World Trade Organization : Meaning, Objectives and functions

What do you understand by WTO? Explain its objectives and functions.

World Trade Organization

World Trade Organization (WTO) is international organization dealing with the rules of trade between nations who are its members. It was established on 1st January 1995 and India became a founder member of WTO b ratifying the WTO agreement in 30 December 1964. At p resent theses are 153 members in WTO as on November 2011.

The WTO is a new international organization set up as a permanent body and is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investments, intellectual property right etc. In short, WTO is a new globally reorganized trade organization with the new name succeeding GATT or renewed agreements and having a new vision and strong enforcement power to promote international trade.

Functions of WTO

The WTO agreement provides the legal ground rules for international commerce. It entered agreement on trade goods, trade in services, intellectual property rights, dispute settlements, trade policy review and multilateral trade agreement. It has the following five functions as set out in article III –

(1) The WTO shall facilitate the implementation, administration and operation and further the objectives of this agreement and of the multilateral trade agreements and shall also provide the framework for implementation, administration and operation of the plurilateral trade agreements.

(2) The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the agreement in the annexes to this agreement.

(3) WTO shall administer the understanding on rules and procedures governing the settlement of disputes.

(4) The WTO shall administer the trade policy review mechanism.

(5) With a new of achieving greater coherence in global economic policy making, the WTO shall co-operate, as appropriate, with the IMF and with the IBRD and its affiliated agencies.

Objective of world trade organization

The agreement while establishing the WTO adopted the following objectives in its preamble of WTO-

1. The primary objective of WTO is to implement new trade policy in agreement.
2. To eliminate discriminatory treatment in international trade relations.
3. To improve standard of living of people in the member countries.
4. To enhance production and trade of goods.
5. To develop multilateral organized trade system.
6. To ensure full employment and broad increase in effective demand.
7. To ensure the reduction of tariffs and other barriers of trade.
8. To facilitate the optimal use of the world’s resources for sustainable development.
9. To ensure optimum utilization of world resources.
10. To enlarge production and trade of services.
11. To procured environment.

IMPORTANT LINK

• What is Meaning of Analysis of Financial Statement? Its objectives and importance
• IMPORTANCE AND LIMITATIONS OF FINANCIAL STATEMENTS
• Meaning and Definitions of Financial Statement | Nature of Financial Statements | Characteristics of an Ideal Financial Statement
• What is the scope of management accounting?
• Procedure of Financial Statements Analysis
• Comparative Financial statement Analysis | Advantages of Comparative Financial Statements | Limitations of Comparative Financial Statements
• IMPORTANCE AND LIMITATIONS OF TREND ANALYSIS IN HINDI

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