Question

1. Describe the World Trade Organization including its function and the number of members.

2. Explain Globalization

Answer 1

Q1- World Trade Organization (WTO) is an international trade organization. It looks after the overall international trade scenario among the nations. The organization came into existence in January 1995 to facilitate multilateral trade arrangements between various countries. Before the establishment of WTO, the countries followed the General Agreement on Tariffs and Trade (GATT) to promote international trade since 1947. The proposal for the formation of WTO was pit forward in the eighth rounTd of GATT held at Uruguay.

The functions of WTO are:

• To administer trade agreements between member countries.
• To facilitate proper implementation of those multilateral trade agreements.
• To act as a forum for the settlement of trade-related disputes between nations.
• To review and monitor the trade policies undertaken by the member countries.
• To cooperate with IMF and World Bank for achieving greater coherence in global economic policy.

The member nations of WTO are currently 139 in number.

Q2- Globalization means the integration of national economies with the international economy through trade, foreign direct investment, capital flows, migration, spread of technology with minimum restrictions. Essential elements of globalization are almost free flow of goods, services, capital,knowledge, technology and labor.

The 19th century is called as the 'first era of globalization' because this period was characterized by rapid growth in international trade and investment between the European imperial powers, their colonies and USA. The 'second era of globalization' began since the World War II when the political leaders of different countries took the initiative of establishing some international financial institutions like IMF, World Bank etc, for helping the war-devastated countries and for promoting free trade between nations. The GATT was signed in 1947 and then WTO was established as part of globalization process.

Globalization has got several favorable impacts like:

• promotion of foreign direct investment.
• greater access to improved knowledge and technology.
• advantaged of international division of labor.
• greater export opportunities before the developing nations.
• inter-linkage of production in distant locations.
• greater scope of innovation in a globally competitive environment.