An oversight authority was developed due to the rapid trade globalization over the last few decades. The need for a body that offers oversight on international trade rules led to forming an intergovernmental organization known as the World Trade organization in 1995 ( Tarver , 2020). The organization replaces the existing body referred to as General Agreement on Tariffs and Trade.
The World Trade Organization plays an important role in ensuring control and order by upholding business rules. The body provides frameworks and platforms through which trade mediations and negotiations take place. The organization’s primary function is dispute resolution among its member states. The organization’s major aim is to help set a smooth transition towards a free global trade system. The body helps its members formulate agreements and solutions through which they can achieve the free trade system. Members of the World Trade Organization rely on the body for peace and dispute resolution ( Krishnan , 2018). The body lowers or raises trade barriers depending on the trade conditions to ensure seamless transactions amongst the member states. Low trade barriers lower the prices of goods and services hence stimulating transactions between member states while increasing the trade barriers maintain marketability of member state goods by ensuring competitiveness.
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The World Trade Organization affects freight distribution by controlling the prices of goods and their availability along specific trade routes. Goods freight across the World Trade Organization members is cheaper than non-member states thanks to the free trade deals amongst member states. The World Trade Organization ensures tariff reduction and implementation of foreign trade policies among the member states to ensure they abide by the trade guidelines and member state agreements to facilitating fair trade. The World Trade Organization works together with other international bodies in policy formulation and authority implementation.
References
Krishnan, R. (2018). ROLE OF WTO IN PROMOTING INTERNATIONAL TRADE AFTER MARRAKESH AGREEMENT . International Journal of Pure and Applied Mathematics. https://acadpubl.eu/hub/2018-120-5/3/269.pdf.
Tarver, E. (2021, June 15). How Best to Define the World Trade Organization (WTO) . Investopedia. https://www.investopedia.com/terms/w/wto.asp.
