Lesson 41-The world trade organization and world trade patterns

Question 1

What is a WTO

Answer 1

This is an international organization whose purpose is to encourage free trade by persuading countries to reduce trade barriers.

Question 2

What are the aims of the WTO

Answer 2

1. Reduce protectionism and increase trade flow
2. Deal with complaints between member countries.
3. Organize negotiations and also make judgments against a country if necessary.
4. Encourage countries to join the movement of free trade thereby increasing international trade.

Question 3

State an advantage of the WTO

Answer 3

World trade increase along with global trade hence generating a high output (economic growth and higher output), employment(employees and gvt), incomes and standards of living. (Through consumption of cheaper and better quality goods)

Question 4

5 criticism of the WTO

Answer 4

1. The WTO rules out disputes and agreements very often in favor of the developed countries.
   2.WTO agreements can be time consuming before a final decision is made
2. Govts are prevented from providing subsidies to local traders as to avoid unfair competition.
3. Opening up trade has meant that come countries have experiences the flip side such as trade imbalances, closure of factories, loss of employment and incomes.
4. Removal of barriers across countries has lead to a rise in imports leading to the worsening of the BOP

Question 4

Reasons behind the increase in world trade

Answer 4

1. Better transport and communication has meant goods can be supplied easily and connects sellers more easily though the internet
2. Removal of tariffs and trade barriers has made international trade cheaper
3. Development of MNC’s

Question 5

What are the features of trade in developed countries

Answer 5

1.Loss of trade in the manufacturing sector and movement towards the tertiary sector
2. More air travel
3. Widening of the development gap

Question 6

What are the features of trade in developing countries?

Answer 6

1. An increase in migration
2. Increase in FDI- cheap labor and rm
3. Debt cancellation
4. Reduction in trade barriers
5. Rise in commodity dependence