The WTO, trade blocs and concerns

The General Agreement on Tariffs and Trade (GATT), set up in 1948, worked to reduce tariffs. On 1 January 1995, it was transformed into the World Trade Organisation (WTO). The WTO is the only international organisation dealing with the global rules of trade. It sets the rules for trade between nations and settles disputes between its members. It also covers trade in services, such as telecommunications and banking, and intellectual property.

The WTO has its headquarters in Geneva, Switzerland, and has 166 members (December 2024). India is one of its founder members.

The WTO has critics. They say that free trade has not made people's lives better: it has widened the gap between rich and poor countries, since powerful countries have more influence, and that the WTO pays too little attention to workers' rights, health and the environment.

Regional trade blocs are groups of countries, usually neighbours, that promote trade among themselves by removing barriers, sharing similar products and needs. There are about 120 of them, and together they generate about 52% of world trade. Examples include ASEAN, the European Union, SAARC and OPEC.

There are also concerns about the effects of trade itself. When trade is driven only by profit, without regard for sustainability, it can deplete natural resources and cause pollution. Trade must be fair and sustainable too.