The World Trade Organization or WTO was formed in the year 1995. The main goal of WTO is to help the trading industry to become smooth, fair, free and predictable.
It was organized to become the administrator of multilateral trade and business agreements between its member nations. It supports all occurring negotiations for latest agreements for trade. WTO also tries to resolve trade disputes between member nations.
Multi-lateral agreements are always made between several countries in the past. Because of this, such agreements become very difficult to negotiate but are so powerful and influential once all the parties agree and sign the multi-lateral agreement. WTO acts as the administrator. If there are unfair trade practices or dumping and there is complain filed, the staff of WTO are expected to investigate and check if there are violations based on the multi-lateral agreements. If the offending country is found guilty of violations, sanctions are levied.
To become a member of WTO is very important. It only means that a member country automatically becomes part of the "Most Favored Nations." Having the status of being one of the "Most Favored Nation" gives access to discounted tariffs and lesser trade barriers, excessive regulations and import quotas that are all the privileges of WTO's members. These privileges pave way to bigger market for the members' products which results to more sales, more jobs and better economic growth.
More than 75% of the members are ranked as developing countries. Through their membership with WTO, they can easily penetrate the market of developed countries at lower tariffs. At the same time, developing countries are also lessening tariffs in their import market. By doing this practice, developing countries are using the chance to develop their corporations and industries into more mature and sophisticated kind until they become competitive to the market of developed countries.
Four Steps to Become a WTO Member
1. The interested country should submit an application to become a member. A committee of any member country can review this application.
2. The interested country then makes negotiations on bilateral agreements on trade with any country it prefers. The content of these agreements will apply automatically to all members of WTO.
3. The review committee of WTO creates a draft of the terms and conditions of membership which takes account of the necessary changes in its current trade policies.
4. Two-thirds of the member nations should vote that the interested country can become a part of WTO. After the voting, the new member must ratify the membership agreement.
If a country is not yet a member of WTO, they can opt to become the "observers" where they must apply for membership within five years of being an observer.
The highest decision-making committee of the WTO is known as the Ministerial Conference which meets biennially. All the members of WTO attend this conference. The last Ministerial Conference was held in Geneva from November 30 to December 2, 2009.
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