WORLD TRADE

ORGANISATION
Submitted To:Dr. Savita Gautam

Submitted By:
Bhanu Pratap Chauhan -
Gaurav Kumar Yadav
Kaushikey Nayan
Sourajit Dawn
Ekansh Daniel
Reet Agarwal
Pragya Kumari
 INDEX
Table of Content Page Number

Abstract 2

Introduction 2-3

History 3-4

Organisational Structure 4-9

Membership & Accession 9-10

Functioning 10-12

Conclusion 12

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Abstract
The significance of the World Trade Organization (WTO) in promoting international trade
and investment is examined in this paper. It provides a quick overview of the restrictions and
constraints of international trade prior to the foundation of the World Trade Organization
(WTO). The World Trade Organization (WTO) was established as a multilateral international
organization with a global presence. The World Trade Organization's establishment has
resulted in the liberalization of international trade and investment. The WTO also has well-
organized structures to ensure economic globalization and trade regime compliance among
member states. Trade negotiations have stalled due to mistrust and governments' inability to
put their economic differences aside. The tensions between developed and developing
member nations have resulted in the emergence of regional economic organizations, some of
whose goals conflict with those of the WTO. This has the potential to erode the WTO's
influence. It is thus concluded that, in order for the WTO to remain successful and relevant, it
must continue to reassure its member states, particularly developing nations, that it is
working in their best interests by ensuring that it promotes not only free but fair trade.

Introduction
The World Trade Organization (WTO) is an intergovernmental organization that regulates
and facilitates international trade between nations to eliminate trade barriers and create
transparent and non-discriminatory rules to govern trade. Governments use the organization
to establish, revise, and enforce the rules that govern international trade. It officially
commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus
replacing the General Agreement on Tariffs and Trade (GATT) that had been established in
1948. The WTO is the world's largest international economic organization, with 164 member
states representing over 98% of global trade and global GDP. The WTO encompassed and
expanded on the commitments and institutional functions of the General Agreement on
Tariffs and Trade (GATT), established in 1947 by the United States and 22 other countries.
The WTO is headquartered in Geneva, Switzerland. Its top decision-making body is the
Ministerial Conference. The WTO is a consensus and member-driven organization. Its core
principles include non-discrimination (most-favoured nation treatment and national
treatment), freer trade, fair competition, transparency, and encouraging development. These
are enshrined in WTO agreements covering goods, agriculture, services, intellectual property
rights (IPR), and trade facilitation, among other issues. Many countries have been motivated
to join the WTO not just to expand access to foreign markets, but also to spur domestic
economic reforms, transition to market economies, and promote the rule of law.
The WTO facilitates trade in goods, services and intellectual property among participating
countries by providing a framework for negotiating trade agreements, which usually aim to
reduce or eliminate tariffs, quotas, and other restrictions; these agreements are signed by
representatives of member governments  and ratified by their legislatures. The WTO also
administers independent dispute resolution for enforcing participants' adherence to trade
agreements and resolving trade-related disputes. The organization prohibits discrimination
between trading partners, but provides exceptions for environmental protection, national
security, and other important goals.
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The WTO has fuelled globalization, with both positive and negative effects. The organization
provides a platform that allows member governments to negotiate and resolve trade issues
with other members. The WTO’s main focus is to provide open lines of communication
concerning trade among its members. All WTO agreements include a settlement process,
whereby the organization legally conducts neutral conflict resolution. No negotiation,
mediation, or resolution would be possible without the foundational WTO agreements. These
agreements set the legal ground rules for international commerce that the WTO oversees.
They bind a country’s government to a set of constraints that must be observed when setting
future trade policies. These agreements protect producers, importers, and exporters while
encouraging world governments to meet specific social and environmental standards.
The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably.
It does this by administering trade agreements, acting as a forum for trade negotiations,
settling trade disputes, reviewing national trade policies, assisting developing countries in
trade policy issues, cooperating with other international organizations.

World Trade Organization (WTO) 

International organization established to supervise and liberalize world trade. The WTO is the
successor to the General Agreement on Tariffs and Trade (GATT), which was created in
1947 in the expectation that it would soon be replaced by a specialized agency of the United
Nations (UN) to be called the International Trade Organization (ITO). Although the ITO
never materialized, the GATT proved remarkably successful in liberalizing world trade over
the next five decades. By the late 1980s there were calls for a stronger multilateral
organization to monitor trade and resolve trade disputes. Following the completion of the
Uruguay Round (1986–94) of multilateral trade negotiations, the WTO began operations on
January 1, 1995.

