World Trade Organisation (WTO) : What It is, Function and Activities

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World Trade Organisation (164 Members)

  • Earlier known as General agreement on Trade and Tariff: 1947
  • From 1948 to 1994: The GATT Period.
  • In 1994, GATT was replaced with WTO under Uruguay Round.
  • GATT dealt with trade in goods, whereas WTO deals with Trade in goods, services and intellectual property.
  • The primary purpose of the WTO is to open trade for the benefit of all.

Functions of WTO

1. To administer trade agreements: It forms trade agreements, review the policies which restrict trade.

MFN Status: Under MFN Clause, if one nation gives concession to other nation in a trade agreement then such concession should be extended to all the member countries of WTO.

2. Settling trade disputes: platform for negotiations and to solve disputes. (Dispute Settlement Board) of WTO.

India-Brazil: Sugarcane subsidy dispute.

3. To review trade policy of member countries. : TPR reports (includes Foreign Trade policy review, Export-Import schemes, Subsidies, incentives etc,)

4. To cooperate with International organisation: Meetings with IMF, World bank, World Economic Forum etc. for International Cooperation and Growth.

5. Building trade capacities: Aiding the UDC and developing countries. E. g. : Trainings, Workshops, Technical assistance etc.

Main Activities

  • To reduce & eliminate barriers to trade: Studying the trade agreements and giving out reports. E. g. Prohibition of Import quota.
  • Getting non-member countries on Board.
  • To stimulate economic growth and employment.
  • To cut the cost of doing business internationally.
  • Ensuring that trade takes place as per WTO norms and regulations.


Q 1 At present how many members are in the WTO?

(a) 160

(b) 164

(c) 207

(d) 195

Ans: (b)

Q 2 Which of the following institutions is not part of the World Bank community?

(a) IBRD

(b) WTO

(c) IDA

(d) IFC

Ans: (b)

Q 3 Which of the following is not the objective of the WTO?

(a) To improve the standard of living of peoples of the member countries

(b) To enlarge production and trade of goods

(c) To protect environment

(d) To improve the Balance of Payment situation of the member countries

Ans: (d)