International Trade Rules

The World Trade Organization (WTO) provides the institutional and legal foundation for the multilateral trading system. It entered into force on January 1, 1995. The Agreement that sets out its role, structure and powers is the first text in the package of Uruguay Round Agreements that were signed in Marrakech on 15 April 1995.

The creation of a new international organization to oversee and coordinate the functioning of the multilateral trading system was not foreseen at the beginning of the Uruguay Round (UR) negotiations. As the negotiations advanced, however, it became increasingly evident that great advantage could be derived from creating institutional structure to oversee the post-UR world trading system. The result was the WTO, established by a brief Agreement of sixteen Articles, plus four annexes that contain all the other agreements reached in the UR as well as the many earlier GATT provisions and understandings that have been carried over to the new system of multilateral trade relations.

Structure and Basic Functions

The WTO is headed by a Ministerial Conference, composed of all WTO members, which meets at least once every two years. It is, however, the General Council (GC) -also made up of the full membership of the WTO- that is in effect responsible for the continuing management of the organization. The General Council has also two additional specific tasks:  it acts as the Dispute Settlement Body and the Trade Policy Review Body, as requested.

Three separate sets of subsidiary bodies report to the GC. The first and most important set consists of three Councils which supervise the work arising from the obligations of member countries under the agreements on trade in goods, trade in services and trade-related aspects of intellectual property rights. A second set of subsidiary bodies is responsible for broad functions that cut across sectoral responsibilities. The third group consists of bodies established under the Plurilateral Trade Agreements (these are agreements that are binding only for those countries that elect to sign them).

Further readings and links:

• WTO organizational chart

 Functions

Article III of the WTO Agreement defines five functions for it:

• to facilitate the implementation, administration and operation and further the objectives of the multilateral and plurilateral trade agreements;
• to provide a forum for multilateral and plurilateral trade negotiations;
• to settle disputes that may arise between members
• to conduct trade policy reviews;
• to cooperate with the World Bank and the IMF with a view to achieving coherence in global economic policy making.

Further readings and links:

• Dispute Settlement at the WTO
• Trade Policy Reviews by the WTO

Last updated on Jan 21, 2009