The World Trade Organization (WTO) was established in 1995 as the successor to the General Agreement on Trade and Tariffs (GATT), which was founded in 1948. Initially, GATT served as a global trade body that facilitated multilateral trade agreements among nations by offering fair opportunities in international trade.

The WTO’s mission is to create a rule-based trading system where countries cannot impose unreasonable restrictions on trade. It also aims to promote the trading of goods and services, ensure optimal utilization of world resources, and protect the environment.

The WTO plays a crucial role in eliminating both tariff and non-tariff barriers, increasing market access for all its member nations. As an active member, India has contributed significantly to shaping global trade policies and advocating for developing countries’ concerns.

Objectives of WTO

1. Setting Rules for International Trade: WTO establishes and implements rules for global trade, ensuring transparency and fair competition.
2. Promoting Trade Liberalization: It provides a platform for negotiations aimed at further reducing trade barriers.
3. Resolving Trade Disputes: WTO acts as a mediator for settling trade disputes between member nations.
4. Enhancing Decision-Making Transparency: It ensures that trade-related decision-making processes are transparent and accessible.

Functions of WTO

• Facilitating International Trade: WTO works to remove tariff and non-tariff barriers to promote global trade and improve market access for all member nations.
• Rule Formulation: It establishes a framework of rules to govern international trade, preventing countries from imposing arbitrary restrictions.
• Protecting Developing Countries: WTO frames regulations that protect the interests of developing nations, ensuring fair participation in global trade.
• Optimal Resource Utilization: WTO supports the increase of trade and production of services while ensuring the efficient use of world resources.

Why Was WTO Established?

The World Trade Organization (WTO) was established with several key objectives in mind:

1. Improving Living Standards: To enhance the standard of living in its member countries.
2. Developing a Multilateral Trading System: To promote a multilateral trading system that reduces both tariff and non-tariff barriers.
3. Eliminating Discrimination in Trade: To foster non-discriminatory treatment in global trade relationships.
4. Harmonizing Trade and Environmental Policies: To align trade policies with environmental sustainability and development goals.

Features of WTO

1. Broader Scope than GATT: WTO has a wider scope and covers both goods and services, unlike GATT which focused mainly on trade in goods.
2. Single Voting Rights: Every member nation has an equal vote in decision-making processes.
3. International Privileges: Member countries enjoy certain privileges in global trade.
4. Unified Agreements: WTO administers a unified set of agreements that all members are committed to follow.
5. Discussion Forum: It serves as a platform for member nations to negotiate and discuss trade-related matters.