The World Trade Organization (WTO) is an intergovernmental organization established on January 1, 1995, replacing the earlier General Agreement on Tariffs and Trade (GATT). It is an international organisation headquartered in Geneva, Switzerland dealing with the international rules of trade between nations. WTO is run by its member governments of over 160 countries representing 98 per cent of world trade. To join the WTO, a government has to bring its economic and trade policies in line with WTO rules and negotiate its terms of entry with the WTO membership.
The primary purpose of the WTO is to open trade for the benefit of all. Several simple, fundamental principles form the foundation of the multilateral trading system. The WTO approaches are built on five principles namely non-discrimination, reciprocity, binding and enforceable commitments, transparency, and safety values.
While the WTO replaced GATT as an international organisation, the General Agreement still exists as the WTO’s umbrella treaty for trade in goods, updated under the Uruguay Round negotiations. The General Agreement on Trade in Services of the World Trade Organization (WTO), commonly known as the GATS, established a multilateral framework of rules and principles for trade in services, a large and fast-growing segment of world trade.
The core objective of WTO is setting trade rules mandated by its members. 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 in Geneva). The WTO has many other roles. It operates a global system of trade rules, acts as a forum for negotiating trade agreements, settles trade disputes between its members, and supports the needs of developing countries.
The WTO’s top decision-making body is the Ministerial Conference. Below this are the General Council and various other councils and committees. All major decisions are made by the WTO’s member governments, either by ministers (who usually meet at least every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities. The agreements deal with agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property, and much more. However several simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system.
“Special and differential treatment” provisions:
WTO Agreements contain provisions which give developing countries special rights. These are called “special and differential treatment” provisions. At the 4th WTO Ministerial Conference member governments agreed that all special and differential treatment provisions are an integral part of the WTO agreements and that these provisions should be reviewed to strengthen them and make them more effective and operational. The 4th WTO Ministerial Conference member governments also mandated that the Committee on Trade and Development examine these special and differential treatment provisions and consider the legal and practical implications of making mandatory those which are currently non-binding. In addition, the Committee is to consider ways in which developing countries, particularly the LDCs, may be assisted to make best use of special and differential treatment. The Bali Ministerial Conference in December 2013 established a mechanism to review and analyse the implementation of special and differential treatment provisions.
The special provisions include:
- longer periods for implementing Agreements and commitments,
- measures to increase trading opportunities for developing countries,
- provisions requiring all WTO members to safeguard the trade interests of developing countries,
- support to help developing countries build the capacity to carry out WTO work, handle disputes, and implement technical standards, and;
- Provisions related to least-developed country (LDC) Members.
Waiver from main WTO rules:
Despite legal provisions stated unambiguously in WTO agreements, actions in favour of developing countries, individually or as a group, may also be taken under “waivers” from the main WTO rules. These waivers are granted by the General Council according to procedures set out in Article IX:3 of the Agreement Establishing the WTO..
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