The World Trade Organization Essay -- International Monetary Fund

The World Trade Organisation (WTO) is today seen as one of the pillars of international trade and financial systems of the world alongside the World Bank and the International Monetary Fund, despite being only sixteen years old. With what began as the succession to the previous guidelines and rules set out by the General Agreement on Tariffs and Trade back in 1948, it is now seen as the ‘main unifying force of world trade today’ a key player in both the conduct of trade relations and global governance. (Herman, 1999) Today, as the world’s economy and its nations continue to change and grow together with the global business environment itself, the WTO has faced new challenges and perhaps its biggest challenges to date which question the relevance and future of the WTO. The essay will address such concepts through the analysis of the WTO’s main role, the importance and successes of the WTO to date, the challenges it currently faces and a look towards its pote ntial relevance in the future of world trade. The discussion will be aided through the use of published data, literature, online sources and journals. (WTO, Trading into the future 2011) Beginning with only 23 members, the WTO currently stands at 153 members representing a total of 97% of all world trade although this is set to increase following Russia’s accession into the WTO. This statistic details the importance of the WTO as the only international body that deals with the rules of trade between nations. (Hamilton, Webster 2009) The WTO was created as the previous system the General Agreement on Tariffs and Trade (GATT), needed an institutional and stronger framework to allow them to drive forward policies and advice. The WTO’s overriding principle is to help free trade,... ...ineffective with the growing number and diversity of members. Suggestions to overcome the problem include ‘Critical-Mass’ thinking and the creation of smaller groups of members based on similar trading characteristics may improve the system. In light of the recent financial crisis the role of the WTO is critical, in which its positive impact on world trade to date may become forgotten in light of recent criticisms. The WTO needs correct leadership to overcome the challenges today, to maintain its future survival and ensure it continues to be of success and further improve world trade. If change is not implemented successfully, the great negotiation forum it once was it will instead result in a forum in which the great members will struggle to compromise on trade issues thus harming the WTO’s main purpose which is to encourage the growth of world trade.