Since its inception The World Trade Organisation (WTO) has played a pivotal role in ensuring that trade flows as smoothly, predictably and freely as possible across all nations. The purpose of this paper is to consider the role that the WTO plays in creating multilateral agreements and to contrast these with those roles played by other nations when negotiating bilateral trade agreements. A review of trade creation and trade diversion is put forward followed by discussion of the proposed free trade agreement between Australian and the United States of America.
The World Trade Organisation (WTO) came of age in 1995 and was successor to the General Agreement on Tariffs and Trade (GATT) that was established in the wake of the Second World War. The WTO was founded on the principle of decreasing trade barriers and providing all nations equal footing in trading relationships (WTO 2004). The WTO is the only international organisation dealing with the global rules of trade between nations, with its main objective being to ensure that trade flows as smoothly, predictably and freely as possible (WTO 2004; Carbaugh 2004). …
