"The World Trade Organization"Introduction
Students have already learned that international trade is
important to all nations, even a country as large as the United
States. Most of the products exchanged are goods, although
a growing number of services, such as insurance and banking,
are also bought and sold. Nations trade for the same reasons
that individuals do—they trade because they believe that
the products they receive are worth the products they give
up. In addition, because nations are free to trade, they must
believe that they are better off with trade than without it.
The World Trade Organization (WTO) is an important organization
dedicated to promoting freer trade. This activity is designed
to help students learn more about this new international agency. Lesson Description
Students will use information from the WTO Web site to find
out more about the organization's role in our global economy.
Previous Knowledge Expected
Students should be familiar with the following terms:
absolute advantage: country's ability to produce more
of a given product than can another country
comparative advantage: country's ability to produce
a given product relatively more efficiently than another country;
production at a lower opportunity cost Applied Content Standards (from
the Council for Economic Education)
Standard 5: Voluntary exchange occurs only when all
participating parties expect to gain. This is true for trade
among individuals or organizations within a nation, and among
individuals or organizations in different nations.
Standard 6: When individuals, regions, and nations
specialize in what they can produce at the lowest cost and
then trade with others, both production and consumption increase.
Instructional Objectives
- Students will discover when the World Trade Organization
was established and where it is located.
- Students will discover the six functions of the WTO.
- Students will be able to describe the benefits of the WTO
trading system.
Student Web Activity Answers
- The WTO is located in Geneva, Switzerland and was established
on January 1, 1995.
- Answers will vary, but students might note the following:
(1) administering WTO trade agreements, (2) providing a forum
for trade negotiations, (3) handling trade disputes, (4) monitoring
national trade policies, (5) providing technical assistance
and training for developing countries, and (6) cooperating
with other international organizations.
- Teacher may provide an answer sheet obtained from information
from the Web site.
- Answers will vary, but students should describe in their
own words 5 of the 10 benefits listed on the Web site.
Extending the Lesson
Encourage students to read further information that is provided
on the Web site. The "FAQs" is an especially useful section
that provides a wealth of information on the WTO and its purposes.
Have students make a presentation describing the mechanism
used by the WTO to settle trade disputes. To do so, they will
need to go to the "Dispute settlement" link that appears under "Trade Topics" on
the Web page.
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