Economics: Today and Tomorrow © 2012

Introduction
In this exercise, students will examine the role of the World Trade Organization and research how it attempts to promote trade and enhance the welfare of the peoples of its member nations.

Lesson Description
Students will use information from the World Trade Organization (WTO) Web site to learn about the functions of the WTO. Students will read about the goals of the WTO, the methods it employs, and its organization. Students will then answer four questions and apply this information by creating a chart defining the benefits of global trade both to smaller, developing nations and to larger, industrialized nations.

Previous Knowledge Expected
World Trade Organization: world's largest trade agreement—currently includes 134 nations
developed nations: nations with relatively high standards of living and economies based more on industry than on agriculture
developing nations: nations with little industrial development and relatively low standards of living

Applied Content Standards (from the Council for Economic Education)Standard 3: Different methods can be used to allocate goods and services. People, acting individually or collectively through government, must choose which methods to use to allocate different kinds of goods and services.

1. Students will to able to recognize the purpose of the WTO and evaluate how its practices affect global trade.
2. Students will be able to use this knowledge to chart the benefits of global trade to both developing nations and developed nations.

1. The WTO consists of over 145 members, accounting for over 90% of all world trade. The top-level decision-making body is the Ministerial Conference, which meets at least once every two years. The next level is the General Council, which meets several times each year to review trade policies and disputes. Reporting to the General Council are the Goods Council, Services Council, and Intellectual Property Council. Specialized committees, working groups, and working parties deal with specific agreements. The WTO Secretariat supplies technical support to council and committees and legal assistance in settling disputes.
2. The WTO's trade system encourages trade to flow smoothly, freely, fairly, and predictably by several means. The WTO's agreements, which organize the global rules of trade among nations, are central to the WTO trade system. With trade barriers lowered, trade among WTO members increases. In the event of trade disputes, the WTO acts as a forum for negotiation. The WTO also reviews national trade policies and assists developing countries in trade policy issues through technical assistance and training programs.
3. Developing countries are given special consideration in their compliance with WTO agreements so that they can increase their ability to trade. Special provisions include: a longer time frame for implementing agreements and commitments; measures to increase trade opportunities; provisions requiring all WTO members to safeguard the trade interests of developing countries; and support to help developing countries build the infrastructure for WTO standards.
4. By promoting peaceful trade among nations, WTO trade agreements help to protect economies in transition from threats of war. Healthy commercial relationships lead to lessened political conflict. Additionally, freer trade can cut the costs of goods and services, and the cost of living. By discouraging trade quotas, the WTO agreements help transitional economies keep competition up and prices down. Unhampered trade also helps provide for a greater supply of goods.
5. Students' answers will vary.