WTO –WORLD TRADE
ORGANIZATION
• The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade
between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading
nations and ratified in their parliaments.
• The WTO has 164 members (including European Union) and 23 observer governments (like Iran, Iraq, Bhutan,
Libya etc).
BASIC FACT
World Trade Organization
Organisation mondiale du commerce (in French)
Organización Mundial del Comercio (in Spanish)
Formation 1 January 1995; 25 years ago
Type International trade organization
Purpose Reduction of tariffs and other barriers to trade
Headquarters Centre William Rappard, Geneva, Switzerland
Coordinates 46°13′27″N 06°08′58″ECoordinates: 46°13′27″
N 06°08′58″E
Region served Worldwide
[1]
Membership 164 member states
[2]
Official languages English, French, Spanish
Director-General Roberto Azevêdo
Budget 197.2 million Swiss francs (approx. 209 million
[3]
US$) in 2018.
[4]
Staff 640
Website www.wto.org
History
From the early days of the Silk Road to the creation of the General Agreement on Tariffs and Trade (GATT) and the
birth of the WTO, trade has played an important role in supporting economic development and promoting peaceful
relations among nations.
•The General Agreement on Tariffs and Trade (GATT) traces its origins to the 1944 Bretton Woods
Conference, which laid the foundations for the post-World War II financial system and established two key
institutions, the International Monetary Fund (IMF) and the World Bank.
• The conference delegates also recommended the establishment of a complementary institution to be
known as the International Trade Organization (ITO), which they envisioned as the third leg of the system.
• 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.
• The Havana Charter never entered into force, primarily because the U.S. Senate failed to ratify it. As a
result, the ITO was stillborn.
• Meanwhile, an agreement as the GATT signed by 23 countries in Geneva in 1947 came into force on Jan 1,
1948 with the following purposes:
• to phase out the use of import quotas
• and to reduce tariffs on merchandise trade,
•The GATT became the only multilateral instrument (not an institution) governing international trade from 1948
until the WTO was established in 1995.
Objectives of WTO
The WTO agreements are lengthy and complex because they are legal texts covering a wide
range of activities. But a number of simple, fundamental principles run throughout all of these
documents. These principles are the foundation of the multilateral trading system.
• A country should not discriminate between its trading partners and it should not discriminate
between its own and foreign products, services or nationals.
• Lowering trade barriers is one of the most obvious ways of encouraging trade; these barriers
include customs duties (or tariffs) and measure such as import bans or quotas, anti dumping
duty that restrict quantities selectively.
• Foreign companies, investors and governments should be confident that trade barriers should
not be raised arbitrarily. With stability and predictability, investment is encouraged, jobs are
created and consumers can fully enjoy the benefits of competition — choice and lower prices.
• Discouraging ‘unfair’ practices, such as export subsidies and dumping products at below cost
to gain market share; the issues are complex, and the rules try to establish what is fair or unfair,
and how governments can respond, in particular by charging additional import duties calculated
to compensate for damage caused by unfair trade.
Functions of WTO
The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by
ministers (who usually meet at least once every two years) or by their ambassadors or delegates (who meet regularly
in Geneva). While the WTO is driven by its member states, it could not function without its Secretariat to coordinate
the activities. The Secretariat employs over 600 staff and its experts — lawyers, economists, statisticians and
communications experts — assist WTO members on a daily basis to ensure, among other things, that negotiations
progress smoothly, and that the rules of international trade are correctly applied and enforced.
• Trade negotiations: The WTO agreements cover goods, services and intellectual property. They spell out the
principles of liberalization, and the permitted exceptions. They include individual countries’ commitments to lower
customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for
settling disputes. These agreements are not static; they are renegotiated from time to time and new agreements can
be added to the package. Many are now being negotiated under the Doha Development Agenda, launched by WTO
trade ministers in Doha, Qatar, in November 2001.
