An In-depth Report on the World Trade Organisation (WTO)

This report provides a comprehensive analysis of the World Trade Organization (WTO), exploring its formation, functions, and the motivations behind its establishment. It delves into the literature review, critically discussing the WTO's role in international business, including its impact on trade negotiations, dispute settlement, and the challenges it faces. The report examines the suitability of the WTO, its primary functions such as administering trade agreements and building trade capacity, and assesses how its policies affect businesses and industries. It also covers the challenges faced by the organization, such as China's state capitalism and issues related to e-commerce, agriculture, and environmental sustainability, concluding with an overview of the WTO's impact on global trade and its future prospects.

International Business

EXECUTIVE SUMMARY
International business is a business where there is movement of goods and services from
one country to another in order to accomplish business objectives. In business sector, where they
are operating in international as well as domestic market where they operate their business by
following all rules and regulation.

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION ..........................................................................................................................1
MAIN BODY...................................................................................................................................1
LITERATURE REVIEW ...............................................................................................................1
CRITICAL DISCUSSION AND ANALYSIS ...............................................................................3
Explain an understanding of motivation behind the formation of World Trade
Organisation(WTO)................................................................................................................3
Functions of World trade organisation ..................................................................................4
Primary functions of WTO:....................................................................................................4
Assess the suitability of World Trade Organisation and what are the challenges faced by
organisation in order to achieve objectives of influencing the trade between other countries5
Apply theory to practice of effectiveness of WTO and how they are affected by policies of
WTO.......................................................................................................................................7
CONCLUSION ...............................................................................................................................7

