Last Updated on March 11, 2021 by Filip Poutintsev
The only worldwide intercontinental organization that is bound to deal with the trade rules among the nations is known as the World Trade Organization (WTO). The WTO agreements which were ratified in the parliament and passed and ratified by the bunch of trading nations of the world are its core as well as a goal in securing the free, predictable, and smooth flow of the trade.
Pros and Cons of World Trade Organization
The GATT (General Agreement on Tariffs and Trade) whose purpose was to promote free trade practices across the globe was superseded and continued in the name of the World Trade Organization on January 1, 1995. This is an organization where governments of several nations come together to discuss agreements and resolve disputes of trade.
Several member nations along with a legal system come together to agree upon the implementing and defending the rules and protocols which form the body of the World Trade Organization. Within the WTO, it is illegal for anyone to discriminate among cohorts of trade, but if the case is for national security, ecological fortification, and other major goals, exceptions are provided.
The World Trade Organization consists of sovereign judges who are the ones to resolve any disputes involving the trade via a process known as dispute settlement. With headquarters being in Geneva, Switzerland, the World Trade Organization has a very huge impact on the trade of the overall world and there are few details that indicate the disadvantage in such a case. Many concerns arise on the good and bad of the WTO to the developing as well as developed nations, and therefore in this article, we will discuss some of those points in brief.
Pros of World Trade Organization
1. Simplifies Businesses
The World Trade Organization is committed to laying down guidelines aimed at making business simpler. The WTO establishes these laws and regulations and guarantees that all nations comply with the trade regulations set down by them, thus simplifying businesses.
2. Endorses Harmony
One of the prime objectives of the WTO is to endorse trade between the member nations and guarantee that each nation continues to abide by the provisions of the trade treaty set by it so as to maintain harmony and peace in trade within the member nations.
3. Rouses Monetary Progress
The World Trade Organization is such an international firm that looks after all the trade-related concerns of the member nations. Thus, for confirming that people have enough to choose from, it inspires countries to vary their product to simulate monetary progress.
4. Productively Knobs Quarrels
Responsibility of the World Trade Organization is also to knob the quarrels that might arise among the nations when conducting trade amid themselves. Hence, the WTO makes sure that each dispute is heard clearly and correct jurisdiction is passed for resolving it productively.
5. Heightens Nations’ Net Income
The basic aim of WTO is to embolden trade between the nations and ensure smooth trade flow. This allows nations to do business with other nations and ensures the flow of the economy which eventually then leads to the diversification of the capital and increasing of the nations’ net income.
6. Lessens the Lifestyle Cost
As long as the matter is related to trade, WTO confirms that the nations remain fruitful which eventually raises their profiles. The countries try to maintain that profile by continuing the trade following the WTO guidelines which then improves their lifestyle by lowering the living cost.
Cons of the World Trade Center
The only concern of the World Trade Organization is to govern and maintain the conditions related to trade and thus validate the security of the governments only in the case of trade. Other than that, the WTO is not accountable for ensuring the nations’ security in any other aspect.
For a long time, WTO is blamed for being unfair towards the governments of the developing countries since it conducts its dealings where powerful governments and large firms dictate policy. Under WTO, developing nations are bound to suffer more due to the cut-off of their trade deals with other countries just because of their weak impact on the global economy.
3. Disregards Labor Rights
The WTO’s primary concern lies among the interests of big corporations and governments and thus does not care about the unjust behavior towards the laborers and workers concerned with the trade. The rights of neither the workers nor the consumers are protected by the WTO.
4. Bends Towards Multinationals
Despite the WTO’s assertion that it has set rules and regulations on trade to treat all firms equally, the rules have been designed to mostly favor multinationals and powerful firms. This compromises the trade balance between the companies and compels other small companies to be unproductive.
5. Hampers Nature
The World Trade Organization encourages countries to maintain free trade throughout the globe and inspires them to increase their trade for more profit. In doing so, the countries build more industries and technical enterprises causing the destruction of the environment.
In conclusion, the World Trade Organization is a globally recognized organization to govern the trade among several nations and to set rules and restrictions on the mode of conducting trade. This effectively aids in limiting disputes and equalizing progress among each nation which eventually increases the per capita income of the nations and aids in maintaining harmony and peace.
However, since trade is the main concern of this organization, it formulates its rules that are usually favorable to large and influential companies and governments that can contribute more towards the trade.
But doing so forces other small nations and companies to buy the products of those companies and thus remain unproductive. With the influence of WTO, many countries for improving their trade are bound to increase their productivity by increasing the number of industries that ultimately harm nature.