Lesson video

Hello.

My name's Miss Ikomi and I'm a teacher from London.

I'm going to be taking you through today's lesson, so we're going to get started.

Today's lesson is called What is the UK's role in the World Trade Organisation? It's part of the wider unit, How does the UK play a role in the international community? By the end of today's lesson, you will be able to explain the function of the World Trade Organisation, the WTO, and how the UK plays a part in this international organisation.

The keywords we're gonna hear in today's lesson are: trade.

This is the action of buying and selling goods and services.

And also World Trade Organisation, or WTO.

This is an international organisation that deals with the global rules of trade between nations.

We're going to start by thinking about what is the World Trade Organisation? We hear the word trade come up a lot in our everyday life.

We might engage in trade as part of our lives.

In the same way, countries also engage in trade for the common items that we then buy and really depend on.

Aisha says, "Oh no! I have an apple for lunch.

I hate apples! Can we swap?" Sofia says, "I have two oranges.

I'll trade you your apple for one of the oranges." We see an example here of a small case whereby people are trading, one thing for the other.

In the context of the World Trade Organisation, trade means buying and selling goods, like cars or raw materials such as metals, and services, like banking services or research services.

Trade of these different things can happen in different ways.

Bilateral trade is trade that is between two countries.

We can see the word bi, referencing two.

Multilateral trade involves three or more countries that trade together.

Let's do a check.

Which of the following is an accurate description of trade? Pause your video and choose your answer now.

The correct answer is C.

The UK buys cars from Germany, which in turn by UK research into car battery efficiency.

One is trading for the other.

While trade allows countries to benefit from each other's goods and services, it doesn't always happen fairly.

To help make trade more fair and consistent, the World Trade Organisation was created in 1995.

This organisation sets out rules that any state who is a member of agree to follow.

This helps to make sure that trade is fair, the prices are reasonable, and that countries aren't taking unfair advantage of one another, particularly in terms of countries that may have more or less economic resources.

If trade disputes do arise, the WTO provides a way for countries to resolve their disagreements peacefully through negotiation, and the WTO may act as a mediator.

Andeep says, "The WTO has rules which stop countries dropping their prices really low to undercut other countries.

They allow competitive prices, but they do not allow unfair practises." Sofia says, "If countries undercut each other too much, it can lead to low wages and poor working conditions.

This can slow down development and increase poverty, so therefore, the WTO is working to make trade fair for everyone." Before the WTO, there was an organisation called the General Agreement on Tariffs and Trade.

It was formed in 1947 after the Second World War.

The GATT was one of several organisations set up to promote peace and rebuild global economies.

Other examples of organisations that were aiming to do this include the World Bank and the International Monetary Fund.

These organisations were established to help the world's economies recover and reduce the chances of future global conflict.

In the 1980s, world leaders realised that the GATT was no longer keeping up with the changes that were happening when it came to global trade.

Since the 1940s, the world has changed a lot.

Advances like cheaper and faster air travel and other things meant that trade was happening faster.

Therefore, a new organisation was needed.

In 1994, ministers from around the world met in Marrakesh, Morocco and agreed to create the World Trade Organisation.

It replaced the GATT and started updating trade rules to better suit the modern world.

Let's do a check.

True or false? The World Trade Organisation helps to negotiate peace during a conflict.

Pause your video and choose your answer.

The correct answer is false.

This is because the WTO doesn't negotiate peace.

It helps to negotiate if there's disagreements about trade issues specifically.

However, it can also step in to prevent this from occurring by providing rules and regulation, so thereby it does in some ways contribute to peace.

Izzy's asking, "What does the WTO actually do?" Some of the things the WTO does include producing an annual report based on expert research.

These reports are impartial, meaning they're not biassed in one way or the other, and show how much trade is happening around the world.

They also explore what this means in different countries.

One important factor they examine is the socio-economic impact, for example, whether trade has helped to improve people's incomes or made living conditions hard.

Socio-economic means factors that affect people's lives in a social perspective and how that marries up with the economy and how that is impacting them.

So you might hear that term used in other contexts as well.

The WTO also sets clear expectations for trade relationships.