INTRODUCTION
The term business refers to as an entity where they are engaged in various activities
which include commercial, professional and other business. The business can be large or small as
there main focus is to achieve business goals effectively and efficiently. As there are different
organisation who operated their business internationally as they work in international trade for
exploring more opportunities in order to earn profit and increase sales on market. The report is
based on WTO which stands for World Trade Organisation, this is established on 1 January,
1995 as they regulate and facilitates in international trade between different nation. The
headquarter of WTO is located in Geneva, Switzerland. The main purpose World Trade
Organisation is to reduce tariff and other barrier which come in between during trade. As WTO
helps in facilitating trade in services, intellectual property and goods. This report include
motivation behind formation of WTO, functions, suitability and challenges faced by company in
order to achieve aim of encouraging trade between countries. In this report, it also include
effectiveness that how particular company and industries are affected by the policies of WTO.
MAIN BODY
LITERATURE REVIEW
According to the viewpoint of (Vandana, 2021), international business is defined as
business where transactions are been carried out by different organisation in order to exchange
goods within foreign countries. In international trade business risk is highly involved because it
is important for organisation to be clearly identify regarding domestic as well as international
trade market. In other words, it does not only mean the exchange of goods and services internally
but it also means it also involve intellectual property, capital, technology and many other. As per
author if any organisation want to expand their business so they have to maintain and manage
trade relation as it consume lot of time.
The international trade business is divided into three parts such as export, import and
entreport trade. Export trade are trade where it refers to trade of goods and service in foreign
countries whereas import trade means purchasing from other countries in order to purchase
goods and services (Buckley, Enderwick and Cross, 2018). On the other hand, Entreport trade is
defined as trade where business import goods and services so they can re-export to other
countries. As this help every business achieve their goals in order to increase their sales and
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profit of organisation. Many business also use illegal activities to explore their business
internationally. Every countries are now dependent to other countries where they receive and sell
their goods and services in market as this change their business form self dependent to dependent
to other. The major reason behind interaction between other countries is that development of
communication and infrastructure which is been carried out by government of different
countries. When World Trad Organisation is formed it become easy for business to operate
internationally by managing trade relation with different countries (Chi and et. al., 2019). If any
organisation have to explore their business globally, they have to take knowledge about
international market without this they do not utilise their resources in an efficient manner.
After it is also analysed that how these goods and service are been receive and selling
products and services from import and export. This is the major problem for organisation to carry
out activities in proper manner because this will them to expand their business globally. As
GATT only emphasise on exchanging goods in international trade and on the other hand WTO
main focus on exchanging services and design. To ensure that there is smooth operation in
functioning of business as in organisation there are various people who focus on trade activities
such as manufacturer, retailer, supplier.
According to the viewpoint of (Hekal, 2021), every organisation has to monitor and
identify business environment and with the help of this they can successfully implement trade
policies and can develop strategies in order to achieve business objectives effectively. The main
focus of international business is international trade which include both export and import,
licensing and franchising, foreign investment. Moreover, it is also stated that WTO work in
different countries of trade areas. The international business also help in using proper resources,
selecting and recruiting talented employees on organisation and many more which help
organisation to achieve business objectives.
Main objective of business is to trade globally for development and growth of
organisation and they can develop business strategies for effectively achieve business objective
in proper manner. In relation to World Trade Organisation, relation of trade include agreement
and interest in order to trade (Coviello, Kano and Liesch, 2017). In other words, it can be said
that it is important for organisation to monitor all activities of competitor which help them to
explore more opportunities in international market. The author have defined international trade
which is defined as a transaction where the transaction are done between organisation either to
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receive and sell goods and services in market. The international can be occur in different manner
which include movement of goods and services from one country to another country. There are
contractual agreement which include licensing and franchising that allow business to use goods
and services from other country. They can operate various activities which include sales,
marketing and other facilities from other other market. As there are various functions of World
Trade Organisation which help them to develop and growth of market (Hamilton and Webster,
2018). This include administrating trade agreements, acting as forum of trade organisation,
setting trade dispute, building expectancy of trade, cooperating with other international firm.
This all function is done because to analyse roles and objectives so that goals which are set is
accomplish on time.
WTO protect them to trade illegal activities so they can effectively trade between
different foreign countries. There are various type of challenges that is also faced by World
Trade Organisation (WTO) such as china state capitalism which means china face challenge of
free trade. As there are some other challenges also which include e-commerce trade, agriculture
and development and environmental sustainability.
CRITICAL DISCUSSION AND ANALYSIS
Explain an understanding of motivation behind the formation of World Trade
Organisation(WTO)
World trade organisation is an international organisation which help organisation to trade
in different countries. This organisation is established in the year 1995 as this is created because
it help business environment is changing globally and it is important for organisation to trade in
such a manner which help them to achieve business objective. While doing import trade or
export trade any problem occur in functioning and performing any activities then WTO will help
business to solve problem easily in an efficient manner and can run their business smoothly in
global market. As WTO is established out of General Agreement on Tariff and Trade (GATT) as
this also ensure that trade and exchange of goods and services are been done in systematic
manner (Hansen and Prescott, 2021). The main objective or aim of WTO is to reduce tariff and
eliminate barrier in managing and maintaining exchange of product. GATT is the first who is
been organisation who govern in the exchange of goods and services and after that World Trade
organisation has been established and have develop procedure to follow rules and regulation for
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business so they can comply and can eliminate all barrier while producing goods in foreign
countries or receiving goods from other countries. When WTO has established their main focus
and responsibility is to maintain and manage trade relation and many more. Moreover, in World
Trade Organisation there are 164 members which is related with country which are Liberia and
Afghanistan and there are 23 countries who are monitoring countries and they have joined in the
year of July 2016 (Hill and et. al., 2017). in context to WTO they have various rules in
international market in various organisation as the main impact of globalisation which can be
positive and negative and can communicate with trade countries and business who operate
internationally. The manager who develop this type of organisation as they only focus on
eliminating barrier and help to maintain relationship between other countries which help every
organisation to perform their activities in proper manner. There are four countries and from them
it become difficult for them to supply products with consideration of WTO and without
negotiating.
Functions of World trade organisation
Primary functions of WTO:
Administering trade agreements: WTO is a forum where government can
negotiate trade agreements and can settle any dispute related to trade. Their aim is to provide a
platform for different governments in order to settle cross border disputes. WTO members
operates a non-discriminatory trading system which tells them about their rights and obligations.
Guarantees have been given to all the members that their exports will be fairly treated by other
members in the market.
Trade negotiations: The agreement by WTO covers services, goods and
