question_answer 2)

Why is it necessary to become a member of WTO?

Answer:

The World Trade Organisation (WTO) was founded in 1995 as the successor to the General Agreement on Trade and Tariff (GATT). It is beneficial to become a member of WTO because of the following reasons (i) Rule Based Trading WTO is formed to establish a rule based trading system in which arbitrary restrictions cannot be placed on trade by different nations. This helps in making the trade environment more stable. (ii) Equality of Opportunities Under WTO, the member countries confer the status of Most Favoured Nation (MFN) to all other member countries. Thus, WTO provides equal opportunities to all countries in the international market for trading purposes. (iii) Multilateral Negotiations The purpose of WTO is also to enlarge production and trade of services, to ensure optimum utilization of world resources and to protect the environment. The WTO agreements cover trade in goods as well as services to facilitate international trade through multilateral trade negotiations leading to removal of tariff as well as non-tariff barriers. This helps in providing {greater market access to all member countries. However, some scholars question the usefulness of being a member of the WTO. They are of the view that while developed countries force the developing countries to open up their markets but do not allow access to their own markets. Similarly, developing countries are pressurized to remove non tariff barriers such as subsidies but developed nations continue with them.