100%(4)4 out of 4 people found this document helpful
This preview shows page 1 - 4 out of 10 pages.
Running head: WORLD TRADE ORGANIZATION1World Trade OrganizationGBA 440World Trade Organization
WORLD TRADE ORGANIZATION2Many nations rely on free trade for their country’s prosperity and the ability to receive imports from around the world. The benefits of free trade are higher incomes, more jobs, and greater equality. With trade between nations there is bound to be disputes about what serves as the best interest for each country involved. There needs to be a governing body that goes beyondborders to ensure trade flows smoothly, predictably and freely as possible. The World Trade Organization (WTO) is the sole organization that controls and regulates global trade among mostof the world’s nations. The WTO is where countries negotiate trade agreements to further open markets or maintain trade barriers. This allows merchants and producers to sell their products to consumers world-wide. Additionally, it protects consumers against certain products and against the spread of disease. The WTO is where countries bring disputes against each other for resolution. It settles disputes peacefully avoiding political conflict and preventing possible wars.We will cover the origins of the WTO, trade negotiations, implementation and monitoring of trade, dispute settlement, and the building of trade capacity. OriginThe first attempt at establishing a global trade system was the General Agreement on Tariffs and Trade (GATT) which was formed in 1947 involving 23 nations[Wil13]. The implementation of GATT was one of the results from the Bretton Woods Agreement. Even though this system greatly contributed to the world’s recovery from World War II, it had some flaws. The GATT had no formal structure, making it weak and with little or no authority to uphold its rulings on trade disputes. The WTO was created during the Uruguay Round of GATT negotiations which had begun in 1986 and ended in 1994[Pit95]. Even though global trading hadbeen widely successive in the past using the GATT, it needed improvements in the way it settled disputes. Using the GATT, nations could make complaints against other members. The GATT
WORLD TRADE ORGANIZATION3would investigate the matter using committees and pressure the offending nation to change. However some of the investigations took years to complete and most chose to ignore the GATT’srulings. The WTO was developed to fix this by making the agreements actual contracts among members to commit to fair and open trade policies. The WTO was established in 1995 and replaced the GATT and absorbed all of the terms and agreements put in place by the GATT[Wil13]. The WTO is located in Geneva, Switzerland and there are currently 159 countries making up the WTO’s membership[Wor]. Trade NegotiationsTrade negotiation is a process in which nations meet together to discuss the possibility of trade, with the goal of reaching a trade agreement. Both nations have a vested interest in negotiating a successful trade agreement because it has the potential of promoting economic