The World Trade Organization is large, for an organization formed twenty years ago. With over 160 nations holding membership, and numerous others observing their rules, the WTO has a massive influence over the global economy.
The WTO was formed in 1995 after seven previous unsuccessful attempts to build a regulatory body for global trade negotiations, by the General Agreement on Tariffs and Trades (GATT). It’s function, as determined by its predecessor was to adapt to working with a kind of global market unfamiliar to the world previous to the second world war. Adoption of their policies and national membership spread rapidly, encompassing the majority of the globe within the space of two decades. While the WTO has come under criticism, with arguers suggesting that the organization favours rich countries and multinational corporations, their presence in the market worldwide has solidified their influence.
As a regulatory body, the World Trade Organization’s chief function is the oversight of international trade negotiations. As a self-proclaimed neutral body in trade, they offer their services as a forum for these proposed trade agreements, and as dispute mediators should negotiations go awry. Further supporting evidence of their global influence, is the WTO’s implementation and monitoring functions. Demanding that member countries make their trade policies public, WTO staffed councils scrutinize the trade practices and policies of their members for signs of wrongdoing or bias.
A lesser known interest of the World Trade Organization, is their assistance of developing and impoverished countries. Utilizing its expertise, the economic knowledge of its more than 600 staff, the WTO has set its focus to helping countries transition into economic viability through training and technical cooperation; so long as WTO regulations are adopted by the aided national body. The WTO refers to these new member nations with the United Nations term, ‘least-developed countries’, or LDCs. And, to date, they have accepted 34 of the 48 LDCs listed by the UN. Accusations reported by news outlets such as, ‘The Guardian’ claim, however, that deliberately ambiguous rules on concluding trade agreements allow these less economically viable countries to be manipulated by the powerful. Though, certain advantages promote joining even still, such as the ‘most favoured nation’ (MFN) status, which the member countries give one another, ensure that they forward the same favoured trading terms offered to certain countries to all member favoured nations.
While the true neutrality of the WTO may be under dispute, and criticism of their work is widespread, global economic stability is in large part owed to their work. And there are those hopeful in other international organisations (like the UN) that future policies implemented by the WTO will do away with profiteering legislative abuses within its system.
Know Your Subject Ltd provides learning resources for the ACCA & CIMA professional accountancy syllabus.
Please visit our website: http://www.knowyoursubject.com to download our free student interface and read about our new mobile revision applications.