Definition: The General Agreement on Tariffs and Trade was the first worldwide multilateral free trade agreement.

It was
in effect from June 30, 1948 until January 1, 1995. It ended when it was replaced by the more robust World Trade
Organization. (Source: "GATT and the Goods Council," WTO.)

Purpose

The purpose of GATT was to eliminate harmful trade protectionism. That had sent global trade down 65 percent during
the Great Depression.

By removing tariffs, GATT boosted international trade. It restored economic health to the world after the devastation of
World War II.

What Exactly Was Agreed Upon?

GATT had three main provisions. The most important requirement was that each member must confer most favored nation
status to every other member. That means all members must be treated equally when it comes to tariffs. It excluded the
special tariffs among members of the British Commonwealth and customs unions. It permitted tariffs if their removal
would cause serious injury to domestic producers.

Second, GATT prohibited restriction on the number of imports and exports. The exceptions were:

 When a government had a surplus of agricultural products.

 If a country needed to protect its balance of payments because its foreign exchange reserves were low.
 Developing countries that needed to protect fledgling industries.

In addition, countries could restrict trade for reasons of national security.

These included protecting patents, copyrights and public morals.

The third provision was added in 1965. That was because more developing countries joined GATT, and it wished to promote
them. Developed countries agreed to eliminate tariffs on imports of developing countries to boost their economies. It was
also in the stronger countries' best interests in the long run.

That’s because it would increase the number of middle-class consumers throughout the world. (Source: E. Kwan
Choi, "General Agreements on Tariffs and Trade," Iowa State University.)

History

GATT grew out of the Bretton Woods Agreement. The summit at Bretton Woods also created the World Bank and
the International Monetary Fund to coordinate global growth.
The summit almost led to a third organization, too. It was to be the highly ambitious International Trade Organization. The
50 countries that started negotiations wanted it to be an agency within the United Nations that would create rules, not just
on trade, but also employment, commodity agreements, business practices, foreign direct investment and services. The ITO
charter was agreed to in March 1948, but the U.S. Congress and some other countries' legislatures refused to ratify it. In
1950, the Truman Administration declared defeat, ending the ITO.

At the same time, 15 countries focused on negotiating a simple trade agreement. They agreed on eliminating trade
restrictions affecting $10 billion of trade, or a fifth of the world’s total. Under the name GATT, 23 countries signed the deal
on October 30, 1947. It was put into force on June 30,1948.

GATT didn’t require the approval of Congress. That’s because it was technically just an agreement under the provisions of
U.S. Reciprocal Trade Act of 1934. It was only supposed to be temporary until the ITO replaced it.

Throughout the years, rounds of further negotiations on GATT continued. The main goal was to further reduce tariffs. In
the mid-1960s, the Kennedy round added an Anti-Dumping Agreement. The Tokyo round in the seventies improved other
aspects of trade. The Uruguay round lasted from 1986 to 1994 and created the World Trade Organization. (Source:
"Understanding the WTO: The GATT Years," WTO.)

GATT and WTO

GATT lives on as the foundation of the WTO. The 1947 agreement itself is defunct. But, its provisions were incorporated
into the GATT 1994 agreement. That was designed to keep the trade agreements going while the WTO was being set up.

Then, the GATT 1994 is itself a component of the WTO Agreement. (Source: "Understanding the WTO: The GATT Years,"
WTO.)

Member Countries

The original 23 GATT members were Australia, Belgium, Brazil, Burma (now Myanmar), Canada, Ceylon, Chile, China,
Cuba, Czechoslovakia (now Czech Republic and Slovakia), France, India, Lebanon, Luxemburg, Netherlands, New
Zealand, Norway, Pakistan, Southern Rhodesia (now Zimbabwe), Syria, South Africa, the United Kingdom and the United
States. The membership increased to 100 countries by 1993. (Source: "Why Is GATT Important?" U.S. Department of
Commerce.)

