Role and Function of World Trade Organization in International Business

This report discusses the role and function of the World Trade Organization (WTO) in promoting international business and managing trade disputes. It analyzes the motivations behind the formation of the WTO, its functions, and the challenges faced by the organization in achieving its aims of trade enhancement between different countries.

Individual academic report

Executive Summary
Business is initiated with an aim to earn higher profit margin. There are several
organizations are working within different countries that play crucial role in overall development
and growth of economy. Here, World trade organization is an autonomous body that is working
at global level for enhancement of international trade and practice within different countries. It is
also responsible to prepare appropriate policies, rules, regulations in order to manage business in
an effective manner. There are several functions performed by organization to attain predefined
objectives. There are ample of challenges also faced by WTO while performing different
functions for betterment of international trade. So, it is really essential for authorities of entity to
manage different functions of organization in significant manner.

Table of Contents
INTRODUCTION.......................................................................................................................................4
Literature review.....................................................................................................................................4
Analysis and Discussion..........................................................................................................................7
Discuss the motivations behind the formation of World trade organization............................................7
Function of World trade organization......................................................................................................8
Analyze the suitability of WTO and challenged faced by organization in achieving its aims of trade
enhancement between different countries................................................................................................9
Evaluate the effectiveness of WTO with relevant example along with the impact of its policies over
specific organization and industries.......................................................................................................10
CONCLUSION.........................................................................................................................................11
REFRENCES............................................................................................................................................12

INTRODUCTION
There are several organizations are working in different countries at global level that are
managed as well as controlled by world trade organization. Here, WTO is a global a body that
formulated rules and regulations of trade between different nations. It controls Imports and
exports between different countries at global level. It was founded in 1995 and headquartered in
Geneva Switzerland (Suttle, 2017). It deals with regulations, compliances of trade in services,
goods and well as intellectual properties and also provides a framework to different nations for
negotiation on trade agreement. In addition, WTO is considered as the largest economic
organization across the world. It was formulated as the replacement of General Agreement on
Tariffs and Trade (GATT) and currently operating at global level as an autonomous body. The
current report discuss regarding the role, function of WTO in the enhancement of business. It
also comprises a detailed overview regarding the previous studies on the topic. Further, reasons
to establish the organization along with its functions, challenges are also discussed in the present
report. Further, the impact of WTO over business entities at global level also discussed in the
following report.
Literature review
According to McGovern, (2018), it is analyzed that WTO is an international organization
that has been initiated in order to bring liberalization in global trade. Main aim is to maintain
remarkable trade relationship between different nations in order to facilitate international
business. Previously, there were GATT organization which regulates business and determine
necessary rules and regulations of trade. It was not proved successful in terms of managing
international trade and the disputes between different countries. In addition, there were several
restrictions over business that also restricts overall growth of organizations within country. So, it
is really essential to establish such an organization that is more liberalize and able to promote
international business in significant manner. Therefore, WTO is initiated in the year of 1995 that
also facilitate trade of services as well as intellectual properties between different nations. The
aim of this organization is to improve transparency of decision making, resolve trade disputes,

cooperate with other economic institutions and more. It is analyzed that main focus of GAAT
was on agriculture and textile products while WTO focuses on services, investments and more.
In addition, there were nearly 23 countries were the member of GATT that increases currently at
rapid rate. Now, there are more than 160 countries are associate with World trade organization.
Disputes between nations is also a major issue that need to be addressed in an efficient manner. It
is also analyzed that one of the main reason of establishment of organization is to manage the
trade disputes of different nations effectively. It also aims to provide equal treatment and
opportunities to all nations. For this, there is equal assess of market has been provided to small
countries in order to ensure their growth and success. So there are several reasons due to which
WTO is initiated and this will really help in growth and expansion of international trade in an
efficient manner.
According to Tans, (2017), business between different countries is regulated as per the
rules and regulations of World trade organization. It is analysed that WTO is global organization
that is responsible to manage imports as well as exports between different nations in an efficient
manner. There are several countries are member of this organization thus have access of
international market place. Apart from formulating rules entity is also responsible to minimize
the disputes regarding international trade. In addition, there are several functions are performed
by WTO such as formulation of agreement, handling disputes and more. There is an agreement
has been prepared for the benefit of all members to promote imports and exports at global level.
In addition, it also works as an intermediary between countries that are involved in international
trade. Here, organization is responsible to manage trade negotiation between members so that
there is no disputes occurred and business can be manage in an effective manner. There are
several policies have been formulated by WTO with an aim to facilitate effective trade practices
across the globe. Mangers of organization also review the policies in regular intervals so that
they can undertake appropriate changes. Main function of entity is to provide assistance to
developing economies in order to ensure their growth. For this, it provides necessary technical
assistance, training to the business personnels of developing nation. In addition, it always ensure
to provide equal opportunities and assess of market to smaller and weaker economies. There are
several other organizations that also work in different fields as autonomous bodies at global
level. So, it is also essential to have better cooperation with these entities in order to get
necessary support. Therefore, there are several functions are performed by WTO with an aim to

