WTO Explained

What is the World Trade Organization?

The WTO is a Geneva-based international body that acts as a forum for trade negotiations and as a referee in trade disputes.

What is its objective?

Its stated purpose is to help trade flow as freely as possible, by removing or reducing obstacles such as tariffs and ensuring that people and governments know about and have confidence in trade rules around the world.

What is the WTO’s history?

It was created in 1994 as the successor to the organization known as the General Agreement on Tariffs and Trade, or GATT, which was established after World War II. WTO was created to establish a firmer legal basis for trade and to cover a fuller range of trade issues, although GATT remains the basic rule book for the WTO.

What is its organization?

The WTO is an intergovernmental body, with 135 member states and about 30 more candidates waiting to join. Administrative and technical support come from the WTO Secretariat in Geneva, currently headed by Director General Mike Moore.

Who belongs?

The 135 members represent most of the industrial world, three-quarters of the world’s population and more than 90% of global trade. More than 75% of WTO members are developing countries, which receive special provisions such as longer time periods to implement agreements.

Who doesn’t belong?

More than 30 so-called WTO observer states, including China and Russia, are negotiating to become members. Applicants can join if two-thirds of WTO members vote in favor. Some other states, such as North Korea, are neither WTO members nor observer countries.

How does the WTO function?

Major decisions are made by the entire membership, either by ministers (who meet every two years) or by officials at councils and committees (who meet regularly in Geneva). Decisions typically are made by consensus. The Seattle ministerial conference is the WTO’s third gathering of this top-level decision-making body, following meetings in Singapore in 1996 and Geneva in 1998.

How are trade disputes resolved?

A panel of independent experts makes the first rulings. Appeals based on points of law are possible, with final rulings or decisions made by the WTO’s full membership. There have been 167 cases brought to the WTO through March 1999, compared with about 300 during the entire life of GATT (1947-94).

Who are some of the key players in the Seattle WTO summit?

U.S. Trade Representative Charlene Barshefsky; European Union Trade Commissioner Pascal Lamy; the Cairns Group, a 15-nation agricultural-trade liberalization coalition that includes Australia, Canada and Brazil; International Trade Minister Takashi Fukaya of Japan’s long-ruling Liberal Democratic Party; Shi Guangsheng, head of China’s Ministry of Foreign Trade and Economic Cooperation.

What are some of the WTO’s current issues?

Subsidized exports of farm goods and, in general, fewer barriers in agricultural trade; barriers in the trade of services, especially banking and telecommunications; trade and tariff rules involving electronic commerce; incorporating into WTO agreements standards on labor and environment.

Sources: WTO, Bloomberg Business News, Reuters