World Trade Organization (WTO)

Introduction
● The World Trade Organization (WTO) was officially established on January
1, 1995, following the conclusion of the Uruguay Round of GATT negotiations
and the signing of the Marrakesh Agreement in 1994. In response to problems
identified in the 1982 Ministerial Declaration (structural deficiencies, spill-over
impacts of certain countries' policies on world trade which GATT could not
manage, etc.), a meeting in Punta del Este, Uruguay, launched the eighth
GATT round—known as the Uruguay Round—in September 1986.
● The Final Act concluding the Uruguay Round and officially establishing the
WTO regime was signed on 15 April 1994, during the ministerial meeting at
Marrakesh, Morocco.
● The WTO is an international organization that oversees global trade rules
between nations, serving as the successor to the General Agreement on
Tariffs and Trade (GATT).
● It provides a comprehensive institutional framework for the administration
and enforcement of trade agreements, aiming to facilitate smooth,
predictable, and free trade across the globe.
Objectives of the WTO
1. Promote Free Trade: Encourage the liberalization of international trade by
reducing or eliminating trade barriers like tariffs, quotas, and subsidies.
2. Ensure Fair Competition: Create a level playing field in international trade by
preventing unfair trade practices, such as dumping and subsidies.
3. Encourage Development and Economic Reform: Support the economic
development of member countries, particularly developing and least-
developed nations, by providing them with special provisions and flexibility.
4. Provide a Platform for Negotiation: Facilitate negotiations among member
countries to update and create new trade agreements that reflect
contemporary economic realities.
5. Settle Trade Disputes: Provide an effective and impartial dispute resolution
mechanism to handle trade conflicts between member nations.
Structure of the WTO
1. Ministerial Conference: The highest decision-making body of the WTO, it
meets every two years and is composed of representatives (usually trade
ministers) from all member countries. The Ministerial Conference can take
decisions on all matters under any of the WTO agreements.
2. General Council: Operates as the WTO’s main decision-making body between
Ministerial Conferences. It oversees the day-to-day operations and functions
as the Dispute Settlement Body (DSB) and the Trade Policy Review Body
(TPRB).
3. Dispute Settlement Body (DSB): Manages disputes arising between
members over the interpretation and application of WTO agreements. It has
the authority to establish panels, adopt panel and appellate reports, and
 authorize retaliation in cases of non-compliance.
4. Trade Policy Review Body (TPRB): Conducts regular reviews of the trade
policies and practices of member countries. The frequency of these reviews
depends on the country’s share of global trade.
5. Council for Trade in Goods: Oversees the implementation of agreements
related to trade in goods, including the GATT, agreements on agriculture,
textiles, subsidies, anti-dumping, and technical barriers to trade.
6. Council for Trade in Services: Supervises the General Agreement on Trade in
Services (GATS) and manages agreements related to the service sector.
7. Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS):
Administers the TRIPS Agreement and monitors the protection of intellectual
property rights among member nations.
8. WTO Secretariat: The administrative arm of the WTO, based in Geneva,
Switzerland. It is headed by the Director-General and provides technical and
professional support to the various WTO councils, committees, and
negotiations.
Functions of the WTO
1. Administering WTO Agreements: The WTO is responsible for implementing
and monitoring the various trade agreements that make up the WTO
framework, including GATT, GATS, TRIPS, and others.
2. Negotiating Trade Agreements: The WTO provides a forum for negotiations
among member states to create and update trade agreements. These
negotiations occur through rounds, with the Doha Round being a significant
(though still ongoing) example.
3. Settling Trade Disputes: The Dispute Settlement Body (DSB) resolves
disputes between member countries regarding the interpretation and
application of WTO agreements. This mechanism is a key aspect of the WTO,
providing a structured and enforceable process for resolving trade conflicts.
4. Monitoring National Trade Policies: Through the Trade Policy Review
Mechanism (TPRM), the WTO reviews and assesses the trade policies of
member countries, ensuring transparency and adherence to WTO rules.
5. Building Trade Capacity: The WTO provides technical assistance and
training to developing and least-developed countries to help them build the
capacity to engage effectively in the global trading system.
6. Cooperating with Other International Organizations: The WTO works closely
with other international organizations, such as the International Monetary
Fund (IMF) and the World Bank, to ensure a coherent approach to global
economic policy-making.
Key Agreements under the WTO
The World Trade Organization (WTO) Agreements establish a global legal framework
for trade involving 164 economies worldwide. These agreements encompass various
aspects such as goods, services, intellectual property, standards, investment, and
other factors that influence the movement of international trade.
 1. General Agreement on Tariffs and Trade (GATT): Forms the foundation of
the WTO's framework for trade in goods. It covers rules related to tariffs, non-
tariff measures, and trade-related aspects of agriculture, textiles, and more.
2. General Agreement on Trade in Services (GATS): The first multilateral
agreement covering trade in services. It sets out rules for all service sectors
and encourages progressive liberalization.
3. Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS):
Establishes minimum standards for the protection and enforcement of
intellectual property rights across member countries.
4. Agreement on Trade-Related Investment Measures (TRIMS): Prohibits trade-
related investment measures that violate GATT's principles, such as local
content requirements and trade-balancing measures.
5. Agreement on Agriculture (AoA): Regulates agricultural trade with rules on
market access, domestic support, and export subsidies, aiming to create a fair
and market-oriented agricultural trading system.
6. Agreement on the Application of Sanitary and Phytosanitary Measures (SPS
Agreement): Sets guidelines for food safety and animal and plant health
standards, ensuring that such measures are not used as unjustified trade
barriers.
7. Agreement on Technical Barriers to Trade (TBT Agreement): Aims to prevent
technical regulations, standards, and conformity assessment procedures from
creating unnecessary obstacles to international trade.
Dispute Settlement Mechanism (DSM)
● Overview: The WTO’s Dispute Settlement Mechanism is a key pillar of the
organization, ensuring that trade disputes are resolved efficiently, fairly, and in
a rules-based manner.
Process:
● Consultations: The disputing parties must first attempt to resolve the issue
through consultations.
● Panel Formation: If consultations fail, a panel of experts is established to
examine the case.
● Panel Report: The panel’s findings are submitted in a report, which can be
appealed.
● Appellate Body: The Appellate Body reviews appeals based on points of law,
not facts.
● Implementation: If a country is found to be in violation, it must comply with
the ruling or face possible retaliation.
Significance of the WTO
1. Global Trade Growth: The WTO has played a critical role in the significant
growth of global trade since its inception, promoting economic development,
job creation, and poverty reduction.
2. Legal Certainty and Predictability: By establishing clear rules and a dispute
 resolution system, the WTO provides legal certainty and predictability in global
trade relations.
3. Integration of Developing Countries: The WTO has brought developing
countries into the global trading system, providing them with access to
markets and opportunities for growth.
4. Comprehensive Trade Coverage: The WTO’s agreements cover goods,
services, and intellectual property, making it a comprehensive framework for
global trade governance.

