Role of The World Trade Organization in International Trade and Freight Distribution
As the world moved towards globalization, there was a need to have a body to control trade between countries. This need led to the formation of an inter-governmental organization called the World Trade Organization (WTO) in 1995, to oversee international trade rules. It took the place of the General Agreement on Tariffs and Trade (GATT) (Tarver, 2019).
The World Trade Organization is vital to international trade as it upholds the rules of business, which ensures order and control. It acts as a medium of dispute resolution by providing a platform and framework for trade negotiations and mediation among its member states (Tarver, 2019). It offers methods for arriving at amicable solutions when conflicts in trade arise. WTO also provides an international forum for its members to formulate solutions and agreements that would help in transitioning to a free trade system (Krishnan & Nivetha, 2018).
The WTO helps maintain peace by ensuring fairness in how member countries trade and conduct business with each other. It protects its members by lowering or raising trade barriers (Tarver, 2019). Low trade barriers translate to lower prices for goods and services, thus increased trade, while raising them protects its members from the entry of competitor goods and services, therefore maintaining marketability. Since WTO influences trade relations, it also affects freight distribution. This effect is linked to its control of trade barriers, which affect mobility and transportation cost of goods along trade routes as well as their availability. Freight distribution along trade routes through member countries of the WTO is seamless and cheaper for its members compared to non-members, because WTO members enjoy free international trade with each other.
The WTO examines and monitors the implementation and reduction of tariffs and foreign trade policies among its member countries to ensure that they are in line with trade agreements and its guidelines for fair trade (Krishnan & Nivetha, 2018).
References
- Radha Krishnan And V. Nivetha. (2018). Role of WTO In Promoting International Trade After Marrakesh Agreement. Retrieved on March 5, 2020, from https://acadpubl.eu/hub/2018-120-5/3/269.pdf
Evan Tarver. (2019). World Trade Organization (WTO). Retrieved on March 5, 2020, from https://www.investopedia.com/terms/w/wto.asp