Pros

For 47 years, GATT reduced tariffs. This boosted world trade 8 percent a year during the 1950s and 1960s. That was faster
than world economic growth. Trade grew from $332 billion in 1970 to $3.7 trillion in 1993.
It was seen as such a success that many more countries wanted to join. By 1995, there 128 members, generating at least 80
percent of world trade. (Source: "GATT Members," WTO.)

By increasing trade, GATT promoted world peace. in the 100 years before GATT, the number of wars was ten times greater
than the 50 years after GATT. Before World War II, the chance of a lasting trade alliance was only slightly better than
50/50.

By showing how free trade works, GATT inspired other trade agreements. It set the stage for the European Union. Despite
the EU's problems, it has prevented wars between its members. (Source: "Can Trade Prevent War?" Stanford University,
May 28, 2014.)

GATT also improved communication by providing incentives for smaller countries to learn English, the language of the
world's largest consumer market. This adoption of a common language reduced misunderstanding. It also gave less
developed countries a competitive advantage. English gave them insight into the developed country's culture, marketing
and product needs. (Source: E. Kwan Choi, "Trade and the Language War: Chinese and English," Iowa State University,
September 2001.)

Cons

Low tariffs destroy some domestic industries, contributing to high unemployment in those sectors.
Governments subsidized many industries to make them more competitive on a global scale. U.S. and EU agriculture were
major examples. In the early 1970s, the textile and clothing industries were exempted from GATT. When the Nixon
Administration took the U.S. dollar off the gold standard in 1973, it lowered the value of the dollar compared to other
currencies. That further lowered the international price of U.S. exports.

By the 1980s, the nature of world trade had changed. GATT did not address the trade of services. That allowed them to
grow beyond any one country's ability to manage them. For example, financial services became globalized. Foreign direct
investment had become more important. As a result, when U.S. investment bank Lehman Brothers collapsed, it threatened
the entire global economy. Central banks scrambled to work together for the first time to address the 2008
financial crisis. They were forced to provide the liquidity for frozen credit markets.

Like other free trade agreements, GATT reduced the rights of a nation to rule its own people. The agreement required them
to change domestic laws to gain the trade benefits. For example, India had allowed companies to create generic versions of
drugs without paying a license fee. This helped more people afford medicine. GATT required India to remove this law. That
raised the price of drugs out of reach for many Indians.

Trade agreements like GATT often destabilize small, traditional economies. Countries like the United States that subsidize
agricultural exports can put local family farmers out of business. Unable to compete with low-cost grains, the farmers
migrate to cities looking for work, often in factories set up by multi-national corporations. Often these factories can move
to other countries with lower-cost labor, leaving the farmers unemployed.

Farmers that stay often grow opium, coca or marijuana, just because they can't grow traditional crops and stay in business.
Violence from the drug trade may force them to emigrate to protect themselves and their children. (Source: "CAFTA and
the Forced Migration Crisis," Eyes on Trade, September 26, 2014.)

EFFECTS

The average tariff levels for the major GATT participants were about 22 percent in 1947. [11] As a result of the first
negotiating rounds, tariffs were reduced in the GATT core of the United States, United Kingdom, Canada, and Australia,
relative to other contracting parties and non-GATT participants.[11] By the Kennedy round (1962–67), the average tariff
levels of GATT participants were about 15%.[11]After the Uruguay Round, tariffs were under 5%.[11]

In addition to facilitating applied tariff reductions, the early GATT's contribution to trade liberalization "include binding the
negotiated tariff reductions for an extended period (made more permanent in 1955), establishing the generality of
nondiscrimination through most-favored nation (MFN) treatment and national treatment, ensuring increased transparency
of trade policy measures, and providing a forum for future negotiations and for the peaceful resolution of bilateral disputes.
All of these elements contributed to the rationalization of trade policy and the reduction of trade barriers and policy
uncertainty."[11]

Contrary to the temporary nature of GATT, WTO is a permanent organization which has been established on the basis of

an international treaty approved by participating countries. It achieved the international status like IMF and IBRD, but it is

not an agency of the United Nations Organization (UNO).

Structure:

The WTO has nearly 153 members accounting for over 97% 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 members’ parliaments.

The WTO’s top level decision-making body is the Ministerial Conferences which meets at least once in 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 Disputes Settlement Body.

ADVERTISEMENTS:

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.

Secretariat:

The WTO secretariat, based in Geneva, has around 600 staff and is headed by a Director-General. Its annual budget is

roughly 160 million Swiss Francs. It does not have branch offices outside Geneva. Since decisions are taken by the members

themselves, the secretariat does not have the decision making the role that other international bureaucracies are given.

The secretariat s main duties 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.

Objectives:

The important objectives of WTO are:

ADVERTISEMENTS:

1. To improve the standard of living of people in the member countries.

2. To ensure full employment and broad increase in effective demand.

3. To enlarge production and trade of goods.

4. To increase the trade of services.

ADVERTISEMENTS:

5. To ensure optimum utilization of world resources.

6. To protect the environment.

7. To accept the concept of sustainable development.

Functions:

The main functions of WTO are discussed below:

1. To implement rules and provisions related to trade policy review mechanism.

2. To provide a platform to member countries to decide future strategies related to trade and tariff.

3. To provide facilities for implementation, administration and operation of multilateral and bilateral agreements of the

world trade.

4. To administer the rules and processes related to dispute settlement.

5. To ensure the optimum use of world resources.

6. To assist international organizations such as, IMF and IBRD for establishing coherence in Universal Economic Policy

determination.

WTO Agreements:

The WTO’s rule and the agreements are the result of negotiations between the members. 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).

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 30 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 countries’

markets. Each country promises to do the same for imports into its own market. The system also gives developing countries

some flexibility in implementing their commitments.

(a) 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 the General Agreement spelt out important, rules, particularly non-discriminations 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 action taken against dumping.

(b) Services:

Banks, insurance firms, telecommunication companies, 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.

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 for foreign competition

and how open those markets are.

(c) Intellectual Property:

The WTO’s intellectual property agreement amounts to rules for trade and investment in ideas and creativity. The rules state

how copyrights, patents, 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.

(d) 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 the ruling by a panel of experts and the chance to

appeal the ruling on legal grounds.

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).

(e) 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.

Dispute Settlement Body

The General Council convenes as the Dispute Settlement Body (DSB) to deal with disputes between WTO members. Such
disputes may arise with respect to any agreement contained in the Final Act of the Uruguay Round that is subject to the
Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). The DSB has authority to establish
dispute settlement panels, refer matters to arbitration, adopt panel, Appellate Body and arbitration reports, maintain
surveillance over the implementation of recommendations and rulings contained in such reports, and authorize suspension
of concessions in the event of non-compliance with those recommendations and rulings.

Philippines and the WTO

This page gathers key information on the Philippines' participation in the WTO. The Philippines has been a WTO member
since 1 January 1995 and a member of GATT since 27 December 1979.

PHILIPPINES CONVENES SECOND HEADS OF DELEGATION MEETING OF THE APEC GENEVA CAUCUS
(AGC)
 PRINT
 EMAIL
GENEVA – Following its first meeting on 17 February 2015, as well as three succeeding technical-level meetings to draft
the statement supporting the multilateral trading system for the APEC Ministers Responsible for Trade (MRT) meeting in
Boracay in May 2015, Philippine Permanent Representative to the WTO, Ambassador Esteban B. Conejos, Jr., convened
the second Heads of Delegation (HoD) meeting of the APEC Geneva Caucus (AGC) on 11 May 2015 at the Centre William
Rappard.

In attendance were Permanent Representatives of the 21 APEC Economies, as well as Geneva-based officers who
participated in the three previous technical-level meetings. Ambassador Conejos’ chairmanship of the meeting allowed the
representatives of the 21 APEC Economies to diligently discuss and negotiate on the elements of the draft statement
supporting the multilateral trading system.

