The 10 Benefits of the Wto

Topics: International trade, Free trade, Economics Pages: 3 (1071 words) Published: September 4, 2006
1. The system helps to keep the peace

Most fundamental principles of the trading system are helping trade to flow smoothly and dealing with disputes over trade issues. If trade flows smoothly and both sides enjoy a healthy commercial relationship, political conflict is less likely. Smoothly-slowing trade also helps people all over the world become better off because they are less likely to fight. The system is important as a confidence-builder as well. Governments are confident that others will not raise their trade barriers so they will also be in a better frame of mind to cooperate with each other.

2. The system allows disputes to be handled constructively
More trade means more possibilities for disputes to arise. But in reality, a lot of international trade tension is reduced because countries can turn to organizations to settle their trade disputes. When they bring disputes to the WTO, the WTO's procedure focuses their attention on the rules then countries concentrate on trying to comply with the rules. There is a clear basis for judging who is right or wrong. The increasing number of disputes reflects the closer economic ties throughout the world and the fact that countries have faith in the system to solve their differences. 3. A system based on rules rather than power makes life easier for all The agreements apply to everyone. Rich and poor countries alike have an equal right to challenge each other in the WTO's dispute settlement procedures. Smaller countries can enjoy some increased bargaining power and perform more effectively if they make use of the opportunities to form alliances and to pool resources. The major economic powers can use the single forum of the WTO to negotiate with all or most of their trading partners at the same time. This makes life much simpler for the bigger trading countries. The principle of non-discrimination in agreements avoids that complexity and the fact that there is a single set of rules applying to all members...
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