• Implementation and monitoring: WTO agreements require governments to make their trade policies transparent
by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to
ensure that these requirements are being followed and that WTO agreements are being properly implemented. All
WTO members must undergo periodic scrutiny of their trade policies and practices, each review containing reports by
the country concerned and the WTO Secretariat.
• Dispute settlement: The WTO’s procedure for resolving trade quarrels under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring
disputes to the WTO if they think their rights under the agreements are being infringed. Judgements by specially
appointed independent experts are based on interpretations of the agreements and individual countries’
commitments.
• Building trade capacity: WTO agreements contain special provision for developing countries, including longer time
periods to implement agreements and commitments, measures to increase their trading opportunities, and support to
help them build their trade capacity, to handle disputes and to implement technical standards. The WTO organizes
hundreds of technical cooperation missions to developing countries annually. It also holds numerous courses each
year in Geneva for government officials. Aid for Trade aims to help developing countries develop the skills and
infrastructure needed to expand their trade.
Outreach: The WTO maintains regular dialogue with non-governmental organizations, parliamentarians,
other international organizations, the media and the general public on various aspects of the WTO and the
ongoing Doha negotiations, with the aim of enhancing cooperation and increasing awareness of WTO
activities.
Structure of WTO:
The basic structure of the WTO includes the following bodies:
• The Ministerial Conference, which is composed of international trade ministers from all member countries. This is
the governing body of the WTO, responsible for setting the strategic direction of the organization and making all final
decisions on agreements under its wings.
• The General Council composed of senior representatives (usually ambassador level) of all members. It is
responsible for overseeing the day-to-day business and management of the WTO, and is based at the WTO
headquarters in Geneva. In practice, this is the key decision-making arm of the WTO for most issues. Several of the
bodies described below report directly to the General Council.
• The Trade Policy Review Body is also composed of all the WTO members, and oversees the Trade Policy
Review Mechanism, a product of the Uruguay Round. It periodically reviews the trade policies and practices of all
member states.
• The Dispute Settlement Body is also composed of all the WTO members. It oversees the implementation and
effectiveness of the dispute resolution process for all WTO agreements, and the implementation of the decisions on
WTO disputes.
• The Councils on Trade in Goods and Trade in Services operate under the mandate of the General Council and
are composed of all members. They provide a mechanism to oversee the details of the general and specific
agreements on trade in goods (such as those on textiles and agriculture) and trade in services.
• The Secretariat and Director General of the WTO resides in Geneva, in the old home of GATT. The Secretariat
now numbers just under 550 people, and undertakes the administrative functions of running all aspects of the
organization. The Secretariat has no legal decision-making powers but provides vital services, and often advice, to
those who do.
• The Committee on Trade and Development:
Committee on Trade and Development are two of the several committees continued or established under the
Marrakech Agreement in 1994. They have specific mandates to focus on these relationships, which are especially
relevant to how the WTO deals with sustainable development issues.
The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)
•It monitors implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS
Agreement).
•It provides a forum in which WTO Members can consult on intellectual property matters, and carries out the specific
responsibilities assigned to the Council in the TRIPS Agreement.
•The TRIPS Agreement:
• sets the minimum standards of protection for copyrights and related rights, trademarks, geographical
indications (GIs), industrial designs, patents, integrated circuit layout designs, and undisclosed
information.
• establishes minimum standards for the enforcement of intellectual property rights (IPRs) through civil
actions for infringement, actions at the border,
• and at least in regard to copyright piracy and trademark counterfeiting, in criminal actions.
Conclusion
Today, the world is going through the protectionism, trade war (like USA & China), and Brexit making global economy
squeezed. The role of WTO in future is very crucial to preserve global liberalized economic system evolved since the
end of the 2nd World War.
It is right time when countries like USA giving threat to withdraw from WTO making it dysfunctional, India and other
emerging economies like Brazil, South Africa etc. can provide a strong base for strong WTO with saving interests of
developing countries.