Origins
The ITO was initially envisaged, along with the International Monetary Fund (IMF) and
the World Bank, as one of the key pillars of post-World War II reconstruction and economic
development. In Havana in 1948, the UN Conference on Trade and Employment concluded a
draft charter for the ITO, known as the Havana Charter, which would have created extensive
rules governing trade, investment, services, and business and employment practices.
However, the United States failed to ratify the agreement. Meanwhile, an agreement to phase
out the use of import quotas and to reduce tariffs on merchandise trade, negotiated by 23
countries in Geneva in 1947, came into force as the GATT on January 1, 1948.

Although the GATT was expected to be provisional, it was the only major agreement
governing international trade until the creation of the WTO. The GATT system evolved over
47 years to become a de facto global trade organization that eventually involved
approximately 130 countries. Through various negotiating rounds, the GATT was extended
or modified by numerous supplementary codes and arrangements, interpretations, waivers,
reports by dispute-settlement panels, and decisions of its council.

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During negotiations ending in 1994, the original GATT and all changes to it introduced prior
to the Uruguay Round were renamed GATT 1947. This set of agreements was distinguished
from GATT 1994, which comprises the modifications and clarifications negotiated during
the Uruguay Round (referred to as “Understandings”) plus a dozen other multilateral
agreements on merchandise trade. GATT 1994 became an integral part of the agreement that
established the WTO. Other core components include the General Agreement on Trade in
Services (GATS), which attempted to supervise and liberalize trade; the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), which sought to improve
protection of intellectual property across borders; the Understanding on Rules and Procedures
Governing the Settlement of Disputes, which established rules for resolving conflicts between
members; the Trade Policy Review Mechanism, which documented national trade policies
and assessed their conformity with WTO rules; and four plurilateral agreements, signed by
only a subset of the WTO membership, on civil aircraft, government procurement, dairy
products, and bovine meat (though the latter two were terminated at the end of 1997 with the
creation of related WTO committees). These agreements were signed in Marrakech,
Morocco, in April 1994, and, following their ratification, the contracting parties to the
GATT treaty became charter members of the WTO. By the 2020s the WTO had more than
160 members.

The structure of the WTO

The structure of the WTO is dominated by its highest authority, the Ministerial Conference,
composed of representatives of all WTO members, which is required to meet at least every
two years and which can take decisions on all matters under any of the multilateral trade
agreements.
The day-to-day work of the WTO, however, falls to a number of subsidiary bodies;
principally the General Council, also composed of all WTO members, which is required to
report to the Ministerial Conference. As well as conducting its regular work on behalf of the
Ministerial Conference, the General Council convenes in two particular forms - as the
Dispute Settlement Body, to oversee the dispute settlement procedures and as the Trade
Policy Review Body to conduct regular reviews of the trade policies of individual WTO
members.
The General Council delegates responsibility to three other major bodies - namely the
Councils for Trade in Goods, Trade in Services and Trade-Related Aspects of Intellectual
Property. The Council for Goods oversees the implementation and functioning of all the
agreements (Annex 1A of the WTO Agreement) covering trade in goods, though many such
agreements have their own specific overseeing bodies. The latter two Councils have
responsibility for their respective WTO agreements (Annexes 1B and 1C) and may establish
their own subsidiary bodies as necessary.
Three other bodies are established by the Ministerial Conference and report to the General
Council. The Committee on Trade and Development is concerned with issues relating to the
developing countries and, especially, to the "least-developed" among them. The Committee
on Balance of Payments is responsible for consultations between WTO members and
countries which take trade-restrictive measures, under Articles XII and XVIII of GATT, in
order to cope with balance-of-payments difficulties. Finally, issues relating to WTO's
financing and budget are dealt with by a Committee on Budget.

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Each of the four plurilateral agreements of the WTO - those on civil aircraft, government
procurement, dairy products and bovine meat - establish their own management bodies which
are required to report to the General Council.

