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Overview of World Trade Organization


Discuss about the International Political Economy for Globalization.

In the modern world of growing connectivity and globalization, international trade is the crucial instrument playing important role in cross border share and exchanges of goods and service. With the passage of time, world grows compact and integrated through extensive trade taking place. Trade not only let the countries access to each others’ production but also feeds into  the need of the business to expand based on evolving market demand. It is to be kept in mind that the countries differ in terms of geographical positioning, natural resources possessed, prevalent political and economic conditions (Sunkel & Inotai, 2016). This influences the mode and extent of trade based on differed policies taken up based on the varied national economic situation. This multiplicity can possibly lead to difficulties in carrying out exchange of goods and services. To bring all nation under the control of one organization based on pre-fixed rules and regulations to be followed in trade, the World Trade Organization came into existence.

The paper is to present a discussion on the overall information of WTO focusing mainly on finding out the principle reason behind recent crisis diagnosed within the organization. The discussion further drives our attention toward how well the understanding of economic cooperation gets justification through the analysis made in the report.

World Trade Organization an intergovernmental international organization that controls and regulated the trade taking place worldwide among nations. Since 1995 January 1, the organization is operative and came into existent through Marrakesh Agreement. This agreement replaced earlier General Agreement on Tariffs and Trade (GATT) and was supported and signed by 123 nations of the world in 1994 The organization as global international body deals with the regulation policies and practices regarding goods and service trading as well as intellectual property rights among nations who make negotiations and sign the agreement. The agreements further get ratified in subsequent parliaments of the nations leading to fortified trade negotiations. The major issues that are focused by WTO are mainly derived from trade negotiations made in Uruguay Round form 1986 to 1994 (Abdelal, Blyth & Parsons, 2015). Main WTO agreements are Agreement on Agriculture, General Agreement on Trade and Service and Trade Related Aspects of Intellectual Property Rights. Four major committees of WTO are:

Under the Council for Trade in Goods, there are 11 committees every one assigned with specific task. All the existing members of WTO take part in the functioning of the all the committees

WTO Agreements

This segment deals with intellectual property rights and every information on this.  All the official news, data, information that are recorded in the WTO and TRIPS Council as well as WTO’S interaction with other international organization

This segment is operative under the control and guidance of General Council. This has the responsibility of supervising the operation and functioning of General Agreement on Trade and Service. The segment is open for membership of all the countries. This segment is relaxed toward creating as much subsidiary body as required.

This segment mostly deals with talks round of current trade. The committee was assigned with Doha Development Round. Financial services, GAT rules, commitments, and domestic services are the three subsidiary bodies of these service council.

The organization forms the foundation of a multilateral trading system through supervision, implementation and administration of agreements covered among nations. It also makes provision of an international forum that takes care of all the negotiations required in settling disputes taking place in world trades. WTO also makes propagation and review of the trade policies in different nations  with an aim to ascertain transparency an d coherence of trade policies through surveillance of world economic situation and policies (Drezner & McNamara, 2013). Moreover the organization prioritize providing assistance to least developed and developing nations with low income level to let them adjust to rules of WTO by way of technical cooperation and rigorous training. Apart from setting rule there are wide ranges of purposes served by WTO are :

Government ratification are important for WTO agreements to be transparent.  Moreover it confers notification to WTO regarding enforced law. It I is the duty of the various committees under WTO to ensure the follow up of these requirements

There is a wing called Dispute Settlement Understanding  under WTO that plays important role in in settling down the issues and quarrels taking place among nations.  This enhances the flow of free trade. Based on any infringements of right made by nations they can come up with their complaints that gets judged and settled based on the interpretations derived from commitments made in agreements.

The agreements followed under WTO provide special benefits in favor of the developing countries in form of support. It includes longer time period for implementation of agreements to be effective, measures to enhance the trade opportunities while boosting the capacity f trade by the nations. It also allows the nations to upgrade their technical standards as well be able to handle disputes.

Four Major Committees of WTO

The organization maintains connection with international organizations both governmental and non-governmental, parliaments, media and layman based on the current aspects ongoing within WTO. This action aims to increase the cooperation as well as awareness of WTO activities among people.

