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Q.(a) Explain the criticisms faced by the World Trade Organization.

(OR)
(b) What is ‘Balance of Trade’ ? Explain the characteristics of ‘Balance of Trade’.
CBSECBSE Class XII Board 2024Subjective· 3mImportance★★★★★
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Part (a): The WTO is criticised for favouring developed nations, tolerating their farm subsidies, enforcing IP rules that restrict medicines, ignoring environment and labour, and eroding sovereignty.

Part (b): Balance of Trade is the value of visible exports minus visible imports — goods only, part of the current account, favourable or unfavourable, a flow concept, and a competitiveness indicator.

The World Trade Organization was set up to make global trade flow smoothly and freely, yet it has drawn substantial criticism.

  • Bias towards developed countries: Its rules and negotiations are seen as serving developed nations and multinational corporations, so free trade has widened rather than narrowed the gap between rich and poor countries.
  • Agricultural subsidies: Developed countries maintain heavy farm subsidies that let their produce undercut farmers in developing countries, even as those countries are pressed to open their own markets.
  • Intellectual property (TRIPS): Strong patent protection benefits large corporations but restricts access to affordable medicines, seeds and technology in poorer nations.
  • Neglect of environment, labour and health: The single-minded pursuit of trade liberalisation can encourage a "race to the bottom" in environmental and labour standards, and WTO rules have sometimes been used to challenge national health or environmental regulations.
  • Erosion of sovereignty and transparency: Member states must conform to WTO rulings; the closed "Green Room" style of decision-making is criticised as undemocratic and as forcing countries to alter domestic policies.

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