Founded in 1995, The World Trade Organization (WTO) streamlines trading between nations. It helps the makers of goods and services, importers, and exporters conduct business in a civilized manner.
While this trading system isn’t perfect, it does offer several benefits such as it allows governments to negotiate trade agreements and settle disputes in a refined way.
Here are 5 benefits brought forward by the WTO.
Let’s start with the fact that the WTO contributes to international peace. Without this system in place, chances are that countries would participate in unhealthy commercial relationships and political conflicts. Instead, this organization helps trade services flow smoothly. It gives both parties a chance to deal with disputes in a constructive way.
Increased Income For Businesses
Trade raises both national and personal income. With the WTO, trade barriers are lowered. This boosts national income and prosperity which leads to an increase of job opportunities and employment. This isn’t just great for consumers, but also property investors since they will benefit from rental income.
Let’s take hotel investors for instance. When the economy is good, they’re looking at increased profits. They also have the option of selling their property down the road for a profit. Those interested in investing in hotels or similar properties should read a hotel room investment review to learn the advantages of this type of investment. It’s a great opportunity to take on when the economy is booming, thanks to the WTO.
Rules Are in Place
This is such a large benefit offered by the WTO. This system offers a set of rules. While these rules won’t make all countries equal, it will reduce some inequalities and give smaller countries more of a voice. This means that both rich and poor countries can challenge one another when disputes arise. The dispute settlement agreement in place makes life easier for all the parties involved.
Disputes Are Handled in a Civilized Manner
It’s extremely likely that disputes will arise especially when trade services expand in volume. The WTO is here to help resolve these disputes and keep the peace between countries.
When countries run into problems they can turn to the WTO for help. Prior to the establishment of this organization, this was not an option causing parties to act individually. The party with the most power usually won these disputes.
Like we mentioned earlier, a big benefit of the WTO is that rules are in place. Without rules, we would be witnessing several challenges when it comes down to disputes within trading countries.
Provides a Larger Choice of Products
If you stop and think about it, many of products we’re accustomed to are imported. This includes food, clothing, and household goods. If imports were taken away, so would many of the products we use today. Imports offer us a larger choice of products in both quality and quantity, courtesy of trade through the WTO.
Reduced Cost of Living
Everyone is a consumer, which means that everyone is affected by trade policies. The WTO offers freer trade and protectionism, resulting in cheaper goods such as food, clothing, and services. The money that we spend on these goods is affected by trade policies.
Protectionism is very expensive; however, the WTO system lowers trade barriers by opening the door to negotiation. This means reduced prices for us all.
As you can see, the World Trade Organization promotes peace between countries, handles disputes in a more civilized manner, and offers an increase in income. While no system is perfect and there will always be debate as to how trade should be handled, this organization puts rules in place to carry out fair and regulated negotiations.
Related article, possibly of interest: “What is International Trade?“