Overview of the WTO
The World Trade Organisation (WTO)
is the only global international organization dealing with the rules of
trade between nations. At its heart are the WTO agreements,
negotiated and signed by the bulk of the world’s trading
nations and ratified in their parliaments. The goal is to
help producers of goods and services, exporters, and importers
conduct their business.
Principles
The key principle of the
World Trade Organisation is non-discrimination, ensuring
that products from different countries are treated the same
way.
The WTO is a member-driven organisation which works on a consensus
basis, ensuring that all Members have an equal voice.
As an international organisation it has a sound legal basis with
all WTO members being accountable, having ratified the WTO
Agreements. These agreements are contracts, guaranteeing
member countries important trade rights. They also bind
governments to keep their trade policies within agreed limits
to everybody’s benefit.
Functions
As well as acting as a forum for trade negotiations, the WTO provides
an arbitration service for countries embroiled in trade
disputes. For details of the dispute settlement process,
see the WTO Rules and Dispute
Settlement page.
History
In 1995, the WTO was established to succeed the General Agreement
on Tariffs and Trade (GATT). The GATT was formed in
1948 as a ‘provisional’ instrument initially intended to
pave the way to an International Trade Organisation (ITO).
However, the Havana Charter, which would have established
the ITO, was never ratified and the GATT remained the only
multilateral instrument governing international trade.
An informal organisation was built around the GATT to discuss trade-related
issues and negotiate further liberalisation. Taking place
in ‘rounds’, these negotiations at first concentrated on
lowering tariffs before moving on to additional issues such
as subsidies, anti-dumping and non-tariff measures.
The eighth trade round - the Uruguay Round - ran from 1986-94 and
was the most extensive of all, covering trade in goods,
services, and intellectual property and establishing the
WTO as a permanent organisation.
Doha Development Agenda
The current round of negotiations, the Doha Development Agenda (DDA)
began in 2001. This includes negotiations on agriculture,
Non Agricultural Market Access (NAMA), trade and environment,
trade facilitation, services and Special and Differential
Treatment for developing countries addressing, for example,
the difficulties they face in implementing WTO agreements.
The next major milestone in the Round is the Ministerial
Conference in Hong Kong, December 2005.
Membership
The WTO currently has 149 member countries, with 32 observer governments.
A list of WTO members is available from the WTO website.
For a country to accede
to the WTO, a working party is formed which examines all
aspects of the prospective member’s trade and economic policies
that have a bearing on WTO agreements, to ensure their compatibility
with the obligations of membership. There are also detailed
negotiations over the market access guarantees the acceding
country can offer. Once the terms of accessions have been
finalised, they are presented to the WTO General Council
or the Ministerial Conference. If a two-thirds majority
of WTO members vote in favour, the applicant is free to
sign the protocol and to accede to the organization. In
some cases, the country’s own parliament or legislature
has to ratify the agreement before membership is complete.
UK membership
Although the UK is
a member of the WTO in its own right, for all practical
purposes we work through our membership of the European
Union (EU), as required by the Common Commercial Policy
of the European Community (EC). The most recent comprehensive
statement of EU policy can be found at the Commission website.
Liz Lalley
Tel: 020 7215 6029
Fax: 020 7215 2235
Email: liz.lalley@dti.gsi.gov.uk
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