WORLD TRADE ORGANISATION

General Agreement on Tariffs & Trade (GATT) was made in the year 1947 that aimed at initiating
an international trade, by liberalizing policies & removing tariffs. It was succeeded by World Trade
Organization (WTO), which is a global organization that encourages and facilitates inter-country trade
and also helps in resolving trade disputes. WTO is a global institution which deals with the set of laws
to administer & liberalize international trade between different nations. It was officially constituted on
January 1, 1995 which took the place of GATT as an effective formal organization. GATT was an
informal organization which regulated world trade since 1948. The Headquarters of WTO is at Geneva,
Switzerland. The WTO acts as a framework for formulating & negotiating trade agreements between
nations. The membership of WTO comprises of 160 countries worldwide. The WTO’s top level
decision-making body is the Ministerial Conferences which meets at least once in every two years.
Difference between GATT and WTO
Basis GATT WTO
1. Full form General Agreement on Tariffs & Trade World Trade Organization
2. Establishment 1948 1995
GATT as a set of rules, multilateral WTO is an international organization
trade agreement came into force, to that came into existence to oversee and
3. Meaning encourage international trade & liberalize trade between countries.
remove cross-country trade barriers.
Trade in goods; trade in services &
4. Scope Trade in goods. trade-related aspects of intellectual
property rights
5. Participants Contracting parties Members
6. Commitments Provisional Full and Permanent
Their agreements are originally Its agreements are purely multilateral.
7. Agreement multilateral, but plurilateral
agreements are added to it later.
8. Dispute Slow and ineffective Fast and ineffective
Settlement
System
9. Institution It does not have any institutional It has permanent institution along with
existence, but have a small secretariat. a secretariat.
Objectives of WTO
1. To help the people of the member nations in improving their standard of living.
2. To provide proper market share to the developing countries & least developed countries in the
growth of international trade.
3. To help the member countries in increasing effective demand & help in achieving full employment.
4. To ensure the protection of environment.
5. To make sure that the resources of the world are utilized
6. To encourage trading activities and ensure large scale of production.
Organisation Structure of WTO

1. Ministerial Conferences: 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.
2. General Council: The General Council is the WTO’s highest-level decision-making body in
Geneva, meeting regularly to carry out the functions of the WTO. It has representatives from all
member governments and has the authority to act on behalf of the ministerial conference which only
meets about every two years.
a) Dispute Settlement Body (DSB): The DSB, on which all member countries can sit, usually meets
twice a month to hear complaints of violations of WTO rules and agreements. It sets up expert panels
to study disputes & decide if the rules are being broken. The DSB’s final decisions, unlike those of a
similar but less powerful body in the old GATT, cannot be challenged.
b) Trade Policy Review Body: The TPRB is a forum for the entire membership to review the trade
policies of all WTO member countries. Other bodies are the Council for Trade in Goods, the Council
for Trade in Services & the Council for Trade-Related Aspects of Intellectual Property Rights.
3. Councils: There are three more councils under the supervision of general council:
a) The Council for Trade in Goods: The GATT covers international trade in goods. The Goods
Council has 10 committees dealing with specific subjects (agriculture, market access, subsidies, &
anti-dumping). These committees consist of all member countries. The GATT agreements are the
responsibility of the Council which is made up of representatives from all WTO member countries.
b) The Council for Trade in Services: The Council for Trade in Services is responsible for facilitating
the operation of the General Agreement on Trade in Services It is open to all WTO members The
Council work of 4 bodies: the Committee on Trade in Financial Services, the Committee on Specific
Commitments, the Working Party on Domestic Regulation & the Working Party on GATS Rules.
c) The Council for Trade Related Aspects of Intellectual Property Rights: TRIPS provides
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.
4. Committees: There are three more committees under the supervision of general council:
a) Committee on Trade and Development: This committee deals with various issues concerned with
trading activities of the developing countries. It works as the central body for the consideration and
coordination of work on development in the WTO.
b) Committee on BOP Restrictions: Countries facing balance of payment difficulty may apply import
restrictions under provisions in the agreement & under the General Agreement on Trade in Services.
c) Committee on Budget, Finance & Administration: These committees oversee the budget, finance
and administration functions of WTO.
WTO Agreements:
1. Goods: It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating
lower customs duty rates & trade barriers; the text of the General Agreement spelt out important,
rules, particularly non-discriminations since 1995, the updated GATT has become the WTO. 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.
2. Services: Banks, insurance firms, telecommunication companies, tour operators, hotel chains and
transport companies looking to do business abroad can now enjoy the same principles of free and fair
that originally only applied to trade in goods. WTO members have also made individual
commitments under GATS stating which of their services sectors, they are willing to open for foreign
competition and how open those markets are.
3. Intellectual Property: The WTO’s intellectual property agreement amounts to rules for trade &
investment in ideas & creativity. The rules how copyrights, patents, trademarks, geographical names
used to identify products, industrial designs, layout designs and undisclosed information such as
trade secrets “intellectual property” should be protected when trade is involved.
4. Dispute Settlement: The WTO’s procedure for resolving trade under the Dispute Settlement.
Understanding is vital for enforcing the rules and ensuring that trade flows smoothly. Judgments by
specially appointed independent experts are based on interpretations of the agreements and individual
countries’ commitments. The system encourages countries to settle their differences through
consultation. Failing that, they can follow a carefully mapped out, stage-by-stage procedure by a
panel of experts and the chance to appeal the ruling on legal grounds.
5. Policy Review: 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.
6. Technical assistance and training: The WTO organizes hundreds of technical cooperation missions
to developing economies annually. It also holds many trade policy courses each year in Geneva for
government officials. Regional seminars are held regularly in all regions of the world, with a special
emphasis on African countries.
Functions of WTO
1. It shall facilitate the implementation, administration and operation of the WTO trade agreements,
such as multilateral trade agreements, plurilateral trade agreements.
2. It provide forum for negotiations among its members concerning their multilateral trade relations.
3. It shall administer the ‘Understanding on Rules and Procedures’ so as to handle trade disputes.
4. It shall monitor national trade policies.
5. It shall cooperate with various international organizations like the IMF and the WB with the aim of
achieving greater coherence in global economic policy-making.
6. It shall provide technical assistance and training for members of the developing countries.
7. To ensure the implementation of the substantive code.
8. To act as a forum for the negotiation of further trade liberalisation.