World Trade Organisation (WTO), History, Functions and Significance

World Trade Organisation (WTO)

The World Trade Organisation (WTO) is a global organisation founded in 1995 to regulate and promote international trade. The World Trade Organisation (WTO) is the successor to the 1947 General Agreement on Tariffs and Trade (GATT). The World Trade Organisation is headquartered in Geneva, Switzerland. The World Trade Organisation (WTO) has 164 members (including the European Union) and 23 observer governments (like Iran, Iraq, Bhutan, Libya etc).

WTO is an organisation in charge of trade liberalisation. It is a forum for various governments to negotiate trade agreements. It is a venue for the resolution of commercial disputes and has a set of trade rules in place. One of the most important aspects is that it is a forum where results are announced after extensive negotiations. Essentially, the WTO is a place where governments that are members go to resolve trade disputes with one another. The first step is to communicate. Negotiations gave birth to the WTO, and everything the WTO does is the result of negotiations. The majority of the WTO’s current work stems from the Uruguay Round negotiations, which took place between 1986 and 1994.

The negotiations aided in the liberalisation of trade in countries that faced trade barriers and desired to lower them. However, the World Trade Organisation is more than just about trade liberalisation, and in some cases, its rules support trade barriers—for example, to protect consumers.

World Trade Organisation (WTO): History

The World Trade Organisation (WTO) began operations on January 1, 1995, but its trading system dates back more than a century. Since 1948, the General Agreement on Tariffs and Trade (GATT) has established the system’s rules. (The second WTO ministerial meeting, held in Geneva in May 1998, included a commemoration of the system’s 50th anniversary). It didn’t take long for the General Agreement to give birth to an unofficial, still-existing international organisation known colloquially as GATT.

GATT evolved through several rounds of negotiations. The last round of the General Agreement on Tariffs and Trade (GATT) took place in 1986 and lasted until 1994. The Uruguay Round was the result of this, and it resulted in the formation of the World Trade Organisation (WTO). While GATT primarily dealt with trade in goods, the WTO and its agreements could cover trade in services as well as other intellectual property such as trade creations, designs, and inventions.

The World Trade Organisation has 164 members and 23 observer governments. In July 2016, Afghanistan became the 164th member. In addition to states, the European Union exists, and each EU country is a member in its own right.

World Trade Organisation Headquarters

The World Trade Organisation (WTO) is headquartered in Geneva, Switzerland. The WTO is housed in the Centre William Rappard, which is named after the first Director-General of the GATT, the WTO’s predecessor. The structure, which was completed in 1927, was originally intended to house the International Labour Organisation (ILO). It was later chosen as the headquarters of the GATT and, later, the World Trade Organisation when they were established in 1995.

The Centre William Rappard building is a landmark in Geneva, located near the shores of Lake Geneva. It houses the offices of the WTO’s Director-General and other senior officials, as well as the organisation’s various divisions and departments. The building also serves as a venue for various World Trade Organisation and member country meetings and conferences.

Director General of the World Trade Organisation

The very first Director-General of the GATT, the WTO’s predecessor, was William Rappard. Ngozi Okonjo-Iweala is the current Director-General of the World Trade Organisation (WTO). She took over as CEO on March 1, 2021, becoming the organisation’s first female and African leader.

Nigerian economist Ngozi Okonjo-Iweala previously served as Finance Minister and later as Foreign Affairs Minister. She was also the World Bank’s Managing Director from 2007 to 2011. Okonjo-Iweala studied economics and development and is well-known for her knowledge of international trade and finance.

As WTO Director-General, Okonjo-Iweala is in charge of leading the organisation’s efforts to promote international trade, negotiate trade agreements, and resolve disputes among member countries. She faces numerous challenges in her role, including dealing with the effects of the COVID-19 pandemic on international trade, promoting economic development in developing countries, and addressing critics’ claims that the WTO primarily benefits wealthy nations at the expense of poorer ones.

Functions of WTO

The World Trade Organisation operates on several key principles, including nondiscrimination, transparency, predictability, and the promotion of fair competition. The WTO’s main agreements cover goods, services, and intellectual property rights, and are intended to help businesses around the world compete on a level playing field. The World Trade Organisation’s (WTO) primary functions are as follows:

Trade Agreement Administration

The World Trade Organisation (WTO) oversees the implementation and enforcement of international trade agreements negotiated among its member countries. These treaties address a wide range of issues, including goods, services, intellectual property, and trade-related investment measures.

