Benefits of the World Trade Organization
One of the biggest firms associated with globalization is the World Trade Organization. The World Trade Organization is the only international body that deals with the rules of trading between nations. It has evolved over the past half century into an entity that contract with the trade of services, intellectual property as well as its original intent of the trade of goods. The WTO controls most trade in the world today through over 100 countries, and even more on the way. The World Trade Organization is beneficial economically and we should support its principles.
The original and main goal of the WTO is to remove trade barriers between countries, which is a major idea behind globalization. Anyone who knows the slightest bit of economics knows that trade is beneficial to a country as a whole. When free trade is allowed it opens up foreign markets for domestic producers. It also opens up the possibility of foreign competition in domestic markets. This fact will lead to the reduction in price of many products, which will benefit the consumer. Trade restrictions hurt the consumer, and this is a problem that the WTO is charged with addressing.
In the 1980’s when Japanese cars were quickly gaining a foothold in the American market the US limited the number of imports from Japan, in theory to protect the American worker. In response to this, car prices rose extremely. If the imports were to be allowed into the United States it would no doubt have a short-term negative effect on the economy. This would all change however when a shift in the economy occurred or the American producers were forced to make better products which in the end will benefit the costumer. The long-term benefits, although hard to see by many politicians, would benefit our country in the long run.
The WTO also makes life much simpler for companies wishing to import raw materials from outside of the United States in order to make finished goods through Non-discrimination. If the WTO did not exist then the United States in all likelihood would have different import duties applying to different nations. Therefore if a company from the US wanted to import a raw material it would not be a simple case of comparing prices from differing countries. The company would have to make calculations and study the regulations of buying from certain countries making life much more complicated then it has to be. Since the rules of the WTO apply to all member countries there is no confusion about the import duties and companies can choose simply from the cheapest producer thus making the final product cheaper for the consumer.
Aside from the WTO’s involvement in the trading of goods it also regulates services and intellectual property. The service sector which includes banks,...