World Trade Organization (WTO)

What Is the World Trade Organization (WTO)? Created in 1995, the World Trade Organization (WTO) is an international institution that oversees the global trade rules among nations. It superseded the 1947 General Agreement on Tariffs and Trade (GATT) created in the wake of World War II.

The WTO is based on agreements signed by the majority of the world’s trading nations. The main function of the organization is to help producers of goods and services, exporters, and importers protect and manage their businesses. As of 2021, the WTO has 164 member countries, with Liberia and Afghanistan the most recent members, having joined in July 2016, and 23 “observer” countries.

The WTO is essentially an alternative dispute or mediation entity that upholds the international rules of trade among nations. The organization provides a platform that allows member governments to negotiate and resolve trade issues with other members. The WTO’s main focus is to provide open lines of communication concerning trade between its members.

For example, the WTO has lowered trade barriers and increased trade among member countries. On the other hand, it has also maintained trade barriers when it makes sense to do so in the global context. Therefore, the WTO attempts to provide negotiation mediation that benefits the global economy.

Once negotiations are complete and an agreement is in place, the WTO then offers to interpret that agreement in the event of a future dispute. All WTO agreements include a settlement process, whereby the organization legally conducts neutral conflict resolution.