World Trade Organization (WTO)
Organisation mondiale du commerce (OMC)
Organización Mundial del Comercio
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Established 1 Jan 1995, on entry into force of Agreement Establishing the World Trade Organization (Marrakech Agreement). Set up to encompass General Agreement on Tariffs and Trade (GATT), following successful conclusion, 15 Dec 1993, of the 'Uruguay Round Negotiations' which had commenced in 1986. The Final Act of the Uruguay Round was signed on 15 Apr 1994, Marrakech (Morocco), by 111 countries, 104 countries signing the Marrakech Agreement the same day.
The idea of an International Trade Organization (ITO) -- Organisation internationale du commerce (OIC) -- Organización Internacional de Comercio (OIC) was first put forward by John Maynard Keynes and others in the 1940s, but not materialized. GATT, negotiated and signed by 23 countries in 1947, and established on 1 Jan 1948, Geneva (Switzerland), was a forerunner. At the same time, a number of countries were working on drawing up a charter for a proposed ITO, which would have been a specialized agency of the United Nations. The GATT was signed, 30 Oct 1947, ahead of 'UN Conference on Trade and Employment', 21 Nov 1947, Cuba. One of its provisions said that the agreement should accept some of the trade rules of the draft ITO chart, and it largely based on selected parts of the draft ITO charter. In order to get trade liberalization underway quickly it was provided with only minimum institutional arrangements because it was expected that responsibility for it would soon be assumed by ITO. However, plans for ITO were abandoned when it became clear that its charter would not be ratified and GATT was left as the only international instrument laying down trade rules accepted by the nations responsible for most of the world's trade. 'Interim Commission for the International Trade Organization (ICITO/GATT) -- Organization (ICITO/GATT) -- Commission intérimaire de l'Organisation internationale du commerce', set up Mar 1948, Geneva, to work on the proposed ITO, continued to exist, from 1954 in the form of the GATT secretariat in Geneva, its members being the governments of 128 countries at end of 1994.
The proposals which eventually succeeded in establishing WTO were initiated by European Community and Canada, and subsequently supported by Japan. The Marrakech Agreement envisaged a single institutional framework encompassing: GATT, as modified by the Uruguay Round; all agreements concluded under its auspices; the complete results of the Uruguay Round. It stipulates that General Agreement on Tariffs and Trade, 1947 (GATT 1947) and General Agreement on Tariffs and Trade, 1994 (GATT 1994) are two different agreements - they are legally distinct - although GATT 1994 includes the text of GATT 1947 and its legal instruments, as well as of several Understandings on interpretations and modifications of GATT Articles plus the Marrakech Protocol containing schedules of concessions on goods. GATT 1947 continued to exist to the end of 1995, allowing GATT member countries to accede to WTO and permitting an overlap in activities. GATT 1994 is an integral part of the WTO Agreement. The WTO framework ensures a single undertaking approach to the results of the Uruguay Round so that membership in the WTO entails accepting all the results of the Round without exception. WTO has a larger membership than GATT and much broader scope in terms of the commercial activity and trade policies to which it applies. Whereas GATT applied only to trade in merchandise goods, the WTO covers trade in goods, services and intellectual property, being covered in the separate General Agreement on Trade in Services (GATS) and WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS); which were signed 15 Apr 1994, Marrakech (Morocco), as part of the Final Act of the 1986-1994 Uruguay Round of trade negotiations.
A Protocol of Amendement was opened for acceptance 27 Nov 2014 and following its ratification, it inserted Trade Facilitation Agreement (TFA) into the WTO Agreement.
'WTO Preparatory Committee', which ensured a smooth transition to the implementation of the WTO, ceased to exist on entering into force of the WTO Agreement.
Although the WTO is effectively a separate organization, WTO-UN relations are governed by Arrangements for Effective Cooperation with other Intergovernmental Organizations-Relations Between the WTO and the United Nations signed on 15 Nov 1995. The text sees no grounds for formal institutional links between WTO and United Nations System although it recognizes the need for the establishment of cooperative ties between the two organizations. Although it is not one of the financial institutions set up following the Bretton Woods Conference, 22 July 1944, the WTO is nevertheless sometimes included when referring to Bretton Woods Institutions (BWIs).
Ensure that trade flows as smoothly, predictably and freely as possible 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.