Certainly the operation of WTO and its regulations through polices have some impacts on the economic conditions of nation. The most important channel is through which it brings peace is handling the disputes and issues quite constructively. With growing volume of trade and number of countries involved in trade, the complexity in the trade process arises that needs to be neutralized which is done rightly by WTO. The main function of WTO is to ascertain the free flow of trade without hassle. Now free trade creates much more benefits for the nations (Oatley, 2015).   More of the variety of goods with good quality can enter the national market that also in lesser price. Moreover, trade acts as stimulus to economic growth. Higher the trade volume more is the revenue earned and increase in basket of goods that enhances the lifestyle of the people leading them toward developed condition (Dutt, Mihov & Van Zandt, 2013). More national output leads to greater national income as well as per capita income making people live affluent life.

WTO helps government in devising strategies focused on trade policies. It allows government adopts more balanced trade policies. It provides shield to the government against narrow interest groups. pressure groups. This allows the national government to take up policies that benefits all rather than facilitating some tradeoffs benefitting one group against others. Encouragement of good governance is another greater impact of WTO on national as well as international economies. Being one of the most powerful secretive body of international importance, the organization turning into global government controlling almost 134 nations of the world including biggest economies like USA, India and China. The body is representative of rule based policy regime of economic globalization that announces commercial interests among nations to be superseded at its best (Hoekman & Mavroidis, 2015). Hindrance of operation and expansion among any global nations are to be subordinated. The hindrances are generally economic policies imposed politically or the variant democratic processes involved with different countries. The WTO as a policy maker acts on behalf of the people who work and their labor rights, protection of environment, provision and protection human rights, rights of the consumers, local culture and social justice for all of it member countries. The organization plays immense role in maintaining national sovereignty of world nations and binding these multiplicity of national political differences through one chord.

Purposes Served by WTO

Despite the greater role the organization plays in the politics and economic of nations, the WTO has fallen under strong attack of allegations and operative inefficiencies. Criticisms are reflective of perceptions that are multiple based on the fact. What is ideally thought that all the problems will be resolved by WTO and what reality drove was the body failed to take care of many issues that emanated from process of globalization. The developing country with larger majority among themselves believes that the operation of WTO is biased and makes agreements asymmetric to their interests(Wilkinson, 2013). The WTO policies creates binding upon the nations that often leads to disappointment in terms of trade related support provided by the donor countries (Donnan, 2014). The financial backers have failed to make provision of adequate funding for its own secretariat that takes care of the dispute settlement being burdened with financial and technical assistances demand as well as major accessions.

One of the major crisis going within WTO is the confliction between developing and developed nation mostly due to difference in their opinion based on the difference in their outlook and needs (Wilkinson, 2013). Developing nations have many obstacles thet require them to go for productions and exchanges without much protectionism.  The interests of the two type of nation clash as the developing ones seem to oppose new changes made to the policies. On the other hand the developed nation tries to control the decision in their favor through playing substitutive role of power owned global civil societies.

There are indications of growing discomfort and frustration among business community and investors because of the slow pace of the decision making process followed in WTO. The results coming after negotiations of the nations are also reason of dissatisfaction. The international body is operative under immense pressures mostly conflicting. While the civil societies apply lobby for the expansion of their mandate and power which requires trade to be sanctioned and agreements enforced protecting and maintaining labor rights, environmental standards etc. The pivotal international body is in crisis of proper leadership that is evident in failure of the organization in its duties and implementations (Hoekman & Mavroidis, 2015). The combined decision of major industrial counties that could initiate changes and reforms in the drooping system are now diagnosed with internal divisions and conflicts.

The WTO has undergone changes in its outlook of the policies, objectives and negotiations from Uruguay Round to Doha Round. The rounds mostly focused on the liberalization of the countries enhancing their economic growth throughout. WTO as backbone of the international trade provided rights in form of rules and allowed each nation to experience increased openness and trade. These had higher implication on developing economies that are economically untapped with lot more potential to grow. The failure of the WTO negotiations has been received muchseverely by these developing fragile economies. This further expedited the loss in confidence as dispute settlement as well as trade facilitating unit to bring actual growth among the nation through integration and cooperation.

