Why in News?
- Brazil has filed a complaint against the United States at the WTO over a 50 % tariff on Brazilian imports, drawing attention to the organisation’s role in resolving trade disputes.
Overview of the WTO
- The WTO is the principal global organisation governing international trade rules. It offers a forum for negotiations, resolves disputes and promotes free and fair trade practices.
- Headquartered in Geneva, Switzerland, it was established on 1 January 1995, replacing the General Agreement on Tariffs and Trade (GATT) of 1947.
Historical Background
- After World War II, nations sought to create a rules‑based system for trade to avoid protectionist policies that had worsened the Great Depression.
- GATT facilitated tariff reductions among members. During the Uruguay Round (1986–1994), trade rules were expanded to cover services and intellectual property, leading to the creation of the WTO.
Objectives
- Promote free, predictable and transparent trade flows.
- Reduce tariffs and non‑tariff barriers.
- Provide a platform for negotiations and cooperation on trade matters.
- Offer legal procedures to settle disputes among members.
- Assist developing and least‑developed countries in integrating into the global trading system.
Core Functions
- Administer trade agreements: Ensure members comply with obligations they have signed.
- Forum for negotiations: Facilitate talks on trade in goods, services and intellectual property.
- Dispute settlement: Provide a structured mechanism to resolve trade disagreements.
- Trade policy review: Enhance transparency by reviewing members’ policies.
- Capacity building: Offer training and technical assistance to developing countries.
- Cooperation: Work with institutions such as the IMF and World Bank to ensure coherence in global economic policy.
Conclusion
The WTO remains vital for maintaining a rules‑based trading system. However, it faces challenges from protectionism and geopolitical tensions. Reform efforts aim to strengthen its dispute‑resolution mechanisms and update rules for the digital economy.
