The World Trade Organization (WTO) is the one whose function is to establish rules that facilitate trade between nations smoothly and well. It is the biggest economic organization in the whole world; it has 164 members and 98% of Global trade and Global GDP is represented by WTO. It has a budget of 197.2 million Swiss francs (approx. 220 million US$) as calculated in 2020.
Date of Formation:
1 January 1995; 27 years ago
Center William Rappard, Geneva, Switzerland
164 countries (160 UN countries, EU, Hong Kong, Macau and Taiwan)
English, French, Spanish
Although the WTO began in 1995, the system for it was already established in 1948. The General Agreement on Tariffs and Trade (GATT) already gave the rules and regulations for the system trading in 1948, hence giving the foundation for WTO in that year itself. The second ministerial meeting was conducted in Geneva, 1998 and also it was a 50th anniversary celebration of the system.
The General Agreement on Tariffs and Trade (GATT), the parent organization of the World Trade Organization (WTO), went through many evolutions through many levels or rounds of negotiations. Finally, after its last round in 1986, it ended in 1994. The last round was known as the Uruguay Round and it led to the formation of the WTO in 1995.
GATT only used to deal with goods only but WTO and its rules became upgraded and it started with services and other intellectual properties as well, like discoveries, trade creations and designs.
Functions of WTO:
Its main purpose is to make international trade run smoothly, effectively, without any chaos and conflict between the nations. The rules to make all that happen are:
- Being an administrator in Trade Agreements.
- Organize meetings for nations where they can have negotiations related to trade. In these meetings WTO arranges such an environment where nations can have one on one talks and come to a conclusion for mutual benefits of both nations.
- Any kinds of Trade Disputes on the international level are dealt with by the WTO.
- It also examines the trade policies and guidelines of member nations.
- WTO provides all the help needed in technical aspects and training to developing countries.
- Maintains healthy relationships with other International Organizations.
Ministerial Conferences of WTO:
- First Ministerial Conference was held in Singapore in 1996. The ministry of finance, trade and agricultural departments of 120 countries took part in this to resolve the issues in the respective areas and discuss how to make development in them.
The main issues discussed in MC1.
- Trade and investment
- Smoothness in trade all over the world.
- Fairness and transparency of governments in worldwide trade and competition.
- MC2 happened in Geneva, Switzerland in 1998, the purpose for this conference was to have discussions regarding implementation of Singapore Issues. Export subsidies and market access in the world were other issues discussed too.
- MC3 was held In Seattle, USA In 1999, in this one a thorough discussion on The Uruguay Round was done. Further discussions were on agricultural and services mentioned by ministries of nations. This conference failed to come up with any kind of conclusion.
- MC4 was conducted in Doha, Qatar, 2001 and the main discussion was The Doha Round.
- MC5 was held in Cancún, México, in 2003 and it was done to further discuss the Doha development process, all the ministerial negotiations were done to resolve the issues of the last conference.
- MC6 happened in Hong Kong in 2005. Discussions were mainly to resolve the Doha Round completely and finally come to a conclusion.
- MC7 was held in Geneva, Switzerland in 2009, this conference didn’t revolve around the Doha round, other discussions were done to resolve and develop the other issues. MC7 had a theme and it was ‘The WTO, the Multilateral Trading System and the Current Global Economic Environment’
- MC8 happened in Geneva, Switzerland in 2011; multiple topics were discussed related to the issues of trade policies in least developed countries. WTO also approved Montenegro, Russian Federation, and Samoa accessions in this conference. Discussion about the Doha round was also done to make the command more effective, functional and accurate.
- MC9 was held in Bali, Indonesia, 2013: in this conference WTO adopted the Bali Package, and the purpose of this package was;
- Enhancing trade opportunities in least developed countries.
- Guidelines related to food safety and security in Developing countries.
- To make the trading smooth overall.
- Yemen joined the WTO.
- MC10 happened in Nairobi, Kenya, 2015. Discussion about agricultural issues, cotton and general trade in Least Developed Countries were done in this conference. WTO adopted The Nairobi package and this package was aimed to help the poorest member nations of WTO.
- MC11 was held in Buenos Aires, Argentina, 2017. WTO discussed e-commerce duties, fisheries subsidies, and other issues to negotiations in all fields.
- MC12 happened, Nur-Sultan, Kazakhstan, 2021. It was canceled due to COVID 19.
Dispute settlement of WTO;
- WTO also helps nations to settle their conflicts and disputes in the trading.
- When a member country fails to follow the trade rules by the WTO, the country must approach the development settlement body of WTO.
- Members should settle their dispute by consultation provided by WTO.
- If the consultation doesn’t work, a panel is made to help resolve the conflicts.
- And then the panel will take all the necessary actions to resolve the disputes.
FAQs about WTO:
Q1. How long has India been a member of the WTO?
A1. India has been a member of the WTO since the beginning. India is one of the founding members. And India was also a member of GATT.
Q2. Why do we need WTO in the World?
A2. WTO helps the countries provide a legal framework so that the nations handle their trade related disputes well. Other benefits are:
- Better stable trade throughout the World.
- Better transparency and predictability in international trade.
- WTO provides all conditions and requirements to all member nations to make the trading well for them worldwide.
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