World Trade Organisations

Question 1

What was the first function of the World Trade Organisation?

Answer 1

The first function of the World Trade Organisation is to organise rounds of talks in which trade deals are negotiated in order to try to reduce trade barriers and increase trade. For example, at the Ministerial Conference in 2013, all members agreed to the Bali package which is estimated to boost world trade by about $1 trillion!

Question 2

World Trade Organisation

Answer 2

An organisation of 164 countries that regulates world trade.

Question 3

Functions of the World Trade Organisation

Answer 3

There are two functions; to organise rounds of talks to negotiate trade deals and to settle trade disputes.

Question 4

Trading blocs have two crucial effects on trade

Answer 4

Trading blocs have two crucial effects on trade. They lead to trade creation where imports increase as a result of the removal of tariffs and
trade diversion where trade moves from low cost producers to high cost producers.

Question 5

Which of the following describes the World Trade Organisation’s position towards trading blocs?

Answer 5

The WTO’s position towards trading blocs is complex. They support trading blocs that lead to trade creation and don’t support those that lead to trade diversion.

Question 6

Which of the following was agreed at the World Trade Organisation Ministerial Conference in 2013?

Answer 6

The Bali Package was agreed at the WTO Ministerial Conference in 2013. It aimed to create trade for developing (poorer) countries by reducing the trade barriers that they face with developed (richer) countries. This enables them to export more and should boost economic growth. It is estimated that the Bali package will boost world trade by about $1 trillion!