Representation in the WTO and economic groupings

The work of the WTO is undertaken by representatives of member governments but its roots
lie in the everyday activity of industry and commerce. Trade policies and negotiating
positions are formulated in capitals, usually with a substantial advisory input from private
firms, business organizations, farmers as well as consumer and other interest groups. Most
countries have a diplomatic mission in Geneva, sometimes headed by a special Ambassador
to the WTO, whose officials attend meetings of the many negotiating and administrative
bodies at WTO headquarters. Sometimes expert representatives are sent directly from capitals
to put forward their governments' views on specific questions.
As a result of regional economic integration - in the form of customs unions and free trade
areas - and looser political and geographic arrangements, some groups of countries act
together in the WTO with a single spokesperson in meetings and negotiations.
The largest and most comprehensive grouping is the European Union and its 15 member
states. The EU is a customs union with a single external trade policy and tariff. While the
member states coordinate their position in Brussels and Geneva, the European Commission
alone speaks for the EU at almost all WTO meetings. The EU is a WTO member in its own
right as are each of its member states.
A lesser degree of economic integration has so far been achieved by the countries which are
GATT members of the Association of South East Asian Nations (ASEAN) - Malaysia,
Indonesia, Singapore, Philippines, Thailand and Brunei Darussalam. Nevertheless, they have
many common trade interests and are frequently able to coordinate positions and to speak
with a single voice.
Among other groupings which occasionally present unified statements is the Latin American
Economic System (SELA) and the African, Caribbean and Pacific Group (ACP). More recent
efforts at regional economic integration - for instance, NAFTA (Canada, US and Mexico) and
MERCOSUR (Brazil, Argentina, Paraguay and Uruguay) - have not yet reached the point
where their constituents frequently have a single spokesperson on WTO issues.
A well-known alliance in the Uruguay Round - bringing together a similarity of trade
interests rather than a regional identity - was the Cairns Group which comprised, and still
comprises, agricultural exporting nations from developed, developing and East European
countries.

How the WTO takes decisions

The WTO continues a long tradition in GATT of seeking to make decisions not by voting but
by consensus. This procedure allows members to ensure their interests are properly
considered even though, on occasion, they may decide to join a consensus in the overall

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interests of the multilateral trading system. Where consensus is not possible, the WTO
agreement allows for voting. In such circumstances, decisions are taken by a majority of the
votes cast and on the basis of "one country, one vote".
There are four specific voting situations envisaged in the WTO Agreement. First, a majority
of three-quarters of WTO members can vote to adopt an interpretation of any of the
multilateral trade agreements. Second, and by the same majority, the Ministerial Conference,
may decide to waive an obligation imposed on a particular member by a multilateral
agreement. Third, decisions to amend provisions of the multilateral agreements can be
adopted through approval either by all members or by a two-thirds majority depending on the
nature of the provision concerned. However, such amendments only take effect for those
WTO members which accept them. Finally, a decision to admit a new member is taken by a
two-thirds majority in the Ministerial Conference.

The WTO Secretariat and Budget

The WTO Secretariat is located in Geneva. It has around 450 staff and is headed by its
Director-General, Mr. Renato Ruggiero, and four deputy directors-general. Its responsibilities
include the servicing of WTO delegate bodies with respect to negotiations and the
implementation of agreements. It has a particular responsibility to provide technical support
to developing countries, and especially the least-developed countries. WTO economists and
statisticians provide trade performance and trade policy analyses while its legal staff assist in
the resolution of trade disputes involving the interpretation of WTO rules and precedents.
Much of the Secretariat's work is concerned with accession negotiations for new members
and providing advice to governments considering membership.
The WTO budget is around US$83 million (105 million Swiss Francs) with individual
contributions calculated on the basis of shares in the total trade conducted by WTO members.
Part of the WTO budget also goes to the International Trade Centre.

How countries join the WTO

Most WTO members are previously GATT members who have signed the Final Act of the
Uruguay Round and concluded their market access negotiations on goods and services by the
Marrakesh meeting in 1994. A few countries which joined the GATT later in 1994, signed
the Final Act and concluded negotiations on their goods and services schedules, also became
early WTO members. Other countries that had participated in the Uruguay Round
negotiations concluded their domestic ratification procedures only during the course of 1995,
and became members thereafter.
Aside from these arrangements which relate to "original" WTO membership, any other state
or customs territory having full autonomy in the conduct of its trade policies may accede to
the WTO on terms agreed with WTO members.
In the first stage of the accession procedures the applicant government is required to provide
the WTO with a memorandum covering all aspects of its trade and economic policies having

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a bearing on WTO agreements. This memorandum becomes the basis for a detailed
examination of the accession request in a working party.
Alongside the working party's efforts, the applicant government engages in bilateral
negotiations with interested member governments to establish its concessions and
commitments on goods and its commitments on services. This bilateral process, among other
things, determines the specific benefits for WTO members in permitting the applicant to
accede. Once both the examination of the applicant's trade regime and market access
negotiations are complete, the working party draws up basic terms of accession.
Finally, the results of the working party's deliberations contained in its report, a draft protocol
of accession, and the agreed schedules resulting from the bilateral negotiations are presented
to the General Council or the Ministerial Conference for adoption. If a two-thirds majority of
WTO members vote in favour, the applicant is free to sign the protocol and to accede to the
Organization; when necessary, after ratification in its national parliament or legislature.