One key principle is the idea of non-discrimination.

That means that countries have to treat all their trading partners equally and offer the same deals and treatment to everyone.

It also requires countries to be transparent about their trading rules and practises.

That means that the deals that they're making are open and honest.

Contracts and deals can be scrutinised, looked at really carefully, to prevent one country being exploited by another.

The WTO also organises regular meetings for world leaders and ministers to discuss things to do with trade.

These meetings help to keep global economic stability and prevent conflicts from escalating due to economic or trade issues.

So it provides a platform for countries and leaders to have these really important conversations.

Let's do another check.

Which of the following is not a job that the WTO does? Pause your video and choose your answer now.

The correct answer is C.

The WTO does not protect wealthy countries by enforcing discriminatory rules.

We're going to put this into practise.

I'd like you to explain the importance of the WTO's role in the world.

You might consider: reports, the idea of transparency, meetings, and rules and regulations.

Pause your video and have a go at this now.

Let's have a think about what we could have included in our answer.

You might have said: the WTO was created to try to reduce conflict as a result of economic and trade issues.

It attempts to do this in many ways: producing reports, supporting regulation and transparency, and facilitating meetings.

The WTO produces annual reports which are available to everyone.

They show the impact of trade globally and give recommendations about how to improve this.

The WTO also provides a space for world leaders to meet and work out issues to do with trade without it escalating to issues or conflict.

They help to ensure that trade deals are transparent, and this makes sure that countries are behaving properly and following the rules.

Next we're going to learn about how is the WTO organised? As of 2024, there are 166 members of the WTO, including the UK, Germany, India, and Ghana.

Together, these member states represent 98% of global trade.

Lucas is telling us, "Having so many members is important because it gives the WTO authority over global trade.

If some countries weren't members, they might create their own trade rules, which could destabilise the global trading system." The highest authority in the WTO is the Ministerial Conference that meets every two years.

Decisions are made through multilateral agreements, which means that all member states have a say and most must agree for a decision to go ahead.

This approach helps to ensure that all the members feel involved and reduces the risk of countries feeling ignored or left out.

That might mean that they would want to withdraw from the organisation in the future.

Let's do a check.

I'd like you to complete the sentences below.

Pause your video and have a go at this now.

Let's check our answers.

There are 166 members of the World Trade Organisation, which accounts for 98% of the world's trade.

The highest authority in the WTO is the Ministerial Conference.

Whilst the Ministerial Conference makes key decisions, the day-to-day work of the WTO is carried out by three main bodies: the General Council, the Dispute Settlement Body, and the Trade Policy Review Body.

The General Council is made up of ambassadors from each member state.

These people represent their state and speak and vote on behalf of their nation.

Big decisions are left for the Ministerial Conference, but the General Council handles important day-to-day discussions.

They have a chairperson who is elected annually and comes from different countries.

This helps to ensure that the voices of many nations are heard and the organisation isn't overly influenced by one country.

True or false? The highest authority of the WTO is the General Council.

They make key decisions every two years.

Pause your video and choose your answer.

The correct answer is false.

This is because the highest authority is the Ministerial Conference.

They meet every two years to make decisions.

The General Council meets more often and can make decisions.

Each country has an ambassador to represent them.

The Dispute Settlement Body is part of the General Council.

It means when member states have a disagreement about trade, they listen to both sides, check the rules, and work to solve the problem fairly.

In rare cases, it can take stronger actions, like suspending a member or placing a trade sanction on them, to help resolve serious disputes.

For example, dumping is when a country sells a product to another country at a lower price than it would cost to buy in its own country.

For instance, when a company from one country sells steel in another country for two pounds per bar, but that same steel sells for four pounds per bar in the country where it was made.

The WTO doesn't stop companies from doing this, but it does have rules for how governments can respond fairly.

The last is the Trade Policy Review Body.

This is also part of the General Council and meets to review the trade policies of each member.

This helps ensure that all members are following the principles of non-discrimination and engaging in fair trade.

As part of the WTO's efforts to make trade more transparent, the body holds public meetings and produces reports after each review session so members of the public know what's going on.

