the world trade organization

the world trade organization

Since its formation in 1995, the world trade organization has many impacts on international trade over time. International trade can be defined as the selling of goods and or services across nations. The world trade organization is the only international body that governs international trade through established laws and policies. The world trade organization has evolved from the General Agreement on Tariffs and Trade (GATT), formed in 1947 with only 23 members, post world war 2 to the powerful organization we know of today with 159 member states. As an international marketer, one has to grasp various things about the world trade organization.

The world trade organization has various vital objectives. The organization’s primary goals include; setting and enforcing rules for international trade, creating a platform for negotiations regarding trade liberation, resolving trade disputes, increasing transparency in the decision-making process, and corporation with other organizations to enhance international trade.

The world trade organization has various rules and principles that help govern international trade. The principle of nondiscrimination holds that there should be no discrimination both at and behind the border. Nondiscrimination at the border, commonly known as the most favored nation, ensures that no country treats another better than the rest. If it reduces tariffs on one nation, the same should apply to all members. On the other hand, the principle of transparency is aimed at lowering trade conflicts by making public all policies.

Consequently, the principle of reciprocity holds that any nation that reduces tariffs should expect the other countries to reciprocate. If any nation increases tariffs on another nation, the other nation reciprocates the same. The principle of flexibility allows exceptions to the world trade organization rules. For example, a nation is allowed to impose trade barriers given various conditions.

The world trade organization is crucial in international trade as it is the only body that regulates it. Through the world trade organization, barriers of international trade have been successfully handled. As a global marketer, it is essential to learn the tariffs imposed on exporting or importing goods to specific countries in order to enhance profitability.

Reference

Baldwin, R. (2016). The World Trade Organization and the future of multilateralism. Journal of Economic Perspectives, 30(1), 95-116.