The WTO plays a crucial role in the economic development of the nations. This paper seeks to highlight how WTO, as an intergovernmental organisation have been able to influence international trade and foster economic development among the member nations. It has been found that the nations under the oversight of the WTO enjoy open market economy, access to the global market system and ease of doing business with other member nations. It has been further mentioned that WTO focuses on the development of weaker economies and taking care of their interests while ensuring equal trade privileges. It has been concluded WTO have had positive impacts on the member nations in improving their economic conditions by enabling higher cash flows and better job creation.
The World Trade Organisation (WTO), is an intergovernmental organisation that oversees, regulates and controls international trade. It acts as a forum where governments negotiate on trade agreements, deal with trade disputes and structures trade rules. The WTO also acts as a platform for solving international trade issues faced by the member nations. The objective of WTO is largely governed by the General Agreement on Tariffs and Trade (GATT) (WTO, 2016a). It operates under the philosophy of trade being the bearer of prosperity. Therefore, in order to foster better cross border trade, the WTO has lowered or supressed the trade barriers. As a result the nations can leverage the comparative advantage of one another, which will eventually improve the economic status of the nations through increased international trade (WTO, 2016b). This paper aims to discuss about the role of World Trade Organisation in international trade and how it benefits the member nations in terms of trade and economic development.
Discussion and Analysis
The WTO is composed of 164 member nations, among which 128 of them are GATT members (WTO, 2016c). The key objective of WTO is to facilitate trade at a global scale among all the member nations, so that they can achieve economic growth and prosperity. As highlighted by Matsushita (2015), International trade can be defined as the contract of buying and selling of products (good and services) between parties who are separated by national boundaries. It typically involves the import and export activities along with outsourcing of services and resources. The member nations of the WTO benefits from certain trade policies or sale contract, which acts as the agreement for the sale of goods and services from one nation to the other (Van den Bossche, 2008).
WTO has laid down clearly defined trade contracts which are on the following grounds:
• Sale of goods contracts
• Carriage of goods contracts
• Insurance of goods contracts
• Compliance with export and import authorities
• Payment mechanism set up by buyer
The above mentioned trade contracts indicates that WTO governs the cross border trades between the member nations. Goldstein, Rivers and Tomz (2007) have mentioned that role of the WTO is highly crucial to ensure economic growth of the nations. It can be stated that no nations have the capability to produce all kinds of products and services, therefore the global trade acts as a platform for sourcing them from different regions. Moreover, not only does international trade helps in economic development through cash inflow and generation of jobs, but it also helps to foster global peace and harmony among the trading nations.