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.
Born in 1995, but not so young: The WTO began life on 1 January 1995, but its trading system is half a century
older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. (The
second WTO ministerial meeting, held in Geneva in May 1998, included a celebration of the 50th anniversary of the
It did not take long for the General Agreement to give birth to an unofficial, de facto international organization, also
known informally as GATT. 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. 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).
The WTO in brief: the World Trade Organization (WTO) is the only international organization dealing with the global
rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as
The result is assurance. Consumers and producers know that they can enjoy secure supplies and greater choice of
the finished products, components, raw materials and services that they use. Producers and exporters know that
foreign markets will remain open to them.
The result is also a more prosperous, peaceful and accountable economic world. Virtually all decisions in the WTO
are taken by consensus among all member countries and they are ratified by members' parliaments. Trade friction is
channelled into the WTO's dispute settlement process where the focus is on interpreting agreements and
commitments, and how to ensure that countries' trade policies conform with them. That way, the risk of disputes
spilling over into political or military conflict is reduced.
By lowering trade barriers, the WTO‟s system also breaks down other barriers between peoples and nations.
At the heart of the system — known as the multilateral trading system — are the WTO‟s agreements, negotiated
and signed by a large majority of the world‟s trading nations, and ratified in their parliaments. These agreements are
the legal ground-rules for international commerce. Essentially, they are contracts, guaranteeing member countries
important trade rights. They also bind governments to keep their trade policies within agreed limits to everybody‟s
The agreements were negotiated and signed by governments. But their purpose is to help producers of goods and
services, exporters, and importers conduct their business.
The goal is to improve the welfare of the peoples of the member countries
The organization: The WTO‟s overriding objective is to help trade flow smoothly, freely, fairly and predictably.
It does this by:
Administering trade agreements
Acting as a forum for trade negotiations
Settling trade disputes
Reviewing national trade policies
Assisting developing countries in trade policy issues, through technical assistance and training programmes
Cooperating with other international organizations
Structure: The WTO has nearly 150 members, accounting for over 97% of world trade. Around 30 others are
Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it
has never been used in the WTO, and was extremely rare under the WTO‟s predecessor, GATT. The WTO‟s
agreements have been ratified in all members‟ parliaments.
The WTO‟s top level decision-making body is the Ministerial Conference which meets at least once every two
Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes
officials sent from members‟ capitals) which meets several times a year in the Geneva headquarters. The General
Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.
At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the
Numerous specialized committees, working groups and working parties deal with the individual agreements and
other areas such as the environment, development, membership applications and regional trade agreements.
Secretariat: The WTO Secretariat, based in Geneva, has around 600 staff and is headed by a director-general. Its
annual budget is roughly 160 million Swiss francs. It does not have branch offices outside Geneva. Since decisions
are taken by the members themselves, the Secretariat does not have the decision-making role that other
international bureaucracies are given.
The Secretariat‟s main duties are to supply technical support for the various councils and committees and the
ministerial conferences, to provide technical assistance for developing countries, to analyze world trade, and to
explain WTO affairs to the public and media.
The Secretariat also provides some forms of legal assistance in the dispute settlement process and advises
governments wishing to become members of the WTO.
Understanding the WTO: The first step is to talk.
Essentially, the WTO is a place where member governments go, to try to sort out the trade problems they face with
At its heart are the WTO agreements, negotiated and signed by the bulk of the world‟s trading nations.
But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade
barriers — for example to protect consumers or prevent the spread of disease.
Basics: The WTO was born out of negotiations; everything the WTO does is the result of negotiations.
The agreements: The WTO is „rules-based‟; its rules are negotiated agreements.
- Overview: a navigational guide; - Tariffs: more bindings and closer to zero; - Agriculture: fairer markets for farmers
Standards and safety; - Textiles: back in the mainstream; - Services: rules for growth and investment; - Intellectual
property: protection and enforcement; - Anti-dumping, subsidies, safeguards: contingencies, etc; - Non-tariff barriers:
red tape, etc; - Plurilaterals: of minority interest; - Trade policy reviews: ensuring transparency.
Settling disputes: The priority is to settle disputes, not to pass judgement.
A unique contribution, The panel process, Case study: the timetable in practice.
Cross-cutting and new issues: Subjects that cut across the agreements, and some newer agenda items.
The WTO‟s work is not confined to specific agreements with specific obligations. Member governments also discuss
a range of other issues, usually in special committees or working groups. Some are old, some are new to the GATT-
WTO system. Some are issues in their own right, some cut across several WTO topics. Some could lead to
- Regionalism: friends or rivals; - The environment: a new high profile; - Investment, competition, procurement,
simpler procedures; - Electronic commerce; - Labour standards: highly controversial.
UNDERSTANDING THE WTO: BASICS
What is the World Trade Organization?
Simply put: the World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-
global level. But there is more to it than that.
Is it a bird, is it a plane?
There are a number of ways of looking at the WTO. It‟s an organization for liberalizing trade. It‟s a forum for
governments to negotiate trade agreements. It‟s a place for them to settle trade disputes. It operates a system of
trade rules. (But it‟s not Superman, just in case anyone thought it could solve — or cause — all the world‟s
Above all, it’s a negotiating forum … Essentially, the WTO is a place where member governments go, to try to
sort out the trade problems they face with each other. The first step is to talk. The WTO was born out of negotiations,
and everything the WTO does is the result of negotiations. The bulk of the WTO's current work comes from the
1986-94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs
and Trade (GATT). The WTO is currently the host to new negotiations, under the “Doha Development Agenda”
launched in 2001.
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize
trade. But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade
barriers — for example to protect consumers or prevent the spread of disease.
It’s a set of rules … At its heart are the WTO agreements, negotiated and signed by the bulk of the world‟s
trading nations. These documents provide the legal ground-rules for international commerce. They are essentially
contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by
governments, the goal is to help producers of goods and services, exporters, and importers conduct their business,
while allowing governments to meet social and environmental objectives.
The system‟s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable
side-effects. That partly means removing obstacles. It also means ensuring that individuals, companies and
governments know what the trade rules are around the world, and giving them the confidence that there will be no
sudden changes of policy. In other words, the rules have to be “transparent” and predictable.
And it helps to settle disputes … This is a third important side to the WTO‟s work. Trade relations often involve
conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, often need
interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an
agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO