World Trade Organisations (WTO)

WTO was created on 1 January 1995 which marked the biggest reform of international trade since after the second world war. WTO is simply a place where member states go, to try to sort out the trade problems they face with each other. Negotiations take place. The bulk of the WTO's current work comes from the 1986 - 1994 negotiations called the Urugray Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT).

There is a process of binding in the GATT. WTO system. When a tariff rate is 'bound', the country imposing the tariff agrees not to raise the rate in the future. At present, almost all tariff rates in developed countries are bound, as are about 3/4 of the rates in developing countries.

The WTO replaced GATT as an international organisation but the General Agreement still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations. Wto is an organisation for liberalising trade. It's a forum for trade disputes. It operated a system off trade rules. 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 negotiation have helped to liberalise trade.
At its heart are the WTO agreement negotiation and signed by the bulk of the world's trading nation. These documents provide the legal ground - rules for international commerce. These are essentially contracts binding, governments to respect their trade policies within agreed limits.

The system's  purpose is to help trade flow as freely as possible. These rule have to be 'transparent' and predictable. this is the third important side to WTO's work. Trade relations often involve conflicting interests. Agreements, including those pain stakingly 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 negotiation.

WTO structure

The WTO has about 150 members, accounting for about 95% of world trade. Around 30 others are negotiating membership. Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO and was extremely rare under the WTO's predecessor, GATT. The WTO's agreements have been ratified in all member's parliaments.

The WTO's top level decision making body is the Ministerial Conference composed of one representative from each WTO member state. It meets at least once every 2 years and ecide any member of issues under a growing list of multilateral trade agreement. However the admin work of the WTO (the bulk of its work) is performed by subsidiary bodies. Of these, the principal one is the General council reparts to the Ministerial conference.

The Meeting of the General council take two forms: the Dispute settlement body; which oversees the procedures for dispute settlement, and the Trade Policy Review Body which constructs regular reviews of the trade policies of WTO member states.

Under the GATT, a complaint by one member that another had engaged in unfair trade practices  went through a process called 'dispute resolution' or 'dispute settlement'. A panel of three independent legal experts considered arguments from both sides and then issued a ruling. The offending nation could vote against implementation and block the panel's ruling. Many countries including the US, simply ignored GATT ruling. The WTO charter avoided this problem by requiring only a consensus. In the WTO, the consensus must be to reject the decision of the panel (called negative consensus), The 'negative consensus' effectively eliminates a veto by the offending nation.

The future of the WTO

Its membership is broad based and is steadily increasing the trade sectors under negotiation. If progress filters at the multinational level, regional trading groups are almost certain to develop their own standards competing with the WTO.