In this increasingly globalized scenario, companies need to be globally competitive in order to survive. Knowledge and understanding of different countries’ economies and their market is a must for establishing oneself as a global player. Now the business has gone beyond the boundaries of a nation and has turned into the international business. It’s quite necessary to understand the meaning of international trade and the international organization popularly known as World Trade Organization (WTO) and its contribution towards the international business and smooth trading between countries. International trade is defined as a contract where two parties (These parties may operate their business in different countries trading in goods and services) enters into the transaction of buying and selling of goods and services irrespective of national boundaries. This involves the import and export trade where one country either sells goods or service to other country or buys goods and service from other country. Followings are the five essentials for such international trades – The contract of sale of goods.
The contract of carriage of goods.
The contract of insurance for the goods.
The compliance with exports and imports authorities in terms of formalities and documentation required. The mechanism for payment set up by the buyer.
Since no nation can produce all its needs by itself alone, international trade has become not only a means by which nations source those goods and services they lack or do not have in sufficient quantities but also a subject of international politics either for achieving, promoting or maintaining peace between international trading partners or countries. As a result of external developments in countries with which countries inter-depends or depends on for the essential products and sometimes wars are also fought to preserve the national security. Its has been a common observation that one of the reasons for US going into the Gulf wars on the side of Kuwait against Iraq was US’s intention to preserve the vulnerability of its economy to oil crisis if it’s cut off from oil purchase from the Gulf by the hostile Iraq that had annexed the oil-rich portions of Kuwait. The allied countries involved in World War 2nd realized at the end of the war that the trade tensions among the allied countries contributed on outbreak of World War 2nd. They felt the need for an organization for international cooperation which can work among countries to establish a discipline in economic relations in order to prevent future disputes. However, the resolution passed in 1946 by the United Nations Economic and Social Council [ECOSOC] to prepare a protocol to establish a world organization whose parties would jointly establish rules for trade among them, was to be embodied in the International Trade Organization [ITO]. The first attempt by an international body to bring out fair and uniform guidelines for international trade at both private and international levels was at the Havana Conferences [1947 and 1948] consequent to which a charter for ITO [The Havana Charter] was drafted. Somehow, the ITO did not receive necessary support but the GATT (General Agreement on Tariffs and Trade) which was drafted parallel with the Havana Charter after negotiations in Geneva, was adopted by a provisional protocol under which the signatories agreed to apply GATT until ITO could take over supervisions of international trade. When ITO collapsed, GATT used to order the international trade relationships of the signatories. Multilateral negotiations went for a series of rounds, and the the Uruguay Round of which brought the World Trade Organization into existence, and it has become an umbrella organization with responsibility for the GATT. The World Trade Organization is therefore the organization which was set up out of the Uruguay Round of General Agreement on Tariffs and Trade negotiations...