World trade organisation

World trade organisation

International organizations and movements. Their role in the promotion of

peace, global cooperation and mutual understanding

WORLD TRADE ORGANISTAION

Matveev Andrey 11 “A”

Center of Education №1816

2002

WORLD TRADE ORGANISATION

Nobody will deny if I say that in our modern world it is very important

to control the relationship between different countries. There are

different organizations nowadays. They control different aspects of our

everyday life. I would like to speak about world trade organization. It

deals with the global rules of trade between nations. Its main function is

to ensure that trade flows as smoothly, predictably and freely as possible.

First of all I would like to give some facts about the creation and

location of WTO.

Location: Geneva, Switzerland

Established: 1 January 1995

Created by: Uruguay Round negotiations (1986–94)

Membership: 134 countries (as of February 1999)

Budget: 122 million Swiss francs for 1999

Secretariat staff: 500

Head: Director-general

Functions:

• Administering WTO trade agreements

• Forum for trade negotiations

• Handling trade disputes

• Monitoring national trade policies

• Technical assistance and training for developing countries

• Cooperation with other international organizations

The World Trade Organization came into being in 1995. One of the

youngest of the international organizations, the WTO is the successor to

the General Agreement on Tariffs and Trade (GATT) established in the wake

of the Second World War. So while the WTO is still young, the multilateral

trading system that was originally set up under GATT is already 50 years

old. The system celebrated its golden jubilee in Geneva on 19 May 1998,

with many heads of state and government leaders attending. The past 50

years have seen an exceptional growth in world trade. Merchandise exports

grew on average by 6% annually. Total trade in 1997 was 14-times the level

of 1950. GATT and the WTO have helped to create a strong and prosperous

trading system contributing to unprecedented growth. The system was

developed through a series of trade negotiations, or rounds, held under

GATT. The first rounds dealt mainly with tariff reductions but later

negotiations included other areas such as anti-dumping and non-tariff

measures. The latest round—the 1986-94. Uruguay Round—led to the WTO’s

creation. The negotiations did not end there. Some continued after the end

of the Uruguay Round. In February 1997 agreement was reached on

telecommunications services, with 69 governments agreeing to wide-ranging

liberalization measures that went beyond those agreed in the Uruguay Round.

In the same year 40 governments successfully concluded negotiations for

tariff-free trade in information technology products, and 70 members

concluded a financial services deal covering more than 95% of trade in

banking, insurance, securities and financial information. At the May 1998

ministerial meeting in Geneva, WTO members agreed to study trade issues

arising from global electronic commerce. The next ministerial conference is

due to be held in the United States in late 1999. In 2000, new talks are

due to start on agriculture and services and possibly a range of other

issues.

FUNCTIONS

The WTO’s overriding objective is to help trade flow smoothly, freely,

fairly and predictably. It does this by:

• Administering trade agreements

• Acting as a forum for trade negotiations

• Settling trade disputes

• Reviewing national trade policies

• Assisting developing countries in trade policy issues, through

technical assistance and training programs

• Cooperating with other international organizations

STRUCTURE

The WTO has more than 130 members, accounting for over 90% of world

trade. Over 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 members’ parliaments. The WTO’s top level decision-making body is

the Ministerial Conference which meets at least once every two years. Below

this is the General Council (normally ambassadors and heads of delegation

in Geneva, but sometimes officials sent from members’ capitals) which meets

several times a year in the Geneva headquarters. The General Council also

meets as the Trade Policy Review Body and the Dispute Settlement Body. At

the next level, the Goods Council, Services Council and Intellectual

Property (TRIPS) Council report to the General Council. Numerous

specialized committees, working groups and working parties deal with the

individual agreements and other areas such as the environment, development,

membership applications and regional trade agreements. The first

Ministerial Conference in Singapore in 1996 added three new working groups

to this structure. They deal with the relationship between trade and

investment, the interaction between trade and competition policy and

transparency in government procurement. At the second Ministerial

Conference in Geneva in 1998 ministers decided that the WTO would also

study the area of electronic commerce, a task to be shared out among

existing councils and committees.

SECRETARIAT

The WTO Secretariat, based in Geneva, has around 500 staff and is

headed by a director-general. It does not have branch offices outside

Geneva. Since decisions are taken by the members themselves, the

Secretariat does not have the decision-making role that other international

bureaucracies are given. The Secretariat’s main duties are to supply

technical support for the various councils and committees and the

ministerial conferences, to provide technical assistance for developing

countries, to analyze world trade, and to explain WTO affairs to the public

and media.

The Secretariat also provides some forms of legal assistance in the

dispute settlement process and advises governments wishing to become

members of the WTO.

The annual budget is roughly 122 million Swiss francs. How can you

ensure that trade is as fair as possible, and as free as is practical? By

negotiating rules and abiding by them. The WTO’s rules—the agreements—are

the result of negotiations between the members. The current set were the

outcome of the 1986–94 Uruguay Round negotiations which included a major

revision of the original General Agreement on Tariffs and Trade (GATT).

GATT is now the WTO’s principal rule-book for trade in goods. The Uruguay

Round also created new rules for dealing with trade in services, relevant

aspects of intellectual property, dispute settlement, and trade policy

reviews. The complete set runs to some 30,000 pages consisting of about 60

agreements and separate commitments (called schedules) made by individual

members in specific areas such as lower customs duty rates and services

market-opening. Through these agreements, WTO members operate a non-

discriminatory trading system that spells out their rights and their

obligations. Each country receives guarantees that its exports will be

treated fairly and consistently in other. These principles appear in the

new General Agreement on Trade in Services (GATS). WTO members have also

made individual commitments under GATS stating which of their services

sectors they are willing to open to foreign competition, and how open those

markets are. countries’ markets. Each promises to do the same for imports

into its own market. The system also gives developing countries some

flexibility in implementing their commitments.

GOODS

It all began with trade in goods. From 1947 to 1994, GATT was the forum

for negotiating lower customs duty rates and other trade barriers; the text

of General Agreement spelt out important rules, particularly non-

discrimination. Since 1995, the updated GATT has become the WTO’s umbrella

agreement for trade in goods. It has annexes dealing with specific sectors

such as agriculture and textiles, and with specific issues such as state

trading, product standards, subsidies and actions taken against dumping.

SERVICES

Banks, insurance firms, telecommunications companies, tour operators,

hotel chains and transport companies looking to do business abroad can now

enjoy the same principles of freer and fairer trade that originally only

applied to trade in goods.

INTELLECTUAL PROPERTY

The WTO’s intellectual property agreement amounts to rules for trade

and investment in ideas and creativity. The rules state how copyrights,

trademarks, geographical names used to identify products, industrial

designs, integrated circuit layout-designs and undisclosed information such

as trade secrets—“intellectual property”—should be protected when trade is

involved.

DISPUTE SETTLEMENT

The WTO’s procedure for resolving trade quarrels under the Dispute

Settlement Understanding is vital for enforcing the rules and therefore for

ensuring that trade flows smoothly. Countries bring disputes to the WTO if

they think their rights under the agreements are being infringed. Judgments

by specially-appointed independent experts are based on interpretations of

the agreements and individual countries’ commitments. The system encourages

countries to settle their differences through consultation. Failing that,

they can follow a carefully mapped out, stage-by-stage procedure that

includes the possibility of a ruling by a panel of experts, and the chance

to appeal the ruling on legal grounds. Confidence in the system is borne

out by the number of cases brought to the WTO—167 cases by March 1999

compared to some 300 disputes dealt with during the entire life of GATT

(1947–94).

POLICY REVIEW

The Trade Policy Review Mechanism’s purpose is to improve transparency,

to create a greater understanding of the policies that countries are

adopting, and to assess their impact. Many members also see the reviews as

constructive feedback on their policies. All WTO members must undergo

periodic scrutiny, each review containing reports by the country concerned

and the WTO Secretariat. Over 54 members have been reviewed since the WTO

came into force.

DEVELOPMENT AND TRADE

Over three quarters of WTO members are developing or least-developed

countries. Special provisions for these members are included in all the WTO

agreements. They include longer time periods for implementing agreements

and commitments, measures to increase trading opportunities for these

countries, provisions requiring all WTO members to safeguard the trade

interests of developing countries, and support to help developing countries

build the infrastructure for WTO work, handle disputes, and implement

technical standards. In 1997, a high-level meeting on trade initiatives and

technical assistance for least-developed countries brought their concerns

to centre stage. The meeting involved six intergovernmental agencies and

resulted in an “integrated framework” to help least-developed countries

increase their ability to trade, and some additional preferential market

access agreements. A committee on trade and development, assisted by a sub-

committee on least-developed countries, looks at developing countries’

special needs. Its responsibility includes implementation of the

agreements, technical cooperation, and the increased participation of

developing countries in the global trading system

TECHNICAL ASSISTANCE AND TRAINING

The WTO organizes around 100 technical cooperation missions to

developing countries annually. It holds on average three trade policy

courses each year in Geneva for government officials. Regional seminars are

held regularly in all regions of the world with a special emphasis on

African countries. Training courses are also organized in Geneva for

officials from countries in transition from central planning to market

economies. In 1997/98, the WTO set up reference centers in over 40 trade

ministries in capitals of least-developed countries, providing computers

and internet access to enable ministry officials to keep abreast of events

in the WTO in Geneva through online access to the WTO’s immense database of

official documents and other material.