Lesson 28 — Activity 3: The World Trade Organization
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Lesson 28 — Activity 3:
The World Trade Organization
Warm Up
In 2015, Canada had free trade agreements in force with more than 15 countries around the world. These include the Canada–European Free Trade Association (2009), the North American Free Trade Agreement (NAFTA, 1994), and agreements with such countries as Korea (2015) and Honduras (2014). In 2016, there were ongoing negotiations to form trade agreements with countries such as India and Japan.
Established in 1995, the World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.
Courtesy of Gerd Altman, Pixabay
The WTO provides its members with a public meeting place for trade negotiations, allows countries to review trade policies and practices, and settles disputes between its members. Canada has been a member of the WTO since January 1, 1995.
The major aim of the WTO is to lower
customs
duty rates and other trade barriers on various goods. This is very important for its developing nation members. They are very involved in the agriculture and textile industries, but need support if they are to compete with more developed countries.
The WTO also benefits the service industry. The service industry includes banks, insurance firms, telecommunications companies, hotel chains, and transport companies. These companies want to expand their business abroad. With the WTO's commitment to reduced taxes and barriers for services, it is much easier for these businesses to expand to other countries.
By lowering trade barriers, the WTO's system also breaks down other barriers between people and nations. This allows individual owners of businesses to export their products across borders and continents. For example, Alberta beef farmers can sell their products to other countries without facing the trade barriers of the past.
The WTO's goal is to improve the welfare of the people of other countries. It is an organization that benefits the countries that are members. However, like every organization, the WTO is sometimes criticized.