Introduction
Students have already learned that international trade is important to all nations, even a country as large as the United States. Most of the products exchanged are goods, although a growing number of services, such as insurance and banking, are also bought and sold. Nations trade for the same reasons that individuals do--they trade because they believe that the products they receive are worth the products they give up. In addition, because nations are free to trade, they must believe that they are better off with trade than without it. The World Trade Organization (WTO) is an important organization dedicated to promoting freer trade. This activity is designed to help students learn more about this new international agency.

Lesson Description
Students will use information from the WTO Web site to find out more about the organization's role in our global economy.

Previous Knowledge Expected
Students should be familiar with the following terms:
absolute advantage: country's ability to produce more of a given product than can another country
comparative advantage: country's ability to produce a given product relatively more efficiently than another country; production at a lower opportunity cost

Applied Content Standards (from the National Council on Economic Education)
Standard 5: Voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations.
Standard 6: When individuals, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase.

Instructional Objectives
1. Students will discover when the World Trade Organization was established and where it is located.
2. Students will discover the six functions of the WTO.
3. Students will be able to distinguish between GATT the organization and the WTO which succeeded it.

Student Web Activity Answers
1. The WTO is located in Geneva, Switzerland and was established on January 1, 1995.
2. Answers will vary, but students might note the following: (1) administering WTO trade agreements, (2) providing a forum for trade negotiations, (3) handling trade disputes, (4) monitoring national trade policies, (5) providing technical assistance and training for developing countries, and (6) cooperating with other international organizations.
3-4: Teacher may provide an answer sheet obtained from information from the Web site.

Extending the Lesson
Encourage students to read further information that is provided on the Web site. The "FAQs" is an especially useful section that provides a wealth of information on the WTO and its purposes.
Have students make a presentation describing the mechanism used by the WTO to settle trade disputes. To do so, they will need to go to the "Dispute settlement" link that appears on the Web page.

Student Web Activity