An Overview of the Role of the World Trade Organization
Let us now look at the world trade organization and its impact on the USA’s economy. The World Trade Organization is an operation that brings together countries worldwide under one set of rules and regulations. This is a global trade association with a capital W TE, commonly referred to as the World Trade Organization. This association’s primary purpose is to promote trade and help developing countries gain access to international markets. However, the impact of this organization has been quite different.
The World Trade Organization is an agency that has no real power of its own. It can’t dictate what should be the conditions for international trade. It can, however, make a difference in the overall needs of trade between countries. For instance, one country can gain access to global markets through the WTO while another country can suffer a loss. However, there is minimal impact on the domestic market as a result of these trade flows.
What impact does the World Trade Organization have on a country like the USA? The USA is one of the significant contributors to the growth of the world trade system. There are many reasons for this. Some of them are discussed below.
The United States is a moderately open country.
The United States is a fairly open country and has a vast market. The biggest problem for a developing country is to get products to reach people. The World Trade Organization made access to cheap products easier for developing countries. The regulation of the World Trade Organization allows countries to negotiate with each other regarding trade freely. So the country with the largest market is bound to be the one that receives the largest goods within the global trade system.
This makes the country’s economy grow. Another reason for this is that the USA supports a very open global trade system. Other countries fear that this might lead to the USA withdrawing from the worldwide trade agreement. That fear is non-existent in the present period.
Besides the United States, the European Union is another country that has a large share in global trade. However, the EU is a very slowly developing country. So, the EU’s impact is not very high compared to the USA or the other European countries. So the overall effect of the European Union on the US is still relatively low.
The third country, which has a significant influence on global trade, is China. China is not the world’s second-largest economy, but it also has the largest foreign exchange market. Therefore China’s demand for global trade commodities like oil, steel, copper, and agricultural produce is very high. The other thing in order from China is machinery and automobiles. In the past, China has purchased goods from all over the world, but the Chinese economy’s growth has made it increasingly possible to buy products that are manufactured in China itself.
The world trade organization does have an impact on the US economy, but this impact is shallow. There is a very negligible difference in the economic performance between the US and China. China’s growth has made it possible for the country to utilize the opportunities that globalization provides. However, the overall economic condition of the country is not too good.
slowing down of the housing market
On the other hand, the US market is suffering from serious difficulties. For example, the slowing down of the housing market and increased unemployment rate make it hard for United States residents to obtain jobs. Apart from this, the market is affected by a global trade imbalance. When the European countries get an advantage over the United States due to the World Trade Organization, the United States feels let go.
There are so many players in the global market, and they all have something different to offer. Sometimes, the products imported from other countries are more expensive than those produced in the United States. In this case, the United States consumers will buy more expensive products, which leads to increased inflation. Who will force the American economy to cut down on the number of goods and services it purchases from other countries. If this trend continues, then the American economy will be adversely affected.
So it is clear that the World Trade Organization has a vital role in the international trade system. So, the US government has been putting pressure on the World Trade Organization to change its rules so that the US is not held liable for its actions. The European Union and the Chinese government have been lobbying intensely to eliminate the limits on the export of goods from the World Trade Organization countries. They feel that who should balance the rules in favor of the poorer countries. The members of the World Trade company should be allowed a larger share of the international trade pie.