A Few Reasons Behind Why Global Institutions Were Established

As we notice there are several international institutions out there, perhaps, we’ve been wondering why they are needed to be established with a certain purpose or objective on behalf of regulating and controlling the world’s economy. First, because of the limits of the world market and the reduction of proportion in business activities through the boundaries of the country’s state, it is required to have a global agency that can help to manage, organize, and keep an eye on the global market as a whole; promoting the establishment of multinational treaties which govern international business systems.

And then, during the last half-century, there has been several number of following global institutions which have also been established to assist in carrying out those functions such as the General Agreement in Tariff and Trade (GATT) and its successors which are the World Trade Organization ranging from The International Monetary Fund, The World Bank, and The United Nations.

Then, all those institutions established through voluntary agreements between each country and the institutional functions, additionally, have formed some sort of mutual understanding which is popularly known as the international agreements. The World Trade Organization so-called WTO, as we know, is responsible for maintaining the order of the world’s trading system by ensuring countries to be bound or obliged by the rules set from the trade agreements which are signed by the members of respective countries of the WTO.

In addition, back in the year of 2010, there were approximately 153 WTO members of countries which were collectively accounted for 90 percent of the world’s trading value; contributing the scope and huge influence for their organizations. The global institution so-called WTO (World Trade Organization) is responsible for facilitating the establishment of additional multinational agreement between members of countries as we know, and its job is also to improve the implementation of the previous decline in international trade and investment barriers. Therefore, we can simply put a remark saying that this WTO has played an important role for its members in creating global business system which seems to be more open and not hindered by trade and investment barriers between countries. 

Overall, without the world creating such an institution as the WTO, today's globalization of markets and production may not reach this far. However, we need to pay our attention that there are some negative critics as well arguing that this organization so-called the WTO have seized the national sovereignty from each member.

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