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Published on Cato's Center for Trade Policy Studies (http://www.freetrade.org)

The World Trade Organization (WTO)

The World Trade Organization promotes liberalization by encouraging nations to lower trade barriers and to keep them down. Since its original founding in 1948 as the General Agreement of Tariffs and Trade, the GATT/WTO system has seen global tariffs on manufactured goods fall dramatically and global trade volumes grow exponentially, resulting in more freedom and prosperity for hundreds of millions of people.

The WTO's dispute settlement mechanism helps nations resolve trade disputes without resorting to costly trade wars. The system relies on voluntary compliance and does not compromise national sovereignty. The aim of new negotiations should be to lower barriers against trade in agricultural products and services and to limit the widespread abuse of antidumping laws.

America's membership in the WTO has been a double blessing for the United States. The liberalization of markets abroad has created export opportunities for U.S. companies, raising profits, employment, and wages in industries that serve expanding global markets. Meanwhile, WTO membership exerts influence on the U.S. government to keep our own market open to the global economy. American families benefit from this openness through access to a wider range of affordable goods and services, raising the real value of our paychecks. The competition from abroad spurs domestic producers to keep prices down, develop new and better products, and adopt more efficient production. The ability to import raw materials, capital equipment, and intermediate inputs, such as competitively priced steel and semiconductors, lowers the cost of production for U.S. producers and keeps them competitive in global markets.

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  • Raw Deal
    by Sallie James (December 27, 2007)
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