The World Trade Organization (WTO), as understood within Advanced Placement Human Geography, is a global intergovernmental organization that regulates international trade. Its primary function is to ensure that trade flows as smoothly, predictably, and freely as possible between nations. This is achieved through a system of trade agreements negotiated and signed by a large majority of the worlds trading nations and ratified in their parliaments. An example would be the WTO mediating a dispute between two countries regarding import tariffs on agricultural products.
The importance of this organization stems from its role in facilitating economic growth and development. By reducing barriers to trade, it encourages specialization and efficiency, leading to lower prices for consumers and increased opportunities for businesses. Historically, the formation of this organization and its predecessor, the General Agreement on Tariffs and Trade (GATT), reflects a movement towards greater economic interdependence and cooperation following World War II. The benefits include fostering peaceful relations among trading nations, providing a platform for resolving trade disputes, and contributing to global economic stability.