The World Trade Organization

The World Trade Organization (WTO) is the legal and institutional basis of the multilateral trading system. It embodies the main contractual obligations which determine how governments must formulate and apply their laws and regulations relating to trade. It is also the framework for the conduct of trade relations among its Members. This is done through a collective process of discussions, negotiations and decisions.

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Prior to 1995 there was no permanent institutional framework for the multilateral trading system. The expression "the GATT" tended to be used to refer to both the actual General Agreement on Tariffs and Trade and the framework in which the multilateral trade negotiations took place. Since 1 January 1995, the World Trade Organization constitutes the permanent institutional framework for the multilateral trading system. However, the GATT survives as an Agreement. The General Agreement on Tariffs and Trade as it results from the Uruguay Round negotiations is referred to as "GATT 1994". It embodies a modified and updated version of the original General Agreement on Tariffs and Trade, now referred to as "GATT 1947".

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For several decades, the General Agreement on Tariffs and Trade was applied on a provisional basis. It was a multilateral agreement containing rules relating to trade in goods. Although it operated like a permanent agreement, it was without a permanent institutional framework, and was serviced by a provisional Secretariat. The WTO now provides a permanent institutional framework for the multilateral trading system. It has its own Secretariat. Like the GATT, the WTO covers trade in goods. However, it also covers trade in services and trade-related aspects of intellectual property rights. Also, the dispute settlement mechanism has been considerably strengthened in the WTO.

Since its establishment, the WTO has had extensive contact with other intergovernmental organizations interested in its activities. Relations have been established with relevant organizations in the United Nations system, the Bretton Woods organizations, and various regional bodies. This is to ensure that the resources and expertise of the international community remain focused and coordinated. Many organizations have been granted observer status in one or more of the various WTO councils, committees or working groups.

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In the preamble of the Marrakesh Agreement establishing the WTO, members recognize certain objectives, to which they wish to contribute through the multilateral trading system. It is recognized that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living. They should ensure full employment and a large and steadily growing volume of real income and effective demand. This is to be coupled with an expansion of production and trade in goods and services, while allowing for the optimal use of the world's resources. This is to be in accordance with the objective of sustainable development. The Agreement also recognizes the need for positive efforts to ensure that developing countries, and especially the leastdeveloped among them, secure a share in the growth in international trade which is commensurate with the needs of their economic development.

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The WTO provides the common institutional framework for the conduct of trade relations among its Members in matters related to agreements negotiated during the Uruguay Round. It monitors and oversees, through its various bodies, the implementation, operation and administration of the various agreements. It also administers the trade policy review mechanism and the dispute settlement mechanism. In addition, the WTO provides the forum for further negotiations between its Members in matters dealt with under the Agreements and also more generally concerning their multilateral trade relations.

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Countries which were contracting parties to the GATT 1947 and which took part in the Uruguay Round negotiations could become original Members of the WTO. This was accomplished by accepting the WTO Agreement. The Agreements remained open for acceptance for a period of two years after the entry into force of the WTO. Now, any State or separate customs territory can become a Member of the WTO through the process of accession. The terms of accession are agreed between the State or territory requesting accession and the Members of the WTO. This implies acceptance of the Agreements and negotiations with current WTO Members on schedules of concessions in goods and specific commitments in services.

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The WTO is an intergovernmental organization, and only the governments of Members take part in its activities. However, other intergovernmental organizations can be granted observer status. This means they may attend the meetings of WTO bodies. In addition, the General Council may make arrangements for consultation and cooperation with non- governmental organizations concerned with WTO-related matters.

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The various councils and committees are composed of representatives of all the Members. The Members have the same voting rights in these bodies. Decision-making in the WTO generally follows the previous GATT 1947 practice of consensus. This means a decision is considered to be adopted if no Member present at the meeting when the decision is taken, formally objects to the proposed decision. If voting is required, each Member has one vote, regardless of its importance in terms of international trade.

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The WTO is a "Member-driven" organization. Delegates of the Member countries participate actively in the meetings of the various committees and councils of the WTO. These meetings take place all year round at WTO headquarters in Geneva. These meetings are assisted and serviced by the staff of the Secretariat of the WTO. The WTO Secretariat is composed of a number of divisions, each of which is responsible for a certain area of work. The respective divisions service the relevant WTO bodies. The Secretariat comprises approximately 500 staff members. At the head of the Secretariat is a Director-General, appointed by the Ministerial Conference.

