c
c

  





 

‘



 




 

 







 
 


WTO founder members (January 1, 1995)

WTO subsequent members


 
 January 1, 1995



 Centre William Rappard,Geneva, Switzerland


 153 member states


  English, French, Spanish[1]



!"

  Pascal Lamy

#   189 million Swiss francs(approx. 182

million USD) in 2009.[2]

  625[3]

‘  www.wto.int

The ‘



 
(‘) is an organization that intends to supervise an
d 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 1948. The organization deals with regulation of trade between participating countries; it
provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process
aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of
[4][5]
member governments and ratified by their parliaments. Most of the issues that the WTO focuses on
derive from previous trade negotiations, especially from the Uruguay Round (1986-1994).

The organization is currently endeavoring to persist with a trade negotiation called the Doha Development
Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer
countries which represent a majority of the world's population. However, the negotiation has been dogged
by "disagreement between exporters of agricultural bulk commodities and countries with large numbers of
subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges
[6]
in imports. At this time, the future of the Doha Round is uncertain."
[7] [8]
The WTO has 153 members, representing more than 97% of total world trade and 30 observers, most
seeking membership. The WTO is governed by a ministerial conference, meeting every two years; a
general council, which implements the conference's policy decisions and is responsible for day-to-day
administration; and a director-general, who is appointed by the ministerial conference. The WTO's
headquarters is at the Centre William Rappard,Geneva, Switzerland.




[hide]

1 History

a 1.1 ITO and GATT 1947

a 1.2 GATT rounds of negotiations

a 1.3 Ministerial conferences

a 1.4 Doha Round

2 Functions

3 Principles of the trading system

4 Organizational structure

a 4.1 Voting system

5 Dispute settlement

6 Accession and membership

a 6.1 Accession process

a 6.2 Members and observers

7 Agreements

8 Effectiveness

9 Directors-General
10 See also

11 Notes

12 References

13 External links

a 13.1 Official WTO pages

a 13.2 Government pages on the WTO

a 13.3 Media pages on the WTO

a 13.4 Non-governmental organization pages on the WTO

[edit]History

˜

  
 

[edit]ë

˜
  
 

Harry White (l) and John Maynard Keynes at the Bretton Woods Conference ² Both economists had been strong advocates
of a liberal international trade environment, and recommended the establishment of three institutions: the IMF (fiscal and

monetary issues), the World Bank (financial and structural issues), and the ITO (international economic cooperation).[9]

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 ² notably the Bretton Woods institutions known as the World Bank and the International
Monetary Fund. 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
[10][11][12]
approved by the U.S. and a few other signatories and never went into effect.

In the absence of an international organization for trade, the GATT would over the years "transform itself"
[13]
into a   international organization.
[edit]

 
  

˜
 




The GATT was the only multilateral instrument governing international trade from 1948 until the WTO was
established in 1995.[14] Despite attempts in the mid 1950s and 1960s to create some form of institutional
mechanism for international trade, the GATT continued to operate for almost half a century as a semi-
institutionalized multilateral treaty regime on a provisional basis.[15]
[edit]÷

   

Seven rounds of negotiations occurred under the GATT. The first real GATT trade rounds concentrated
on further reducing tariffs. Then, the Kennedy Round in the mid-sixties brought about a GATT anti-
dumping Agreement and a section on development. The Tokyo Round during the seventies was the first
major attempt to tackle trade barriers that do not take the form of tariffs, and to improve the system,
adopting a series of agreements on non-tariff barriers, which in some cases interpreted existing GATT
rules, and in others broke entirely new ground. Because these plurilateral agreements were not accepted
by the full GATT membership, they were often informally called "codes". Several of these codes were
amended in the Uruguay Round, and turned into multilateral commitments accepted by all WTO
members. Only four remained plurilateral (those on government procurement, bovine meat, civil aircraft
and dairy products), but in 1997 WTO members agreed to terminate the bovine meat and dairy
agreements, leaving only two.[14]
[edit]
  


During the Doha Round, the US government blamed Brazil and India for being inflexible, and the EU for impeding

agricultural imports.[16] The President of Brazil, Luiz Inácio Lula da Silva, responded to the criticisms by arguing that progress
would only be achieved if the richest countries (especially the US and countries in the EU) make deeper cuts in

their agricultural subsidies, and further open their markets for agricultural goods. [17]
O  !

Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to
adapt to a new globalizing world economy.[18][19] 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 ² known as the Uruguay Round ² was
launched in September 1986, in Punta del Este, Uruguay.[18]

It was the biggest negotiating mandate on trade ever agreed: the talks were going 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.[19]The
Final Act concluding the Uruguay Round and officially establishing the WTO regime was signed during
the April 1994 ministerial meeting at Marrakesh,Morocco, and hence is known as the Marrakesh
Agreement.[20]

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

"##$, the updated parts of GATT, and 


[18]
"#$%, the original agreement which is still the heart of GATT 1994). GATT 1994 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 a structure with six main
parts:

M The Agreement Establishing the WTO

M Goods and investment ² the Multilateral Agreements on Trade in Goods including the GATT 1994
and the Trade Related Investment Measures
M Services ² the General Agreement on Trade in Services
M Intellectual property ² the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS)
M Dispute settlement (DSU)
[21]
M Reviews of governments' trade policies (TPRM)
[edit]O
 




The topmost decision-making body of the WTO is the Ministerial Conference, which 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.
The inaugural ministerial conference was held in Singapore in 1996. Disagreements between largely
developed and developing economies emerged during this conference over four issues initiated by this
conference, which led to them being collectively referred to as the "Singapore issues". The second
ministerial conference was held in Geneva in Switzerland. The third conference in Seattle,
Washington ended in failure, with massive demonstrations and police and National Guard crowd control
efforts drawing worldwide attention. The fourth ministerial conference was held in Doha in the Persian
Gulf nation of Qatar. The Doha Development Round was launched at the conference. The conference
also approved the joining of China, which became the 143rd member to join. The fifth ministerial
conference was held in Cancún, Mexico, aiming at forging agreement on the Doha round. An alliance of
[22]
22 southern states, the G20 developing nations (led by India, China , Brazil, ASEAN led by
the Philippines), resisted demands from the North for agreements on the so-called "Singapore issues"
and called for an end to agricultural subsidies within the EU and the US. The talks broke down without
progress.

The sixth WTO ministerial conference was held in Hong Kong from 13-18 December 2005. It was
considered vital if the four-year-old Doha Development Agenda negotiations were to move forward
sufficiently to conclude the round in 2006. In this meeting, countries agreed to phase out all their
agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of
2006. Further concessions to developing countries included an agreement to introduce duty free, tariff
free access for goods from the Least Developed Countries, following the Everything but Armsinitiative of
the European Union ² but with up to 3% of tariff lines exempted. Other major issues were left for further
negotiation to be completed by the end of 2010. The WTO General Council, on 26 May 2009, agreed to
hold a seventh WTO ministerial conference session in Geneva from 30 November-3 December 2009. A
statement by chairman Amb. Mario Matus acknowledged that the prime purpose was to remedy a breach
of protocol requiring two-yearly "regular" meetings, which had lapsed with the Doha Round failure in
2005, and that the "scaled-down" meeting would not be a negotiating session, but "emphasis will be on
transparency and open discussion rather than on small group processes and informal negotiating
structures". The general theme for discussion was "The WTO, the Multilateral Trading System and the
Current Global Economic Environment"[23]
[edit]u  

O &!

The Doha Development Round started in 2001 and continues today.

The WTO launched the current round of negotiations, the Doha Development Agenda (DDA) or Doha
Round, at the fourth ministerial conference in Doha, Qatar in November 2001. The Doha round was to be
an ambitious effort to make globalization more inclusive and help the world's poor, particularly by slashing
[24]
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
[25]
countries.

The negotiations have been highly contentious and agreement has not been reached, despite the intense
negotiations at several ministerial conferences and at other sessions. Disagreements still continue over
[26]
several key areas including agriculture subsidies.

[show]"$
‘


[27]v % d % e

[edit]Functions

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

[28][29]
M It oversees the implementation, administration and operation of the covered agreements.
M It provides a forum for negotiations and for settling disputes.[30][31]

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-
[29][31]
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.[32]

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.[33] Finally, the WTO cooperates closely with the two other components of the Bretton Woods
system, the IMF and the World Bank.[30]

[edit]Principles of the trading system

The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is
concerned with setting the rules of the trade policy games.[34] Five principles are of particular importance
in understanding both the pre-1994 GATT and the WTO:

