The World Trade Organization (WTO) is an institution that aims at liberalizing and overseeing international trade. The institution regulates trade operation between members, creates a background for dialogue, formalizes trade arrangements, and creates a procedure of dispute settlement that is directed towards imposing participating countries to act in accordance with WTO agreements signed by representatives of participating countries. The WTO is advantageous to its members and the global citizens. Contracting participants and consumers in non-member states face various risks when doing business. This paper highlights the advantages of WTO to global citizens and participating nations, the risk faced by contracting parties and consumers when doing business in non-member states; in addition, it also tries to depict the world trade system without the WTO.
Advantages of the World Trade Organization to Global Citizens
The global citizen enjoys cut down cost of products and production. The global citizen also enjoys wide range of qualities and variety of choices to take from. The WTO system provides a favorable setting for importation, which provides global citizens with more choices.
The WTO creates an enabling environment for trading which increases the income of global citizens and creates more employment. Trade increases income and effective trade policies will enhances economy growth which results to more employment.
Advantages of World Trade Organization to Members
Members of the WTO enjoy the position of the “Most Favored Nation”. This essentially means that all the members of WTO are treated and regarded as the same. No member nation is given preferential trade predilection above another. WTO ensures that members enjoy the same privilege.
Members of the WTO enjoy reduced trade barrier such as import quotas, inordinate rules and regulations, and import/export tax. The members enjoy bigger market for their product and services, which results to more job opportunities, rapid economic development and more sales.
Members of the WTO have access to bigger and developed markets at a lesser tariff charge, as more than 70% members of the WTO consist of developing and developed nations. Members also enjoy all the gains they can get from any trade agreement. The gains are significant and global, as numerous nations around the world constitute the WTO.
The WTO creates a safer and more conducive trading environment for the benefit of its members, as members are aware of the rules and regulations, punishment for going against the rules, and how to go about trading worldwide.
Risks Faced by Contracting Parties and Consumers in Non-member States
Contracting parties and consumers in non-member states face quite a number of risks. For instance, running a Limited Liability Company in the United Arab Emirate, demands that nationals of the UAE be principal shareholders of the company. Hence, international investors are compelled to partner with a domestic party. As a result, disputes between shareholders may emerge, especially if one party wants to increase their participation in the running of the company or increase their percentage of profit. These parties and customers in non-member states also stand the risk of higher tariff charge.
If the World Trade Organization Was Not in Place
If the WTO was not in place, disputes would be highly prevalent among nations of the world as they would be no healthy platform and agreement terms to trade. The cost of services, products and production would be excessively high, as they would be less viable terms for trade and importation. Also, smaller nations would suffer unfairness, as they would have a lesser bargain of most every business deals. Trade between countries would be hampered, as there would be high trade barriers between nations intending to transact business.