What is the basic function of the World Trade Organisation(WTO)? What benefits do nations get by forming trading blocs?

WTO stands for World Trade Organisation. It is an international organisation.

1. World Trade Organisation deals with global rules of trade between nations.

2. The rules and regulations of international trade are set by the WTO.

3. General Agreement for Tariffs and Trade (GATT) was formed to liberalise the trading policies related to customs and other restrictions in the year 1948.

4. GATT was transformed into WTO in the year 1995 in order to look after the promotion of free and fair trade among the nations.

5. WTO intervenes and resolves any trade disputes between the nations.

6. It also supervises other services such as telecommunication and banking.

The following are the benefits of forming trade blocs:

a. To put an end to the trading restrictions and facilitate trading activities between the countries which are in geographical proximity, Regional Trading Blocs are formed.

b. These Trading blocs speed up the process of intra-regional trade and today these 120 trading blocs account for nearly fifty-two per cent of the world trade.

Thus, WTO monitors the trading activities between nations while trading blocs facilitate trading between nations.