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Imagine that your friend is the CEO of a company, called Magna Clothes, that manufactures cool new clothing accessories for both men and women. Now that it has achieved a large following and a level of success in the United States, Magna Clothes wants to start conducting business abroad. Your friend knows you have taken a management class and has asked you to explain the history and significance of the World Trade Organization (WTO). Which of the following statements are true?

a. The WTO seeks to establish impartial procedures for resolving trade disputes among its members.
b. The WTO seeks to reduce remaining trade barriers through multilateral negotiations.
c. The WTO is headquartered in Belgium.
d. Existence of the WTO has allowed most member countries to replace their local currencies with a universal currency beginning in 2002.

2 Answers

1 vote

Final answer:

The WTO is responsible for resolving trade disputes and reducing trade barriers, is headquartered in Geneva, and does not govern currency matters. Statements a and b are true, while c and d are false, relevant to companies like Magna Clothes expanding globally.

Step-by-step explanation:

The World Trade Organization (WTO) plays a vital role in international trade. To provide your friend with accurate information about the organization:

a. True - The WTO is indeed responsible for establishing impartial procedures for resolving trade disputes among its members. This function helps maintain peaceful and consistent trade relations.

b. True - It seeks to minimize trade barriers through multilateral negotiations, which can facilitate easier and more fruitful trade for companies like Magna Clothes when doing business abroad.

c. False - The WTO is headquartered in Geneva, Switzerland, not Belgium.

d. False - The WTO does not control currency issues; its member countries retain their local currencies. The replacement of local currencies with a universal currency in some countries is unrelated to the WTO; it is a result of regional agreements like the euro in the European Union starting in 2002.

In conclusion, as Magna Clothes looks to expand internationally, understanding the WTO's role in international trade, from dispute resolution to reducing trade barriers, is essential for navigating global markets.

User Ryder Bergerud
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4.7k points
1 vote

Answer:

a) & b) are true. c) & d) are false.

Step-by-step explanation:

WTO is an international (intergovernmental) organisation, supervising international trade between countries.

a) is true. It seeks to establish impartial procedures for resolving trade disputes among its members.

It seeks to reduce remaining trade barriers through multilateral negotiations, b) is true

c) is false. It is headquartered in Geneva, Switzerland (not Belgium)

d) is false. Existence of the WTO has allowed most member countries to replace their local currencies with a universal currency beginning in 2002. It is an international trade organisation, not monetary policy organisation.

User Jonathan Zhan
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4.8k points