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 goal is to help producers of goods and services, exporters, and importers conduct their business.
2. 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 goal is to
help producers of goods and services, exporters, and
importers conduct their business.
3. Established : 1st January 1995
Created by : Uruguay Round
Negotiations (1986 – 1994)
Headquarter : Geneva,
Membership : 162 member states (till
November 2015)
Secretariat Staff : 634
Head : Roberto Azevêdo
Budget :163 Million USD (Approx.)
Mr. Roberto Azevêdo
WTO Headquarters : Geneva
Switzerland
4. To ensure the reduction of tariffs and other barriers to trade.
To eliminate discriminatory treatment in international trade
relations.
To facilitate higher standards of living, full employment, a
growing volume of income, and an increase in production and
trade in goods and services of the member nations.
To facilitate the optimal use of the world’s resources for
sustainable development.
5. • Multi-lateral agreements are always made between several
counties in the past. Such agreements become very difficult
to negotiate but are so powerful and influential once all the
parties agree and sign the multi-lateral agreement. WTO acts
as an administrator. If there are unfair trade practices or
dumping and there is complain filed, the staff of WTO are
expected to investigate and check if there are violations
based on the multi-lateral agreements.
6. GATT was a multilateral trade treaty between countries to
regulate international trade and tariffs in accordance with specific
rules, norms or code of conduct. GATT was set up in 1948 in
Geneva. There were 117 member nations in GATT. The principle
purpose was to ensure removal or reduction in trade barriers.
Under GATT, member nations met at regular intervals to negotiate
agreements. GATT became a permanent international trade
institution until it was replaced by WTO in 1995.
7. To implement rules and provisions related to trade policy
review mechanism.
To provide a platform to member countries to decide future
strategies related to trade and tariff
To administer the rules and processes related to the dispute
settlement.
To ensure the optimum use of world resources.
To assist international organizations such as IMF and
IBRD for establishing coherence in Universal Economic
Policy determination.
FUNCTIONS
8. Unlike the IMF and WB it is not an agent of the United Nations.
There is no weighted voting, but all the WTO members have
equal rights.
Unlike the GATT, the agreements under the WTO are
permanent and binding to the member countries.
WTO’s approach is rule- based and time-bound.
WTO covers trade in goods as well as services.
WTO have a focus on trade-related aspects of intellectual
property rights and several other issues of agreements.
9. ORGANIZATIONAL STRUCTURE
The General Council has the following subsidiary bodies which oversee committees in different areas:
• 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 GATS. It is open to all WTO members, and can
create subsidiary bodies as required.
• Trade Negotiations Committee : TNC is the committee that deals with the current trade talks round. The chair is
WTO's director-general. As of June 2012 the committee was tasked with the Doha Development Round.
The Service Council has three subsidiary bodies: financial services, domestic regulations, GATS rules and specific
commitments. The council has several different committees, working groups, and working parties. There are
committees on the following: Trade and Environment; Trade and Development (Subcommittee on Least-Developed
Countries); Regional Trade Agreements; Balance of Payments Restrictions; and Budget, Finance and Administration.
There are working parties on the following: Accession. There are working groups on the following: Trade, debt and
finance; and Trade and technology transfer.
10. URUGUAY ROUND: 1986–1994
During the Doha Round, the US government blamed Brazil and India for being
inflexible and the EU for impeding agricultural imports.
Well before GATT's 40th anniversary, its members concluded that the GATT system
was straining to adapt to a new globalizing world economy. In response to the
problems identified in the 1982 Ministerial Declaration (structural deficiencies, spill-
over impacts of certain countries' policies on world trade GATT could not manage,
etc.), the eighth GATT round—known as the Uruguay Round—was launched in
September 1986, in Punta del Este, Uruguay.
It was the biggest negotiating mandate on trade ever agreed: the talks aimed to
extend the trading system into several new areas, notably trade in services and
intellectual property, and to reform trade in the sensitive sectors of agriculture and
textiles; all the original GATT articles were up for review. The Final Act concluding the
Uruguay Round and officially establishing the WTO regime was signed 15 April 1994,
during the ministerial meeting at Marrakesh, Morocco, and hence is known as the
Marrakesh Agreement.