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Most of the WTO's Members are developing countries. The Marrakesh Declaration adopted at the close of the Uruguay Round stresses the notably active role played by developing countries in the negotiations. It also notes that this "has marked a historic step towards a more balanced and integrated global trade partnership". This active participation is reflected in the results of the negotiations. The interests of developing countries are taken into account in various ways in the WTO Agreements. Part IV of the GATT 1994 contains principles, commitments and special provisions for joint action by Members towards the development of the economies of developing country Members. In addition, the WTO Agreements often contain specific provisions for the special and differential treatment of developing countries. Longer transition periods to implement the provisions of the Agreements are also granted in many cases. Also, developing countries can benefit from technical cooperation and training provided by the Secretariat or directly by developed country Members on a bilateral basis as foreseen in the various WTO agreements.

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The Ministerial Conference is the highest body of the WTO. It is composed of representatives of all the Members and meets at least once every two years. To date, there have been five such meetings: in Singapore, Geneva, Seattle, Doha and Cancun. It is the ministerial conferences that guide the work of the WTO. The central tasks are threefold. First, to review what the WTO has been doing. Second, to assess the present situation of world trade and international relations and to identify challenges that must be met. Finally, to agree on the work programme of the WTO for the months and years ahead. This may involve the launching of a new round of multilateral trade negotiations.

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Concerns have been expressed by some WTO Members over the observance of core labour standards and their possible place in the framework of the WTO. Ministers addressed this issue during the Singapore Ministerial Conference. The Declaration from that meeting includes a paragraph on core labour standards. The Ministers declared: I quote "we renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them. We reject the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question. "

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At a meeting held in Punta de Este, Uruguay, Ministers of GATT contracting parties decided to launch a round of multilateral trade negotiations, which became known as the "Uruguay Round". This was the most important trade negotiation ever undertaken. The negotiating agenda covered a number of very important new areas, in particular trade in services and trade-related aspects of intellectual property. The Round was intended to last four years. In December 1990, however, a final agreement had not been reached. Significant disagreements remained in the area of agriculture. It took another three years for all the remaining negotiating difficulties to be solved and the Agreement Establishing the World Trade Organization was signed in Marrakesh on 15 April 1994.

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The Marrakesh Agreement Establishing the World Trade Organization, often referred to as "the WTO Agreement", embodies the results of the Uruguay Round. The Agreement defines the institutional framework, objectives and functions of the new organization. In addition, a number of important specific agreements and understandings negotiated during the Uruguay Round are also incorporated into this Agreement as Annexes.

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Before the Uruguay Round, some agreements which related to GATT 1947 had been negotiated during previous negotiating rounds. In particular, a number of agreements were negotiated during the Tokyo Round. These were in the area of non-tariff barriers. These agreements, however, were not adopted by all the parties to the GATT. They were only applied to those countries which accepted to be bound by them. In the Uruguay Round, a different approach was adopted. It was decided that the bulk of the multilateral agreements negotiated was to be accepted as a whole. The GATT, the Agreement on Agriculture, the Agreement on TradeRelated Aspects of Intellectual Property Rights, the GATS, as well as most of the other agreements negotiated during the Uruguay Round are part of this "single undertaking". On the contrary, plurilateral agreements are binding only on those Members who have accepted them.

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One of the central elements of the WTO framework is its dispute settlement mechanism. WTO Members commit themselves not to take unilateral action against perceived violation of the agreements. They do, however, commit themselves to seek recourse to the multilateral dispute settlement system and abide by its findings and recommendations. The Dispute Settlement Understanding was adopted as part of the single undertaking. It sets out the procedures to be followed for the resolution of disputes. The aim of this mechanism is to "secure a positive solution to a dispute". While building on the past GATT practice of dispute settlement, it has been considerably strengthened in comparison with its predecessor.

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The Fourth WTO Ministerial Conference was held in Doha, Qatar, in November 2001. Ministers adopted a broad work programme for the coming years. This work program is called the Doha Development Agenda. It envisages negotiations on improving market access and a variety of other challenges facing the trading system. It is called a development agenda as the work programme places the development of developing countries at the core.

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The WTO has an Internet website which contains a wealth of information about the WTO Agreements and the structure and work of the Organization. A number of WTO documents can also be downloaded directly from the website. The WTO website is located at http://www.wto.org In addition, the Information and Media Relations Division in the WTO Secretariat is available to answer questions for information from the general public and media.

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