International Business Report: Analyzing the World Trade Organization

This report provides an in-depth analysis of the World Trade Organization (WTO) within the context of international business, examining its motivations for formation, key functions, suitability, and effectiveness in encouraging trade between nations. It delves into the General Agreement on Tariffs and Trade (GATT) and the reasons for its replacement by the WTO, highlighting emerging trade issues and the need for a more comprehensive regulatory body. The report assesses the WTO's role in policing global trade, addressing challenges faced by international companies, and evaluating the impact of foreign trade policies. Examples of how specific sectors and companies are affected by WTO policies are used to illustrate its effectiveness, with a focus on its influence on firms within Japan, China, the EU, and other nations. The analysis draws upon a literature review of various perspectives on global trade, political activities, economic factors, and technological advancements, ultimately concluding that the WTO plays a vital role in economic development and trade flow, while acknowledging the potential negative impacts of ineffective trade policies.

International Business

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
LITERATURE REVIEW................................................................................................................4
ANALYSIS AND DISCUSSION...................................................................................................7
Demonstrating understanding of motivations behind formation of World Trade Organization.7
Explaining key function of WTO................................................................................................8
Assessing suitability of firm and challenges facing in achieving its principal aim of
encouraging trade between nations.............................................................................................9
Assessing effectiveness of WTO by using appropriate examples of how specific sectors or
companies are affected by its policies.......................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
BIBLIOGRAPHY..........................................................................................................................14

EXECUTIVE SUMMARY
A company is formed for specific reason for example, global companies is formed to
increase GDP and boost economic standards successfully. The current assignment is based on
WTO, which is one of those international companies that contributes in development of
economies and emerging nations, by developing effective and fair policies relate to trade.
Company has developed varied rules and created policies which provides a lot of advantages to
products or services provides and traders. It has been determined through this study is that world-
trade-organization has put positive influenced upon many firms within Japan, China, EU and
other nations that has been operated in different sectors from longer period.

INTRODUCTION
International business is defined as cross border transactions process that conducted
between individuals, ventures or government entities. It contributes to increase GDP, sales,
profitability and boost growth of a company in effective manner. An international firm conduct
all ethical business practices appropriately. It provides benefits to nation or whole world in term
of increasing revenues, minimizing competition, benefiting form currency exchange, etc. Global
ventures has varied benefits and edges for a manufacturing brand. The current study is based on
WTO, which falls under category of global brand. It majorly deals with international rules of
trade between countries. As international venture, organization supports in economic
development in several manners. The mission of firm is to assure that trade flows as easily as
possible. It wants to lower trade barriers between regions, nations and its people. The assignment
will define understanding of motivations behind formation of company and will also explain key
function of World Trade Organization. Furthermore, it will justify suitability of firm and
challenges it faces in context of achieving its principal aim of encouraging trade between
nations. Lastly, the report will clarify effectiveness of brand by using relevant examples of how
particular companies or sectors are impacted by WTO policies.
LITERATURE REVIEW
A company formation is defined as procedure of incorporating a venture within profitable
and appropriate sector. In the world of business, there are varied factors available that drive the
attention of an entrepreneur, person or government entities towards forming a organization,
which may in return provides benefits in several terms. According to Perchard and MacKenzie,
(2020) political activities and tactics are one of those forces that create a specific reason behind
the formation of a brand in particular industry, which help to build strong relation between two
or more nations by conducting varied practices such as selling or trading products/ services to
consumers that may target within another country. Political elements are the most common
factors that contribute to establish organizations and create a path to trade successfully.
On the other hand, Witte, Burger and Pennings, (2020) stated that in many nations due to
political instability, the process of organizations formation is not possible. It cannot be
considered as a motivation source behind the formation of companies. Instead of this, economic
factors may recognize as those elements that arise as the reason behind the formation of varied

