The WTO IN BRIEF

History:

The World Trade Organization came into being in 1995. The WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. So the multilateral trading system that was originally set up under GATT is already 50 years old. The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew on average by 6% annually. GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth. The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The 1986-94 Uruguay Round led to the WTO’s creation. In February 1997 agreement was reached on telecommunications services, with 69 governments agreeing to wide-ranging liberalization measures that went beyond those agreed in the Uruguay Round. In the same year 40 governments successfully concluded negotiations for tariff-free trade in information technology products, and 70 members concluded a financial services deal covering more than 95% of trade in banking, insurance, securities and financial information.

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

§ Assisting developing countries in trade policy issues, through technical assistance and training programmes

§ Cooperating with other international organizations

The WTO has more than 130 members, accounting for 90% of world trade. Over 30 others are negotiating membership. Decisions are made by the entire membership and 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 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 years. 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 Geneva head-quarters. 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 General Council. Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications, regional trade agreements, relationship between trade and investment, the interaction between trade and competition policy and transparency in government procurement.