Have you ever queried that how do countries regulate themself, and how trade transpires among them? How do the countries settle upon the trade policies, currency exchanges, or dispute settlements? There must be the presence of some organization for such issues, right? This particular organization is World Trade Organization.
Now let us plunge straight into the detailed pool of information about WTO. It was established on January 1, 1995, and has its headquarters in Geneva, Switzerland. WTO is the only global international body that deals with the edicts of trade amidst several countries.
Numerous countries try to infer ways to barter with the predicaments they face during international trade through WTO, and the only place to settle the grievances of member nations, WTO is a forum for governments to negotiate trade treaties.
ESTABLISHMENT of WTO–
WTO commenced under the Marrakesh Agreement signed by 123 countries on April 15, 1994. The most substantial economic organization today, WTO, replaced the General Agreement on Tariffs and Trade (GATT), which commenced its operations in 1948.
PREREQUISITES TO BECOME AN AFFILIATE MEMBER OF WTO–
The WTO has 164 affiliates along with 24 observer governments. Liberia and Afghanistan were the last two recently joined members of WTO. A country need not be fully sovereign to become a part of the WTO. However, the country’s external commercial relations should be under customs territory with full autonomy. Due to this clause, Hong Kong has been a part of WTO since 1995 as Hong Kong, China.
WTO members represent 96.4% of global trade, and 96.7% of global GDP, according to the 2007 data. Iran and Algeria have the highest GDP and commerce outside the WTO.
The WTO carves a structure for trade policies; however, it does not particularize any consequences. It is concerned with locking the rules of a Trade Policy. WTO works on five elementary beliefs that are of utmost relevance to understand the role of WTO. These principles are:
- Non-Discrimination: – The Most Favored Nation (MFN) and the National Treatment Policy are its core components. The MFN rule signifies that a WTO member must implement the same rules and regulations to all the WTO members. The National Treatment Policy asserts that the imported goods should be treated equivalently to the domestic products, and more so after the product has infiltrated the domestic market.
- Reciprocity: – According to this, if a country wants to negotiate, then the accrual from such negotiation must be more prominent than the one that would arise from unilateral liberalization.
- Binding and Enforceable Commitments: – The tariff commitments decided upon by the trading parties could be changed only after negotiating it with the trading partner.
- Transparency: – It is mandatory for the WTO members to publish their trade regulations, to provide information to the other members when demanded, and to communicate the modifications made in the trade policy to WTO.
- Safety Values: – The WTO allows its members to shield the environment, public safety, plant health, plus animal health.
ORGANIZATIONAL STRUCTURE OF WTO:
ROLES OF WTO–
Following the brief overlook of the organization of WTO, let’s understand the purposes of WTO. It has primarily two roles: –
- To look after the implementation, administration, and operation of the agreements.
- To act as a forum for negotiations and dispute settlement.
DECISION- MAKING IN WTO–
Now here comes a knowledgeable part- Who exactly makes the resolutions? The answer to this particular question lies in the subtitle of the article. It is a rules-based, member-driven organization. All the verdicts are decided upon by the members of WTO. Hence, all the rules are the outcome of the negotiations among the governments. In case the consensus doesn’t work out, the WTO goes for voting.
Ministerial Conference, the highest decision-making body of the WTO, holds an assemblage usually every two years. All the countries in WTO (or customs unions) join together in this remarkable conference. The Ministerial Conference can take decisions on matters relating to the multilateral trade agreements.
DISPUTE SETTLEMENT SYSTEM OF WTO–
And what does the WTO do when a dispute arises among the nations? The evolution of rules, procedures, and practices during the half-century, at the time of GATT, forms the dispute settlement system of WTO. The WTO recognizes its dispute settlement system as a vital pillar of its organization. Also, it is a novel contribution to the stability of the global economy.
The multilateral system of settling disputes has been agreed upon by the member nations of WTO. The constituent realms do not take decisions individually but follow a rigorous procedure to get their grievances resolved. The prime partakers of the Dispute Settlement Body of WTO are-
Case-specific Panels,
Appellate body,
Director-general of WTO,
Secretariat of WTO,
Arbitraries, and
Advisory Experts.
WTO prioritizes mutually agreed solutions, and a provision regarding this is that no case should take more than 12 months to arrive at a decision. A maximum of 16 months of time is allotted to arrive at a judgment if the complaint is of such nature. If the complainant deems the case urgent, the decision is made even in fewer than 12 months.
RESEARCHES REGARDING WTO–
In the absence of WTO, the research says that the world could witness an increase in tariffs on their corresponding exports by nearly 32 percentage points. Studies further conclude that WTO has boosted global trade to the next level.
To read more about WTO’s works and progresses, please go to its official website: https://www.wto.org/
By: Onish
