Table of Contents

The World Trade Organization: Features, Structures, Objective and Function of the WTO...........2
1.

Introduction:.............................................................................................................................2

2.

What is the World Trade Organization?...................................................................................2

3.

WTO: The Beginnings/ History:..............................................................................................2

4.

Fact File of WTO:....................................................................................................................3

5.

Features of the WTO:...............................................................................................................3

6.

Structure of the WTO:..............................................................................................................4

7.

Objectives:................................................................................................................................5

8.

Functions:.................................................................................................................................6

9.

WTO Ministerial Conference:..................................................................................................6

10.

WTO Agreements:................................................................................................................6

(a) Goods:.....................................................................................................................................7
(b) Services:.................................................................................................................................7
(c) Intellectual Property:..............................................................................................................8
(d) Dispute Settlement:................................................................................................................8
(e) Policy Review:........................................................................................................................8

The World Trade Organization: Features, Structure, Objectives
Functions and Agreements of the WTO
Page
1

 It was the outcome of the lengthy (1986-1994) Uruguay round of GATT negotiations.” 3. and importers conduct their business.1.  It extended GATT in two major ways. WTO: The Beginnings/ History:  The World Trade Organization (WTO) came into being on January 1st 1995. Introduction: The World Trade Organization (WTO) came into being on January 1st 1995 under the Marrakesh Agreement that places the global trading system on a firm constitutional footing with the evolution of international economic legislation resulted through the Uruguay Round of GATT negotiations. the WTO completely replaced the GATT. In January 1995. negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.  First GATT became only one of the three major trade agreements that went into the WTO (the other two being the General Agreement on Trade in Services (GATS) and the agreements on Trade Related Aspects of Intellectual Property Rights (TRIPS)) Page 2 . A remarkable feature of the Uruguay Round was that it paved the way for further liberalization of international trade with the fundamental shift from the negotiation approach to the institutional framework envisaged through transition from GATT to WTO Agreement. At its heart are the WTO agreements. The membership of the WTO increased from 77 in 1995 to 127 by the end of 1996. What is the World Trade Organization? “The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The goal is to help producers of goods and services. exporters. The GATT 1947 and the WTO co-existed for the transitional period of one year in 1994. 2.  The WTO was essentially an extension of GATT. however.

Features of the WTO: Some of the most important salient features of world trade organisation are as follows:  Non-Discrimination: This is the most important principle on which WTO has been founded. Fact File of WTO: 5.  Stability in the Trading System: Under WTO agreements member states are committed not to raise tariff and non-tariff trade barriers arbitrarily. In fact. that is. each member state of WTO will treat every other member state equally as the most favoured nation doing trade. Page 3 . This provides stability and predictability to the trading system. market access is ensured by abolishing non-tariff barriers as well as by reducing tariffs.  Free Trade: WTO is to promote free trade among nations through negotiations. No discrimination will be done by a member of state between different trading states who are also members of WTO. All trading partners will be granted the most favoured nation (MFN) status. For this purpose WTO has to work for progressive liberalisation of trade through reduction in tariffs and removal of quantitative restrictions on imports by member countries.  Market Access Commitment: WTO agreements which seek to establish multilateral trading system require the member countries to undertake market access commitment on reciprocity basis.4.

The Ministerial Conference (MC) is at the top of the structural organization of the WTO. The General Council (GC) is composed of the representatives of all the members. It also acts as the Dispute Settlement Body as well as the Page 4 .  Promotion of Fair Competition: Rules such as Most Favoured Nation (MFN) treatment to all trading parties. Structure of the WTO: The organizational structure of the WTO. It is the real engine of the WTO which acts on behalf of the MC. Wider Range of Issues: Another important feature of WTO is that it will deal with not only issues and disputes relating to trade in goods but also the whole range of issues concerning trade in services and intellectual property rights. It is the supreme governing body which takes ultimate decisions on all matters. Ministers of Trade) all the member countries. It is constituted by representatives of (usually. WTO agreement provides for discouraging unfair competitive practices such as export subsidies and dumping 6. Besides this. as with nationals ensure fair competition among trading countries.

: the Council for Trade in Services and the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) operating under the GC.Trade Policy Review Body.  To accept the concept of sustainable development.  To ensure full employment and broad increase in effective demand. viz. the Committee on Balance of Payments Restrictions (CBOPR). There are three councils. 7.  To enlarge production and trade of goods..  To protect the environment. The administration of the WTO is conducted by the Secretariat which is headed by the Director General (DG) appointed by the MC for the tenure of four years.  To provide a platform to member countries to decide future strategies related to trade and tariff. there are three committees. He is assisted by the four Deputy Directors from different member countries. Functions: The main functions of WTO are discussed below:  To implement rules and provisions related to trade policy review mechanism. Finance and Administration (CF A) which execute the functions assigned to them by e WTO Agreement and the GC. Objectives: The important objectives of WTO are:  To improve the standard of living of people in the member countries. the Committee on Trade and Development (CTD). The annual budget estimates and financial statement of the WTO are presented by the DG to the CBFA for review and recommendations for the final approval by the GC. and the Committee on Budget. Page 5 .  To increase the trade of services. 8.  To ensure optimum utilization of world resources. viz. These councils with their subsidiary bodies carry out their specific responsibilities further.

GATT is now the WTO’s principal rule-book for trade in goods. WTO Agreements: The WTO’s rule and the agreements are the result of negotiations between the members. 9. relevant aspects of intellectual property. WTO Ministerial Conference: 10. administration and operation of multilateral and bilateral agreements of the world trade. Page 6 . dispute settlement and trade policy reviews.  To assist international organizations such as. The Uruguay Round also created new rules for dealing with trade in services.  To ensure the optimum use of world resources. IMF and IBRD for establishing coherence in Universal Economic Policy determination. The current sets were the outcome to the 1986-93 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATI).  To administer the rules and processes related to dispute settlement. To provide facilities for implementation.

telecommunication companies. rules. (a) Goods: It all began with trade in goods. From 1947 to 1994. tour operators. hotel chains and transport companies looking to do business abroad can now enjoy the same principles of free and fair that originally only applied to trade in goods. they are willing to open for foreign competition and how open those markets are. (b) Services: Banks. The system also gives developing countries some flexibility in implementing their commitments. WTO members operate a non-discriminatory trading system that spells out their rights and their obligations. These principles appear in the new General Agreement on Trade in Services (GATS). state trading. insurance firms. GATT was the forum for negotiating lower customs duty rates and other trade barriers. WTO members have also made individual commitments under GATS stating which of their services sectors. It has annexes dealing with specific sectors such as.The complete set runs to some 30. particularly non-discriminations since 1995. lower customs duty rates and services market-opening. Each country receives guarantees that its exports will be treated fairly and consistently in other countries’ markets. Each country promises to do the same for imports into its own market. agriculture and textiles and with specific issues such as. the text of the General Agreement spelt out important. trademarks. subsidies and action taken against dumping. product standards. (c) Intellectual Property: The WTO’s intellectual property agreement amounts to rules for trade and investment in ideas and creativity.000 pages consisting of about 30 agreements and separate commitments (called schedules) made by individual members in specific areas such as. The rules state how copyrights. Through these agreements. patents. geographical names used to identify Page 7 . the updated GATT has become the WTO s umbrella agreement for trade in goods.

for ensuring that trade flows smoothly. integrated circuit layout designs and undisclosed information such as trade secrets “intellectual property” should be protected when trade is involved. industrial designs. The system encourages countries to settle their differences through consultation. Many members also see the reviews as constructive feedback on their policies. each review containing reports by the country concerned and the WTO Secretariat. Judgments by specially appointed independent experts are based on interpretations of the agreements and individual countries’ commitments. they can follow a carefully mapped out. (d) Dispute Settlement: The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore. stage-by-stage procedure that includes the possibility of the ruling by a panel of experts and the chance to appeal the ruling on legal grounds. to create a greater understanding of the policies that countries are adopting and to assess their impact. (e) Policy Review: The Trade Policy Review Mechanism’s purpose is to improve transparency. Failing that. Confidence in the system is Bourne out by the number of cases brought to the WTO. around 300 cases in eight years compared to the 300 disputes dealt with during the entire life of GATT (1947-94). Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. All WTO members must undergo periodic scrutiny.products. Page 8 .