The World Trade Organization (WTO) is an organization with 164 members and 25 observer governments and aims to liberalize international trade. At the international level, the WTO has pressured developing countries to liberalize trade and investment.
Objectives of the World Trade Organization
- The main aim of the WTO is to implement the new world trade system.
- To promote world trade in a way that it benefits every country.
- To ensure that developing countries secure a better balance in sharing the advantages, resulting from the expansion of international trade, corresponding to their developmental needs.
- To remove all the restrictions to an open world trading system and introduce international economic renaissance because world trade is an effective instrument to faster economic growth.
- To enhance competitiveness among all trading partners to benefit consumers and help in global integration.
- To expand and use the available resources to the maximum level.
- To improve the standard of living for the global population and speed up economic development of member nations.
The Agreement on Trade-Related Investment Measures (TRIMS) under the WTO calls for introducing a national treatment of foreign investments and for removal of quantitative restrictions. These restrictions were largely identified in developing countries which were creating barriers in the free flow of foreign capital.
Some TRIMS agreements which were not consistent with the General Agreement on Tariffs and Trade (GATT):
- The proportion of domestic sale in foreign trade.
- Trade balancing requirements which states that the imports would not cross the limit in comparison to exports.
- Trade and its payment are made with the balance of foreign exchange.
Achievements of the WTO
- The WTO has changed the trade scenario of the entire world.
- It has revolutionised changes in media, transport and communication.
- It has created free trade and services without any restrictions.
- The WTO has ensured an increase in the export of agricultural products.
- It has resulted in the increase in the industrial efficiency and improvement in the quality of domestic products.
- The WTO has removed the barrier to foreign investment