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Functions of WTO with Objectives and Principles

Last updated on Oct 3, 2023

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There are several functions of the WTO World Trade Organization, as it is an international organization that
deals with the global rules in trade. The primary function of WTO is to ensure that trade flows smoothly,
predictably and freely as possible. The World Trade Organization (WTO) is an intergovernmental
organization that holds international trade between nations. The WTO aims to ensure that trade flows as
smoothly, predictably and freely as possible. Because of the WTO, trade around the globe has become so
tagged, managed and hassle-free.

The functions of WTO are a vital topic to be studied if a learner wants to understand the meaning of WTO
at its core, as questions are expected from this part of the UGC-NET Commerce Examination.

In this article, learners will be able to understand in detail the function of WTO along with other essential
topics like its objectives, principles, etc., which are vital to be known.

Read on Trade Facilitation Agreement.

World Trade Organization (WTO)

In brief, the WTO or World Trade Organization, is a place where countries meet to make rules and settle
disagreements on trade. It helps to settle trade disagreements between countries. It supports developing
countries so they can benefit more from trade. The primary function of the World Trade Organization WTO
is to liberalize international trade through negotiating agreements with clear rules that promote more open,
fair and predictable conditions for trade among its member countries.

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Functions of WTO
The functions of WTO have been stated below.

Promote trade liberalization: The WTO aims to progressively lower trade barriers such as tariffs,
quotas and subsidies. The goal is to facilitate increased trade among nations.
Settle trade disputes: The WTO is a platform for member countries to negotiate and resolve trade
conflicts. This helps create a stable trading environment.
Increase market access: The WTO works towards eliminating discriminatory treatment in
international trade. The goal is to allow all countries to benefit from global trade.
Achieve trade policy transparency: The WTO notification procedures require member countries to
report and share information on trade policies, activities and measures. This helps create
predictability.
Protect the interests of developing countries: The WTO aims to integrate developing countries into the
multilateral trading system. Special provisions are made for developing economies.
Discuss issues related to trade and globalization: The WTO provides a forum for nations to discuss
issues such as the environment, e-commerce, trade facilitation, competition policy, transparency in
government procurement, etc.
Settle trade rules and obligations: The WTO maintains and enforces the legal framework of
international trading rules and obligations. These cover goods, services as well as intellectual
property.
Resolve future trade challenges: The WTO aims to deal with new and emerging challenges in global
trade and ensure the continued relevance and effectiveness of the multilateral trading system.
It negotiates and administers rules for trade between nations. These rules cover goods, services and
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intellectual property.
It provides a platform for member countries to settle trade disputes. When countries disagree over
trade, they can come to the WTO to resolve these issues.
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It monitors the trade policies of nations and ensures transparency. Each country reports its trade
policies and activities to the WTO.
It offers training programs to help developing countries understand trade rules and expand their trade.
The aim is to close the gap in trade
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Super and developing nations.Pass
 It cooperates with other global organizations like the World Bank, IMF, WHO, ILO, etc., on issues such
as trade, finance, health, labour, etc. Get Started
It researches trade and publishes reports on global trade trends and issues. This helps countries in
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policymaking.
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Structure of the World Trade Organization

The World Trade Organization (WTO) is an international organization that deals with the global rules of
trade between nations. It provides a framework for negotiating and formalizing trade agreements and a
dispute resolution process. The structure of the WTO consists of several key components:

Ministerial Conference: The highest decision-making body of the WTO is the Ministerial Conference,
which consists of trade ministers from all WTO member countries. It meets approximately every two
years to make decisions on various trade-related issues, including the negotiation of new trade
agreements.
General Council: The General Council is responsible for overseeing the day-to-day operations of the
WTO. It meets regularly and carries out functions such as monitoring trade policies, handling trade
disputes, and coordinating negotiations.
Councils and Committees: The WTO has numerous specialized councils and committees that focus
on specific trade areas, such as goods, services, intellectual property, and trade and development.
These bodies facilitate negotiations, monitor the implementation of trade agreements, and address
trade issues within their respective domains.
Secretariat: The WTO Secretariat, based in Geneva, Switzerland, serves as the administrative arm of
the organization. It provides support for negotiations, helps member countries with dispute
settlement procedures, and conducts research and analysis on trade-related matters.
Dispute Settlement Body (DSB): The Dispute Settlement Body is responsible for resolving trade
disputes between member countries. It includes panels and an Appellate Body that reviews panel
reports. The DSB ensures that trade disputes are settled according to WTO rules.
Trade Policy Review Body: The Trade Policy Review Body conducts periodic reviews of the trade
policies and practices of member countries. These reviews aim to increase transparency and
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encourage members to adhere to their trade commitments.
Trade Facilitation Agreement (TFA) Committee: The TFA Committee oversees the implementation of
the Trade Facilitation Agreement, which aims to simplify and streamline customs procedures to
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facilitate trade.
Subsidiary Bodies: There are various subsidiary bodies and working groups that focus on specific
issues, such as agriculture, technical barriers to trade, sanitary and phytosanitary measures, and
trade-related
Exams aspects of intellectual
Testsproperty rights (TRIPS). Super Pass
 Specialized Agreements: The WTO administers several specialized agreements that cover trade in
goods, services, and intellectual property. Notable agreements include the General AgreementGet
onStarted
Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), and the Agreement on
Overview
Trade-Related
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Aspects of Intellectual Property Rights (TRIPS). English
Trade Negotiations: The WTO conducts negotiations on various trade issues, including the Doha
Development Agenda (DDA), which addresses trade-related development concerns. Negotiations
involve member countries and are aimed at liberalizing trade and updating trade rules.
Working Parties for Accession: Countries seeking to join the WTO go through a process of negotiation
and accession. Working parties are established to facilitate the accession process by addressing
trade-related issues and commitments.

