What is the WTO? The World Trade Organization

(WTO) is an international organization designed by its founders to supervise and liberalize international trade.

The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1947.

What is the WTO?

The World Trade Organization (WTO) is the 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.

WTOWTOBRIEF HISTORY

The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation - notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund.

WTOWTOBRIEF HISTORY

A comparable international institution for trade, named the International Trade Organization was successfully negotiated. The ITO was to be a United Nations specialized agency and would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. But the ITO treaty was not approved by the United States and a few other signatories and never went into effect.

WTOWTOBRIEF HISTORY

In the absence of an international organization for trade, the GATT would over the years "transform itself" into a de facto international organization.

The GATT was the only multilateral instrument governing international trade from 1948 until the WTO was established in 1995.

Important Functions of WTO It oversees the implementation, administration and

operation of the covered agreements. It provides a forum for negotiations and for settling

disputes. Additionally, it is the WTO's duty to review and

propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy-making.

Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training.[

The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization.

Finally, the WTO cooperates closely with the two other components of the Bretton Woods system, the IMF and the World Bank.

THE ORGANIZATION THE OBJECTIVES:

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,

through technical assistance and training programmes Cooperating with other international organizations

Structure

The WTO has 164 members, accounting for over 97% of world trade.

Decisions are made by the entire membership.

This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTO’s predecessor, GATT.

The WTO’s agreements have been ratified in all members’ parliaments.

Structure

The WTO’s top level decision-making body is the Ministerial Conference which meets at least once every two years.

Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.

At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council.

Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements.

Secretariat 

The WTO Secretariat, based in Geneva, has around 625 staff and is headed by a director-general.

Its annual budget is roughly 189 million Swiss francs.

It does not have branch offices outside Geneva.

Since decisions are taken by the members themselves, the Secretariat does not have the decision-making role that other international bureaucracies are given.

Principles of the trading system Five principles are of particular importance in

understanding both the pre-1994 GATT and the WTO. Non-Discrimination. It has two major components: the most favoured

nation (MFN) rule, and the national treatment policy.

The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members.

National treatment means that imported goods should be treated no less favorably than domestically-produced goods (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al. discriminating against imported goods).