World Trade Organization – The Reason For Trade Successes

The World Trade Organization (WTO) is an intergovernmental organization that regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 124 nations on 15 April 1994, replacing the General Agreements on Tariff and Trade (GATT), which commenced in 1948. It is the largest international economic organization in the world.

The WTO deals with regulation of trade in goods, services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments. The WTO prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals. Trade-related disputes are resolved by independent judges at the WTO through a dispute resolution process.
WTO
Studies show that the WTO boosted trade, and that barriers to trade would be higher in the absence of the WTO. The WTO has highly influenced the text of trade agreements, as “nearly all recent [preferential trade agreements (PTAs)] reference the WTO explicitly, often dozens of times across multiple chapters… in many of these same PTAs we find that substantial portions of treaty language—sometime the majority of a chapter—is copied verbatim from a WTO agreement.”

The WTO’s current Director-General is Roberto Azevedo, who leads a staff of over 600 people in Geneva, Switzerland.

FUNCTIONS

Among the various functions of the WTO, these are regarded by analysts as the most important:

  • It oversees the implementation, administration and operation of the covered agreements.
  • It provides a forum for negotiations and for settling disputes

WTO Hq

Additionally, it is 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.

ORGANIZATION

Subsidiary bodies of the General Council are:

Council for Trade in Goods

There are 11 committees under the jurisdiction of the Goods Council each with a specific task. All members of the WTO participate in the committees. The Textiles Monitoring Body is separate from the other committees but still under the jurisdiction of Goods Council. The body has its own chairman and only 10 members. The body also has several groups relating to textiles.

Council for Trade-Related Aspects of Intellectual Property Rights

Information on intellectual property in the WTO, news and official records of the activities of the TRIPS Council, and details of the WTO’s work with other international organizations in the field.

Council for Trade in Services

The Council for Trade in Services operates under the guidance of the General Council and is responsible for overseeing the functioning of the General Agreement on Trade in Services (GATS). It is open to all WTO members, and can create subsidiary bodies as required.

Trade Negotiations Committee

The Trade Negotiations Committee (TNC) is the committee that deals with the current trade talks round. The chair is WTO’s director-general.

wto conf

MEMBERSHIP

The process of becoming a WTO member is unique to each applicant country, and the terms of accession are dependent upon the country’s stage of economic development and current trade regime. The process takes about five years, on average, but it can last longer if the country is less than fully committed to the process or if political issues interfere.

MEMBERS AND OBSERVERS

The WTO has 164 members and 23 observer governments. Liberia became the 163rd member on 14 July 2016, and Afghanistan became the 164th member on 29 July 2016. A number of international intergovernmental organizations have also been granted observer status to WTO bodies.

DISPUTE SETTLEMENT

The WTO’s dispute-settlement system “is the result of the evolution of rules, procedures and practices developed over almost half a century under the GATT 1947”. In 1994, the WTO members agreed on the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) annexed to the “Final Act” signed in Marrakesh in 1994.

Dispute settlement is regarded by the WTO as the central pillar of the multilateral trading system, and as a “unique contribution to the stability of the global economy”. WTO members have agreed that, if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally.

IMPACT

Studies show that the WTO boosted trade. Research shows that in the absence of the WTO, the average country would face an increase in tariffs on their exports by 32 percentage points.

Leave a Reply

Your email address will not be published. Required fields are marked *