WTO

The World Trade Organization (WTO) is an international organisation that regulates and liberalises global trade. The GATT (General Agreement on Tariffs and Trade )  is the predecessor to the WTO, which was established in 1947 to be replaced by a United Nations (UN) specialised agency known as the International Trade Organization (ITO). Even though the ITO never materialised, the GATT was a massive success in liberalising global commerce during the following five decades. As a result, there were suggestions for a more vital international institution to monitor trade and handle trade disputes by the late 1980s. As a result, the WTO commenced operations on January 1, 1995, following the conclusion of the Uruguay Round of global trade talks (1986–94). The WTO has 164 member countries, representing the majority of the world’s 195. They joined to take advantage of the WTO’s benefits of increased international commerce. The World Trade Organization (WTO) is headquartered in Geneva, Switzerland. The WTO promotes sustainable and universally accessible tourism

History

The ITO was envisioned as one of the fundamental pillars of post-World War II rebuilding and economic development, alongside the International Monetary Fund (IMF) and the World Bank. Accordingly, the UN Conference on Trade and Employment finalised a draught charter for the ITO, known as the Havana Charter, in Havana in 1948. The Havana Charter would have established general laws covering trade, investment, services, and business and employment practices. The United States, however, did not ratify the pact. Meanwhile, in Geneva in 1947, 23 nations reached an agreement to phase out import quotas and lower tariffs on merchandise trade, which became the GATT on January 1, 1948.

Even though the GATT was intended to be temporary, it was the sole significant agreement controlling international commerce until the WTO was established. Over 47 years, the GATT system grew into a de facto global trade organisation with over 130 nations. Numerous supplemental rules and arrangements, interpretations, waivers, reports by dispute-settlement panels, and judgments of the GATT’s council were added to or changed over various negotiating rounds. The original GATT and any revisions made before the Uruguay Round were renamed GATT 1947 during discussions that ended in 1994. This group of accords is distinct from GATT 1994, which includes the Uruguay Round’s revisions and clarifications (known as “Understandings”) and a dozen additional multilateral agreements on merchandise trade. GATT 1994 became an essential feature of the WTO’s funding agreement. 

Objectives

The WTO has six main goals:

1. To establish and enforce international trade rules,
2. To provide a stage for negotiating and monitoring further trade liberalisation,
3. To resolve trade disputes,
4. To improve decision-making transparency,
5. To collaborate with other major international economic institutions involved in global economic management, and
6. To assist developing countries in fully benefiting from the global trading system.

Although the GATT shares these principles, the WTO has followed them more entirely. The WTO, for example, covers all products, services, and intellectual property, as well as some investment policies. In contrast, the GATT concentrated nearly primarily on goods—though most agriculture and textiles were excluded— Furthermore, the permanent WTO Secretariat, which took over from the temporary GATT Secretariat, improved and institutionalised systems for examining trade policy and resolving disputes. Because the WTO covers a far more comprehensive range of products than the GATT, and because the number of member nations and their involvement has constantly increased—WTO members now account for more than 90% of global trade—open-access markets have risen dramatically.

The GATT and the WTO include regulations that serve at least three goals. First, they seek to safeguard the interests of small and weak countries against large and robust countries’ discriminatory trade practices. The most favoured nation and national-treatment provisions of the World Trade Organization (WTO) mandate that each WTO member must provide equal market access to all other WTO members and that domestic and international providers must be treated similarly. Second, members must limit trade exclusively through tariffs and give market access that is no less favourable than that established in their schedules. Third, the laws are intended to assist governments in fending off lobbying efforts by domestic interest groups demanding preferential treatment. 

Resolution of trade disputes

The GATT established a mechanism for resolving trade disputes and expanded significantly under the WTO. Members agree to refrain from taking unilateral action against one another. Instead, they must seek redress through the WTO’s dispute-resolution system and adhere to its rules and conclusions. In addition, the GATT’s dispute resolution procedures have been considerably simplified and automated, and the timeframe has been tightened.

Review of Trade-policy

The WTO also aims to raise public awareness about the scope and effects of trade-distorting policies, which it achieves through annual notification requirements and a policy-review mechanism. All changes in members’ trade and trade-related policies must be announced and made available to their trading partners. This requirement was a big step toward a more transparent government for many developing nations and countries with formerly centrally managed economies. Every two years, the WTO evaluates the trade policies of the world’s four significant traders, every four years, the policies of the next 16 largest traders, and every six years or more the policies of all other traders.

Conclusion

The notion that more open trade may increase economic growth and help countries develop is at the heart of the WTO’s trading system. In this way, business and development are mutually beneficial. Furthermore, the WTO accords contain several clauses that protect the interests of developing nations.