Challenges and Criticisms

1. Stalled Negotiations: The Doha Development Round, launched in 2001,
aimed to address the needs of developing countries but has been stalled due
to disagreements between developed and developing nations, particularly on
issues like agriculture, industrial tariffs, and non-tariff barriers.
2. Dispute Settlement Crisis: The Appellate Body of the WTO's Dispute
Settlement Mechanism has faced a crisis since 2019, as the United States
blocked the appointment of new judges, effectively paralyzing the body.
3. Balancing Interests: The WTO has struggled to balance the diverse interests
of its members, especially between developed and developing countries.
4. Addressing New Issues: The WTO has been slow to address emerging issues
such as digital trade, environmental sustainability, and labor rights, which are
increasingly important in the global economy.
Future of the WTO
● Reform and Modernization: There is a growing consensus that the WTO
needs reform to address its challenges, improve its decision-making
processes, and ensure it remains relevant in the 21st century.
● Multilateralism vs. Regionalism: The rise of regional trade agreements
(RTAs) and plurilateral agreements poses a challenge to the WTO’s
multilateral approach. However, the WTO continues to play a central role in
global trade governance.
● Inclusivity: Future efforts will likely focus on making the WTO more inclusive,
ensuring that the benefits of trade are more widely shared, especially among
developing and least-developed countries.