World Trade Organization (Wto) – A Short Introduction

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments.[4][5] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986-1994).

The organization is currently endeavoring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world’s population. However, the negotiation has been dogged by “disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a ‘special safeguard measure’ to protect farmers from surges in imports. At this time, the future of the Doha Round is uncertain.”[6]

The WTO has 153 members,[7] representing more than 97% of total world trade[8] and 30 observers, most seeking membership. The WTO is governed by a ministerial conference, meeting every two years; a general council, which implements the conference’s policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the ministerial conference. The WTO’s headquarters is at the Centre William Rappard, Geneva, Switzerland.

Progress toward multilateral trade liberalization takes place through rounds of negotiations. Eight rounds have been completed since 1948. The eighth round, the Uruguay Round, began in Punta del Este, Uruguay, in September 1986 and concluded at Marrakech, Morocco, in April 1994. No previous round was as important to U.S. agriculture.

For many years, although agricultural trade grew, it remained in large part outside the GATT process. By the start of the Uruguay Round, the need for reform had become evident. Government support and protection for agriculture had been increasing globally, and all countries felt the consequences in terms of rising budget expenditures, depressed markets, trade frictions, and the overall drain on economic growth. International agricultural markets were distorted by the use of high price supports and restrictive import barriers, which protected domestic producers while denying competitive producers the opportunity to sell their products in these markets. High price supports in some countries led to surplus production that was dumped on world markets with the aid of export subsidies.

The growing impact of barriers and subsidies in agricultural trade resulted in increasing trade friction among countries. The GATT was ill equipped to deal with this situation because trade in agriculture was covered by a number of special provisions that made the GATT an ineffective forum for resolving agricultural trade disputes. Therefore, GATT members made reforming agricultural trade a central part of the Uruguay Round of trade negotiations