enhance international trade and establish better business relationships between different nations
that is really crucial for growth and development of economies.
According to Rieckmann, (2017), there are several organizations that are engage in
international trade and regulate business as per the rules and regulations of WTO. It is analyzed
that international trade is executed between different countries so it is really essential to ensure
the presence of necessary rules and regulations in order to regulated business in an efficient
manner. It also works to manage disputes between different countries that is really essential to
maintain effective relationship among nations at global level. In addition, it also provides
necessary assistance, support to small economies and countries so that they can grow and expand
business in an efficient manner. Therefore, WTO is really suitable for growth and success of
international business. It helps to formulate policies that are crucial to facilitate trade across
different nations at global level. In addition, it also provide technical training to developing
nation to ensure their progress that is also a reason that number of member nation of WTO is
increasing rapidly. Therefore, WTO is really suitable for growth and promotion international
business across the world.
It is monitored that there are several challenges are being faced by World trade
organization that are related to dispute settlement cases. There are several cases have been filed
against WTO by member countries that need to address in an efficient manner. As per the current
time, it is really essential to adopt advance as well as innovative techniques in order to promote
business in an efficient manner. However, technologies adopt by WTO are not adequate as well
as relevant that may create constraint in overall growth of organization. There are several
changes have been introduced in the present structure of World trade organization that affects its
overall performance and operations. Thus, there are several challenges are being faced by
organization in order to undertake its predefined function.
According to Mario Larch and et. al, (2019), there are several policies have been
formulated by WTO in order to manage international business in an efficient manner. There are
several countries that are getting benefited with current policies of organization. In addition, they
also make necessary improvements in existing policies on regular basis. It is analysed that
organizations are highly affected with policies of WTO. Managers of companies are required to
take effective decisions related to imports and exports in order to manage whole business

effectively. in addition, it also affects overall profitability of entities by facilitating imports and
exports of business. So, it is really essential for each and every organization as well as industry
to consider the policies of WTO while formulating their business policies for future growth and
success. It is also analysed that organization help to promote international business but it is not
considered suitable from the prospective of domestic business. Due to enhancement in
international business the progress and growth of domestic companies slow down that need to
manage in an effective manner. So, it is really essential to assess the prevailing policies of WTO
and make necessary changes in organizational policies accordingly. There is an agreement
prepared by World trade organization that is agreed by all members. Main aim of organization is
to help producers, owners to manage the business of goods, services in an effective manner. In
addition, it helps to facilitate trade communication between different nation that is really
essential to maintain better relationship between member countries. Therefore, the impact of
policies of WTO is really helpful for companies in order to manage their business in an efficient
manner.
Analysis and Discussion
Discuss the motivations behind the formation of World trade organization
It is analysed that WTO is working at global level in order to promote business in
different countries (Khan, 2017). Main aim to initiate organization is to minimize trade disputes
and maintain better relationship within nations. There is a proper agreement is prepare by WTO
that is agreed by all the members to maintain business in an effective manner. Motivation behind
the formation of organization is given as under:
To enforce rule of international trade: The main reason to establish World trade
organization is to formulate rules and regulations in order to promote business in an efficient
manner. There are several countries are members of organization who perform business
functions in guidance of the policies of organization. The police are prepare as well as reviewed
by members of entity in regular basis in order to make necessary improvements. These rules are
essential and help to manage international business in an efficient manner.
To resolve trade conflicts: It is monitored that there are several disputes are prevailing
within countries that are involve in international business (Kaminskas and Bridge, 2016). So, it is
really essential to minimize trade conflicts between nations so that effective trade relations can

be maintained across the world. All the business transaction are controlled with predefined
agreement of WTO that is formulated by the consensus of all member nation. Before WTO there
were an organization called GATT under which there were no specific regulations in order to
manage business as well as disputes. It really helps to resolve disputes between different nations
in an efficient manner.
With the above discussion, it is seen that there were a lot of reason to establish world
trade organization. Apart from above stated motives, one of the crucial reasons is to bring
liberalization within international business. It is analysed that WTO is more liberal that provides
an opportunity to member countries to transfer good and services with each other in an efficient
manner. In addition, it also includes transaction of services, intellectual property rights and more
that is crucial to maintain better relationship between different nations across the globe. So, there
are several reasons due to which WTO has been initiated which are really helpful in order to
improve business transaction as well as trade relationship between different nations at global
level.
Function of World trade organization
There are several functions are performed by world trade organization that are related to
management of the overseas business within different countries (Bourcieu, 2017). It is the largest
body of managing trade at global level. For this purpose there are ample of functions performed
by organization which are given as under:
To facilitate trade negotiation: It is considered as major function of WTO as per which
trade agreement for international trade is formulated. There are 164 members of organization and
agreement is formulated with the negotiation of different nations. In 2001, there was negotiation
done by developing nations on non agriculture tariffs, trade and environment and more. It helped
to bring several changes in current policies of WTO that will help in development of smaller
countries.
To formulate global trade rules: It is analyzed that global trade is governed with several
rules, regulations as well as policies (Messenger, 2016). Producers as well as exporters both are
well known with the policies, rules of international trade that really helps in execution of
business transaction between different nations at global level. It helps in formation of prosper,

peaceful economy across the globe. In addition, predefined rules also help to resolve the conflicts
and manage disputes between member nations in an efficient manner.
To provide training and technical assistance to members of developing nation: In
members of WTO, developing countries are also included. Organization provided necessary
support, assistance to smaller economies in order to ensure their growth and development. For
this, there are various regional seminars are organized across the world to enhance prosperity of
countries at global level. It is monitored that in 2017, there were nearly 18500 people get
benefited from training session of WTO that was formulated to enhance the knowledge of people
regarding agreement of WTO and global trade rules.
It is seen that there are ample of functions are perfumed by world trade organization that
are really essential to ensure the betterment of international trade and felicitate effective
relationship between different countries at global level (Maggio, 2017). With global trade
policies, organization is able to maintain effective relationship between different countries that
further helps to minimize trade disputes arise between nations.
Analyze the suitability of WTO and challenged faced by organization in achieving its aims of
trade enhancement between different countries
Suitability of WTO:
It is monitored that world trade organization is an autonomous body that works for
betterment and enhancement of trade at international level. It is based on agreement that has been
prepared with negotiation between member nations in order to maximize growth of each and
every country at global level. In addition, this organization is really helpful to manage imports
and exports between different nations in an effective manner. Further, effective trade
communication across the world is also facilitate through WTO that is crucial to maintain long
term relationship between member countries. Here, it also monitors existing policies on regular
basis in order to make necessary improvements that are essential for growth and enhancement. In
addition, entity plays a major role in development of weaker economies by providing necessary
technical assistance and support to them. Therefore, it is really suitable for organizations and
industries at global level.

