World Trade Organization Definition, History, Facts and Working.
                     World Trade Organization: Definition, 
History, Facts and Working
World Trade Organization
• The World Trade Organization (WTO) is a global organization that helps countries 
and producers of goods deal fairly and smoothly with conducting their business 
across international borders. 
Source: study.com
History
• The WTO was officially created in January of 1995 and essentially replaced the 
General Agreement on Tariffs and Trade (GATT), which had been in force since 
1948, a few years after the Second World War. 
Source: study.com
Initial Phase
• Before the WTO was created, an initiative to start something similar known as the 
International Trade Organization (ITO) took place. 
• Unfortunately, the ITO treaty was not approved by the U.S. and a few other countries 
and ultimately never went into effect.
Source: study.com
Objectives
• The WTO has six key objectives: 
– (1) to set and enforce rules for international trade
– (2) to provide a forum for negotiating and monitoring further trade liberalization
– (3) to resolve trade disputes
– (4) to increase the transparency of decision-making processes
– (5) to cooperate with other major international economic institutions involved in global economic 
management
– (6) to help developing countries benefit fully from the global trading system.
Source: britannica.com
Resolution of trade disputes
• The GATT provided an avenue for resolving trade disputes, a role that was strengthened 
substantially under the WTO. Members are committed not to take unilateral action against other 
members. 
Source: britannica.com
WTO Help in Development
• The WTO can help countries develop underlying the WTO’s trading system is the fact that more 
open trade can boost economic growth and help countries develop.
• In that sense, commerce and development are good for each other.
Source: drishtiias.com
WTO can give the weak a 
stronger voice
• Small countries would be weaker without the WTO. Differences in bargaining power are narrowed 
by agreed rules, consensus decision-making and coalition building.
• Coalitions give developing countries a stronger voice in negotiations.
Source: drishtiias.com
Dispute Settlement Body 
(DSU)
• The General Council convenes as the Dispute Settlement Body (DSB) to deal with disputes 
between WTO members.
• Such disputes may arise with respect to any agreement contained in the Final Act of the Uruguay 
Round that is subject to the Understanding on Rules and Procedures Governing the Settlement 
of Disputes (DSU).
Source: drishtiias.com
WTO and India
• India is a founder member of the General Agreement on Tariffs and Trade (GATT) 1947 and its 
successor, the WTO.
• India's participation in an increasingly rule based system in the governance of international trade 
is to ensure more stability and predictability, which ultimately would lead to more trade and 
prosperity.
Source: drishtiias.com
How WTO work?
• It administers existing multilateral trade agreements. Every member receives Most Favored 
Nation Trading Status. 
• Second, it settles trade disputes. Most conflicts occur when one member accuses another of 
dumping. 
• Third, it manages ongoing negotiations for new trade agreements. 
Source: drishtiias.com