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What
is the WTO?
The
World Trade Organization (WTO) is the only global 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 goal is to help producers of goods and
services, exporters, and importers conduct their business.
Fact
File:
Location :
Geneva, Switzerland
Established : 1 January 1995 Created by : Uruguay Round negotiations (1986-94) Membership : 159 countries on 2 March 2013 Budget : 196 million Swiss francs for 2011 Secretariat staff : 640 Head : Roberto Azevêdo (Director-General)
Functions:
• Administering WTO trade agreements • Forum for trade negotiations • Handling trade disputes • Monitoring national trade policies • Technical assistance and training for developing countries • Cooperation with other international organizations |
Who
we are
There
are a number of ways of looking at the World Trade Organization. It is an
organization for trade opening. It is a forum for governments to negotiate
trade agreements. It is a place for them to settle trade disputes. It operates
a system of trade rules. Essentially, the WTO is a place where member
governments try to sort out the trade problems they face with each other.
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 open markets for trade. But the WTO is not just about opening
markets, and in some circumstances its rules support maintaining trade barriers
for example, to protect consumers or prevent the spread of disease.
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.
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.
What
we do
The
WTO is run by its member governments. All major decisions are made by the
membership as a whole, either by ministers (who usually meet at least once
every two years) or by their ambassadors or delegates (who meet regularly in
Geneva).
While
the WTO is driven by its member states, it could not function without its
Secretariat to coordinate the activities. The Secretariat employs over 600
staff and its experts lawyers, economists, statisticians and communications
experts — assist WTO members on a daily basis to ensure, among other things,
that negotiations progress smoothly, and that the rules of international trade
are correctly applied and enforced.
Trade
negotiations
The
WTO agreements cover goods, services and intellectual property. They 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. These agreements are not static; they are renegotiated from
time to time and new agreements can be added to the package. Many are now being
negotiated under the Doha Development Agenda, launched by WTO trade ministers
in Doha, Qatar, in November 2001.
Implementation and monitoring
WTO
agreements require governments to make their trade policies transparent by
notifying the WTO about laws in force and measures adopted. Various WTO
councils and committees seek to ensure that these requirements are being
followed and that WTO agreements are being properly implemented. All WTO
members must undergo periodic scrutiny of their trade policies and practices,
each review containing reports by the country concerned and the WTO
Secretariat.
Dispute settlement
The
WTO’s procedure for resolving trade quarrels under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that
trade flows smoothly. Countries bring disputes to the WTO if they think their
rights under the agreements are being infringed. Judgements by specially
appointed independent experts are based on interpretations of the agreements
and individual countries’ commitments.
Building trade capacity
WTO
agreements contain special provision for developing countries, including longer
time periods to implement agreements and commitments, measures to increase
their trading opportunities, and support to help them build their trade
capacity, to handle disputes and to implement technical standards. The WTO
organizes hundreds of technical cooperation missions to developing countries
annually. It also holds numerous courses each year in Geneva for government
officials. Aid for Trade aims to help developing countries develop the skills
and infrastructure needed to expand their trade.
Outreach
The
WTO maintains regular dialogue with non-governmental organizations,
parliamentarians, other international organizations, the media and the general
public on various aspects of the WTO and the ongoing Doha negotiations, with
the aim of enhancing cooperation and increasing awareness of WTO activities.
What we stand for
The
WTO agreements are lengthy and complex because they are legal texts covering a
wide range of activities. But a number of simple, fundamental principles run
throughout all of these documents. These principles are the foundation of the
multilateral trading system.
Non-discrimination
A
country should not discriminate between its trading partners and it should not
discriminate between its own and foreign products, services or nationals.
More open
Lowering
trade barriers is one of the most obvious ways of encouraging trade; these
barriers include customs duties (or tariffs) and measures such as import bans
or quotas that restrict quantities selectively.
Predictable and transparent
Foreign
companies, investors and governments should be confident that trade barriers
should not be raised arbitrarily. With stability and predictability, investment
is encouraged, jobs are created and consumers can fully enjoy the benefits of
competition — choice and lower prices.
More competitive
Discouraging
‘unfair’ practices, such as export subsidies and dumping products at below cost
to gain market share; the issues are complex, and the rules try to establish
what is fair or unfair, and how governments can respond, in particular by
charging additional import duties calculated to compensate for damage caused by
unfair trade.
More beneficial for less developed countries
Giving
them more time to adjust, greater flexibility and special privileges; over
three-quarters of WTO members are developing countries and countries in
transition to market economies. The WTO agreements give them transition periods
to adjust to the more unfamiliar and, perhaps, difficult WTO provisions.
Protect the environment
The
WTO’s agreements permit members to take measures to protect not only the
environment but also public health, animal health and plant health. However,
these measures must be applied in the same way to both national and foreign
businesses. In other words, members must not use environmental protection
measures as a means of disguising protectionist policies.
WTO's Trading System Principles
The
trading system should be
A
country should not discriminate between its trading partners (giving them
equally “most-favoured-nation” or MFN status); and it should not discriminate
between its own and foreign products, services or nationals (giving them
“national treatment”);
Barriers
coming down through negotiation;
Foreign
companies, investors and governments should be confident that trade barriers
(including tariffs and non-tariff barriers) should not be raised arbitrarily;
tariff rates and market-opening commitments are “bound” in the WTO;
Discouraging
“unfair” practices such as export subsidies and dumping products at below cost
to gain market share;
Giving
them more time to adjust, greater flexibility, and special privileges.
Source
: “About the WTO”, www.wto.org
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