firms. For example, for example, economic status drive the attention of individual person or a
businessman to take major action in term of company formation. By creating a large portion of
new employment opportunities, start up firms contribute to economic development, which is
quite beneficial for local people as it help to improve their living standard even better than
earlier. It is one of those motivations that supports in process of forming varied companies either
small or large.
In view of Ge, Dollar and Yu, (2020) varied forms of companies are included in category
of global institutions that play vital role in context of policing global trade. Policing is described
as enforcing or supervising rules, which drive the focus of many firms towards conducting
ethical business practices in term of complying business laws and regulations. International
government entities are considered as global institutes, which are accountable to develop rules
relating to global trade that affect practices and strategic decision-making procedures of other
enterprises in positive manner as it allow firms to trade globally without any fear or threat. For
instance, international agency for trade information and cooperation is one of those global
institutions that play crucial role in regard to policing international trade in term of assisting less
advantaged nations to have a better trade diplomacy by supporting them in better comprehending
technicalities of world trade and trade regulations as well.
Bertola, (2020) contradict that global trade policing is quite challenging task for varied
global institutions, it requires a lot of hard work and strategic management plans. Such firms
play important role in term of policing global trade by talking and providing suggestions relate to
trade flow, which is quite beneficial for the whole world as it helps to make trading process
easier for each company. Through recommendations and legal advices, companies may support
in overall procedure in effective and most influencing manner. Not only this, there are more
ways that a global institute may adapt to conduct practice of international trade policing, which
turns into profitability.
According to Abu-Bakar and Yusuf, (2020) international companies while operating and
running ventures within particular sector face varied challenges, which put negative impact on
their productivity, performance, sales and strategic management practices. For example, due to
changes in existing trade policy, a company face challenge to flow trade in effective manner. As
it affect negatively upon its sales and profits margin. New set of trade rules impact current
planing and strategies of many firms who are ready to take steps towards trading process. Just

because of this element, firms may face challenge to supply their products from home town to
another nation or region in hassle free manner. New set of rules bring barrier in process of
success and excellent business growth. It affects the way management take decision and also the
way they manage operations.
On the other side, Du and Kim, (2021) discussed that organizations faces a lot of major
challenges while operating their business at global level in context of achieving aim and set
objectives. For example, the most usual barrier for any firm is intense competition within chosen
sector where companies may plan to expand their business in term of establishing branch through
which they may sell quality products or services. High competition between existing brands
create a competitive environment for each firm who has already established and for those who
plan to do so. It impacts the process of trade, production, supply and demand as well in negative
manner, which is not beneficial for any company in the corporate world. It is one of the biggest
challenges, which drive the focus of organizations towards developing effective tactics & using
approaches.
Competitive environment, trade barriers and socio cultural elements are included in list of
external global forces, which affect a business in varied manners. Wang and et.al., (2020) state
that social forces directly affect market entry tactics of companies. It includes current market
trends that change preferences and buying behaviour of consumers and drive them towards
switching to those firms that are offering services or products according to existing market trend.
In recent time, people purchase those items which are promoted by their favourite celebrity and
used by friends as well as family members. They follow trend and buy valuable products which
in return provide unforgeable experiences to individual consumer in exchange for money.
Changing needs of customers put high pressure on brands to rethink about their market entry
tactics.
In the opinion of Rouhani Rad and Tayebi Abolhasani, (2020) there are certain external
global factors available in the corporate world that are influencing market entry strategies of
varied companies in positive manner instead of negative. For example, technology advancement
is one of those key external international forces that affect businesses tactics positively in term of
increasing their operational efficiencies in context of conducting marketing activities as well as
product production efficiency. Technology advancement is the most beneficial external factor