Assisting developing and transition economies

Developing countries accounted for 97 of the total GATT membership of 128 at the end of
1994 and, together with countries currently in the process of "transition" to market-based
economies, they are expected to play an increasingly important role in the WTO as the
Organization's membership expands. As a consequence, much attention is paid to the special
needs and problems of developing and transition economies. For instance, the WTO
Secretariat, alone or in cooperation with other international organizations, conducts missions
and seminars and provides specific, practical technical cooperation for governments and their
officials dealing with accession negotiations, implementing WTO commitments or seeking to
participate effectively in multilateral negotiations. Courses and individual assistance is given
on particular WTO activities including dispute settlement and trade policy reviews.
Moreover, developing countries, especially the least-developed among them, are helped with
trade and tariff data relating to their own export interests and to their participation in WTO
bodies.
The WTO Secretariat has also continued GATT's programme of training courses. These take
place in Geneva twice a year for officials of developing countries. Since their inception in
1955 and up to the end of 1994, the courses have been attended by nearly 1400 trade officials
from 125 countries and 10 regional organizations. Since 1991, special courses have been held
each year in Geneva for officials from the former centrally-planned economies in transition to
market economies.

Specialized help for export promotion

The International Trade Centre was established by GATT in 1964 at the request of the
developing countries to help them promote their exports. It is jointly operated by the WTO
and the United Nations, the latter acting through UNCTAD (the UN Conference on Trade
and Development).

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The Centre responds to requests from developing countries for assistance in formulating and
implementing export promotion programmes as well as import operations and techniques. It
provides information and advice on export markets and marketing techniques, and assists in
establishing export promotion and marketing services and in training personnel required for
these services. The Centre's help is freely available to the least-developed countries.

The WTO's part in global economic policy-making

An important aspect of the WTO's mandate is to cooperate with the International Monetary
Fund, the World Bank and other multilateral institutions to achieve greater coherence in
global economic policy-making. A separate Ministerial Declaration was adopted at the
Marrakesh Ministerial Meeting in April 1994 in order to underscore this objective.
The declaration envisages an increased contribution by the WTO to achieving greater
coherence in global economic policy-making. It recognizes the interlinkages between
different aspects of economic policy and calls on the WTO to develop its cooperation with
the international organizations responsible for monetary and financial matters - the World
Bank and the International Monetary Fund...
The declaration also recognizes the contribution that trade liberalization makes to the growth
and development of national economies. It views such liberalization as an increasingly
important component in the success of the economic adjustment programmes which many
WTO members are undertaking, even though it may often involve significant transitional
social costs.

Overseeing national trade policies

Surveillance of national trade policies is a fundamentally important activity running
throughout the work of the WTO. At the centre of this work is the Trade Policy Review
Mechanism (TPRM).
The objectives of the TPRM are, through regular monitoring, to increase the transparency and
understanding of trade policies and practices, to improve the quality of public and
intergovernmental debate on the issues, and to enable a multilateral assessment of the effects
of policies on the world trading system. In this way member governments are encouraged to
follow more closely the WTO rules and disciplines and to fulfil their commitments.
Reviews are conducted on a regular, periodic basis. The four biggest traders - the European
Union, the United States, Japan and Canada - are examined approximately once every two
years. The next 16 countries in terms of their share of world trade are reviewed every four
years; and the remaining countries every six years, with the possibility of a longer interim
period for the least-developed countries.
Reviews are conducted in the Trade Policy Review Body (TPRB) - established at the same
level as the General Council - on the basis of two documents: a policy statement prepared by
the government under review, and a detailed report prepared independently by the WTO

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Secretariat. These two reports, together with the proceedings of the TPRB are published after
the review meeting.
In addition to the TPRM, many other WTO agreements contain obligations for member
governments to notify the WTO Secretariat of new or modified trade measures. For example,
details of any new anti-dumping or countervailing legislation, new technical standards
affecting trade, changes to regulations affecting trade in services, and laws or regulations
concerning the TRIPs agreement all have to be notified to the appropriate body of the WTO.
Special groups are also established to examine new free-trade arrangements and the trade
policies of acceding countries.

Structure of World Trade Organisation (WTO)

Membership & Accessions

Membership means the state or status of being a member of any particular organisation or
group. All members have joined the system as a result of negotiation and therefore
membership means a balance of rights and obligations. They enjoy the privileges that other
member-countries give to them and the security that the trading rules provide. In return, they
had to make commitments to open their markets and to abide by the rules.

