Glossary term
World Trade Organisation (WTO): Meaning and Definition
Reviewed and approved by Dr. Anamika ShrivastavaPublished Last updated
The World Trade Organisation (WTO) is the international body, founded in 1995 as successor to the General Agreement on Tariffs and Trade (GATT), that administers rules for trade in goods and services between its members. It aims at a rule-based system with no arbitrary restrictions and resolves trade disputes.
In more detail
The WTO provides a forum for trade negotiations and a dispute settlement system. Members agree to bind tariffs and treat trading partners without discrimination. Developing countries such as India press for fairer rules on farm subsidies and for flexibility to protect livelihoods.
Example
A WTO rule bars a member from setting arbitrary quotas on imports, so India removed quantitative restrictions as it had agreed.
Key points
- GATT began in 1948 with 23 countries.
- WTO started in 1995.
- India is a founding member.
Common mistake
Believing the WTO sets prices or trade in a country. It sets rules for governments.
Related terms
Where it is explained
This term is explained in Class 11 Indian Economic Development Chapter 3: Liberalisation, Privatisation and Globalisation: An Appraisal.