Q.Which of the following organisations sets the rules for the global trading among its member nations ? Choose the most appropriate option. (A) United Nations (B) World Trade Organisation (C) North American Free Trade Association (D) South Asian Free Trade Agreement

The question asks us to identify which organisation holds the authority to set rules for international trade on a worldwide scale. To answer this, we need to understand what each option represents and the scope of its mandate.

The United Nations is the broadest international organisation, dealing with peace, security, human rights, and development across the globe. While it touches on economic issues through agencies like UNCTAD, it does not directly set trade rules or adjudicate trade disputes between nations. Its role is more about fostering cooperation and dialogue than creating binding commercial regulations.

The World Trade Organisation, established in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT), exists specifically to govern international trade. It provides the legal framework within which member countries negotiate trade agreements, and it operates a dispute-settlement mechanism to resolve conflicts when nations believe others have violated trade rules. The WTO's agreements cover goods, services, and intellectual property, and its decisions are binding on members. With over 160 member nations, it is the only global institution with this mandate. …

The World Trade Organisation (WTO) emerged from the General Agreement on Tariffs and Trade (GATT), which was established in 1948 in the aftermath of World War II. The primary objective of GATT was to promote free trade among member countries by reducing tariffs and other trade barriers. The underlying belief was that fewer restrictions on international trade would lead to economic growth and greater prosperity for all nations. Over several rounds of negotiations, GATT successfully brought down tariffs on industrial goods, fostering a more integrated global economy.

However, as the global economy evolved, the scope of international trade expanded beyond just goods to include services and intellectual property. This necessitated a more robust and comprehensive framework, leading to the creation of the WTO in 1995. The WTO inherited GATT's principles but established a permanent institutional structure, a more formal dispute settlement mechanism, and broader agreements covering areas like trade in services (GATS) and intellectual property rights (TRIPS). Its overarching goal remained the same: to ensure that trade flows as smoothly, predictably, and freely as possible.

Despite its stated aims of promoting equitable trade, the WTO has faced significant criticism from developing countries. Many feel that the organisation's rules and their implementation often favour developed nations, perpetuating existing economic inequalities rather than alleviating them. Developing countries frequently argue that they are pressured to open their markets to goods and services from developed countries, while developed countries often maintain protectionist policies in sectors where developing countries have a comparative advantage, such as agriculture. This imbalance creates an uneven playing field, hindering the economic growth and development prospects of poorer nations.