Objectives of World Trade Organization
The objectives of World Trade Organization are spelt out better by the General Agreement on Tariffs and Trade (GATT). This refers to a trade agreement whose aim was to abolish quotas while reducing tariff duties among contracting nations. The trade agreement was concluded at Geneva by 23 countries in 1947 and it became effective on 1st January 1948. World Trade Organization (WTO) is an international organization that was formed to liberalize and supervise world trade. It succeeded GATT after it was established and became effective from 1st January 1995.
Objectives of World Trade Organization- What led to the establishment WTO
The agreement for establishing the World Trade Organization was signed by GATT members in Morocco in April 1994. However, it became effective on 1st January 1995 replacing GAAT, which as an informal organization regulating global trade from 1948. Establishing the World Trade Organization and its objectives was necessary because this is a formal and permanent organization whose basis is an approved international treaty that involved all participating countries. This gave it an international status like the World Bank and IMF. However, the World Trade Organization is not a United Nations’ agency. This article will focus on the objectives of world trade organization.
There are many objectives of the World Trade Organization as described by its agreements which are basically legal texts that cover different activities. However, there are key objectives that guide most activities of this organization. These are at the core of the establishment of a system for multilateral trade.
Generally, the World Trade Organization has the following major objectives:
- To set international trade rules and enforce them.
- To create a negotiation and monitoring forum for further liberalization of trade.
- To resolve arising trade disputes.
- To enhance transparency in the processes of making decisions.
- To cooperate with different global economic institutions involved in the management of the global economy.
- To assist developing countries so that they can fully benefit from trading systems globally.
- To enhance the living standards as well as incomes while ensuring that citizens of member countries are in full employment.
- To ensure discrimination-free trade via the application of the principle of the Most Favored Nation (MFN). This principle requires member nations of the World Trade Organization to accord other members similar preferential treatment in terms of concession or tariff reduction.
- To ensure that world resources are used optimally in order to expand production globally and trade of services and goods.
- To ensure that the world environment is protected and preserved in order to benefit all global nations.
- To ensure the growth of the less developed nations by enabling them to secure a share of the international trade’s growth.
- To enlarge trade and production of services and goods.
How the objectives of World Trade Organization are achieved
The World Trade Organization has short term and long term objectives. Some of these objectives have been achieved while others entail continuous activities. In order to realize its core objectives, the World Trade Organization implements the provisions and rules that it sets in relation to its mechanism of reviewing trade policy. For instance, it ensures that countries observe the nondiscrimination policy. It also provides a platform that member countries can use to decide on the future strategies that relate to tariffs and trade.
The World Trade Organization provides facilities that are required to implement, administer and operate bilateral and multilateral agreements of the global trade. This organization strives to realize its objectives by administering rules as well as processes that relate to international trade’s disputes settlement. Additionally, it assists other international organizations like the World Bank and the International Monetary Fund in order to ensure coherence in the determination of the global economic policy.
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