The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Facts about the WTO
Location: Geneva, Switzerland
Established: 1 January 1995
Created by: Uruguay Round negotiations (1986-94)
Membership: 164 members as of September 2020
Budget: 197 million Swiss francs for 2020
Secretariat staff: 623
Objectives of the WTO
In the preamble to the Marrakesh Agreement Establishing the World Trade Organization, the parties to the Agreement recognize the objectives they wish to attain through the multilateral trading system:
- raise living standards;
- ensure full employment;
- ensure a large and steadily growing volume of real income and effective demand;
- expand the production of and trade in, goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development.
The Agreement also recognizes the need for "positive efforts to ensure that developing countries, and especially the least-developed among them, secure a share in the growth in international trade commensurate with … their economic development".
Functions of the WTO
The WTO’s overriding objective is to help trade flow smoothly, freely and predictably. It does this by:
- Administering WTO trade agreements;
- Acting as a forum for trade negotiations;
- Settling trade disputes;
- Monitoring national trade policies;
- Building the trade capacity of developing economies;
- Cooperating with other international organizations.
The WTO has 164 members, accounting for about 98% of world trade. 25 countries are observers.
Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO and was extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments.
The WTO’s top-level decision-making body is the Ministerial Conference, which meets at least once every two years.
Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from Members’ capitals) which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.
At the next level, the Council for Trade in Goods, Council for Trade in Services and Council for Trade-Related Aspects of Intellectual Property Rights report to the General Council.
Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, regional trade agreements etc.
Detailed organization chart of the WTO structure:
The WTO Secretariat, based in Geneva, has 623 staff and is headed by a Director-General. It does not have branch offices outside Geneva. Since decisions are taken by the WTO’s members, the Secretariat does not itself have a decision-making role.
The Secretariat’s main duties are to supply technical support for the various councils/committees and the Ministerial Conferences, to provide technical assistance for developing economies, to analyse world trade and to explain WTO activities to the public and media.
The Secretariat also provides some forms of legal assistance in the dispute settlement process and advises governments wishing to become Members of the WTO. The annual budget contributed by Members is roughly 197 million Swiss francs.
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