intellectual property. It includes country's commitment individually to lower trade barriers and
custom tariffs and keep open service market. System for trade negotiations have been made after
a series of rounds, held under by GATT. Initial rounds mainly focussed on tariff reduction but
later on included areas of non-tariff measures and anti-dumping activities (Knudsen and Moon,
2017).
Dispute settlement: This organization has one of the most active international
dispute settlement mechanism. Member countries bring their disputes to the forum to get a
solution or if they feel that they are aggrieved party. A team of specially appointed experts give
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judgement on the basis of individual company's commitments and interpretation of the
agreement.
Building trade capacity: For developing countries, hundreds of technical
cooperation missions are organized. For government officials, numerous of courses are
organized by the organization each year in Geneva. In order to develop skills and infrastructure
of developing countries, aid for trade initiative has been launched so that they can expand their
trade.
Outreach: WTO organises workshops for journalists in order to help them gain
better understanding of rules based trading system as well as to increase awareness about WTO
activities. Workshops basically covers ways of using trade for growth and development and also
new challenges of international trade.
Reviewing national trade policies: Fundamentally most important activity in the
work of WTO is surveillance of national trade policies. The member's share of world trade in
goods and services determines the frequency of each member's review (Kolk, Rivera-Santos and
Rufín, 2018). The purpose of review is to contribute to improved constancy by each member to
commitment and rules made under the Multilateral Trade Agreement.
Cooperating with other international organisations: WTO works with other
international governmental organisations in order to make a decision on achieving greater
coherence in policy making of global economies. The observer status in WTO bodies is achieved
by only 140 international organisations. WTO maintains relations with almost 200 organisations
internationally in activities such as research, technical assistance, training, standard setting, etc.
The dimensions of corporation varies, coordination between the work of international
organisation and WTO continues to evolve in order to assist members about the operations of
economic policies.
From the above discussion, it is analysed that WTO must perform all the
functions so that global trade can run smoothly and no organisation can take improper
advantage of organisation which is in developing economy. HRM department of the organisation
must ensure that all the functions are working properly in order to have effective and efficient
management.
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Assess the suitability of World Trade Organisation and what are the challenges faced by
organisation in order to achieve objectives of influencing the trade between other countries
World Trade Organisation is an international firm where they have to trade from one
country to other country which help business to explore more opportunity as they have to make
sure and known regarding suitability of WTO so that other organisation can make decision in
proper way and also can develop effective strategies. WTO access to trade countries from where
they can on the basis where they can operate their activities and operation. As when companies
have to operate their business globally. There are different type of challenges and issues that is to
faced by World Trade Organisation which are explained in detail below which are as follows: China's State Capitalism: The major challenge is that China is state owned enterprises
where they there is free market for global system of trading. As the rulebook of WTO is
that there inadequate in regarding of intellectual property. This issue is occurred because
of trade war between United State and China. Lack of transparency: As there is no clear understanding of what is developing and
developed country at WTO as members get different treatment in different country
(Mäkelä and Kinnunen, 2018). E-commerce and digital trade: This is the biggest challenge where e commerce has
become the issue and every organisation is focusing on adopting technology as this
become challenge for companies. The increase in competition in international market is
due to advance in technology in organisation. Agriculture and development: The main focus of WTO is on agriculture trade where
they face issue related to industry of food and development is require in developing
country which include India. This is the main issue where World Trade organisation has
to take some measure to solve this issue because for the development and can maintain
trade relation. But is not possible by every organisation as they have to invest lot of
money for agriculture development. In this way they have to follow all rules so that they
can focus on agriculture development.
 Institutional issue: It is an issue where Appellate Body's operation is suspended in
December in the year 2019 as United States there is issue related to appointment of
blocking which have left without adjudicators where they appeal. The main crisis is that
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there is dispute in the function of WTO for settlement which is linked with function of
negotiation.
From the above discussion of challenges that is faced by World Trade Organisation is
that the issue of china where the issue is related to free market trading system. As on the other
hand, as there is lack of transparency between developing and developed countries whereas due
to fast adaptation of e-commerce is that they use digital technology in international as well as
domestic market where they use digital tool in order to retain in market for long period of time
and help in gaining competitive advantage in trade market (Shams and et. al., 2020)
Apply theory to practice of effectiveness of WTO and how they are affected by policies of WTO
There are different agreement which WTO focus on solving dispute and force them to
comply rules and regulation related to agreement of trade and also focus on resolving disputes
that are connected with different countries. The main objective of WTO is to eliminate trade
barrier that help organisation to operate task and activities that help in achieving business goals
in an effective manner (Wevers, 2021).
As they also focus on functioning on international trade as this also help in retaining
customers in market. As there are various policy of WTO which positively impact the activities
and functions of business which help them so they can easily receive and sale their goods. In
other words, it can be said that trade of export and import of goods can be done with compliance
of rules and regulation which is affecting by policies of World Trade Organisation.
The policies is essential as this help them to operate in different countries without
involving in other illegal activities as in this way they can easily operate without any trade
barriers. The policies of WTO is affected as they are operating in every trading countries as they
include services, goods or products and there is intellectual property which is between the
participating countries which help in negotiating trade agreement between organisation. The
policies of WTO is essential as they impact positive for organisation when they are operating in
different country (Yao, 2019).
CONCLUSION
From the above discussion, it is analysed that business are expanding their business
globally and wants to explore more opportunities which help organisation to develop their
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business which lead to increase in sales and profit of organisation. The formation of World trade
organisation is done after the establishment of GATT. The main objective of WTO is to reduce
or eliminate conflict and trade barrier as this help organisation to operate in proper manner by
complying rules and regulation. There are various function of World Trade Organisation which
include Administering trade agreements, Trade negotiations, Dispute settlement, Building trade
capacity, Outreach, Reviewing national trade policies, Cooperating with other international
organisation. As there are various function which is adopted by WTO so they can effectively
import and export their goods and services in different countries. There are various challenges
which include China's State Capitalism, Lack of transparency, E-commerce and digital trade,
Agriculture and development and Institutional issue and many more.
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REFERENCES
Book and Journals
Buckley, P.J., Enderwick, P. and Cross, A.R. eds., 2018. International business. Oxford
University Press.
Chi, T. and et. al., 2019. Real options theory in international business. Journal of International
Business Studies, 50(4), pp.525-553.
Coviello, N., Kano, L. and Liesch, P.W., 2017. Adapting the Uppsala model to a modern world:
Macro-context and microfoundations. Journal of International Business Studies, 48(9),
pp.1151-1164.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hansen, G.D. and Prescott, E.C., 2021. 2. Recursive Methods for Computing Equilibria of
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Hill, C.and et. al., 2017. Global business today: Asia-Pacific perspective. McGraw-Hill
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Wevers, H., 2021. A Basic Guide to International Business Law. Routledge.
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