 The WTO

What is the WTO?  The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.  At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.  The goal is to help producers of goods and services, exporters, and importers conduct their business.

What is the point of the WTO?  Trade friction is channeled into the WTO's dispute settlement process where the focus is on interpreting agreements and commitments, and how to ensure that countries' trade policies conform with them.  That way, the risk of disputes spilling over into political or military conflict is reduced.

Why WTO?  Consumers and producers know that they can enjoy secure supplies and greater choice of the finished products, components, raw materials and services that they use.

WTO Agreements  At the heart of the system are the WTO’s agreements, negotiated and signed by a large majority of the world’s trading nations  These agreements are the legal ground-rules for international commerce.  Essentially, they are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybody’s benefit.

What is traded?  Goods: food, natural resources, cars, textiles, etc.  Services: banking, insurance, hotels, transport companies, etc.  Intellectual Property: ideas, copyrights, patents, trademarks, product names, etc. are protected

How Are Disputes Resolved?  Enforced rules so trade flows smoothly  Countries can bring disputes to the WTO if they think their rights have been infringed  Judgments are made by independent experts and are based on the agreements and commitments made by individual companies  300 cases in the last 8 years

What else does the WTO do?

Policy Review  Improve transparency and understanding of the policies of different countries  Assesses the impact of trade policies  Gives feedback to countries  All WTO members much undergo reviews.

Cut Living Costs and Raise Living Standards  The prices we pay for our food and clothing, our necessities and luxuries, and everything else in between, are affected by trade policies  Protectionism is expensive: it raises prices. The WTO’s global system lowers trade barriers through negotiation and operates under the principle of non-discrimination. Food is cheaper if protection is reduced. When you protect your agriculture, food is artificially expensive. When protection is particularly high — as when market prices are naturally low — the impact can be huge.

Help Countries Develop  Underlying the WTO’s trading system is the fact that more open trade can boost economic growth and help countries develop  Over three-quarters of WTO members are developing or least-developed countries. All of those in the queue to join are likewise developing countries.