The World Trade Organization and The Theory of Absolute and Comparative Advantage

. (TCO 4) What are the connections between GATT and the WTO? Explain the role of the WTO.

The World Trade Organization, or WTO, was established to grow the global economy and assure its success and safety. The WTO derived from the General Agreement of Tariffs and Trades, or the GATT. The GATT was established in 1948 in order to restore the destroyed global economy after the war. The world needed a united organization

The General Agreement on Tariffs and Trade (GATT) is a set of trade agreements. It was created in hopes for the abolition of quotas and the reduction of tariff duties among it's member nations. GATT’s most important principle was to trade without discrimination. GATT was succeeded by the World Trade Organization in 1995, formally going out of existence on April15,f 1994.

The World Trade Organization (WTO) is a global agency that is dedicated to promoting free trade between member nations. It was founded on the idea that the world can be a better place if everyone works together. Before World War II, countries believed in protecting their domestic productions by implementing tariffs, or taxes against goods that are imported. Tariffs make imported goods cost more than domestic goods, thereby protecting the success of domestic producers. Today, most nations support free trade, which is the exchange of goods across borders without restrictions like quotas or tariffs. The elimination of tariffs is meant to allow trade between nations to occur more freely.

NAFTA (North American Free Trade Agreement) was formed in 1994 and created one of the world’s largest free trade zones which includes Mexico, United States and Canada. NAFTA is an example of a multilateral approach to free trade. The multilateral approach states that a country will bargain with its trading partners to remove trade restrictions while the other countries do the same. Another multilateral approach is GATT (General Agreement on Tariffs and Trade) which regulates international trade. GATT is comprised of representatives of all WTO member countries. The WTO (World Trade Organization) was established January 1, 1995 and is headquartered in Geneva Switzerland. As of November 2015 there were one hundred sixty-two countries that were members.

The World Trade Organization was formed on January 1, 1995 however; its trade system is almost 50 years older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. The main purpose for the World Trade Organization is to offer a forum for negotiation of trade between member Governments. The bulk of these agreements came from the 1986-1994 Uruguay Round negotiations, as well as from the GATT. Currently, the WTO is host to a new set of negotiations under the “Doha Development Agenda” launched in 2001. At the center of the WTO, are the agreements reached between the majorities of the world’s trading nations. These documents provide legal guidelines (and rules) for international commerce and general business. These agreements are ultimately viewed as contracts, binding the participating governments to keeping their trade policies within agreed limits. The system’s overriding purpose is to help trade flow freely for the economic development and well being of participating governments and their countries.

participants in this conference created three organizations to help regulate the international economy. The first is the International Monetary Fund (IMF) which was established with the idea of regulating monetary policy. One of the benchmarks of the IMF is the stabilization of exchange rates and the loaning of money to help stabilize countries with balance of payments deficits. The second organization established was the General Agreement on Tariffs and Trade (GATT) whose main focus was on a liberal trading order.

On May 19,1948, the General Agreement on Tariffs and Trade or GATT was created. This was not an international organization but an inter-governmental treaty. This provided the framework for the conduct of international trade. But this expanded and grew yearly and in April 1994, in the Uruguay Round of Multilateral Trade Negotiations expanded on the GATT and created the World Trade Organization or WTO.

In the 1940’s several organizations were created to help manage and regulate the global market place: The General Agreement on Tariffs and Trade (GATT); later the World Trade Organization (WTO); International Monetary Fund (IMF); and the World Bank.

In today’s world, economies are getting more integrated with each other every day. Different agreements are made with countries to help with trade and investment between the two. By doing so, it has the ability to help both economies by increasing the flow of money and culture between them. For example, we signed the North America Free Trade Agreement to help with trade in our region and also occurred when China joined the World Trade organization. The movement of different products and ideas is referred to as globalization. Globalization is the international trade, investments, information technology that weave individual countries’ economies together. It is known as economic integration of global markets, and helps third world countries

Figure 2.1 lists the major international trade pacts. The World Trade Organization (WTO) is a supranational organization that oversees the General Agreement on Tariffs and Trade (GATT). Important regional trade pacts include the North American Free Trade Agreement (NAFTA includes the U.S., Canada, and Mexico), the European Union (EU), and the Asia-Pacific Economic Cooperation pact (APEC

The GATT’s main function was not to resolve trade disputes, which is different from WTO, but rather to provide a set of rules that countries could at least publicly declared that they follow, therefore giving all signatories to the agreement

The postwar era brought about a more multinational approach to dealing with trade issues, most notably in the establishment of the General Agreement on Tariffs and Trade (GATT) in 1948. Although there were high hopes that international labor standards could be established, the GATT made only vague references to the issue, and no concrete and enforceable standards were established. Thus, there was no provision for member states to take action against other members who

One of the biggest firms associated with globalization is the World Trade Organization. The World Trade Organization is the only international body that deals with the rules of trading between nations. It has evolved over the past half century into an entity that contract with the trade of services, intellectual property as well as its original intent of the trade of goods. The WTO controls most trade in the world today through over 100 countries, and even more on the way. The World Trade Organization is beneficial economically and we should support its principles.

     On January 1, 1995, the WTO replaced GATT, which had been in existence since 1947, as the organization controlling the main trading system. The governments that had signed GATT were then called GATT contracting parties. When signing the new WTO agreements that had the updated GATT, which was called GATT 1994. These countries then