Name: JAY SHETH

Roll.no: A-155
Subject: BUSINESS ENVIORMENT Topic: WTO FUNCTIONS

World Trade Organization

INTRODUCTION
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 IT SUPERSEDED THE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 WAS FOUNDED ON CERTAIN GUIDING PRINCIPLES—NON-DISCRIMINATION, FREE
TRADE, OPEN, FAIR AND UNDISTORTED COMPETITION, ETC. IN ADDITION, IT HAS A SPECIAL
CONCERN FOR DEVELOPING COUNTRIE

FUNCTIONS
The overriding objective of the WTO is to help international trade flow as
freely as possible while also making it predictable. To achieve this
objective, it carries out several functions which serve to reach the
ultimate objective of providing common institutional framework for the
conduct of trade relations among its member countries. 

Function 1 
WTO is a system based on rules. Its trade rules consist of approximately 60
agreements covering different areas of trade in goods, customs, agriculture,
quality infrastructure, services, intellectual property rights etc. Having rules
without implementation would not help. Thus, implementation of these
multilaterally agreed rules is vital to assure the proper functioning of the
system. With this in mind, WTO facilitates the implementation, administration,
and operation of the multilateral trade agreements while furthering the
objectives of such agreements. The WTO also provides the framework for the
implementation, administration and operation of the plurilateral agreements to which
only a handful of WTO members are parties.
Function 2 
As a member driven organization, it is the members who decide for the WTO
on different questions through negotiations. WTO provides for a forum where
Members go and try to solve the trade problems they encounter with one
another. These problems can be related to issues covered by already existing
agreements or issues not addressed yet in the WTO.
 Although it covers a great deal of trade-related matters, there are issues that
agreement could not be achieved at the time of WTO’s establishment or new
issues that came up since the establishment. Thus, it is logical that WTO also
provides for further negotiations with a view to expanding the multilateral
trading system and adapting it to the new realities
Function 3 
Imagine a system based on rules without an appropriate enforcement
mechanism. Would such a system be effective and respected by the members?
The answer is most probably, not. Therefore, the dispute settlement mechanism
is an essential part of the WTO as it ensures that the trade rules are respected
and it guarantees the security and predictability to the multilateral trading
system. The achievements of the WTO dispute settlement mechanism have been
celebrated for years by the members making it the “crown jewel” of the
organization.
Function 4
Not all WTO members are in the same level of development. The organization has
highly developed, developing and least-developed country members. Apart from
special and differential provisions offering more convenient rules for developing
countries and LDCs, WTO also developed several tools, both on its own and in
cooperation with other organizations, to support developing and least-developed
country members in participating more fully in the global trading system. These
include different technical assistance and training programs offering human,
institutional and infrastructural capacity building to members which are in need of
this. The assistance helps developing and least-developed country members to
benefit from trade more and achieve economic growth and poverty reduction through
trade
Function 5
The WTO monitors the domestic policies and regulations of the
members to make sure that they are in compliance with WTO
requirements. The Trade Policy Review Mechanism ("TPRM") exists for
this purpose. The function of the TPRM is to examine the impact of a
country’s trade policies and practices on the multilateral system. The
review tries to increase the transparency of Members’ trade policies and
practices and to improve the quality of public and interstate debate on
the trade-related issues. Around 24 countries are reviewed each year.
Function 6
The WTO does not exist in isolation from the international community. It cooperates
with international organizations and non-governmental organizations when
conducting its activities. To assure coherent and mutually supportive policies in
global economic sphere, WTO cooperates with the International Monetary Fund and
World Bank. In the quality infrastructure, food safety, sanitary and phytosanitary
area, the WTO cooperates with several standard-setting international organizations.
It is also worth mentioning WTO’s cooperation with the United Nations on the
achievement of Millennium Development Goals through trade