The
world trade organization, WTO, is an organization created to supervise and
liberalize international trade. The organization officially commenced in
January 1995 under the Marrakech Agreement replacing the general agreement on
tariffs and trade, GATT, which had been in operation since 1948. the head
quarters of the WTO is located in genera. The WTO deals with regulations of trade
between participating countries. It provides a framework for negotiation and
formalization of trade agreements and a dispute resolution process aimed
at enforcing participants adherence to agreements which are signed by
representatives of member governments and ratified by their parliaments. Most
of the issues that the WTO focuses on derive from previous trade negotiations
and agreements.
Since
2001, the WTO has been working on a new trade negotiation agreement called the
“Doha development Agenda”. The aim in the enhance equitable participation of
power countries which represent a majority of the world’s population the WTO
has 153 members representing more than 97% of total world trade and 30
observers, most of them seeking membership the WTO is governed wader the
following arrangement.
1. A
ministerial conference, which meets every two years.
2. A
general council which implements the conferences’ policy decisions and is
responsible for day to day administration.
3. A
director-general who is appointed by the ministerial conference.
BRIEF HISTORY: GATT, which preceded the WTO, was
established after world war II in the wake of other new multilateral
institutions dedicated to international economic co-operation notably the
bretten woods institutions known as the world bank and the IMF. An
international institution for trade named international trade organization was
set up as a UN specialized agency to address trade barriers and other issues
indirectly related to trade including employment, investment, restrictive
business practices and commodity agreements. The ITO however was not approved
by the US and some other signatories which led to the collapse of the ITO. GATT
remained the only multilateral instrument governing international trade from
1948 till the establishment of the WTO in 1995. despite attempts in the mid
1950’s and 1960s to create some form of institutional mechanism for
international trade, GATT continued to operate for almost half a century to
operate for almost half a century as a semi institutionalized multi-lateral
treaty regime on a provisional basis. The GATT regime still exists as the WTO’s
umbrella treaty for trade agreements as updated by the Uruguay rounds
negotiations of 1994. in the final act of Marrakerh, a log list of agreements,
annexes, decisions and understandings
were adopted. The agreements fall into
six main parts.
1. The
agreement establishing the WTO
2. The
multi-lateral agreements on trade in goods and related investment measures.
3. The
general agreement on trade in services
4. The
agreement on trade-related aspects of intellectual property rights
5. Dispute
settlement
6. Review
of government trade policies
Functions of the WTO among the various functions of
the WTO, these are regarded by experts as the most important.
1. It
overseas the implementation, administration and co-operations of the agreements
covered above
2. It
provides a forum for negotiations and for the settlement of disputes
3. It
is the duty of the WTO to review and propagate the national trade policies and
to ensure the coherence and transparency of trade policies through surveillance
in global economic policy making.
4. The
assistance of developing least developed and low income countries in transition
to adjust to WTO rules and disciplines through technical coroperation and
training.
5. The
WTO is also centre of economic research and analysis regular assessments of the
global trade picture in its annual publications and research findings on
specific topics are produced by the organization.
6. The
WTO co-operates closely with the two other components of the Brethen woods
system, the IMF and the World Bank.
PRINCIPLES OF THE WTO TRADING
SYSTEMS:
The WTO established a framework for trade policies. It
does not define or specify outcomes. It is concerned with setting the rules of
the trade policy fames. Five principled of participation important in
understanding both pre-1994 GATT and the WTO are:
1. Non-
discrimination- it has two major component, the most favoured nation rule (MEN)
and the national treatment policy. Both are embedded in the main WTO rules on
goods, services and intellectual property, but their precise scope and nature
differ across these means. The MFN rule requires that a WTO member must apply
the same conditions on all trade relationship with other WTO members.
2. Reciprocity-
it reflects both a desire to limit the scope of fee-riding their may arise
because of MFN rules and a desire to obtain better access to foreign markets.
3. Binding
and enforceable commitments- the tariff commitments made by WTO members in a
multi lateral trade negotiation and on concessional baris are enumerated in a
schedule of concessions
4. Transparency:
the WTO members are required to pubcira their trade regulations, to maintain
institutions allowing for the review of administrative divisions affecting
trade to respond to requests for information by other, members and to notify
changes in trade policies to the WTO . the organizations system tries also to
improve predictability and stability, discourage quotes and other measures used
to set limits on quantities of imports.
5. Safety
values- in specific circumstance, governments are able to restrict trade. There
are three types of provision in their direction.
a. articles
allowing for the use of trade measures to attain no-economic objectives.
b. art
aimed at ensuring fair competition and
c. Provisions
permitting intervention in trade for economic reasons.
Exceptions to the MFN principle also allow
preferential treatment of developing countries, regional free trade areas and
customs unions.