The World Trade Organization (WTO) is an international organization designed by its founders to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1947.
The World Trade Organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalising trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986-1994).
The organization is currently endeavouring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world's population. However, the negotiation has been dogged by "disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain."
The WTO is governed by a ministerial conference, meeting every two years; a general council, which implements the conference's policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the ministerial conference. The WTO's headquarters is at the Centre William Rappard, Geneva, Switzerland.
The General Council also meets as the Trade Policy Review Body and Dispute Settlement Body.
The negotiations mandated by the Doha Declaration take place in the Trade Negotiations Committee and its subsidiaries. This now includes the negotiations on agriculture and services begun in early 2000. The TNC operates under the authority of the General Council.
Each year new chairpersons for the major WTO bodies are approved by the General Council.
What is the WTO?
- Source: UNDERSTANDING THE WTO: BASICS What is the World Trade Organization? WTO site
There are a number of ways of looking at the WTO. It’s an organization for liberalizing trade. It’s a forum for governments to negotiate trade agreements. It’s a place for them to settle trade disputes. It operates a system of trade rules. (But it’s not Superman, just in case anyone thought it could solve — or cause — all the world’s problems!)
Above all, it’s a negotiating forum … Essentially, the WTO is a place where member governments go, to try to sort out the trade problems they face with each other. The first step is to talk. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO's current work comes from the 1986-94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations, under the “Doha Development Agenda” launched in 2001.
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade. But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers — for example to protect consumers or prevent the spread of disease.
It’s a set of rules … At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground-rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.
The system’s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable side-effects — because this is important for economic development and well-being. That partly means removing obstacles. It also means ensuring that individuals, companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no sudden changes of policy. In other words, the rules have to be “transparent” and predictable.
And it helps to settle disputes … This is a third important side to the WTO’s work. Trade relations often involve conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, often need interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO agreements.
WTO rules could undermine US financial reg reform
- Source: Report: US-Initiated WTO Rules Could Undermine Regulatory Overhaul of Global Finance Democracy Now, September 29, 2009
As the G-20 meets in Pittsburgh, a new report from Public Citizen’s Global Trade Watch warns that the World Trade Organization has long advanced extreme financial deregulation under the guise of trade agreements and could undermine the current push for increasing regulation. We speak to Lori Wallach, the director of Public Citizen’s Global Trade Watch division.
JUAN GONZALEZ: World leaders from the Group of Twenty countries are expected to announce today that the G-20 will permanently replace the Group of Seven and Eight as the permanent global council for economic cooperation. The shift would give economies like China, India, Argentina, Brazil, Mexico, Indonesia, Turkey, Saudi Arabia and South Africa a greater say in global economic issues. A draft communiqué also revealed that G-20 leaders have agreed to make the International Monetary Fund more representative by increasing the voting power of the so-called developing countries, which currently only have 43 percent of votes.
Speaking on the eve of the summit Thursday, US Treasury Secretary Tim Geithner called for higher regulatory standards.
TIMOTHY GEITHNER: As you know, the United States Congress has a very aggressive schedule to legislate sweeping changes to our financial system that are going to make—provide greater protection for consumers and investors to create a more stable financial system and to try to make sure that taxpayers are no longer on the hook in the future to bear the burdens of financial crises. But we can’t do this alone. If we continue to allow risk and leverage to migrate where standards are weakest, the entire US global financial system will be less stable in the future. We need to see competition for stronger standards, not weaker standards.
JUAN GONZALEZ: Shortly before leaving for the G-20, German Chancellor Angela Merkel urged her colleagues at the forum to focus on financial regulation.
CHANCELLOR ANGELA MERKEL: [translated] Pittsburgh will be decisive in determining whether the subject of financial market regulation continues to be a central issue. For us, it is the most important subject at the meeting.
JUAN GONZALEZ: How far will the G-20 go on the regulation of financial markets? Well, a draft communiqué from the G-20 also suggests an effort to conclude the long-running world trade talks in Doha as quickly as possible. A report from Public Citizen’s Global Trade Watch warns that the World Trade Organization has long advanced extreme financial deregulation under the guise of trade agreements and could undermine the current push for increasing regulation. For more on this, we’re joined from Pittsburgh by Lori Wallach, the director of Public Citizen’s Global Trade Watch division. Welcome to Democracy Now!, Lori.
LORI WALLACH: Good morning.
JUAN GONZALEZ: Well, tell us about your sense of what will happen in terms of financial regulation.
LORI WALLACH: There’s an incredible contradiction, where the summit communiqué is going to, on one hand, talk about regulating finance, and at the same time, they’re going to talk about adopting the Doha WTO expansion, and a huge part of that agreement is deregulating finance.
And the problem is that the G-20 commitments aren’t binding. It’s a commitment of faith on the countries about what they’re going to do domestically. But the WTO rules are very binding and enforceable by sanctions. And so, it’s hard to know if it’s ignorance or it’s cynicism, but if the Doha round goes into place, all of the world’s countries will have a commitment not only to keep in place the existing WTO deregulation dictates on finance, but to deregulate further, right in the midst of what seems to be a global commitment to re-regulate.
JUAN GONZALEZ: Now, is there any—among the countries now that are going to be getting increased attention, in terms of the G-20’s growing role now in world economic affairs, are there any countries, specifically, that are trying to lead a fight for a greater regulation?
LORI WALLACH: Well, see, this is the most peculiar aspect of it. The European Union, as you just mentioned, Angela Merkel, among others, have been pushing for more regulation, and in fact they want the G-20 to have a—to establish a global floor of regulation. The US hasn’t been for that. It’s not going to be in this communiqué, but they’ve really been pushing. But simultaneously, it’s the European Union that is the major instigator of deregulation. And so, the big development is we finally were able to get documents that actually explain what the plan is for the WTO Doha round, and it’s the European Union that’s been pushing the worst of it. I mean, they literally want a provision that is a standstill, a freeze in place, on regulation, while simultaneously they’re calling for re-regulation. You can’t have it both ways.
Pre-WTO legal texts
- Source: Pre-WTO legal texts WTO site
In the period from 1947 to 1986 there were a number of agreements which developed the basis for international trade relations. The original General Agreement on Tariffs and Trade, which incorporated relevant sections of the Havana Charter, was negotiated in 1947 and came into force in 1948. Subsequent years saw a series of eight negotiating rounds under the GATT, until the launch of the Uruguay Round in 1986.
- What’s on the WTO website WTO site