Our homes are full of goods from all over the world. When it comes to production, China takes the cake. Thanks to the WTO, international commerce is well-regulated, ensuring everyone involved gets a fair deal.
Establishing a global entity
The World Trade Organization was established in on January 1, 1995, after 124 nations signed an agreement to collaborate on trade deals and negotiations. All but 12 countries in the world are presently either members of the WTO or observe its provisions. China is the largest exporter of goods in the world, so it only makes sense that they should be a part of a global trade organization.
Before the establishment of the WTO, the General Agreement on Tariffs and Trade was the only unifying trade structure. It was established in 1947, but it only included 23 countries, and its regulations were far more limited than the WTO’s.
The WTO has five main rules. The first rule states that no nation is allowed to “play favorites” with another country when it comes to trade. Every nation’s export and import rules must apply to everybody. The second rule states that participating countries must bolster other trade partners, creating an element of reciprocity.
The third and fourth regulations serve to protect all trade partners by making sure that all nations publish their rules for trade. The fifth rule says that, if an import threatens the safety of any element of a country, the country may retract their deal.
They’re kind of a big deal
China’s entrance to the WTO six years after its establishment meant that the country could trade on a global level like never before. Their admission also gave the rest of the world access to the inexpensive goods that China produced.
In 2017, China was the US’s largest import supplier and our third largest export recipient. We send them vehicles, machinery, and crops, and they give us furniture, toys, and electronics.