Challenges of WTO:
Inadequate technical functions: It is monitored that effective technologies are used to
manage functions of WTO in an effective manner (Alexander and Marina, 2016). But these
techniques are not adequate as well as sufficient for growth of organization. Due to this, there is
threat of cyber attack that may provide access of confidential data to unauthorized parties. So, it
is really vital for WTO to use higher, innovative tools as well as software to manage different
functions in an efficient manner.
Fragile structure as well as functions: However, WTO is working at global level but its
structure and functions are not so appropriate and can be easily shattered. The structure of
organization is divided into several parts which sometimes lead to conflicts and ambiguity. In
addition, it also creates constraint in decision making of entity
From above points, it is monitored that World trade organization is suitable for the
enhancement and betterment of international trade as it helps to formulate appropriate policies,
rules and regulations to manage business between different countries in significant manner. But,
there are several challenges being faced by entity in order to manage functions effectively.
Evaluate the effectiveness of WTO with relevant example along with the impact of its policies
over specific organization and industries
It is analysed that organizations at global level are highly affected with regulations,
compliances of World trade organization as it is the most higher level organizations that
regulates business in different countries (Hill, 2017). Nowadays, imports and exports have
become crucial part of every industry whether it is automobile, agriculture, hospitality,
pharmaceutical and more. So, it is really crucial for business owners to assess the current
policies of WTO while formulating their business policies. In context of Amazon, it is a leading
ecommerce company that is operating business in different countries. Different charges related to
exports and imports such as tariff, VAT and more are also determined by organization. In
addition, it also takes ample of appropriate steps in order to minimize the conflicts and disputes
between member nations in an efficient manner. Therefore, policies of entity put great impact
over the functions of organizations and industries. So, it is really vital for business managers to
prepare appropriate policies in order to manage international business and transactions in an
efficient manner.

CONCLUSION
With above discussion, it is monitored that WTO is the higher level organization that is
responsible to manage international business and transaction between different countries in
significant manner. It is analyzed that it prepared policies and also monitor those policies on
timely basis in order to undertake necessary improvements. It can be concluded that World trade
organization is established with an aim to facilitate business transactions between member
nations. Discussion has been carried out regarding several functions of WTO that helps to
understand the role of organization in current business world. Further, it is really suitable for
small organizations and help them to grow and expand business to earn potential profit margin.
Moreover, there are several challenges are being faced by entity in order to manage business
transaction within several countries. Moreover, the policies of WTO also highly affect current
functions of organizations and industries at global level.

REFRENCES
Books and Journals
Alexander, K. and Marina, B., 2016. Russia’s participation in WTO trade disputes (No. ppaper-
2016-250).
Bourcieu, E., 2017. The Strategic Dimension of the Transatlantic Trade and Investment
Partnership. In Mega-Regional Trade Agreements (pp. 27-36). Springer, Cham.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing
function. Macmillan International Higher Education.
Kaminskas, M. and Bridge, D., 2016. Diversity, serendipity, novelty, and coverage: a survey
and empirical analysis of beyond-accuracy objectives in recommender systems. ACM
Transactions on Interactive Intelligent Systems (TiiS), 7(1), pp.1-42.
Khan, Z., 2017. Trade, labour and sustainable development: an integrated
perspective (Doctoral dissertation, McGill University).
Maggio, A.R., 2017. Environmental policy, non-product related process and production
methods and the law of the World Trade Organization (Vol. 1). Springer.
McGovern, E., 2018. International trade regulation (Vol. 1). Globefield Press.
Messenger, G., 2016. The development of World Trade Organization law: examining change in
international law. Oxford University Press.
Rieckmann, M., 2017. Education for sustainable development goals: Learning objectives.
UNESCO Publishing.
Smith, A.K., 2019. Creating a World Economy: Merchant Capital, Colonialism, and World
Trade, 1400-1825. Routledge.
Suttle, O., 2017. Distributive justice and world trade law: a political theory of international
trade regulation (Vol. 36). Cambridge University Press.
Tans, S., 2017. The World Trade Organization and the General Agreement on Trade in
Services. In Service Provision and Migration (pp. 24-138). Brill Nijhoff.
Online references
Trade effects of WTO: They're real and they're spectacular, 2019 [Online], Available through <
https://voxeu.org/article/trade-effects-wto#:~:text=Concluding%20remarks,member
%20countries%20by%20about%2088%25 />

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