Impact of WTO on the Economy

Recently the Trade Policy Agenda of USA has evoked crisis in the organization as the negotiations empower US to act much liberally falling outside of the control of the WTO. Itdisregards multilateral trade, prevents member nations to interperet their trade rights, prevents WTO rules to change the national policies of US. This kind of disrespect coming from biggest economies of world like US might influence others to follow the same affecting the harmony among nations and failing the very agenda of WTO. Quite surprisingly China has not followed the footsteps of US keeping its faith alive in WTO mitigating a bit of the ris from increasing.

One of the major reason behind such crisis inflicted in WTO is that it is the source of unequal competition. The Uruguay Round more specifically is major contributor to the inequality in competition because: Developed countries try to provide lesser access to their markets restricting many of the products in their market coming from developing countries. It provides only 3.8% openness to the them compared to 4.3% access to the developed countries (Wilkinson, 2013). This discrimination is implemented through imposition of higher tariffs even on common products like cloths, fish, leather and agricultural goods. This makes the products costlier loosing the international demand that affects the economy of such developing nations.

The quantitative restrictions are still operative in many countries of the world specially in clothing and textiles export. The phasing out process is very slow and that is becoming difficult for poor and small economies to trade and survive. The agricultural agreements taking place in WTO has initiated competition between developed countries’ farm production through subsidy and unsubsidized farm produces in developing nations agriculture. The protectionism in form of safe guard and anti-dumping policies are still under criticism as the rules possess loopholes. They are misused in order to prevent competition coming from countries that produces following labor-intensive technique. The TRIPS, which is one of the important negotiation for the countries involved in trade, has been inefficient (Hoekman & Mavroidis, 2015). It has made the essential goods and technology like seeds and medicines too expensive. Yet it has not been able to prevent the biological piracy going on by the foreign nations.

The WTO follows consensus decision making that seeks for participation, opinion and approval of every nation included within its operation. This process prefers taking into account the presence of all political parties which leads to complexity and longer time period for any policies to be ratified and implemented. The operation and planning of the WTO revolves around only the official member sit has making the organization member driven to the world. This confines the view of the organization stopping its growth in order to bring overall changes in the world trade. Adequate regulation of the trade issue requires the firm to interact more actively with other actors. At the core the organization believed in the inception that harder the structure of law followed in dispute settlement, better is the general outcome. This sometime has fallen reverse indicating the failure of the idea. Rather consideration of flexibility, in its guidelines and dispute settlements rules implemented in both domestic as well as international issues could avoid many problems of the firm. More than 80% of the members of WTO comprise of developing nations and they are allegedly falling victim of differential treatments and bias in actions. This has led to agitation of the developing countries like China, India etc.

The underlying importance behind economic cooperation is immense. It not only supports the nation’s development through utilizing the resources, knowledge but also make cooperation to international countries contributing to foreign policy framework. Economic cooperation between nation benefits all the nations under cooperation strengthening the institutional framework and bridging the gaps in terms of economic and political activities.

The core intention of WTO coming into existence was to bring cooperation worldwide among the member nations through ease of trade and through economic & political manifestations. The recent turmoil inside operations of WTO has posed severe questions of its implication of existence (Qin, 2012). Instead of bringing the developing nations close to developed nations the distance has rather increased leading to conflicts in decisions and agreements. This hampered the growth incentive of these nations through trade (Dutt, Mihov & Van Zandt, 2013). Specially developing nations having fragile and growing economies get affected through such preventive and protectictive environment as preferred by developed nations which  are mostly  saturated. This pushes for reforms within WTO in present situation.


The discussion takes us through the trajectory of WTO so far since its inception. One thing, which is quite evident, is that even though the organization came into existence with few intentions of economic cooperation, ease of trade without disputes and international economic and political connection between nations, it underwent transformations over time with the need of change in economic situations. The organization faces many internal conflictions in terms of lack of leadership, lack of understanding and cooperation among nations failing the very idea of the organization. yet the importance of the body is still undeniable in conducting cross-border agreements  and trade decisions. This pushed the organization o for revisiting its functions and activities done based on the policies. The decision making process needed a massive change on the face of recent crisis that allowed the unit to deploy itself with much more concentration to recover the problems and exert tits roles and responsibilities.


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