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World Trade Organization The World Trade Organization (WTO), established January 1, 1995, is the central body of the multilateral trading system. Based in Geneva, the WTO was established as a result of the Uruguay Round of multilateral trade negotiations (1986 - 1994), replacing the secretariat of the General Agreement on Tariffs and Trade (GATT). One of the WTO’s purposes is to oversee the administration and functioning of the multilateral trade agreements, including the dispute settlement system. The Organization also serves as a forum for future trade negotiations and rule making. As of December 11, 2005 the WTO had 149 members. An additional 30 countries are seeking membership. Once these countries join, the organization will cover practically all world trade. The entire membership typically makes decisions by consensus. All members’ parliaments have ratified the WTO agreements. The Ministerial Conference, held at least once every two years, is the WTO’s top level decision-making body. The General Council (normally ambassadors and heads of delegations in Geneva, but sometimes officials are sent from members’ capitals), reports to the Ministerial Conference. The Council meets several times a year at the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. The Goods Council, the Services Council and the Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) report to the General Council, as do numerous specialized committees, working groups and working parties dealing with the individual agreements and other areas such as the environment, development, membership applications, and regional trade agreements. The WTO Secretariat, based in Geneva, has about 630 staff and is headed by a director-general, Pascal Lamy. An important feature of the WTO system is the Appellate Body. It can review legal matters and interpretations covered by dispute panel reports. An individual panel report is adopted unless all members of the Dispute Settlement Body agree not to adopt it. The Trade Policy Review Body acts as a "watchdog" over international trade. It examines the trade actions and policies of individual members and keeps them informed of changes in each other's trade policies. The multilateral trading system was developed through a series of trade negotiations, or rounds, held under the General Agreement on Tariffs and Trade (GATT). The first rounds dealt mainly with tariff reductions. Later negotiations included other areas, such as anti-dumping and non-tariff measures. The last complete round — the 1986–94 Uruguay Round — led to the WTO’s creation. The negotiations did not end there. To date, 63 members have successfully concluded negotiations for tariff-free trade in information technology products, and 70 members have negotiated a financial services deal covering more than 95 per cent of trade in banking, insurance, securities and financial information. In February 1997, agreement was reached on telecommunications services, with 55 members agreeing to wide-ranging liberalization measures that went beyond those agreed to in the Uruguay Round. The "Doha Development Round" of trade negotiations was launched in 2001. The Declaration specifically recognized that most of the members of the WTO are developing countries, whose needs and interests will be at the heart of the adopted Work Program. Accordingly, negotiations under the Doha Development Round aimed to cover:
A WTO Ministerial Conference, in Cancun, Mexico in September, 2003, failed to achieve consensus, particularly on the so-called “Singapore issues” – trade and investment, trade and competition, policy, transparency in government procurement and trade facilitation. Post-Cancun, all of the Singapore issues, except trade facilitation, have been dropped from the negotiations. The Doha Development agenda now focuses on the following issues: · Agriculture · Non-agriculture market access · Services · Development issues · Trade facilitation Negotiations on each of these issues are ongoing. The WTO Ministerial Conference in Hong Kong (December 2005) is a critical point in the Doha Development Round, although negotiations are expected to continue into 2006. THE AGREEMENTS, An Overview The WTO Agreements cover trade in goods, services and intellectual property. There are also provisions on investment in relation to goods and plurilateral agreements for civil aircraft and government procurement. The agreements spell out the principles of liberalization, and the permitted exceptions. They include individual countries' commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the Trade Policy Review Body on countries' trade policies. The legal text of the Uruguay Round consists of about 60 agreements, annexes, decisions and understandings. The agreements fall into a relatively simple structure. The agreements for the two largest areas of trade - goods and services - share a common three-part outline, even though the detail is sometimes quite different. 1. They start with broad principles and rules: the General Agreement on Tariffs and Trade (GATT) (for goods), and the General Agreement on Trade in Services (GATS). The agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) also falls into this category although at present it has no additional parts. [please fix spacing here] 2. Then come extra agreements and annexes dealing with the special requirements of specific sectors or issues. The 'extra' goods agreements (under the GATT) deal with: agriculture, health regulations for farm products, textiles and clothing, product standards, investment measures, anti-dumping measures, customs valuation methods, pre-shipment inspection, rules of origin, import licensing, subsidies and counter-measures and safeguards. The annexes on services (under the GATS) deal with: movement of natural persons, air transport, financial services, shipping and telecommunications. 3. Finally, there are the detailed and lengthy schedules (or lists) of commitments made by individual countries allowing specific foreign products or service-providers access to their markets. For GATT, these take the form of binding commitments on tariffs for goods in general, and combinations of tariffs and quotas for some agricultural goods. For GATS, the commitments state how much access foreign service providers are allowed for specific sectors, and they include lists of types of services where individual countries say they are not applying the "most-favoured-nation" principle of non-discrimination. There are additional processes around this structure, including the trade policy review mechanism, the dispute settlement understanding, and the plurilateral agreements. Related Links
last updated December 2005 |