11. The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of
the Uruguay Round negotiations (a distinction is made between GATT , the updated parts of
GATT 1994, and GATT 1947, the original agreement which is still the heart of GATT . GATT
is not, however, the only legally binding agreement included via the Final Act at Marrakesh; a
long list of about 60 agreements, annexes, decisions and understandings was adopted. The
agreements fall into six main parts:
the Agreement Establishing the WTO
the Multilateral Agreements on Trade in Goods
the General Agreement on Trade in Services
the Agreement on Trade-Related Aspects of Intellectual Property Rights
dispute settlement
reviews of governments' trade policies
In terms of the WTO's principle relating to tariff "ceiling-binding" (No. 3), the Uruguay Round
has been successful in increasing binding commitments by both developed and developing
countries, as may be seen in the percentages of tariffs bound before and after the 1986–
1994 talks.
12. MINISTERIAL CONFERENCES
• The World Trade Organization Ministerial Conference of 1998, in the Palace of Nations (Geneva,
Switzerland).
• The highest decision-making body of the WTO, the Ministerial Conference, usually meets every two
years. It brings together all members of the WTO, all of which are countries or customs unions. The
Ministerial Conference can take decisions on all matters under any of the multilateral trade
agreements. Some meetings, such as the inaugural ministerial conference in Singapore and the
Cancun conference in 2003 involved arguments between developed and developing economies
referred to as the "Singapore issues" such as agricultural subsidies; while others such as the Seattle
conference in 1999 provoked large demonstrations. The fourth ministerial conference in Doha in 2001
approved China's entry to the WTO and launched the Doha Development Round which was
supplemented by the sixth WTO ministerial conference (in Hong Kong) which agreed to phase out
agricultural export subsidies and to adopt the European Union's Everything but Arms initiative to phase
out tariffs for goods from the Least Developed Countries.
• The Twelfth Ministerial Conference (MC12) is set to be held in Nur-Sultan, Kazakhstan, in June 2020.
13. DOHA ROUND (DOHA AGENDA): 2001
The WTO launched the current round of negotiations, the Doha Development Round, at the fourth
ministerial conference in Doha, Qatar in November 2001. This was to be an ambitious effort to make
globalization more inclusive and help the world's poor, particularly by slashing barriers and subsidies in
farming. The initial agenda comprised both further trade liberalization and new rule-making, underpinned
by commitments to strengthen substantial assistance to developing countries.
Progress stalled over differences between developed nations and the major developing countries on
issues such as industrial tariffs and non-tariff barriers to trade particularly against and between the EU
and the US over their maintenance of agricultural subsidies seen to operate effectively as trade barriers.
Repeated attempts to revive the talks proved unsuccessful, though the adoption of the Bali Ministerial
Declaration in 2013 addressed bureaucratic barriers to commerce.
As of June 2012, the future of the Doha Round remained uncertain: the work programme lists 21 subjects
in which the original deadline of 1 Jan 2005 was missed, and the round remains incomplete. The conflict
between free trade on industrial goods and services but retention of protectionism on farm subsidies to
domestic agricultural sectors and the substantiation of fair trade on agricultural products remain the major
obstacles. This impasse has made it impossible to launch new WTO negotiations beyond the Doha
Development Round. As a result, there have been an increasing number of bilateral free trade
agreements between governments. As of July 2012 there were various negotiation groups in the WTO
system for the current stalemated agricultural trade negotiation.
14. The current were the outcome to the 1986-93 Uruguay
Round negotiations which included a major revision of the
original General Agreement on Tariffs and Trade (GATT).
GATT is now the WTO’s principal rule-book for trade in
goods.
30,000 pages consisting of about 30 agreements and
separate commitments (called schedules).
Each country receives guarantees that its exports will be
treated fairly and consistently in other countries’ markets. And
promises to do the same for imports into its own market.
