The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.
The formation of the World Trade Organisation (WTO) in 1995 was a watershed development in the sphere of international trade. It was a major advancement in the multilateral trade regime, with the previous regime embodied in the form of a treaty known as the General Agreement on Tariffs and Trade (GATT).
The WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation – notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund.
GATT was signed in 1948 and had close to 30 member countries. Its primary objective was to see that impediments to international trade — mainly in the form of tariffs — were reduced or removed in order to facilitate the movement of goods across borders. In the course of six to seven rounds of negotiation, it succeeded in getting countries to lower their tariff rates, thus enabling greater movement of goods.
The end of the Uruguay Round (UR) resulted in the formation of the WTO, which established a substantial set of rules regarding trade in goods — including agricultural goods, included agreements on trade in services and on trade-related aspects of intellectual property rights, as well as a strong and comprehensive mechanism to settle trade disputes between member countries
WTO’s current Director-General is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, Switzerland. A trade facilitation agreement known as the Bali Package was reached by all members on 7 December 2013, the first comprehensive agreement in the organization’s history.
Functions of World Trade Organisation (WTO)
Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. Among the various functions of the WTO, these are regarded by analysts as the most important:
- Monitoring national trade policies
- Technical assistance and training for developing countries
- Cooperation with other international organizations
- It oversees the implementation, administration and operation of the covered agreements.
- It provides a forum for negotiations and for settling disputes.
The procedures for the appointment of the WTO director-general were published in January 2003. 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.
Objectives of World Trade Organisation (WTO)
The World Trade Organization (WTO) deals with the global rules of trade between nations. Important objectives of WTO are mentioned below:
- To implement the new world trade system as visualised in the Agreement;
- To ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needs.
- To enhance competitiveness among all trading partners so as to benefit consumers and help in global integration;
- To increase the level of production and productivity with a view to ensuring level of employment in the world;
- To improve the level of living for the global population and speed up economic development of the member nations.