Chapter 2

Lecture 9 Functions and structure of WTO

Functions
The WTO’s overriding objective is to help trade flow smoothly, freely and predictably. It does this by:

 Administering trade agreements

 Acts as forum for trade negotiations
 Settling trade disputes
 Reviewing national trade policies
 Assisting developing countries in trade policy issues, through technical assistance and training
programmes building the trade capacity of developing economies.
 Cooperating with other international organizations

Structure of WTO
 The WTO has 164 members, accounting for 98% of world trade. A total of 22 countries are negotiating
membership.

 The structure of the WTO is dominated by its highest authority, the Ministerial Conference, composed of
representatives of all WTO members, which is required to meet at least every two years and which can take
decisions on all matters under any of the multilateral trade agreements.
 The day-to-day work of the WTO, however, falls to a number of subsidiary bodies; principally the General
Council, also composed of all WTO members, which is required to report to the Ministerial Conference. As
well as conducting its regular work on behalf of the Ministerial Conference, the General Council convenes in
two particular forms - as the Dispute Settlement Body, to oversee the dispute settlement procedures and as
the Trade Policy Review Body to conduct regular reviews of the trade policies of individual WTO members.
 The General Council delegates responsibility to three other major bodies - namely the Councils for Trade in
Goods, Trade in Services and Trade-Related Aspects of Intellectual Property. The Council for Goods
oversees the implementation and functioning of all the agreements (Annex 1A of the WTO Agreement)
covering trade in goods, though many such agreements have their own specific overseeing bodies. The
latter two Councils have responsibility for their respective WTO agreements (Annexes 1B and 1C) and may
establish their own subsidiary bodies as necessary.
 Three other bodies are established by the Ministerial Conference and report to the General Council. The
Committee on Trade and Development is concerned with issues relating to the developing countries and,
especially, to the "least-developed" among them.
 The Committee on Balance of Payments is responsible for consultations between WTO members and
countries which take trade-restrictive measures, under Articles XII and XVIII of GATT, in order to cope with
balance-of-payments difficulties. Finally, issues relating to WTO's financing and budget are dealt with by a
Committee on Budget.
 Each of the four plurilateral agreements of the WTO - those on civil aircraft, government procurement, dairy
products and bovine meat - establish their own management bodies which are required to report to the
General Council.

Members of WTO
WTO has about 160 members which accounts for 95% of world trade. There are 25 other negotiating memberships.

Structure of WTO
1. MINISTERIAL CONFERENCE:
The topmost decision making body WTO is Ministerial Conference. It meets once in two years.
2. GENERAL COUNCIL: The second level of WTO is General Council. It consists of members, ambassadors and
heads of delegations. It meets several times a year in Geneva.
 3. OTHER COUNCILS: There are many other types of council like Goods Council, Services Council, IP Council
etc. These councils deal with specific issues.
4.

Secretariat of WTO
The secretariat of WTO is based in Geneva, Switzerland headed by Director General. The present Director General
of WTO is Roberto Azevêdo.

How WTO works?

The decisions at WTO are made by entire membership with consensus. These decisions are ratified in member
nation parliaments as well. GATT is principal rule book of WTO for trade in goods.

Trading principles under WTO

Trade without discrimination:

 MOST FAVORED NATION: If a member country of WTO grants special favor in trade to some favored country,
then all other WTO countries will be given the same favor. Thus all countries become the most favored
nation in all other countries, thereby making every country equal.

 NATIONAL TREATMENT: It means treating foreign goods and services at par with local equally by all
members of WTO