1. §
u

 
. It has two major components: the most favoured nation (MFN) rule, and
the national treatment policy. Both are embedded in the main WTO rules on goods, services, and
intellectual property, but their precise scope and nature differ across these areas. The MFN rule
 requires that a WTO member must apply the same conditions on all trade with other WTO
members, i.e. a WTO member has to grant the most favorable conditions under which it allows
[34]
trade in a certain product type to all other WTO members. "Grant someone a special favour
[35]
and you have to do the same for all 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
[34]
goods).
2. !
 . It reflects both a desire to limit the scope of free-riding that may arise because of the
MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a
nation to negotiate, it is necessary that the gain from doing so be greater than the gain available
from unilateral liberalization; reciprocal concessions intend to ensure that such gains will
[36]
materialise.
3. "




#  
. The tariff commitments made by WTO members in a
multilateral trade negotiation and on accession are enumerated in a schedule (list) of
concessions. These schedules establish "ceiling bindings": a country can change its bindings,
but only after negotiating with its trading partners, which could mean compensating them for loss
of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute
settlement procedures.[35][36]
4. 

!

. The WTO members are required to publish their trade regulations, to maintain
institutions allowing for the review of administrative decisions affecting trade, to respond to
requests for information by other members, and to notify changes in trade policies to the WTO.
These internal transparency requirements are supplemented and facilitated by periodic country-
specific reports (trade policy reviews) through the Trade Policy Review Mechanism
(TPRM).[37] The WTO system tries also to improve predictability and stability, discouraging the
[35]
use of quotas and other measures used to set limits on quantities of imports.
5. $ . In specific circumstances, governments are able to restrict trade. There are three
types of provisions in this direction: articles allowing for the use of trade measures to attain
noneconomic objectives; articles aimed at ensuring "fair competition"; and provisions permitting
intervention in trade for economic reasons.[37] Exceptions to the MFN principle also allow for
preferential treatment of developing countries, regional free trade areas and customs
[  ]
unions.
[edit]Organizational structure

The General Council has multiple bodies which oversee committees in different areas, re the following:
j 



 
 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
[38]
chairman and only 10 members. The body also has several groups relating to textiles.
j 


  !  ë
 %
!
  
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
[39]
field.
j 



$

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
[40]
required.

§  
j  
The Trade Negotiations Committee (TNC) is the committee that deals with the current trade talks
round. The chair is WTO¶s director-general. The committee is currently tasked with the Doha
Development Round.[41]

The Service Council has three subsidiary bodies: financial services, domestic
[38]
regulations, GATS rules and specific commitments. The General council has
several different committees, working groups, and working parties.[42] 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.
[edit]& 
 
The WTO operates on a   '  system, but actual votes have never
been taken. Decision making is generally by consensus, and relative market size is
the primary source of bargaining power. The advantage of consensus decision-
making is that it encourages efforts to find the most widely acceptable decision.
Main disadvantages include large time requirements and many rounds of
negotiation to develop a consensus decision, and the tendency for final agreements
to use ambiguous language on contentious points that makes future interpretation
of treaties difficult.[  ]
In reality, WTO negotiations proceed not by consensus of all members, but by a
process of informal negotiations between small groups of countries. Such
negotiations are often called "Green Room" negotiations (after the colour of the
WTO Director-General's Office in Geneva), or "Mini-Ministerials", when they occur
in other countries. These processes have been regularly criticised by many of the
WTO's developing country members which are often totally excluded from the
negotiations..[  ]

Richard Harold Steinberg (2002) argues that although the WTO's consensus
governance model provides law-based initial bargaining, trading rounds close
through power-based bargaining favouringEurope and the U.S., and may not lead
[43]
to Pareto improvement.

[edit]Dispute settlement
O &
( 
   


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.[44] 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".[45] 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.[46]

The operation of the WTO dispute settlement process involves the DSB panels, the
Appellate Body, the WTO Secretariat, arbitrators, independent experts and several
specialized institutions.[47]. Several commentators have pointed out the practical
difficulty in establishing legal elements required to bring trade remedy claim under
WTO law.[48]

[edit]Accession and membership

O 



(

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
[49]
development and current trade regime. The process takes about five years, on
average, but it can last more if the country is less than fully committed to the
process or if political issues interfere.[50] As is typical of WTO procedures, an offer of
[51]
accession is only given once consensus is reached among interested parties.
[edit]
!