Which of the following is part of the WTO? Is it A, the General Assembly; B, the General Council; or C, the General Election? Pause your video and choose your answer.

The correct answer is B.

Let's put this into practise.

I've got a source which sets out the organisation of the World Trade Organisation.

I'd like you to describe how the WTO is organised based on the information in Source A.

Pause your video and have a go at this now.

I asked you to describe the WTO organisation.

You might have said: the WTO is an international organisation with 166 members.

This represents 98% of global trade.

At the top of the organisation is the Ministerial Conference, which makes the major decisions and consists mainly of world leaders.

They meet every two years.

Below the Ministerial Conference is the General Council, which handles the day-to-day work of the WTO.

Ambassadors from member states meet regularly in the General Council to discuss important issues and make decisions.

If countries have trade disputes, the General Council acts as the Dispute Settlement Body to resolve these issues.

The General Council also works with the Trade Policy Review Body, which reviews the trade policies of member states to ensure fairness and transparency in international trade.

Next, we're going to think about what part does the UK in the World Trade Organisation? The UK has been a member of the WTO since 1995 and was a member of the GATT before this.

One way the UK plays a role is by contributing to its overall budget.

All member states pay a portion of the WTO's annual budget that's based on their share of international trade.

This is a financial obligation for all member states.

In 2024, the UK contributed around 7 1/2 million pounds, which is approximately 3.

653% of the WTO's total budget of 200 million pounds.

"It doesn't seem fair that the UK pays so much! Why can't there be one set fee for everyone?" Jacob's telling us, "Well, that would be more unfair! Some countries are small and don't trade much, but they should still have a say in making trade fair.

If the fee is based on how much trade you do, then everyone can have a seat on the table." Let's do another check.

True or false? The UK pays 30% of all trade it makes to the WTO.

Pause your video and choose your answer.

The answer to this is false.

The WTO requires financial contributions from all states.

The contributions are based on the amount of international trade a country does.

The more trade a country has, the higher their contribution.

The UK contributes around 3.

65% of the WTO's budget.

As part of the WTO, the UK sends representatives to the Ministerial Conference and has a permanent representative to the General Council.

These representatives help shape policies on international trade agreements.

They review other countries' policies to ensure fairness and work to protect the UK's interests.

Sam's asking, "So does the UK have an influential role?" The WTO doesn't really work like that.

All nations are equal and the principle of non-discrimination is very important.

The UK is a respected member and will work with other countries to ensure that trade remains free and fair.

True or false? The UK follows the WTO's non-discrimination principle.

Pause your video and choose your answer.

The correct answer is true.

The UK is part of the WTO, and this principle of non-discrimination applies to all members and ensures fair trade between nations.

This helps the UK build positive relationships with other countries and ensures ongoing cooperation.

We're going to put this into practise.

Sam says, "The UK would be better outside of the World Trade Organisation." I'd like you to explain the advantages of the UK being a member of the WTO to Sam.

Pause your video and have a go at this now.

I asked you to explain some advantages of being a member of the WTO.

You might have said: it's important to remember that if we left the WTO, we'd be leaving an organisation that has members which make up 98% of all the world's trade.

We'd have no say in the rules or policies the rest of the world conduct their trade by.

Equally, our representative would no longer be able to take part in the trade dispute meetings.

That means if we had an issue with a partner, there'd be no one to help us solve it.

The UK does pay a lot to be part of the WTO, but it is worth it.

Today, we have been learning about what is the UK's role in the World Trade Organisation? We've learnt that the WTO helps to maintain global trade stability by ensuring fairness, transparency, and peaceful conflict resolution.

It monitors trade, supports rules, and provides a platform for international discussions.

The WTO has 166 members.

Its highest authority is the Ministerial Conference.

Below that, the General Council oversees daily operations, while the Dispute Settlement Body and Trade Policy Review Body handle specific issues like disputes and trade policy reviews.

The UK has been a member of the WTO since 1995, contributing to its budget and influencing global trade rules.

Being a member helps the UK maintain fair trade practises and resolve disputes with other countries.

That's the end of today's lesson.

Thank you for joining me.