The World Trade Organization (WTO) was established on January 1, 1995, replacing the General Agreement on Tariffs and Trade (GATT) as the major entity overseeing international trade.
Aims and Activities
The WTO administers, through various councils and committees, the 28 agreements on international trading relations contained in the final act of the Uruguay Round of trade negotiations, which was approved at a meeting in Marrakesh, Morocco, in 1994. In addition, WTO administers a number of plurilateral agreements, notably on government procurement and civil aircraft.
The WTO goes further than GATT in that it provides the sole legal and institutional foundation for the multilateral trading system. Whereas GATT was applied on a provisional basis, the WTO will be legally binding. It will also provide the principal contractual obligations determining how governments frame and implement domestic trade legislation and regulations.
The WTO has five essential functions:
-- to administer and implement the multilateral and plurilateral trade agreements which make up the WTO Agreements;
-- to act as a forum for multilateral trade negotiations among its members;
-- to seek to resolve trade disputes among WTO members;
-- to oversee national trade policies of its members;
-- to cooperate with other international institutions involved in global economic policy-making.
The WTO is a watchdog on international trade, regularly examining the trade regimes of individual members. In its various bodies, members flag proposed or draft measures by others that can cause trade conflicts. Members are also required to notify in detail various trade measures and statistics, which are maintained by WTO on a large data base. Trade disputes between members than cannot be solved through bilateral talks are adjudicated under the WTO Dispute Settlement Body.
The WTO continues, in a strengthened form, the code of conduct for international trade established by GATT, which came into force in 1948. This includes the principle of non-discrimination between trading partners-the "most-favored nation" clause-and equal treatment for imports and domestic goods in internal markets.
WTO rules also cover trade in services, intellectual property and investment. Under the WTO Agreements, protectionistic policies in important areas such as textile and clothing and agriculture will be phased out or reduced.
The WTO secretariat assists developing countries in the implementation of the round through a newly established Development Division and a strengthened Technical Cooperation and Training Division.
Eight major negotiating "rounds" in GATT brought about far-reaching reductions in tariffs and other trade barriers. The most significant were the first (Geneva, 1947), the Kennedy (1964-67), the Tokyo (1973-79) and the Uruguay (1986-1994) Rounds.
The International Trade Center, established by GATT in 1964, is a joint subsidiary organ of WTO and the United Nations, the latter acting through the United Nations Conference on Trade and Development (see Trade and Development in Chapter 3). The center assists developing countries in export promotion. It provides information and advice on export markets and marketing techniques and helps in establishing export services and training personnel.
Administration
All 128 member countries of GATT automatically become WTO members upon acceptance of the Uruguay Round Agreements and submission of commitments on trade in goods and services. The highest body of WTO is the Ministerial Conference, which meets at least once every two years and can take decisions on all matters under any of the multilateral trade agreements. The General Council is responsible for WTO's day-to-day activities. Its mandate includes supervising bodies relating to dispute settlement and trade policy reviews of WTO members. It also delegates responsibility to other committees and bodies, namely the Council for Trade in Goods, the Council for Trade in Services and the Council on Trade-Related Aspects of Intellectual Property Rights.
From Basic Facts About the United Nations. Published by United Nations Department of Public Information. Copyright 1995 United Nations.