2020 Nur-Sultan, Kazakhstan – Ministerial Conference
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Covers the previous activities of GATT and provides a legal mechanism to administer the results of the Uruguay Round negotiations. Councils and committees facilitate implementation and operation of all agreements and legal instruments in connection with the Uruguay Round, including 'Plurilateral Trade Agreements', which include International Dairy Agreement and International Bovine Meat Agreement - Agreement on trade in civil aircraft and Agreement on government procurement - and 'General Agreement on Trade in Services (GATS)', of which countries must be members in order to be members of WTO. The TRIPS agreement recognizes that varying standards in protection and enforcement of intellectual property rights and lack of multilateral disciplines dealing with international trade in counterfeit goods cause increasing tension in international relations. It therefore addresses: applicability of basic GATT principles and of relevant intellectual property agreements; provision of adequate intellectual property rights and provision of effective enforcement for those rights; multilateral disputes management; transitional implementation arrangements. WTO provides a forum for negotiations and administers the 'Understanding on Rules and Procedures Governing the Settlement of Disputes' and the 'Trade Policy Review Mechanism (TPRM)'. TPRM was established provisionally in 1989, subsequently becoming permanent under WTO; it periodically reviews national trade policies of all WTO members.
'Dispute Settlement': From 1 Jan 1995, new procedures are set out in the Dispute Settlement Understanding annexed to the WTO Agreement. WTO decisions are normally taken by consensus, voting only taking place if consensus cannot be reached (to date this has never occurred). In these cases, a majority of three quarters of the membership may adopt an interpretation of any multilateral trade agreement or may waive an obligation imposed on a particular member by such an agreement. To amend a provision, either all members must agree, or a majority of two thirds, depending on the type of provision. A two thirds majority is also required to admit a new member.
'Doha Development Agenda', launched at 4th Session of WTO Ministerial Conference, 9-14 Nov 2001, Doha (Qatar), comprises a new round of multilateral trade negotiations. Under the Agenda, a 'Trade Negotiations Committee (TNC)', which is chaired by WTO Director-General and responds to General Council, supervises negotiations previously taking place at different subsidiary bodies. 'Doha Development Agenda Global Trust Fund', which finances technical assistance programmes, helps countries participate in and benefit from ongoing WTO negotiations.
'Trade without discrimination': allowing for exemptions and special conditions within customs unions and free trade areas, members are required to grant to the products of any other member treatment no less favourable than that accorded products of any other country ('most-favoured nation' clause); in addition, once goods have entered a market they must be treated no less favourably than the equivalent domestically-produced goods. Other non-discrimination provision s include those on rules of origin, pre-shipment inspection, trade-related investment measures and application of sanitary and phytosanitary measures.
'Predictable and growing access to markets': the multilateral trading system is an attempt by governments to provide investors, employers, employees and consumers with a business environment encouraging trade, investment and job creation, and choice and low prices in the market place. Predictable trading conditions are assisted by transparent domestic laws, regulations and practices. WTO agreements contain transparency provisions which require disclosure at national or multilateral level; and WTO bodies review such notifications and regularly survey national trade policies through the Trade Policy Review Mechanism.
'Promoting fair competition': rules on non-discrimination are designed to secure fair conditions of trade, as are those on dumping and subsidies. Existing GATT rules laying down the bas is on which governments may impose compensating duties on unfair competition are extended and clarified in WTO agreements.
'Encouraging development and economic reform': developing countries, although prepared to take on most obligations required of developed countries, have transition periods in which to make adjustments. In particular, least-developed countries (LDCs) have extra flexibility and WTO agreements call for acceleration in implementing market access concessions for goods exported by these countries.
'Assisting developing and transition economies': WTO Secretariat, alone or in cooperation with other international organizations, conducts missions and seminars and provides specific, practical technical cooperation for governments and their officials dealing with accession negotiations, implementing WTO commitments or seeking to participate effectively in multilateral negotiations. Courses and individual assistance on particular WTO activities include dispute settlement and trade policy reviews. GATT's programme of training courses for officials of developing countries, held twice a year from 1955, is continued under WTO.
'Specialized help for export promotion' is provided by International Trade Centre, jointly operated by WTO and the United Nations through UNCTAD. The Centre responds to requests from developing countries for assistance in formulating and implementing export promotion programmes as well as import operations and techniques. It provides information and advice on export markets and marketing techniques and assists in establishing export promotion and marketing services and in training personnel. Help is freely available to least-developed countries.
'Overseeing national trade policies': under the TPRM, the 4 biggest traders (the European Union, USA, Japan and China) are examined by the General Council functioning as the Trade Policy Review Body (TPRB) every 2 years, the 16 next important every 4 years and the remaining countries every 6 years or even less frequently for LDCs. In addition many other WTO agreements require members to notify WTO Secretariat of new or modified trade measures. WTO cooperates with the World Bank and International Monetary Fund for greater coherence in global economic policy making.
'Making trade and environment policies mutually supportive': the Committee on Trade and Environment aims to identify the relationship between trade measures and environmental measures in order to promote sustainable development and make appropriate recommendations on whether modifications of the provisions of the multilateral trading system are required.
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Relations with Inter-Governmental Organizations
Relations with 71 inter-governmental organizations.
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Members in 187 countries
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- International Relations
- United Nations
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