that boost productivity of companies and allow them to enter into new profitable market where
majority of consumers seeking to buy a quality items.
Andrei and et.al, (2020) discussed that, foreign trade policies developed by international
government entities may influenced other firms or sectors in positive manner as it contribute to
create an environment where each company comply laws and follow the principles of global
trade. Effective trade policies reduce risk of trade discrimination, which is quite beneficial for
each stakeholder. It helps to boost process of trading and continuous its flow in systematic
manner, which in return increase gross domestic product (GDP), build strong political
relationship between two or more nations, etc. It shows the effectiveness of global government
firms, who contribute to economic development, trade flow and political stability. Any policy
impact positively upon other brands, when it creates in systematic manner, after considering
overall circumstances by the person that is accountable to formed it.
Sharifi, (2020) cited that foreign trade policies created by government organizations may
affect positively, but when it develops in ineffective manner in term of differentiation, this
element put negative impact on trade flow. The overall process needs full concentration and also
those practices that are conducted by policy creator in term of ethics. It damages economic status
of varied nations and living standards of many people as well. Inappropriate trade policy may
also become a reason of poverty and GDP decreases, which destroy relations between many
nations and bring several challenges for those countries or regions that affected from this factor.
It may increase wars between two or more companies. A trade policy always create in term of
fair manner which provide equal opportunities to all the organizations in the world.
ANALYSIS AND DISCUSSION
Demonstrating understanding of motivations behind formation of World Trade Organization
General agreement on traffics and trade (GATT) is one of the legal contract between
many nations, whose aim is to promote global trade by eliminating barriers relate to trade such as
quotas, etc. successfully. It has functioned very well from earlier period, but leading majority
desire to replace it with worldwide trade regulatory structures like WTO for varied of reasons,
which may considered as actual motivations behind formation of company in the world (The
World Trade Organization (WTO) Creation, 2021). First, Emerging trade issues bring major
challenges for GATT and because of this reason leading members wished to replace it with

WTO as regulatory body. Along with this, general agreement on traffics and trade regulations
applied to trade only in merchandize products. In context of items, world trade organization
covers trade in services as well as similar aspects of IP. Second reason behind formation of firm
is that while GATT is multilateral tools, by 1980s several new contracts of patrilateral and
therefore selective behaviour was added. The agreements which encompasses WTO are almost
all multilateral and it also includes strong commitments for overall memberships (Sari, 2020).
WTO is formed because dispute settlement process being slower than last few years or
months, which may affect trade flow in negative manner. World trade organization is able to
handle overall system in effective manner and solve dispute as fast as possible. Thus, it provides
desire outcomes and much less hypersensitive to blockages, more than old GATT system.
Furthermore, WTO formation process not limited at above three reasons, there were also
more symbolic and philosophical purposes accessible. For example, General agreement on
traffics and trade, is set of laws, a multilateral contract, with no institutional foundation, it only
has a small associated administrative unit which had its origins in efforts to set up a global trade
company. It is not possible to handle or solve trade related problems with small connected
secretariat, and because of this consideration, management has drive their attention towards
forming WTO, which had its own secretariat. World trade organization commitments are
functionally and fully permanent, it never takes single steps back from key trade issues.
Explaining key function of WTO
World Trade Organization play crucial role in the world, it is accountable to conduct
varied types of business practices. One of its important functions is administration of trade
agreements. WTO is responsible to manage trade contract for which it negotiates rules and
abide it for longer period. Furthermore, firm take major decisions in term of creating rules and
policies, which enable it to manage trade contract in effective manner.
WTO function is to handle trade disputes, which also included in list of its functions
that offers several benefits to global organizations (Bown and Keynes, 2020). Resolving trade
problems is one of the main roles of World Trade Organization. According to its members, a
dispute arise when government member trust another individual person is violating a contract
that it has made in firm. At all over the world, company is recognized as active global dispute
settlement mechanism. Firm procedures underscores rule of regulation and it makes trading

process more predictable and secure. Organization in regard to trade dispute developed system
which is based on clearly describing rules with time frame for completing a case.
Third function of WTO is trade policy review, which as beneficial and important as
above two (Wolfe, 2020). Firm from longer term seeks to maximize awareness of degree and
affects of trade distorting rules, an aim that it fulfilled through annual notification necessities and
through a policy review system. Notices of all modifications in members trade and related
practices must be promoted and made available to their trading stakeholders. For varied
emerging nations and countries whose economies are once centrally planned, this needs is major
step towards transparent managed. Word Trade Organization reviews overall trade policies of
four biggest traders such as United States, EU, China and Japan, once every 2 years. Including
these, company has also set rules for global trade.
Assessing suitability of firm and challenges facing in achieving its principal aim of encouraging
trade between nations
World Trade Organization is made up of 164 members that deals with trade rules and
contribute to solve trade barriers. Just like other forms of companies, WTO has also faced
challenges while achieving its aims such as encouraging trade between nations.
China state capitalism-
WTO face challenge in principal goal of encouraging trade between many nations due to
announcement of China relate to its capitalism (Liu and Tsai, 2020). The nation has accounted to
present its owned companies which is the major challenge to free market global trading system
created by WTO. It brings barriers to manage trade and flow of trading process. It can be
analysed that nature of China's economic system, encompasses with growth and size of its
economy, that has created stress in international trading system.
Lack of transparency-
WTO attempts to encourage trade between many nations, which is beneficial for entire
world. Lack of transparency is one the key challenges that affect overall functions and aim
achieving practices of company negatively. The members of firm currently self designate as
emerging nations to obtain particular and differential treatment. It is one of those challenges that
impact the way of taking decisions and converting it into practical way. In context of this
challenge, WTO has taken significant steps & actions.
Consequences of much wider trends & developments-

With above two challenges, WTO faces this one as well which affect process of aim
achievements in negative manner. These barriers may be addresses in course of renovating recent
system of international governance. It can be analysed that due this barrier organization and its
multilateral trade system oversees in trouble. In context of this challenge, firm may take better
solution and action as well. Broader trends impact the outcomes of trade rules and policies may
in negative manner, which is not acceptable.
Assessing effectiveness of WTO by using appropriate examples of how specific sectors or
companies are affected by its policies
Effectiveness of World-Trade-Organization is conceptualized as success in achieving
objectives of trade dispute settlement. Company has successfully handled dispute matters in
systematic manner by taking relevant and reliable actions. It has created varied policies that
affected retail, and other types of industries. WTO has affected varied companies in the world by
providing a platform and fair chances in context of trade, it allows stakeholders to negotiate and
handle trade problems with other members. For example, firm created policy to cater open lines
communication and collaboration, which may consider as key elements that contribute to success
and progress of any firm in effective manner.
Furthermore, WTO supports growth of companies in term of supporting trade throughout
universe flow smoothly via its trade contracts. Members of company known what rules are, and
they comprehend penalties for breaking rules that creates a safer trading connection for
organizations. Trade policy is one of those policies that provides benefits to manufacturing firms
in term of increasing their sales, profits margin and making trading easier than every (Yu, 2020).
With the help to this policy world trade organization aware other companies whether it operates
in retail or whole sales sectors, about venalities when a company break rules and regulations and
do not comply policies with business practices.
There are varied forms of policies accessible that has created by WTO for example,
assisting developing & transition economies. Members has assist developed economies to
conduct ethical business practices in systematic manner.
CONCLUSION
By summing up above analysis, it has been concluded that trade barriers is the key
motivation behind formation of company, its has drives the attention of national to international

authorities towards forming a brand that has solved trade related issues in effective manner by
applying practical approaches, which is easy to understand and comply. Furthermore, from
above study, it has been identified that firm has created trade policies that has provided benefits
in term of reducing trade discrimination in all over the world. It has given fair chances to
organizations in context of trading process and developing economic standards. It has been
determined that by taking beneficial and useful methods and developing strategies, organization
has overcome major challenges which occur during process of achieving aims of encouraging
trade between nations. The actions taken by company is quite beneficial for its mission and
vision achievements, in term of making trade free from any form of discrimination.
Moreover, from above report it has been summarized that firm has benefited every sector
and companies as well by creating policies through which trades become easier and smoother. It
has spread its effectiveness all over the world in term of boosting flow of trading.

REFERENCES
Books and journals
Abu-Bakar, N.S. and Yusuf, B.N.M., 2020. Exploring Challenges Faced By Malaysian Expat-
Preneurs In International Entrepreneurship Sector And Strategies To Overcome, A
Qualitative Study On Self-Initiated Expatriates. Advances in Social Sciences Research
Journal. 7(10).
Andrei, J.V. and et.al, 2020. The impact of agricultural performance on foreign trade
concentration and competitiveness: empirical evidence from Romanian
agriculture. Journal of Business Economics and Management. 21(2) pp.317-343.
Bertola, F., 2020. Drug trafficking on Darkmarkets: How cryptomarkets are changing drug
global trade and the role of organized crime. American Journal of Qualitative Research.
4(2). pp.27-34.
Bown, C.P. and Keynes, S., 2020. Why Trump shot the Sheriffs: The end of WTO dispute
settlement 1.0. Peterson Institute for International Economics Working Paper. (20-4).
Du, Y. and Kim, P.H., 2021. One size does not fit all: Strategy configurations, complex
environments, and new venture performance in emerging economies. Journal of
Business Research. 124. pp.272-285.
Ge, Y., Dollar, D. and Yu, X., 2020. Institutions and participation in global value chains:
Evidence from belt and road initiative. China Economic Review. 61. p.101447.
Liu, M. and Tsai, K.S., 2020. Structural Power, Hegemony, and State Capitalism: Limits to
China’s Global Economic Power. Politics & Society. p.0032329220950234.
Perchard, A. and MacKenzie, N.G., 2020. Aligning to disadvantage: How corporate political
activity and strategic homophily create path dependence in the firm. Human Relations.
p.0018726720908923.
Rouhani Rad, S. and Tayebi Abolhasani, A., 2020. The Requirements of Successful Market
Entry for Startup Knowledge-based Companies (Case Study: ICT Companies in
Tehran). Journal of Technology Development management. 8(1). pp.185-220.
Sari, I.M., 2020. DISPUTE SETTLEMENT OF ANTI-DUMPING LEGAL ASPECT IN
INDONESIA BASED ON GATT/WTO PROVISIONS (ALLEGATIONS CASE
STUDY OF DUMPING WOOD FREE COPY PAPER BETWEEN SOUTH KOREA
AND INDONESIA). Lampung Journal of International Law (LaJIL). 2(2). pp.73-84.
Sharifi, A., 2020. Trade-offs and conflicts between urban climate change mitigation and
adaptation measures: A literature review. Journal of Cleaner Production. p.122813.
Wang, L. and et.al., 2020. Does customer participation hurt new product development
performance? Customer role, product newness, and conflict. Journal of Business
Research. 109. pp.246-259.
Witte, C.T., Burger, M.J. and Pennings, E., 2020. When political instability devaluates home-
host ties. Journal of World Business. 55(4). p.101077.

Wolfe, R., 2020. Exposing governments swimming naked in the COVID-19 crisis with trade
policy transparency (and why WTO reform matters more than ever). COVID-19 and
Trade Policy: Why Turning Inward Won’t Work. p.165.
Yu, T.O., 2020. Theoretical concepts of trade policy development and analysis: Evolution and
modern challenges in the context of the international trading system
transformation. Вестник Санкт-Петербургского университета. Экономика. 36(1).
Online
The World Trade Organization (WTO) – Creation. 2021. [ONLINE]. Available Through:
<https://www.nationsencyclopedia.com/United-Nations-Related-Agencies/The-World-
Trade-Organization-WTO-CREATION.html>

BIBLIOGRAPHY
https://www.britannica.com/topic/World-Trade-Organization
https://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr_e.htm
https://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm