What is the role of the World Trade Organization (WTO)?

The World Trade Organization (WTO) plays a crucial role in fostering global economic cooperation through promoting free trade and acting as a mediator for resolving trade disputes. Its primary function is to create a platform where countries can negotiate trade agreements, establish trade rules, and address trade-related conflicts. By reducing trade barriers, the WTO encourages countries to engage in international trade, which can enhance economic growth and development.

The WTO also provides a structured environment for its member countries to bring disputes regarding trade practices before a panel of experts, ensuring that issues are addressed fairly and according to agreed-upon laws and procedures. This mechanism supports the stability and predictability of the international trading system, thus contributing to a more consistent global marketplace.

In contrast, the other options suggest roles that the WTO does not fulfill. Controlling currency exchange rates falls under the purview of financial institutions and countries’ central banks. Regulating domestic business practices is a responsibility of national governments rather than an international organization like the WTO. Lastly, establishing tariffs is typically a sovereign decision made by individual countries, though the WTO does work to reduce tariffs through negotiations.