The World Trade Organization (WTO) is a multilateral organization headquartered in Geneva, Switzerland. It came into existence on January 1, 1995, as a successor to the General Agreement on Tariffs and Trade (GATT). The organization functions as a central body that facilitates global trade.

The WTO provides a common platform to negotiate trade agreements among member countries and to resolve any trade disputes. It manages 60 global and about 300 Regional trade agreements. The 60 trade agreements are accorded the status of international law. The WTO comprises 164 member states.

There are also observer states that are not signatories to the WTO agreements, and they do not participate in free trade.

Functions of the WTO

The WTO’s functions can be broadly divided into the following categories:

1. Trade Negotiations

The WTO facilitates trade negotiations among countries by providing a framework to structure the agreements, as well as providing dispute resolution mechanisms. It creates an international legal framework that ensures the smooth exchange of goods and services among the member countries.

2. Implementation and Monitoring

Once the agreements are negotiated, the job of the WTO is to ensure that the signatory countries adhere to their commitments in practice. It also produces research based on the impact of the agreements on the
economies of the countries involved.

3. Dispute Settlement

The WTO also acts as a dispute settlement body when there is a trade conflict between its member states. The members of the WTO can file complaints against other member states if they feel the trade and economic policies of a country are divergent from their commitments under one of the agreements of the WTO.

Following the complaint, there are formal hearings like a court until a settlement is reached.

4. Building Trade Capacity

The WTO runs special programs to support developing countries by helping them build the capacity to participate in free trade with more developed countries. It also gives concessions under certain agreements to low-development countries to ease them into free trade with other countries.

5. Outreach

Finally, the WTO carries out lobbying and outreach across the world as a part of its larger objectives to promote free trade. They try to persuade governments to reduce barriers to trade to free, fair, and open markets around the world.