World Trade Organisation (WTO)

The World Trade Organisation is the principal international body that makes and administers the rules of trade between nations. It was established on 1 January 1995 as the successor to the General Agreement on Tariffs and Trade (GATT), which had performed a similar role on a more limited, provisional basis since 1947. The WTO is headquartered in Geneva, Switzerland, and today counts the overwhelming majority of trading nations, including India, among its members.

The WTO's objectives are broader than simply lowering tariffs. They include raising the standard of living of people in member countries; working towards full employment; expanding the production of, and trade in, goods and services; ensuring that the world's resources are put to their most efficient and optimal use, in line with the goal of sustainable development; and steadily reducing tariff and non-tariff barriers that restrict trade between countries. In other words, the WTO treats freer trade not as an end in itself but as a means to raise incomes and living standards worldwide, while explicitly keeping sustainable development in view rather than pursuing growth in trade volumes alone.

To pursue these objectives, the WTO performs several concrete functions. First, it administers and implements the multilateral trade agreements that its member countries have negotiated and signed, making sure members honour the commitments they have made. Second, it acts as a permanent forum for trade negotiations, giving member countries a standing platform to negotiate further liberalisation and to update trade rules as circumstances change, rather than having to convene a fresh conference each time. Third, and distinctively, the WTO operates a dispute-settlement mechanism: when one member country believes another has violated a trade agreement or unfairly restricted its exports, it can bring the matter to the WTO, which examines the dispute and issues a ruling, giving international trade a rules-based system for resolving conflicts rather than leaving countries to resort to unilateral retaliation. Fourth, the WTO monitors and reviews the trade policies of its member countries on a regular cycle, so that other members and the wider public can see whether a country's actual trade practices match its stated commitments. Fifth, it provides technical assistance and training programmes to developing and least-developed countries, helping them build the capacity to participate effectively in the multilateral trading system. Finally, the WTO cooperates with other major international economic bodies — including the World Bank and the IMF — so that global trade, development, and monetary policy are addressed in a more coordinated …