1. World Trade Organisation (WTO)
1.1. About WTO
The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. It’s an organization for liberalizing trade. It’s a forum for governments to negotiate trade agreements. It’s also a place for them to settle trade disputes. It operates a system of trade rules.
1.2. History
The WTO began life on 1 January 1995, even though its trading system is half a century older as earlier General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now cover trade in services, and in traded inventions, creations and designs (intellectual property).
Over the years GATT evolved through several rounds of negotiations. The last and largest GATT round, was the Uruguay Round which lasted from 1986 to 1994 and led to the WTO’s creation.
1.3. Organisational structure
The WTO is run by its member governments. The WTO has 164 members, accounting for 98% of world trade. A total of 22 countries are negotiating membership.
All major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva). Decisions are normally taken by consensus. Reaching decisions by consensus among some 150 members can be difficult. Its main advantage is that decisions made this way are more acceptable to all members
♤ Topmost is the ministerial conference which has to meet at least once every two years. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.
♤ Day-to-day work in between the ministerial conferences is handled by three bodies:
o The General Council
o The Dispute Settlement Body
o The Trade Policy Review Body
1.4. Principles of WTO
Although WTO agreements are lengthy and complex, a number of simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system: