This is a good read about the WTO in Q&A format.
A Q&A on the WTO, IMF, World Bank, and Activism
Prepared by Michael Albert
Culled from work by Albert, Elaine Bernard, Peter Bohmer, Jeremy Brecher, Dorothy Guellec, Robin Hahnel, Russell Mokhiber, Mark Weisbrot, and Robert Weissman
What is trade?
The logic of trade is simple. Suppose I can make wheat better than steel and you can make steel better than wheat. If I then focus on wheat and you focus on steel, we can trade together to exploit our respective talents to each do better than if we didn’t trade. Similarly, if two countries have different “comparative advantage” in the production of wheat and steel, and they each make both wheat and steel for themselves, the total pile of wheat and steel for the two countries will be less than if they specialized. Of course, the extra output from specializing and trading has to exceed the costs of negotiating the trade and sending the items, but if it does, than both sides can get more from trading than not. Free trade, then, is simply trade without taxes, tariffs, or other barriers or restrictions. The logic is that since trade is good in that both parties can benefit relative to not trading, restrictions that reduce trade are bad.
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