What is World Trade Organisation ( WTO ) ? ( History , Objectives , Principles , Structure )

The World Trade Organisation is the successor of General Agreement on Tariffs and Trades (GATT ).
The WTO Agreement is the Uruguay Round agreement where the original GATT is now part of the WTO Agreement which came into force from January 1,1995.

WTO is a multilateral organisation .It has its headquarter in Geneva , Switzerland. It is the central body that facilitates global trade .


It is the only international organization that deals with global rules of trade between nations.
It provides a framework for conduct of international trade in goods and services.


The fundamental objective of the rule-based system of international trade under the WTO is to ensure that international markets remain open and their access is not disrupted by the sudden and arbitrary imposition of import restrictions.


It lays down the rights and obligations of governments in the set of multilateral agreements.
It also covers a wide range of issues related to international trade, such as protection of intellectual property rights and dispute settlement, and prescribes disciplines for governments in formulation of rules, procedures, and practices in these areas.


Structure of WTO

The structure of WTO is headed by the Ministerial Conference composed of representatives of all members which meet at least once every two years.
It carries out the functions of the WTO and takes actions necessary to this effect .

The Ministerial Conference is the supreme authority of the WTO .
The Ministerial Conference operations by different authority bodies.

General Council composed of representatives of all members to oversee the operation of the WTO Agreement and ministerial decisions on a regular basis. It also acts as a Dispute Settlement Body (DSB) and a trade policy review body (TPRB) ,each having its own Chairman.

The Director General , who is the secretariat head of WTO . The Ministerial Conference appoints the Director General and sets out his power duties , conditions of services and term of office. The Director General appoints the members of Staff of the Secretariat and determines their duties in accordance with the regulations adopted by the Ministerial Conference.

There is the Council of Trade in goods , The council for Trade in Services and the Council for Trade Related Aspects of Intellectual Property Right (TRIPs) which operates under the General Council .

Principle of WTO

Five important principles of WTO are :-

Non-discrimination
Reciprocity
Binding and enforceable commitments
Transparency
Safety values

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Objectives

The Preamble of the organisation , The Agreement establishing the WTO lays down the following objectives :-

• It’s relation in the field and economic endeavour shall be conducted with a view to raising standards of living , ensuring full employment and large and steadily growing volume of real income and effective demand and expanding the production and trade in goods and services.

• To allow for the optional use of the world’s resources in accordance with the objectives of sustainable development , to protect the environment and to enhance the means for doing so in a manner consistent with respective needs and concerns at different levels of economic development.

• To make positive efforts designed to ensure that developing countries , especially the least developed among them , secure a share in the growth in international trade commensurate with the needs of their economic development.

• To achieve these objectives by entering into reciprocal and mutually advantageous arrangements directed towards substantial reduction of tariffs and other barriers to trade and the elimination of discriminatory treatment in international trade relations.

• To develop an integrated , more viable and durable multilateral trading system encompassing the GATT , the results of past liberalisation efforts and all the results of the Uruguay Round of multilateral trade negotiations .

• To ensure linkages between trade policies , environment policies and sustainable development.

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Functions :-

The main functions of WTO are :-

1. To facilitate implementation, administration and operations of the objectives of the Agreement and of the Ministerial Trade Agreement.

2. To provide the forum for negotiations among its members concerning their multilateral trade relations , in matters relating to the agreements .

3. To provide a framework for implementation, administration and operation of multilateral and bilateral agreements of world trade.

4. To administer the understanding of rules and Procedures governing the Settlement of dispute .

5. To ensure the optimum use of world resources.

6. To assist international organizations such as, IMF and IBRD for establishing coherence in Universal Economic Policy determination.

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WTO Agreements

The Agreement establishing WTO consists of the following :-

1: Multilateral Agreements on Trade in Goods :

The general agreement on trade in goods defines the GATT 1994 and includes various agreements dealing with Different aspects related to trade in goods.

• GATT Rules 1994
,•Agreement on Agriculture
•Agreement on Textiles and Clothing
•Agreement on Technical Barriers to Trade
• Agreement on Trade Related Aspects of Investment Measures ( TRIMs)
• Agreement on Anti – Dumping


2: General Agreement on Trade in Services .

This agreement covers all Internationally traded services .It also sets out special conditions relating to individual sectors .

In financial services , it establishes the right of governments to take appropriate measures for the protection of investors , depositors and policy holders to ensure integrity and stability of the financial system.

In telecommunications ,the Agreement requires a Member to establish , construct , acquires ,lease , operate or supply telecommunications transport networks and services and make it available to the public

The GATS also contains consultations and dispute settlement and the establishment of a Council on Services.


3: Agreement on Trade – Related Aspects of Intellectual Property Right ( TRIPs) .

The TRIPs covers seven categories of intellectual property –

• Copyright and Related Rights.
• Trademarks
• Geographical Indications
• Industrial Design
• Patents
• Integrated Circuits
• Trade Secrets

This agreement refers to controls of anti competitive practices for developed countries to bring their legislation and practices into conformity for the implementation of TRIPs.


4:. Understanding on Rules and Procedures governing the Settlement of Disputes.

This agreement applies to consultations and the settlement of disputes between Members concerning their rights and obligations under the provisions of the Agreement establishing the WTO .
For this, a Dispute Settlement System was established .


5: Plurilateral Trade Agreement .

This agreement consists of the Agreement on Trade in Civil Aircraft , Agreement on Government Procurement , International Dairy Agreement and International Bovine Meat Agreement . The first Agreement was made at Geneva in April 1979, as subsequently modified , rectified or amended . The latter three Agreements were done at Marrakesh on April 15,1994.



6: Trade Policy Review Mechanism.

The TPRM aims to carry out reviews of the trade policies and practices under the Multilateral Trade Agreements and the Plurilateral Trade Agreements for the smoother functioning of the multilateral trading system.To operate this purpose , Trade Policy Review Body ( TPRB) was established. For better transparency each member reports regularly to the Trade Policy Review Body about the trade policies and practices pursued by it .

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