16. It all began with trade in goods. From 1947 to 1994, GATT
was the forum for negotiating lower customs duty rates and
other trade barriers; the text of the General Agreement spelt
out important, rules, particularly non-discriminations since
1995, the updated GATT has become the WTO’s umbrella
agreement for trade in goods.
It has annexes dealing with specific sectors such as,
agriculture and textiles and with specific issues such as, state
trading, product standards, subsidies and action taken
against dumping.
17. Banks, insurance firms, telecommunications companies, tour
operators, hotel chains and transport companies looking to
do business abroad can now enjoy the same principles of
freer and fairer trade that originally only applied to trade in
goods.
These principles appear in the new General Agreement on
trade in Services (GATS). WTO members have also made
individual commitments under GATS stating which of their
services sectors they are willing to open to foreign
competition, and how open those markets are.
18. The WTO’s intellectual property agreement amounts to
rules for trade and investment in ideas and creativity.
The rules state how copyrights, patents, trademarks,
geographical names used to identify products,
industrial designs, integrated circuit layout-designs and
undisclosed information such as trade secrets ---
“intellectual property” --- should be protected when
trade is involved. In nutshell, the TRIPs Agreement
covers seven categories of intellectual property.
19. The Trade Policy Review Mechanism’s purpose is to
improve transparency, to create a greater understanding of
the policies that countries are adopting, and to assess
their impact. Many members also see the reviews as
constructive feedback on their policies.
All WTO members must undergo periodic scrutiny, each
review containing reports by the country concerned and
the WTO secretariat.
20.
21. • Dispute settlement is the central pillar of the multilateral trading
system. Without a means of settling disputes, the rules-based
system would be less effective because the rules could not be
enforced. The WTO’s procedure underscores the rule of law, and
it makes the trading system more secure and predictable. The
system is based on clearly-defined rules, with timetables for
completing a case.
• However, the point is not to pass judgment. The priority is to
settle disputes, through consultations if possible. By January
2008, only about 136 of the nearly 369 cases had reached the full
panel process. Most of the rest have either been notified as
settled “out of court” or remain in a prolonged consultation phase
— some since 1995.
22. 60 days Consultations, mediation, etc
45 days Panel set up and panelists appointed
6 months Final panel report to parties
3 weeks Final panel to WTO members
60 days Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60 – 90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1 y 3 m (with appeal)
These approximate periods for each stage are given below. Totals are approximate.
23. HOW ARE DISPUTES SETTLED?
Consultations(up to 60 days). The
countries in dispute will talk to each other
to see if they can settle their differences.
The panel(up to 45 days for a panel to be
appointed, plus 6 months for the panel to
conclude). If consultations fail, the
complaining country can ask for a panel
to be appointed.
25. Either side can appeal a panel’s ruling. Appeals have to be
based on points of law such as legal interpretation. Each appeal
is heard by three members of a permanent seven-member
Appellate Body set up by the Dispute Settlement Body and
broadly representing the range of WTO membership. Members
of the Appellate Body have four-year terms. Normally appeals
should not last more than 60 days, with an absolute maximum of
90 days. The Dispute Settlement Body has to accept or reject
the appeals report within 30 days.
26.
27. A complaint by India, Malaysia, Pakistan and Thailand raised
against US because of the prohibition on the importation of certain
shrimp and shrimp products .The prohibition arose from US
concern that shrimp were caught in an environmentally harmful
way due the incidental killing of sea turtles, which were viewed
internationally as endangered or threatened. The complaint relied
upon free trade grounds under WTO rules and in particular Article
XI of the General Agreement on Tariffs and Trade, 1994. On 8
October 1996, the complainant requested consultations with US.
28. On 9 January 1997,requested for the establishment of a panel.
The DSB on its meeting established the panel. On 15 May
1997,the panel report was circulated to Members. The Panel
found that the United States ban on shrimp importation was
inconsistent and could not be justified. On 13 July 1998, the US
requested for an appeal regarding certain issues of law and legal
interpretations developed by the panel. The Appellate Body
report was circulated to Members on 12 October 1998.The
Appellate Body reversed the panel’s findings.
The Dispute Settlement Body adopted the Appellate Body report
on 6 November 1998.