As part of the General Agreement on Tariffs and Trade (GATT) negotiations, WTO has been officially given the responsibility to monitor the national trading policies the occurs around the world aside from the handling of trade disputes and the enforcement of the GATT agreement which considers lowering down the tariff rates and other possible physical and non-physical barriers that could significantly affect the free trading in the world market. (The Columbia Encyclopedia. 6th Ed., 2004) For this reason, WTO is considered to be the backbone of globalization.
Considering the on-going trading between developed and developing countries, WTO is often accused of benefiting richer nations to the detriment of poorer ones. For this study, the advantages and disadvantages of joining the WTO will be discussed on this essay. Prior to conclusion, recommended ways in which the WTO could be transformed positively in terms of being able to help developing nations will be tackled.
The main theoretical argument in promoting the advantages of the WTO is that it leads to greater competitiveness, lower prices, and higher economic growth. But these benefits of free trade are usually experienced by the developed world and at the expense of the developing world. In other words, free trade costs the poorer nations heavily to benefit the richer ones. The WTO however would say that free trade is also advantageous to the developing countries by being an important ‘engine of growth’; in the short term there are problems but in the longer term the poorer nations also benefit from positive growth.
Lowering tariffs has the effect of liberalising trade and removing barriers. Trade liberalization is the main aim of free trade agreements (DFAT). The WTO aims to deregulate the private sector with “the mutual consensus of governments all over the world” (Horiya, 2005) and standardize international interests. Goods and services can then flow freely between countries. As