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Why Is WTO Membership So Important?

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world

Nearly every country in the world is a member or has applied to be a member of the WTO>

Credit: NASA Goddard Space Flight Center
Cargo Ships

WTO membership promotes free trade as a primary benefit.

Credit: Justin Sullivan/Getty Images
Haitian woman after the earthquake.

The WTO provided $20,000 in relief aid to its member Haiti after the earthquake.

Credit: Getty Images

Question: Why Is WTO Membership So Important?

Answer: Members of the WTO enjoy the benefits conferred by any trade agreement. However, since the WTO has so many members, its benefits are really global. The WTO helps trade throughout the world to flow smoothly through its trade agreements. This provides its members with a fair method to resolve trade disputes without resorting to violence or even war.

Membership in the WTO also has responsibilities. Members agree to avoid erecting trade barriers, instead abiding by the WTO's resolution of the dispute. This prevents the escalation of trade restrictions that could help the individual country temporarily, but hurt world trade overall. In fact, it was just this type of retaliatory trade warfare that worsened the Great Depression of 1929. As global trade slowed, countries sought to protect domestic industries. Trade barriers were erected, creating a downward spiral. As a result, global trade shrank by 25%.

Members of the WTO know what the rules are, the penalties for breaking the rules, and how to play the global trade game. This certainty creates a safer trading arena for everyone. It also lowers the costs of doing business just by removing volatility. These general benefits extend to all members. Since the membership is so large, many of these benefits are also felt by the entire world.

Specific WTO Membership Benefits

WTO membership means that the nation automatically receives the Most Favored Nation status. Basically, this means all 159 WTO members must treat each other the same. They give no preferential trade benefit to any one member without giving it to all.

WTO members have lower trade barriers with each other. This includes tariffs, import quotas and excessive regulations. Lower trade barriers allows them a larger market for their goods, leading to greater sales, more jobs and faster economic growth.

Over 75% of WTO members are developing countries. WTO membership allows them access to developed markets at the lower tariff rate. Membership allows them time to remove reciprocal tariffs in their own markets. This gives these countries an opportunity to catch up to sophisticated multinational corporations and their mature industries before opening the developing countries' markets to overwhelming competitive pressure.

List of WTO Members by Continent

Really, it would be easier to list the countries that are not WTO members, since 159 out of 196 countries in the world have joined. Most of them joined in 1995, as soon as the WTO was formed.

Asia: Armenia, Bahrain, Bangladesh, Brunei, Cambodia, China, Georgia, Hong Kong, India, Indonesia, Israel, Japan, Jordan, Kyrgyz Republic, Kuwait, Laos, Macao, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Oman, Pakistan, Papua New Guinea, Philippines, Qatar, Russia, Samoa, Saudi Arabia, Singapore, South Korea, Sri Lanka, Taipei, Tajikistan, Thailand, Turkey, United Arab Emirates, Viet Nam.

Africa: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo Democratic Republic, Congo Republic, Cote d'Ivoire, Djibouti, Egypt, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe.

Europe: Albania, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, European Union, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Moldova, MontenegroNetherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom.

Central and North America: Antigua and Barbuda, Barbados, Belize, Canada, Cape Verde, Costa Rica, Cuba, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent & the Grenadines, Trinidad and Tobago, United States.

Oceana: Australia, Fiji, New Zealand, Solomon Islands, Tonga, Vanuatu,.

South America: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela.

List of Prospective WTO Members: 

The WTO has a category called "Observer." These 25 countries have applied to become members, and have five years to complete the process. They are:

Afghanistan, Algeria, Andorra, Azerbaijan, Bahamas, Belarus, Bhutan, Bosnia and Herzegovina, Comoros, Equatorial Guinea, Ethiopia, the Vatican, Iran, Iraq, Kazakhstan, Lebanon, Liberia, Libya, Sao Tome and Principe, Serbia, Seychelles, Sudan, Syria, Uzbekistan, and Yemen.

List of Countries Outside the WTO

There are 12 countries that aren't members, nor have they applied to become members. They are: Eritrea, Kiribati, Marshall Islands, Micronesia, Monaco, Nauru, North Korea, Palau, San Marino, Somalia, South Sudan, Turkmenistan, Tuvalu. Article updated December 9, 2013

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