World Trade Organization (WTO)

Definition

The WTO is an international organization that deals with the global rules of trade between nations. Its main goal is to ensure that trade flows as smoothly, predictably, and freely as possible.

Analogy

Think of the WTO like a referee in a football game. Just like how the referee ensures fair play and adherence to rules among different teams, the WTO ensures all countries are playing by the same trading rules and no one has an unfair advantage.

Related terms

Trade Liberalization: This refers to reducing barriers to trade such as tariffs, quotas, and regulations. It's like removing hurdles from a race track so runners can sprint without obstacles.

Protectionism: This is when governments impose policies protecting domestic industries against foreign competition - kind of like putting up walls around your house to keep out unwanted visitors.

Globalization: This refers to the integration and interaction among people, companies, and governments worldwide - imagine it as everyone on earth being connected by a giant web.