The draft statement includes paragraphs reaffirming the value, centrality and primacy of the multilateral trading system
under the auspices of the WTO, as well as highlights the progress of the work in various WTO standing bodies. It also
mentions the progress made by the WTO towards the full implementation of the Bali Package, and the commitment to
contribute to the achievement of concrete and meaningful outcomes at the 10th WTO Ministerial Conference to be held in
Nairobi in December 2015.

Although a few issues remain in the said draft, the Heads of Delegation agreed that it can be endorsed to their respective
APEC Senior Officials and Trade Ministers in Boracay for further review and finalization.

Ambassador Conejos noted that the Philippines' chairmanship of the Caucus is part of overall efforts demonstrating the
Philippines' enduring commitment to APEC and its avowed objectives. He added that Members have engaged in a positive
and constructive spirit, generating momentum for concrete and meaningful outcomes in Boracay, and subsequently in
Manila when the Philippines hosts the APEC Leaders' Week in November.

The World Trade Organization (WTO) is an intergovernmental organization that regulates international trade. The WTO
officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing
the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. It is the largest international economic
organization in the world.[5][6] The WTO deals with regulation of trade between participating countries by providing a
framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to
WTO agreements, which are signed by representatives of member governments [7]:fol.9–10 and ratified by their
parliaments.[8] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from
the Uruguay Round (1986–1994).

The WTO is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an
explicit focus on developing countries. As of June 2012, the future of the Doha Round remained uncertain: the work
programme lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still
incomplete.[9] The conflict between free trade on industrial goods and services but retention of protectionism on farm
subsidies to domestic agricultural sector (requested by developed countries) and the substantiationof fair trade on
agricultural products (requested by developing countries) remain the major obstacles. This impasse has made it impossible
to launch new WTO negotiations beyond the Doha Development Round. As a result, there have been an increasing number
of bilateral free trade agreements between governments.[10] As of July 2012, there were various negotiation groups in the
WTO system for the current agricultural trade negotiation which is in the condition of stalemate.[11]

The WTO's current Director-General is Roberto Azevêdo,[12][13] who leads a staff of over 600 people
in Geneva, Switzerland.[14] A trade facilitation agreement, part of the Bali Package of decisions, was agreed by all members
on 7 December 2013, the first comprehensive agreement in the organization's history.[15][16]
Uruguay Round

During the Doha Round, the US government blamed Brazil and India for being inflexible and the EU for impeding
agricultural imports.[24] The then-President of Brazil, Luiz Inácio Lula da Silva (above right), responded to the criticisms by
arguing that progress would only be achieved if the richest countries (especially the US and countries in the EU) made
deeper cuts in agricultural subsidies and further opened their markets for agricultural goods.[25]

Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a
new globalizing world economy.[26][27] In response to the problems identified in the 1982 Ministerial Declaration (structural
deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage etc.), the eighth GATT
round – known as the Uruguay Round – was launched in September 1986, in Punta del Este, Uruguay.[26]

It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several
new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and
textiles; all the original GATT articles were up for review.[27] The Final Act concluding the Uruguay Round and officially
establishing the WTO regime was signed 15 April 1994, during the ministerial meeting at Marrakesh, Morocco, and hence
is known as the Marrakesh Agreement.[28]

The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations
(a distinction is made betweenGATT 1994, the updated parts of GATT, and GATT 1947, the original agreement which is
still the heart of GATT 1994).[26] GATT 1994 is not however the only legally binding agreement included via the Final Act
at Marrakesh; a long list of about 60 agreements, annexes, decisions and understandings was adopted. The agreements fall
are in six main parts, the Agreement Establishing the WTO, the Multilateral Agreements on Trade in Goods, [29] the General
Agreement on Trade in Services, the Agreement on Trade-Related Aspects of Intellectual Property Rights, Dispute
settlement[30] and reviews of governments' trade policies[31]

In terms of the WTO's principle relating to tariff "ceiling-binding" (No. 3), the Uruguay Round has been successful in
increasing binding commitments by both developed and developing countries, as may be seen in the percentages of tariffs
bound before and after the 1986–1994 talks.[

Ministerial conferences[edit]

The World Trade Organization Ministerial Conference of 1998, in thePalace of Nations (Geneva,Switzerland).
The highest decision-making body of the WTO is the Ministerial Conference, which usually meets every two years.[33] It
brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take
decisions on all matters under any of the multilateral trade agreements. Some of these such as the inaugural ministerial
conference in Singapore and the Cancun conference in 2003[34] involved arguments between developed and developing
economies referred to as the "Singapore issues" such as agricultural subsidies while others such as the Seattle conference in
1999 created large demonstrations. The fourth ministerial conference in Doha in 2001 approved China's entry to the WTO
and launched the Doha Development Round which was supplemented by the sixth WTO ministerial conference (in Hong
Kong. when agricultural export subsidies were agreed to be phased out and adoption of the European Union'sEverything
but Arms initiative to phase out tariffs for goods from the Least Developed Countries.
Doha Round (Doha Agenda)[edit]
Main article: Doha Development Round

The WTO launched the current round of negotiations, the Doha Development Round, at the fourth ministerial conference
in Doha, Qatar in November 2001. This was to be an ambitious effort to make globalization more inclusive and help the
world's poor, particularly by slashing barriers and subsidies in farming.[35] The initial agenda comprised both further trade
liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing
countries.[36]

Progress stalled after over differences between developed nations and the major developing countries on issues such as
industrial tariffs and non tariff barriers to trade[37] particularly against and between the EU and the US over their maintenance
of agricultural subsidies—seen to operate effectively as trade barriers. Repeated attempts to revive the talks were without
success[38] although adoption of the Bali Ministerial Declaration in 2013[39] addressed bureaucratic barriers to
commerce[40] although the future of the Doha Round remains uncertain.

Functions[edit]

Among the various functions of the WTO, these are regarded by analysts as the most important:

 It oversees the implementation, administration and operation of the covered agreements.[41][42]

 It provides a forum for negotiations and for settling disputes.[43][44]

Additionally, it is WTO's duty to review and propagate the national trade policies, and to ensure the coherence and
transparency of trade policies through surveillance in global economic policy-making.[42][44] Another priority of the WTO is
the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines
through technical cooperation and training.[45]

1. The WTO shall facilitate the implementation, administration and operation and further the objectives of this
Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation,
administration and operation of the multilateral Trade Agreements.
2. The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations
in matters dealt with under the Agreement in the Annexes to this Agreement.
3. The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes.
 4. The WTO shall administer Trade Policy Review Mechanism.
5. With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as
appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and
Development (IBRD) and its affiliated agencies.[46]

The above five listings are the additional functions of the World Trade Organization. As globalization proceeds in today's
society, the necessity of an International Organization to manage the trading systems has been of vital importance. As the
trade volume increases, issues such as protectionism, trade barriers, subsidies, violation of intellectual property arise due to
the differences in the trading rules of every nation. The World Trade Organization serves as the mediator between the
nations when such problems arise. WTO could be referred to as the product of globalization and also as one of the most
important organizations in today's globalized society.

The WTO is also a centre of economic research and analysis: regular assessments of the global trade picture in its annual
publications and research reports on specific topics are produced by the organization. [47] Finally, the WTO cooperates
closely with the two other components of the Bretton Woods system, the IMF and the World Bank.[43]

Principles of the trading system[edit]

The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with
setting the rules of the trade policy games.[48] Five principles are of particular importance in understanding both the pre-
1994 GATT and the WTO:

1. Non-discrimination. It has two major components: the most favoured nation (MFN) rule, and the national
treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their
precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same
conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favourable conditions
under which it allows trade in a certain product type to all other WTO members.[48] "Grant someone a special favour
and you have to do the same for all other WTO members."[32] National treatment means that imported goods should
be treated no less favourably than domestically produced goods (at least after the foreign goods have entered the
market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al.
discriminating against imported goods).[48]
2. Reciprocity. It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule, and
a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary
that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions
intend to ensure that such gains will materialise.[49]
3. Binding and enforceable commitments. The tariff commitments made by WTO members in a multilateral trade
negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling
bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean
compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO
dispute settlement procedures.[32][49]
 4. Transparency. The WTO members are required to publish their trade regulations, to maintain institutions allowing
for the review of administrative decisions affecting trade, to respond to requests for information by other members,
and to notify changes in trade policies to the WTO. These internal transparency requirements are supplemented
and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy Review
Mechanism (TPRM).[50] The WTO system tries also to improve predictability and stability, discouraging the use
of quotas and other measures used to set limits on quantities of imports.[32]
5. Safety values. In specific circumstances, governments are able to restrict trade. The WTO's agreements permit
members to take measures to protect not only the environment but also public health, animal health and plant
health.[51]

There are three types of provision in this direction:

1. articles allowing for the use of trade measures to attain non-economic objectives;
2. articles aimed at ensuring "fair competition"; members must not use environmental protection measures as a means
of disguising protectionist policies.[51][52]
3. provisions permitting intervention in trade for economic reasons.[50]

Exceptions to the MFN principle also allow for preferential treatment of developing countries, regional free trade
areas and customs unions.[7]:fol.93

Organizational structure[edit]

The General Council has the following subsidiary bodies which oversee committees in different areas:

Council for Trade in Goods

There are 11 committees under the jurisdiction of the Goods Council each with a specific task. All members of the
WTO participate in the committees. The Textiles Monitoring Body is separate from the other committees but still
under the jurisdiction of Goods Council. The body has its own chairman and only 10 members. The body also has
several groups relating to textiles.[53]
Council for Trade-Related Aspects of Intellectual Property Rights
Information on intellectual property in the WTO, news and official records of the activities of the TRIPS Council,
and details of the WTO's work with other international organizations in the field.[54]
Council for Trade in Services
The Council for Trade in Services operates under the guidance of the General Council and is responsible for
overseeing the functioning of the General Agreement on Trade in Services (GATS). It is open to all WTO members,
and can create subsidiary bodies as required.[55]
Trade Negotiations Committee
The Trade Negotiations Committee (TNC) is the committee that deals with the current trade talks round. The chair
is WTO's director-general. As of June 2012 the committee was tasked with theDoha Development Round.[56]

The Service Council has three subsidiary bodies: financial services, domestic regulations, GATS rules and
specific commitments.[53] The council has several different committees, working groups, and working
parties.[57] There are committees on the following: Trade and Environment; Trade and Development
(Subcommittee on Least-Developed Countries); Regional Trade Agreements; Balance of Payments
Restrictions; and Budget, Finance and Administration. There are working parties on the following:
Accession. There are working groups on the following: Trade, debt and finance; and Trade and technology
transfer.

Decision-making[edit]

The WTO describes itself as "a rules-based, member-driven organization—all decisions are made by the
member governments, and the rules are the outcome of negotiations among members". [58] The WTO
Agreement foresees votes where consensus cannot be reached, but the practice of consensus dominates
the process of decision-making.[59]

Richard Harold Steinberg (2002) argues that although the WTO's consensus governance model provides
law-based initial bargaining, trading rounds close through power-based bargaining favouring Europe and
the U.S., and may not lead to Pareto improvement.[60]

Dispute settlement[edit]

Main article: Dispute settlement in the WTO

The WTO's dispute-settlement system "is the result of the evolution of rules, procedures and practices
developed over almost half a century under the GATT 1947".[61] In 1994, the WTO members agreed on
the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) annexed to the
"Final Act" signed in Marrakesh in 1994.[62] Dispute settlement is regarded by the WTO as the central
pillar of the multilateral trading system, and as a "unique contribution to the stability of the global
economy".[63] WTO members have agreed that, if they believe fellow-members are violating trade rules,
they will use the multilateral system of settling disputes instead of taking action unilaterally.[64]

The operation of the WTO dispute settlement process involves case-specific panels[65] appointed by the
Dispute Settlement Body (DSB),[66] the Appellate Body,[67] The Director-General and the WTO
Secretariat,[68] arbitrators,[69] and advisory experts.[70]

The priority is to settle disputes, preferably through a mutually agreed solution, and provision has been
made for the process to be conducted in an efficient and timely manner so that "If a case is adjudicated, it
should normally take no more than one year for a panel ruling and no more than 16 months if the case is
appealed... If the complainant deems the case urgent, consideration of the case should take even less
time.[71] WTO member nations are obliged to accept the process as exclusive and compulsory.[72]

Accession and membership[edit]

Main article: World Trade Organization accession and membership

The process of becoming a WTO member is unique to each applicant country, and the terms of accession
are dependent upon the country's stage of economic development and current trade regime.[73]The process
takes about five years, on average, but it can last longer if the country is less than fully committed to the
process or if political issues interfere. The shortest accession negotiation was that of the Kyrgyz Republic,
while the longest was that of Russia, which, having first applied to join GATT in 1993, was approved for
membership in December 2011 and became a WTO member on 22 August 2012.[74] Kazakhstan also had
a long accession negotiation process. The Working Party on the Accession of Kazakhstan was established
in 1996 and was approved for membership in 2015.[75] The second longest was that of Vanuatu, whose
Working Party on the Accession of Vanuatu was established on 11 July 1995. After a final meeting of the
Working Party in October 2001, Vanuatu requested more time to consider its accession terms. In 2008, it
indicated its interest to resume and conclude its WTO accession. The Working Party on the Accession of
Vanuatu was reconvened informally on 4 April 2011 to discuss Vanuatu's future WTO membership. The
re-convened Working Party completed its mandate on 2 May 2011. The General Council formally
approved the Accession Package of Vanuatu on 26 October 2011. On 24 August 2012, the WTO welcomed
Vanuatu as its 157th member.[76] An offer of accession is only given once consensus is reached among
interested parties.[77]

A 2017 study argues that "political ties rather than issue-area functional gains determine who joins" and
shows "how geopolitical alignment shapes the demand and supply sides of membership".[78] The "findings
challenge the view that states first liberalize trade to join the GATT/WTO. Instead, democracy and foreign
policy similarity encourage states to join."[78]
Accession process[edit]
\

WTO accession progress:[79]

Draft Working Party Report or Factual Summary adopted

Goods or Services offers submitted

Working party meetings

Memorandum on Foreign Trade Regime submitted

Working party established

A country wishing to accede to the WTO submits an application to the General Council, and has to describe
all aspects of its trade and economic policies that have a bearing on WTO agreements.[80] The application
is submitted to the WTO in a memorandum which is examined by a working party open to all interested
WTO Members.[81]

After all necessary background information has been acquired, the working party focuses on issues of
discrepancy between the WTO rules and the applicant's international and domestic trade policies and laws.
The working party determines the terms and conditions of entry into the WTO for the applicant nation,
and may consider transitional periods to allow countries some leeway in complying with the WTO rules.[73]
The final phase of accession involves bilateral negotiations between the applicant nation and other working
party members regarding the concessions and commitments on tariff levels and market access for goods
and services. The new member's commitments are to apply equally to all WTO members under normal
non-discrimination rules, even though they are negotiated bilaterally.[80]