The accession processes

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Any state or customs territory having full autonomy in the conduct of its trade policies may
join (“accede to”) the WTO, but WTO members must agree on the terms. Broadly speaking
the application goes through four stages: -
1. Tell us about yourself - The government applying for membership has to describe all
aspects of its trade and economic policies that have a bearing on WTO agreement
2. work out with us individually what you have to offer - When the working party has
made sufficient progress on principles and policies, parallel bilateral talks begin
between the prospective new member and individual countries
3. let’s draft membership terms - Once the working party has completed its examination
of the applicant’s trade regime, and the parallel bilateral market access negotiations
are complete, the working party finalizes the terms of accession
4. the decision - The final package, consisting of the report, protocol and lists of
commitments, is presented to the WTO General Council or the Ministerial
Conference.

Accessions Intelligence Portal

The Accessions Intelligence Portal contains information on on-going and completed
WTO accessions since 1995 as well as other accession-related information, such as how
to become a WTO member, technical assistance activities, relevant publications and other
resources.

Functioning of World Trade Organization

The World Trade Organization is the only organization at the international level that
regulates and monitors trade among participating countries. It sets the rules and regulations

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for world trade. In the post-globalization era, with an increase in global trade, the need for a
non-biased trade regulating body at the international level was sought. Established on January
1, 1995, under the Marrakesh Agreement, the World Trade Organization fulfilled that need.
Following are the functions of the World Trade Organization:
• Operating under the principle of non-discrimination, WTO lowers the trade barriers
across countries to regulate trade through negotiations. It results in lower cost of production
which leads to lower cost of finished goods thereby reducing the cost of living.
• WTO functions as a negotiator between countries by making rules that are acceptable
to all. Further, it also provides a dispute resolution channel between countries.
• It cuts the cost of doing business internationally; and also stimulates economic growth
and development.
• WTO encourages good governance by encouraging transparency in trade transactions.
• It helps developing countries foster their economies by providing a level playing field
for developing trade relations across countries.

Functions of the WTO

The WTO’s functions can be broadly divided into the following categories:

Trade Negotiations
The WTO facilitates trade negotiations among countries by providing a framework to
structure the agreements, as well as providing dispute resolution mechanisms. It creates an
international legal framework that ensures the smooth exchange of goods and services among
the member countries.

Implementation and Monitoring

Once the agreements are negotiated, the job of the WTO is to ensure that the signatory
countries adhere to their commitments in practice. It also produces research based on the
impact of the agreements on the economies of the countries involved.

Dispute Settlement
The WTO also acts as a dispute settlement body when there is a trade conflict between its
member states. The members of the WTO can file complaints against other member states if
they feel the trade and economic policies of a country are divergent from their commitments

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under one of the agreements of the WTO. Following the complaint, there are formal hearings
like a court until a settlement is reached.

Building Trade Capacity

The WTO runs special programs to support developing countries by helping them build the
capacity to participate in free trade with more developed countries. It also gives concessions
under certain agreements to low-development countries to ease them into free trade with
other countries.

Outreach
Finally, the WTO carries out lobbying and outreach across the world as a part of its larger
objectives to promote free trade. They try to persuade governments to reduce barriers to trade
to free, fair, and open markets around the world.

Conclusion
World trade fell sharply in the first half of the year, as the COVID-19 pandemic upended the
global economy. However, rapid government responses helped temper the contraction, and
WTO economists now believe that while trade volumes will register a steep decline in 2020,
they are unlikely to reach the worst-case scenario projected in April.
World trade will continue to face strong headwinds in 2019 and 2020 after growing more
slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty.
WTO economists expect merchandise trade volume growth to fall to 2.6% in 2019 — down
from 3.0% in 2018.
The Role of Brazil, India, and China (BIC) in their twin roles as system supporters and
change agents in multilateral trade. All three, while still presenting themselves as members of
the developing world, have come to acquire an unprecedented influence in the World Trade
Organization (WTO). Their rise offers several new opportunities for the trading system, but
also poses serious and unanticipated challenges. There are two reasons for studying the WTO
diplomacy of the BICs: economically, the three have captured large shares of global trade;
and politically, their growing voice in the WTO is reshaping at least some of the rules of the
game. After a brief overview of the trade policies of the BICs, we can see that the impact of
the rising powers on the WTO along three fronts: rule making, rule enforcement, and
coalitions. While all three countries show greater activism in the organization, activism does
not equate with leadership.

Reference
https://en.wikipedia.org/wiki/World_Trade_Organization
https://www.wto.org/

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https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

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