Context

• India has recently hit back at allegations in the World Trade Organisation (WTO) that it provides more support to domestic farmers than is permitted.
• Five countries led by the US have estimated that India provides “significantly more” support to its rice and wheat farmers than it has reported to the WTO.

World Trade Organisation (WTO)

• The WTO is an international organization that sets the rules for trade between countries.
• Main Aim: To make world trade as smooth, predictable, and free as possible.
• Headquarters: Geneva, Switzerland
• Secretary-General: Ngozi Okonjo-Iweala

Formation and objectives

• Formation: The WTO was established on 1 January 1995. It is the successor to the General Agreement on Tariffs and Trade (GATT), established in 1947.

Objectives:

• Reducing trade barriers: The WTO strives to reduce trade barriers such as tariffs, quotas and other restrictions between countries.
• Providing a platform for trade: The WTO provides a platform for countries to negotiate trade agreements and settle disputes.
• Coordination of trade policies: The WTO coordinates the trade policies of member countries and makes them transparent.
• Assisting developing countries: The WTO provides technical assistance and capacity building to developing countries to participate in trade.

Major functions of the WTO

• Management of trade agreements: WTO manages several trade agreements that include goods, services, intellectual property, etc.
• Settlement of trade disputes: WTO has a dispute settlement system through which member countries can settle their trade disputes.
• Review of trade policies: WTO regularly reviews the trade policies of member countries.
• Organizing trade negotiations: WTO organizes trade negotiations from time to time to improve trade agreements.

Importance of WTO

• The WTO plays an important role in world trade. It helps integrate the global economy and promote growth. Through the WTO, countries get access to each other's markets, which increases production and employment.
• Criticism of the WTO
• The WTO is also criticized. Some people believe that the WTO does not adequately protect the interests of developing countries and that it gives more importance to the interests of multinational companies.