When the bilateral talks conclude, the working party sends to the general council or ministerial conference
an accession package, which includes a summary of all the working party meetings, the Protocol of
Accession (a draft membership treaty), and lists ("schedules") of the member-to-be's commitments. Once
the general council or ministerial conference approves of the terms of accession, the applicant's parliament
must ratify the Protocol of Accession before it can become a member.[82] Some countries may have faced
tougher and a much longer accession process due to challenges during negotiations with other WTO
members, such as Vietnam, whose negotiations took more than 11 years before it became official member
in January 2007.[83]
Members and observers[edit]

The WTO has 164 members and 22 observer governments.[84] Liberia became the 163rd member on 14
July 2016, and Afghanistan became the 164th member on 29 July 2016.[85][86] In addition to states, the
European Union, and each EU Country in its own right,[87] is a member. WTO members do not have to be
fully independent states; they need only be a customs territory with full autonomy in the conduct of their
external commercial relations. Thus Hong Kong has been a member since 1995 (as "Hong Kong, China"
since 1997) predating the People's Republic of China, which joined in 2001 after 15 years of negotiations.
The Republic of China (Taiwan) acceded to the WTO in 2002 as "Separate Customs Territory
of Taiwan, Penghu, Kinmen and Matsu" (Chinese Taipei) despite its disputed status.[88] The WTO
Secretariat omits the official titles (such as Counsellor, First Secretary, Second Secretary and Third
Secretary) of the members of Chinese Taipei's Permanent Mission to the WTO, except for the titles of the
Permanent Representative and the Deputy Permanent Representative.[89]

As of 2007, WTO member states represented 96.4% of global trade and 96.7% of global GDP. [90] Iran,
followed by Algeria, are the economies with the largest GDP and trade outside the WTO, using 2005
data.[91][92] With the exception of the Holy See, observers must start accession negotiations within five
years of becoming observers. A number of international intergovernmental organizations have also been
granted observer status to WTO bodies.[93] 12 UN member states have no official affiliation with the WTO.

Agreements[edit]

Further information: Uruguay Round

The WTO oversees about 60 different agreements which have the status of international legal texts.
Member countries must sign and ratify all WTO agreements on accession.[94] A discussion of some of the
most important agreements follows. The Agreement on Agriculture came into effect with the
establishment of the WTO at the beginning of 1995. The AoA has three central concepts, or "pillars":
domestic support, market access and export subsidies. The General Agreement on Trade in Services was
created to extend the multilateral trading system to service sector, in the same way as the General
Agreement on Tariffs and Trade (GATT) provided such a system for merchandise trade. The agreement
entered into force in January 1995. The Agreement on Trade-Related Aspects of Intellectual Property
Rights sets down minimum standards for many forms of intellectual property (IP) regulation. It was
negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in
1994.[95]

The Agreement on the Application of Sanitary and Phytosanitary Measures—also known as the SPS
Agreement—was negotiated during the Uruguay Round of GATT, and entered into force with the
establishment of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets constraints
on members' policies relating to food safety (bacterial contaminants, pesticides, inspection and labelling)
as well as animal and plant health (imported pests and diseases). The Agreement on Technical Barriers to
Trade is an international treaty of the World Trade Organization. It was negotiated during the Uruguay
Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of
the WTO at the end of 1994. The object ensures that technical negotiations and standards, as well as testing
and certification procedures, do not create unnecessary obstacles to trade".[96] The Agreement on Customs
Valuation, formally known as the Agreement on Implementation of Article VII of GATT, prescribes
methods of customs valuation that Members are to follow. Chiefly, it adopts the "transaction value"
approach.

In December 2013, the biggest agreement within the WTO was signed and known as the Bali Package.[97]

Office of director-general[edit]

The headquarters of the World Trade Organization in Geneva,Switzerland.

The procedures for the appointment of the WTO director-general were published in January
2003.[98] Additionally, there are four deputy directors-general. As of 1 October 2013, under director-
general Roberto Azevêdo, the four deputy directors-general are Yi Xiaozhun of China, Karl-Ernst Brauner
of Germany, Yonov Frederick Agah of Nigeria and David Shark of the United States.[99]