World Trade Organization (WTO)

The World Trade Organization is a global organization for trade agreements and negotiations between nations to ensure better, smooth, and free trade as possible. The events like the great depression and post-world war II effects around the globe led to the General Agreement on Tariffs and Trade (GATT) signed between 23 governments in 1947. This was a legal agreement, tending to minimize barriers in international trade by reducing tariffs and subsidies while preserving significant regulations. After 47 years in 1995, GATT was eventually shaped into a more uniform structure by the creation of the World Trade Organization.

The WTO has currently over 160 members representing 98% of world trade. The Ministerial Conference is the highest decision-making body of the WTO which consists of a representative from member countries and makes decisions through the census. It also heads the general council and various other committees. WTO also has an Appellate Body that consists of a dispute settlement panel, composed of 7 experts selected by the nature of the dispute. The dispute settlement mechanism provides enforceable means for members to resolve a dispute under WTO obligations and has processed about 600 trade disputes between governments among its member countries.

WTO in future

The WTO despite being the largest global organization for facilitating trade agreements, has not been able to achieve any substantial goals in establishing an ideal global trade system that caters to new problems and compete with extensive advancements over the years in the trading system. The US who once played an important role in shaping the international trade system and had constitutional authority over WTO, now shows a lack of trust in the WTO, accusing it of making a discriminatory decision and taking sides. Considering these issues the US has vetoed the appointment of judges in the appellate body which has played a key role in settling the trade disputes among its member countries, without a functioning appellate body, the dispute resolution system will no longer have the quorum needed to hear cases. Moreover, WTO's failure to establish an agreement during the Doha round of trade talks was another setback for the organization. The Doha round of trade talks for the period of 2001-2006 was an attempt at a multilateral trade agreement. It would have been between every member of the World Trade Organization (WTO). It was launched at the Doha, Qatar WTO meeting in November 2001, to be finished by January 2005, but the deadline was pushed back to 2006. The talks were finally suspended in June 2006, because the United States and the European Union refused to reduce agricultural subsidies.

WTO and Pakistan

Pakistan is also a member of the WTO since 1 January 1995. The main exports of Pakistan are textile articles, cotton, apparel; knit and non-knit, cereals, leather, stones, fruits, and nuts. Whereas Pakistan imports majorly consist of petroleum and its by-products such as plastic, besides, Pakistan also imports industrial machinery, electrical machinery, chemicals, motor vehicle, and its parts, etc. the total exports of Pakistan are estimated $23,748,680,252 and the imports are estimated $50,063,059,560. The exports of Pakistan contribute to 10.12% of the GDP whereas the import constitutes of 20.32% of the GDP as of 2019. Pakistan had trade deficit of $26,314,379,308 in 2019 as compared to 1,640,000,000 in 1995. These statistics show Pakistan trade deficit has increased to 24,674,379,308 since Pakistan joined WTO, however, these figures don’t depict the role of WTO in the trade of Pakistan rather it shows overall trade progress that is dependent on multiple factors, most importantly domestic industry in which no significant growth has been recorded since last 2 decades. However, WTO has benefited Pakistan by smoothening its trade system through negotiating its trade deals and solving trade disputes. Currently, Pakistan is involved in 5 dispute cases as a complaint, 4 cases as respondent, and is 3rd party in 13 dispute cases.

conclusion

WTO has played a significant role in improving the global trade system by introducing low tariff trade deals and platform for settling disputes and negotiating trade terms. It has also helped in increasing and smoothening trade among its member countries including Pakistan. However, to overcome its trade deficiencies, Pakistan has to increase its domestic productions and lower its imports, progressing to a self-sustainable country.