The General Agreement on Tariffs and Trade (GATT), which was created on October 30, 1947, gave way to the World Trade Organization (WTO) on January 1, 1995. It came into existence after the 1986–94 Uruguay Round talks, which aimed at doing away with quotas, lowering of tariffs, reforming agricultural trade, and focusing on intellectual property rights. After the meeting at Marrakesh, Morocco, on April 15, 1994, the 123 participating nations decided to replace the GATT and set up the WTO. An international organization for resolving differences among member states on global trade, the WTO also caters to the needs of consumers.
The WTO has 151 members along with 31 nations having observer status. The nations enjoying the observer status should take steps to become full members within five years. The Vatican is the only exception. Afghanistan, Iran, Iraq, the Russian Federation, and so forth, still send representatives as observers. The WTO functions from Geneva, Switzerland, with a staff of 635 and a budget of about US$141 million.
The top decision-making body is the Ministerial Conference meeting biennially and its policy decisions are implemented by a General Council, which also looks after administration. The Dispute Settlement Body looks after trade disputes, whereas the Trade Policy Review Body reviews trade policies. The present director-general of the WTO is former European commissioner for trade Pascal Lamy. The regional economic integration of countries has resulted in groups and associations speaking with one voice in the WTO. The European Union (EU) is the most forceful voice having member status in the WTO. The Association of Southeast Asian Nations (ASEAN), the African, Caribbean, and Pacific Group (ACP), the Latin American Economic System (SELA), and so forth, are examples of associations by which the member countries increase bargaining power in WTO meetings.
There had been phenomenal trade growth in the last five decades. The WTO sets norms for trade between nations and endeavors to lower trade barriers. The multilateral trading system emerged with agreements signed by countries, which were ratified in respective parliaments. By these contracts, the signatories formulate trade policies with some trading rights.
The talks between nations have been a constant feature of the workings of the WTO. Agreements are reached in areas such as lowering of import duties, antidumping measures, information technology, agriculture, and intellectual property rights. The WTO has not always had smooth sailing. There is mutual bickering and the developed nations are targets of much criticism from the developing and underdeveloped nations.
The developing countries feel that they have agreed on intellectual property protection and liberalization of trade, but the developed countries are not reciprocating in a major way. It becomes difficult for the developing countries to gain access in a substantial way in the agricultural markets of developed nations. The Doha Round of talks held in Potsdam ( June 2007) broke down as India, Brazil, the European Union, and the United States did not reach an agreement on tariff and farm subsidies. The WTO also has become an object of criticism, protest, and anger from different environmental and labor groups. Trade liberalization as such has not increased inequality. Rather, various studies undertaken by the World Bank have proven that it helps in eradicating poverty.
- Daniel C. K. Chow and Thomas J. Schoenbaum, International Trade Law: Problems, Cases, and Materials (Aspen, 2008);
- David A. Deese, World Trade Politics: Power, Principles, and Leadership (Routledge, 2008);
- John Head, Losing the Global Development War: A Contemporary Critique of the IMF, the World Bank and the WTO (Brill, 2008);
- Gary J. Hytrek and Kristine M. Zentgraf, America Transformed: Globalization, Inequality, and Power (Oxford University Press, 2008);
- Saman Kelegama, South Asia in the WTO (Sage, 2008);
- World Trade Organization, www.wto.org (cited March 2009).
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