World Trade Organisation Explained

Q. What is WTO?

It is World Trade Organisation which monitors the liberalisation of trade at international level.

Q. What was the main aim of formation of World Trade Organization?

Ans. The main aim of formation of WTO is to liberalise international trade.

Q. What role does WTO play to liberalise trade?

Ans. WTO was started at the initiative of the developed countries. WTO establishes rules regarding international trade, and sees whether rules are obeyed or not.

Q. What is the role of WTO in international trade?


  • (i) WTO’s aim is to liberalise international trade.
  • (ii) It establishes rules regarding international trade and sees that these rules are obeyed.
  • (iii) 164 countries of the world are its members currently.
  • (iv) It is seen that the developed countries have unfairly retained trade barriers.
  • On the other hand, WTO rules have forced developing countries to remove trade barriers

Q. What is WTO? Why it has been formed?


  • The World Trade Organisation (WTO) is the only International Organisation that deals with the global rules of trade between nations.
  • Its main role is to help producers of goods and services, exporters and importers protect and manage their businesses better.
  • It was established in 1995 and its headquarters are in Geneva, Switzerland.
  • At its heart are the WTO agreements, negotiated and signed by the bulk of the World’s trading nations and ratified in their parliaments.
  • Its purpose is to monitor WTO Trade agreements, facilitate trade negotiations, mediate trade disputes, monitor international trade policies and provide assistance to developing economies.

Q. Explain how the developing countries which are members of the WTO suffer due to trade barriers. 

  • Ans. The developing countries suffer due to trade barriers.
  • WTO is supposed to allow free trade for all in practice.
  • But the developed countries have unfairly retained trade barriers.
  • (i) WTO rules have forced the developing countries to remove trade barriers.
  • (ii) Farmers in most developed countries receive money from their respective government for production.
  • Due to this massive money, they are able to sell their farm products at abnormally low prices.
  • (iii) Developed countries are asking governments of developing countries to stop supporting their farmers, but they are doing it themselves.
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