Status of WTO negotiations:

members (including dual-representation with the European Union)

Draft Working Party Report or Factual Summary adopted

Goods and/or Services offers submitted

Memorandum on Foreign Trade Regime submitted

observer, negotiations to start later or no Memorandum on FTR submitted

frozen procedures or no negotiations in the last 3 years

no official interaction with the WTO

A country wishing to accede to the WTO submits an application to the General

Council, and has to describe all aspects of its trade and economic policies that have
a bearing on WTO agreements.[52] The application is submitted to the WTO in
amemorandum which is examined by a working party open to all interested WTO
Members.[51]

After all necessary background information has been acquired, the working party
focuses on issues of discrepancy between the WTO rules and the applicant's
international and domestic trade policies and laws. The working party determines
the terms and conditions of entry into the WTO for the applicant nation, and may
consider transitional periods to allow countries some leeway in complying with the
WTO rules.[49]

The final phase of accession involves bilateral negotiations between the applicant
nation and other working party members regarding the concessions and
commitments on tariff levels and market access for goods and services. The new
member's commitments are to apply equally to all WTO members under normal
[52]
non-discrimination rules, even though they are negotiated bilaterally.
When the bilateral talks conclude, the working party sends to the general council or
ministerial conference an accession package, which includes a summary of all the
working party meetings, the Protocol of Accession (a draft membership treaty), and
lists ("schedules") of the member-to-be's commitments. Once the general council or
ministerial conference approves of the terms of accession, the applicant's
[53]
parliament must ratify the Protocol of Accession before it can become a member.
[edit]O#

 #


The WTO has 153 members (almost all of the 123 nations participating in the
Uruguay Round signed on at its foundation, and the rest had to get
membership).[54] The 27 states of the European Union are represented also as
the European Communities. WTO members do not have to be full sovereign nation-
members. Instead, they must be a customs territory with full autonomy in the
conduct of their external commercial relations. Thus Hong Kong (as "Hong Kong,
China" since 1997) became a GATT contracting party, and the Republic of China
(ROC) (commonly known as Taiwan, whose sovereignty has been disputed by the
People's Republic of China or £!)) acceded to the WTO in 2002 under the name
of "Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu" (Chinese
Taipei).[55]

A number of non-members (30) are observers at WTO proceedings and are

currently negotiating their membership. As observers, Iran, Iraq and Russia are not
yet members. Russia is the biggest economy outside WTO and after the completion
of Russia's accession, Iran would be the biggest economy outside the WTO.[56] With
the exception of the Holy See, observers must start accession negotiations within
five years of becoming observers. Some international intergovernmental
organizations are also granted observer status to WTO bodies.[57] 14 states and 2
territories so far have no official interaction with the WTO.

[edit]Agreements

O  !

The WTO oversees about 60 different agreements which have the status of
international legal texts. Member countries must sign and ratify all WTO agreements
[58]
on accession. A discussion of some of the most important agreements follows.
The Agreement on Agriculture came into effect with the establishment of the WTO
at the beginning of 1995. The AoA has three central concepts, or "pillars": domestic
support, market access and export subsidies. The General Agreement on Trade in
 Services was created to extend the multilateral trading system to service sector, in
the same way theGeneral Agreement on Tariffs and Trade (GATT) provides such a
system for merchandise trade. The Agreement entered into force in January 1995.
The Agreement on Trade-Related Aspects of Intellectual Property Rights sets down
minimum standards for many forms of intellectual property (IP) regulation. It was
negotiated at the end of the Uruguay Round of the General Agreement on Tariffs
and Trade (GATT) in 1994.

The Agreement on the Application of Sanitary and Phytosanitary Measures ² also

known as the SPS Agreement was negotiated during the Uruguay Round of
the General Agreement on Tariffs and Trade, and entered into force with the
establishment of the WTO at the beginning of 1995. Under the SPS agreement, the
WTO sets constraints on members' policies relating to food safety (bacterial
contaminants, pesticides, inspection and labelling) as well as animal and plant
health (imported pests and diseases). The Agreement on Technical Barriers to
Trade is an international treaty of the World Trade Organization. It was negotiated
during the Uruguay Round of the General Agreement on Tariffs and Trade, and
entered into force with the establishment of the WTO at the end of 1994. The object
ensures that technical negotiations and standards, as well as testing and
certification procedures, do not create unnecessary obstacles to
trade".[59] The Agreement on Customs Valuation, formally known as the Agreement
on Implementation of Article VII of GATT, prescribes methods of customs valuation
that Members are to follow. Chiefly, it adopts the "transaction value" approach.