framework for resolving disputes that may arise among member countries. It has a dispute settlement mechanism that allows countries to bring their trade-related grievances to an impartial panel for resolution. This helps to avoid trade wars and promotes stability in the global economy.
- Technical assistance and capacity building: The WTO provides technical assistance and capacity building to developing countries to help them participate effectively in the global trading system. This includes training, information sharing, and assistance with implementing WTO agreements. The goal is to ensure that all countries, regardless of their level of development, can benefit from international trade.
The role of the WTO in trade liberalisation
One of the key roles of the World Trade Organization (WTO) is to promote trade liberalization. Trade liberalization refers to the process of reducing barriers to trade, such as tariffs, quotas, and other restrictions, in order to promote free and open trade among nations.
The WTO promotes trade liberalization in several ways:
- Negotiating and implementing trade agreements: The WTO negotiates and implements multilateral trade agreements, such as the General Agreement on Tariffs and Trade (GATT) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which aim to reduce trade barriers and promote liberalization.
- Providing a forum for trade negotiations: The WTO provides a forum for member countries to negotiate bilateral and multilateral trade agreements. These negotiations can lead to the reduction of trade barriers and the liberalization of trade.
- Monitoring trade policies: The WTO monitors the trade policies of member countries to ensure they comply with WTO rules and agreements. It also conducts regular trade policy reviews of member countries to identify areas where trade liberalization can be further promoted.
- Providing technical assistance: The WTO provides technical assistance and capacity building to developing countries to help them participate in the global trading system. This includes assistance with implementing WTO agreements and developing the necessary infrastructure to facilitate trade.
Overall, the WTO plays an important role in promoting trade liberalization by providing a framework for negotiations, monitoring trade policies, and providing technical assistance to developing countries. By promoting free and open trade, the WTO helps to create a more level playing field for businesses and consumers around the world.
Possible conflicts between regional trade agreements and the WTO
There can be conflicts between regional trade agreements (RTAs) and the World Trade Organization (WTO) for several reasons. One of the main reasons is that RTAs can create trade discrimination, which goes against the non-discrimination principle of the WTO.
The non-discrimination principle is a core principle of the WTO that states that all member countries must be treated equally and without discrimination. This means that trade preferences granted to one member country must also be granted to all other member countries.
However, regional trade agreements can create trade discrimination by granting preferential treatment to member countries over non-member countries. This can create conflicts with the WTO, which seeks to promote free and open trade among all member countries.
Here are a few examples of conflicts that can arise between RTAs and the WTO:
- Conflicts over rules of origin: RTAs often include rules of origin, which specify the criteria that must be met for a product to qualify for preferential treatment. However, these rules can create conflicts with the WTO's non-discrimination principle, as they can discriminate against products from non-member countries that do not meet the same criteria.
- Conflicts over tariff reductions: RTAs often include tariff reductions between member countries. However, these tariff reductions can discriminate against non-member countries that do not benefit from the same reductions. This can create conflicts with the WTO, which seeks to promote non-discrimination in trade.
- Conflicts over dispute settlement: RTAs often include dispute settlement mechanisms that differ from the WTO's dispute settlement mechanism. This can create conflicts if the RTA's dispute settlement mechanism is inconsistent with the WTO's rules and procedures.
Overall, conflicts can arise between regional trade agreements and the WTO when the RTA's provisions are inconsistent with the WTO's principles and rules. These conflicts can lead to trade tensions and disputes between member countries, which can undermine the benefits of regional and multilateral trade agreements.