Approach:

Introduction:  Introduce by providing a brief overview of the purpose and functions of the WTO or    

Body:    

Heading 1: Analyze the current significance of the WTO and its relevance in the present-day context.  

Heading 2: Discuss the various challenges faced by the WTO 

Heading 3: Provide potential reforms that could strengthen the organization's ability to promote free and fair trade. 

Conclusion: Conclude with final thoughts or recommendations on how the WTO and its member countries could work together to address trade tensions and promote more open and fair international trade. 

Answer: The (WTO) was established in 1995 under the Marrakesh Treaty (1994) with the aim of promoting free and fair trade among its member countries. However, in recent years, the organization has come under scrutiny for its perceived failure to address escalating trade tensions between nations. 

Significance of the WTO in the present-day context: 

• Open and Fair International Trade: The WTO guarantees that global trade is governed by universally accepted rules that are applicable worldwide. 

• For example, Agreement on Agriculture an agreement to reform the agriculture sector and to address the subsidies and high trade barriers that distort agricultural trade.  

• Stimulates Global Growth: Through the elimination of trade barriers, the WTO creates new markets for the world's resources, thereby promoting global economic growth. 

• For example, WTO's elimination of trade barriers, like tariffs on IT products, has boosted global tech sector growth by creating new markets. 

• Promotes Standardization: The WTO and its members set trade standards for goods, services, and intellectual property governance to reduce quality gaps between production and demand. 

• For example, the WTO's TRIPS agreement sets global IP standards for patents, trademarks, copyrights, and trade secrets. 

• Global Arbitrator: The WTO acts as an impartial arbitrator between conflicting nations and endeavors to establish uniformity in policies and practices. 

• It settles disputes among its members through its Dispute Settlement Mechanism and prevents trade wars. 

Challenges faced by the WTO on various issues in recent years: 

• Lack of Transparency: The WTO lacks an agreed definition of developed vs developing countries, which allows members to self-designate and receive preferential treatment, creating controversy. 

• For instance, there have been instances where major decisions were made by a small group of powerful countries, limiting the participation and influence of smaller and developing nations, including India. 

• Trade War Between China and USA: The rise of trade disputes/trade war between China and the USA is threatening the very existence of the WTO. 
• Agriculture Issue: The Agreement on Agriculture is encountering challenges concerning the food security and development needs of developing nations, such as India. 

• For example, India is concerned about agricultural subsidies from developed countries like the US and EU, which distort global markets and hurt Indian farmers in sectors like cotton and dairy. 

• E-commerce & Digital Trade: The WTO has not kept up with global demands and failed to adapt accordingly. 

• For instance, there is no agreement within the WTO to address the issue of e-commerce. 

Reforms Required in Functioning of WTO: 

• The appointment process for the dispute settlement body should be free from political influence and made independent. 
• To modernize the WTO, new rules need to be developed to address the challenges posed by digital trade and e-commerce. 
• Reforms must empower developing countries in the WTO through equitable representation and decision-making. This involves their active involvement in key bodies and support for capacity-building initiatives. 

The WTO remains a vital institution in global trade despite criticisms of its handling of trade tensions. It has been successful in resolving disputes but requires reforms for promoting free and fair trade. Member countries' willingness to cooperate and adhere to the WTO's rules will determine its success.