The WTO operates on principles of non-discrimination, transparency, and rules-based trade. Its structure
and functions are designed to promote global trade, resolve trade disputes, and provide a forum for
member countries to negotiate and manage their trade relations. The organization plays a significant role
in shaping international trade policies and practices.

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Objectives of WTO
The objectives of the WTO have been stated below.
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Promote trade liberalization: The main goal of the WTO is to liberalize international trade by removing
barriers like tariffs and quotas. This means making it easier for goods and services to cross borders.
Establish a rules-based trading system: The WTO aims
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resolution mechanism to govern international trade. This provides stability and predictability for
traders and investors.

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 Ensure fair competition: The WTO tries to ensure a level playing field for all members through
agreements that prevent unfair trade practices like export subsidies and dumping. Get Started
Integrate developing countries into the global economy: The WTO seeks to help developing countries
Overview by lowering trade barriers they face and providing them with technical assistance.
Test Series This aims to help
English
increase their exports and economic growth.
Provide a forum for trade negotiations: The WTO acts as a venue for member countries to negotiate
lower trade barriers and resolve trade disputes. This helps facilitate further trade liberalization over
time.
Increase global output: By reducing trade barriers and facilitating more trade, the WTO aims to
improve production efficiency and allow countries to specialize in what they produce best. This can
increase global output and economic prosperity.
Improve living standards: By increasing trade and economic growth, the WTO tries to ultimately help
improve living standards and reduce poverty worldwide.
Create employment: More trade and economic activity created by the WTO system can lead to more
jobs being created, particularly in developing countries where exports play a prominent role.
Transfer of technology: Increased trade and investment flows can help facilitate the transfer of
technology and know-how between countries, mainly from developed to developing nations.
Environmental sustainability: The WTO promotes trade policies that support environmental
sustainability through various WTO agreements and initiatives.
Foster development of least-developed countries: The WTO has frameworks and provisions to help
the least-developed countries integrate into the global trading system and reap the benefits of trade.

Read about WTO ministerial conference.

Scope of WTO
The scope of WTO has been stated below.

Negotiating trade agreements to reduce trade barriers and establish rules for global commerce. This
includes agreements on goods, services and intellectual property.
Administering existing trade agreements by monitoring member countries' compliance and resolving
interpretive issues that arise.
Providing a forum for members to negotiate further trade liberalization through new rounds of talks
and agreements.
Establishing a dispute settlement mechanism to resolve trade conflicts between members through a
quasi-judicial process. This helps enforce the rules and commitments countries have agreed to.
Collecting and publishing data on international trade in goods and services to provide transparency
and inform trade policies.
Providing technical assistance and training to help developing countries better understand the global
trading system and implement WTO agreements.
Important
Monitoring members' trade policies to ensure Linkswith WTO obligations and do not create
they comply
unfair trade advantages.
Functioning as an international organization where members exchange information, share best
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practices and build relationships to facilitate In App
dialogue and cooperation.
Setting guidelines and standards on trade-related issues to help harmonize policies and regulations
across countries.

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 Supporting the interests of developing and least developed countries through frameworks,
concessions and technical support. Get Started

Read about India's foreign trade policy. English

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Principles of WTO
Following are the principles on which WTO functions.

Trade without discrimination - The most fundamental principle is that members must treat imports
from other members no less favourably than domestic goods or goods from any other country. This
means no discrimination based on nationality.
National treatment - Members cannot treat imported goods less favourably than similar domestic
goods once they have passed customs. This ensures fair competition in the domestic market.
Binding and transparent commitments - Members make obligatory commitments to reduce trade
barriers and open their markets. These commitments are legally binding and transparent.
Freer trade through negotiation - Members negotiate successive rounds of trade liberalization to
further reduce tariffs and other trade barriers. The objective is progressively freer trade.
Reciprocity and mutual benefits - Concessions and obligations must provide mutual benefits to
members. Countries reduce trade barriers in exchange for similar concessions from others, resulting
in balanced reciprocity.
Equal treatment for developing countries - Special provisions are made to grant developing countries
flexibility in implementing agreements and commitments. Longer transition periods are allowed.
Promoting development and economic welfare - Members recognize that trade liberalization can
support development and improve living standards, particularly for developing nations. This is an
underlying purpose of the WTO system.
Peaceful resolution of disputes - The WTO provides a framework for resolving trade conflicts
peacefully through negotiated settlement or adjudication. Using unilateral action is discouraged.
Openness and transparency - Members agree to publish trade laws and regulations, inform other
members of new policies and notify the WTO of changes in existing policies. This promotes
transparency.

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Conclusion
The WTO helps countries trade. They have rules to make trade easy. The WTO has 164 member countries.
The WTO wants trade to be free and fair for all. They want trade to help poor countries. The WTO does
many things. They make deals to lower trade walls. They solve fights between countries. They help
countries follow the trade rules. They collect trade facts. They help poor countries trade better. They watch
that countries follow the trade rules. Important Links

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