World Trade Organization (WTO)- Aims and Roles

Question 1

What is the WTO?

Answer 1

Inter‑governmental body that administers global trade rules. HQ: Geneva. Membership: 164 economies (as of 2025, covering ≈ 98 % of world trade).

Question 2

Core aim of the WTO

Answer 2

Promote smooth, predictable and freely flowing trade to raise living standards, job creation and sustainable development.

Question 3

Principle 1 – Non‑discrimination

Answer 3

(i) Most‑Favoured‑Nation (MFN): a tariff concession given to one member must be given to all. (ii) National Treatment: once goods are inside the border they must be treated like domestic products (no hidden taxes/regs).

Question 4

Principle 2 – Freer trade over time

Answer 4

Members commit to reduce tariffs & other barriers through successive negotiation “rounds.” Bindings lock in maximum tariff rates.

Question 5

Principle 3 – Predictability & transparency

Answer 5

Bound tariffs published; “tariff‑ceiling” cannot be raised unilaterally. Regular notification requirements give firms confidence to invest.

Question 6

Principle 4 – Promoting fair competition

Answer 6

Rules on anti‑dumping, subsidies, and state trading seek a “level playing field.” Limited, time‑bound protection for infant industries must conform to WTO subsidy codes.

Question 7

Principle 5 – Development & special provisions

Answer 7

Special & Differential Treatment (SDT): longer phase‑in periods, higher tariff bindings, and technical assistance for developing & least‑developed members.

Question 8

Main WTO functions (4)

Answer 8

1️⃣ Forum for negotiations (Ministerial Conferences). 2️⃣ Administers agreements. 3️⃣ Dispute Settlement Body (DSB) adjudicates trade conflicts. 4️⃣ Monitors trade policies via regular peer reviews.

Question 9

Example of WTO enforcement

Answer 9

If a panel finds a measure breaks WTO rules, the offender must comply or face authorised retaliation (e.g. EU–US Boeing/Airbus subsidy disputes).

Question 10

Criticisms of the WTO

Answer 10

Slow negotiations (Doha Round deadlock), Appellate Body paralysis (2019‑ ), perceived bias toward rich nations, environmental/ labour concerns.

Question 11

Recent reforms debate (2020s)

Answer 11

Proposals to restore the Appellate Body, curb industrial subsidies, tighten transparency, and integrate sustainability into trade rules.

Question 12

(1) Set & enforce multilateral trade rules

Answer 12

Administers 30‑plus agreements (GATT‑1994, GATS, TRIPS, SCM etc.). Rules create a common legal framework; violation can trigger sanctioned retaliation.

Question 13

(2) Act as a forum for trade negotiations

Answer 13

Ministerial Conferences and Geneva‑based missions give members a permanent venue to bargain cuts in tariffs, subsidies, red‑tape—far easier than arranging bilateral summits ad hoc.

Question 14

(3) Resolve trade disputes

Answer 14

Dispute Settlement Body (panel + Appellate stage) offers a rules‑based alternative to tit‑for‑tat protectionism, reducing escalation risk.

Question 15

(4) Monitor further trade liberalisation

Answer 15

“Trade Policy Review Mechanism” (TPRM) and notification requirements check that members keep markets open and implement FTA commitments.

Question 16

(5) Increase transparency in decision‑making

Answer 16

All draft rules, schedules and panel reports are published; members can question each other, making the system accountable and predictable for firms.

Question 17

(6) Assist developing countries

Answer 17

‑ Technical aid & capacity‑building (e.g. training customs officials).
‑ Longer transition periods & flexibilities (SDT).
‑ Enhanced Integrated Framework for LDCs.

Question 18

(7) Cooperate with other global economic bodies

Answer 18

Works with IMF, World Bank, UNCTAD, OECD on coherence in macro, finance, and development policies (e.g. Aid‑for‑Trade, debt‑sustainability analyses).