Providing a Forum for Trade Negotiations

The World Trade Organisation (WTO) provides a platform for member countries to negotiate new trade agreements as well as discuss and resolve issues concerning international trade.

Monitoring National Trade Policies

The WTO monitors its member countries’ trade policies and practices to ensure that they comply with international trade rules and regulations.

Technical Assistance and Training

The World Trade Organisation provides technical assistance and training to member countries in order to help them develop their trade capacity, including by improving their ability to participate in international trade negotiations and to implement and enforce international trade agreements.

Dispute Resolution

The WTO has a dispute settlement mechanism that allows member countries to bring international trade disputes before a neutral body for resolution.

Cooperation with other International Organisations

To promote international economic cooperation and development, the WTO collaborates closely with other international organisations such as the United Nations and the International Monetary Fund.

The WTO’s ultimate goal is to promote free and open trade among member countries, as well as to ensure that international trade is conducted fairly and transparently. By doing so, the WTO hopes to promote global economic growth, development, and job creation.

WTO Ministerial Conferences

The World Trade Organisation’s highest decision-making body is the Ministerial Conference (WTO). It is held every two years and brings trade ministers from all WTO member countries together to discuss and make decisions on a wide range of international trade issues. The Ministerial Conference is in charge of determining the WTO’s overall direction, as well as approving new trade agreements and negotiating mandates. Many high-profile and contentious trade negotiations have taken place at the Ministerial Conferences, including the Doha Development Agenda negotiations, which began in 2001 and have yet to be completed.

The conferences have also been the site of large-scale protests by civil society organisations criticising WTO policies and advocating for greater transparency and public participation in trade negotiations.

The most recent Ministerial Conference, held in Geneva in November 2021, addressed a variety of issues, including COVID-19 and the trade response, fisheries subsidies, and agriculture. The conference also saw the appointment of Ngozi Okonjo-Iweala as the World Trade Organisation’s first African and first female Director-General.

Here is a table summarising the dates and locations of the Ministerial Conferences of the World Trade Organisation (WTO):

The MC 12th was postponed due to the COVID-19 pandemic and was to be held in Nur-Sultan, Kazakhstan, in 2021. The 13th World Trade Organisation (WTO) Ministerial Conference (MC13) will be held in Abu Dhabi, United Arab Emirates (UAE), during the week of February 26th, 2024.

Dispute Settlement of the World Trade Organisation

WTO is an international organisation that also handles Dispute Resolution. When a member country fails to comply with WTO rules, the member country will approach the WTO’s dispute settlement body. All members are encouraged to settle disputes through consultation or, if that fails, through a panel.

The appointed panel will distribute the outcome of the dispute settlement to WTO members, who may choose to reject the ruling. If the ruling is upheld, the member country that violated the rules is required to change its rules under the WTO Agreement. If this is not done, the complaining country and the violating country may reach an agreement on mutually acceptable compensation, failing which the complaining country may retaliate appropriately.

World Trade Organisation (WTO): Criticism

The World Trade Organisation (WTO) has faced criticism from a variety of groups, including the following:

Lack of Transparency

Critics claim that the WTO’s decision-making processes are opaque and undemocratic and that the organisation does not allow for enough public input or scrutiny.

Unequal Treatment of Developing Countries

Some critics argue that the WTO’s rules and policies disproportionately benefit wealthy countries at the expense of developing countries and that the organisation does not do enough to promote equitable and sustainable economic development.

Negative Effects on Labour and the Environment

Critics argue that the WTO’s emphasis on free trade and deregulation has resulted in a race to the bottom on labour and environmental standards and that the organization’s policies have contributed to worker exploitation and natural resource depletion. Negotiations have stalled for years due to disagreements between member countries, according to some critics.

Bias Towards Corporations

Critics claim that large corporations and their lobbyists heavily influence WTO policies and rules and that the organisation prioritises corporate interests over the needs and concerns of ordinary citizens.

Critics also point out that the World Trade Organisation (WTO) has been the site of numerous large-scale protests by civil society organisations calling for greater transparency, accountability, and democratic participation in international trade negotiations. Despite these criticisms, the World Trade Organisation (WTO) remains an important forum for international trade negotiations and the promotion of economic development and growth.

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