The World Trade Organization (WTO) is the only international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The fundamental goal of the WTO, as set out in the organization’s founding agreement, is to use trade as a means to improve people’s living standards, create better jobs and promote sustainable development.
The WTO operates the global system of trade rules and helps developing countries improve their capacity to trade. It also provides a forum for its members to negotiate trade agreements and to resolve the trade problems they face with each other. The overall objective of the WTO is to help its members use trade as a means to raise living standards, create jobs and improve people’s lives.
The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities. But certain simple, fundamental principles run throughout all of these documents and form the foundations of the multilateral trading system.
The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly at the WTO’s headquarters in Geneva). Decisions are normally taken by consensus.
The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. The WTO also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application.
The current body of trade agreements comprising the WTO consists of 16 different multilateral agreements (to which all WTO members are parties) and two different plurilateral agreements (to which only some WTO members are parties).
Over the past 60 years, the WTO, which was established in 1995, and its predecessor organization the GATT have helped to create a strong and prosperous international trading system, thereby contributing to unprecedented global economic growth.
The WTO currently has 166 members, of which 117 are developing countries or separate customs territories. WTO activities are supported by a Secretariat of some 700 staff, led by the WTO Director-General. The Secretariat is located in Geneva, Switzerland, and has an annual budget of approximately CHF 200 million. The three official languages of the WTO are English, French and Spanish.
Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the organization’s business in the intervals between Ministerial Conferences.
Both of these bodies comprise all members. Specialised subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, administer and monitor the implementation by members of the various WTO agreements.
More specifically, the WTO’s main activities are:
- negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade) and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies, product standards, etc.)
- administering and monitoring the application of the WTO’s agreed rules for trade in goods, trade in services, and trade-related intellectual property rights
- monitoring and reviewing the trade policies of our members, as well as ensuring transparency of regional and bilateral trade agreements
- settling disputes among our members regarding the interpretation and application of the agreements
- building capacity of developing country government officials in international trade matters
- assisting the process of accession of some 30 countries who are not yet members of the organization
- conducting economic research and collecting and disseminating trade data in support of the WTO’s other main activities
- explaining to and educating the public about the WTO, its mission and its activities.
The WTO’s founding and guiding principles remain the pursuit of open borders, the guarantee of most-favoured-nation principle and non-discriminatory treatment by and among members, and a commitment to transparency in the conduct of its activities.
The opening of national markets to international trade, with justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable development, raise people’s welfare, reduce poverty, and foster peace and stability. At the same time, such market opening must be accompanied by sound domestic and international policies that contribute to economic growth and development according to each member’s needs and aspirations.
Membership
The WTO has 166 members, accounting for 98% of world trade. All members have joined the system as a result of negotiation and therefore membership means a balance of rights and obligations. Over 20 countries are negotiating to join the organization.
How the organization is structured
Unlike some other international organizations, such as the World Bank and the International Monetary Fund, power is not delegated to a board of directors or the organization’s head.
The WTO’s main decision-making body is the Ministerial Conference, which meets usually every two years. Below this is the General Council, which meets several times a year in Geneva.
The General Council acts on behalf of the Ministerial Conference in between ministerial conferences. It meets as the Dispute Settlement Body to oversee procedures for settling disputes between members and as the Trade Policy Review Body to analyse members’ trade policies and practices.
Numerous councils, committees, working groups and working parties deal with the individual WTO agreements and other specific issues, such as the environment, development and membership applications.
Source: World Trade Organization
