World Trade Organization (WTO) Agreements
Article reviewed by
The World Trade Organization (WTO) is an organization for liberalizing trade. It is a forum for governments to negotiate trade agreements. It is a place for them to settle trade disputes, and operates a system of global trade rules.
Start of the WTO
The WTO began life on 1 January 1995, but its trading system dates back half a century. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. The General Agreement gave birth to an unofficial, de facto international organization, known informally as GATT. Over the years GATT evolved through several rounds of negotiations. The last and largest GATT round, was the Uruguay Round which lasted from 1986 to 1994 and led to the WTO’s creation. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now cover trade in services, and in traded inventions, creations and designs (intellectual property).
The WTO is a place where member governments sort out the trade problems they face with each other. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTO's current work comes from the 1986-94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade. The WTO is currently the host to new negotiations, under the “Doha Development Agenda” launched in 2001.
Fields of action
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade. But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers — for example to protect consumers or prevent the spread of disease. At its heart are the WTO agreements which provide the legal ground-rules for international commerce. They are contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.
The system’s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable side-effects — because trade is viewed as important for economic development and well-being. This partly means removing obstacles, and also means ensuring that individuals, companies and governments know what the trade rules are and that they are transparent and predictable.
A third important side to the WTO’s work is the resolution of trade conflicts. Trade relations often involve conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, need interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO agreements.
WTO and the environment
The negotiations on trade and the environment are part of the Doha Development Agenda launched at the Fourth WTO Ministerial Conference in Doha, Qatar, in November 2001. The overarching objective is to enhance the mutual support of trade and environmental policies. The negotiations focus on three main themes:
- the relationship between the WTO rules and multilateral environmental agreements (MEAs). About 20 of the more than 250 multilateral environmental agreements (MEAs) include provisions that can affect trade. For instance, they may contain measures that prohibit trade in certain species or products, or that allow countries to restrict trade in certain circumstances;
- closer collaboration between the WTO and MEA secretariats to ensure that the trade and environment regimes develop coherently;
- the elimination of tariffs and non tariff barriers on environmental goods and services, to create “win win win” situations for trade, the environment and development. These negotiations deal with the reduction or elimination of tariff and non-tariff barriers to environmental goods and services — for example catalytic converters, air filters or consultancy services on wastewater management;
- The issue of fisheries subsidies is also part of the Doha negotiations on trade and the environment. The Doha Ministerial Conference launched negotiations on fisheries subsidies, to ban certain forms of fisheries subsidies that contribute to overcapacity and overfishing.
Please note that others may also have edited the contents of this article.