World Trade Organization

The mission statement of the World Trade Organization (WTO), the only international organization for the multilateral trading system, is open trade for the benefit of all. The statement raises several questions. Does every country in the world benefit equally from free trade? How does WTO ensure this? What are the mechanisms that are in place to help WTO distribute the benefits of free trade globally in an equitable fashion? The implications of free trade for poverty are not straightforward, primarily because there is an indirect effect of trade liberalization on poverty. Trade liberalization causes economic growth, which in turn reduces poverty. Although overlooked in the literature, the effects of free trade on poverty have recently gained some currency. This entry will discuss the relationship between ...