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What
is the WTO?
WTO is short for the World
Trade Organization
The WTO is the
only international body dealing with the rules of
trade between nations. Membership is voluntary and is composed of
the governments of sovereign nations and autonomous trade/tariff
districts.
The WTO has nearly 150 member nations, who together represent over 97%
of global trade.
Over 30 additional countries are negotiating membership.
Headquartered in Geneva, Switzerland, the WTO is completely
separate from the United Nations. Known initially as GATT, it grew up as an informal organization
supporting the 1947 GATT treaty. The WTO was not formally established
until January 1, 1995 as part of the GATT 1994 revision.
The WTO provides the
framework for member governments to negotiate trade agreements and resolve trade disputes.
Trade agreements have the status of
international treaties. They are negotiated by consensus
and signed by ministerial-level representatives of member governments,
but they do not enter into force until ratified by two-thirds of the national legislatures (parliaments)
of member nations.
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The
scope of trade
agreements has expanded over the years. Initially focused
on agricultural products and manufactured goods, WTO treaties
now cover services and intellectual property: |
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General Agreements on Tariffs and Trade
(GATT), the initial treaty, was first adopted in 1947 and
substantially revised in 1994. |
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General Agreement on Trade in Services
(GATS) entered into force January 1995 and covers banking,
insurance, telecommunications, transport, travel and hotels. |
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Trade-Related Aspects of Intellectual
Property Rights Agreement (TRIPs) also entered into force January 1995
and covers copyrights, patents, trademarks, industrial designs,
integrated circuit layout and trade secrets. |
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Barriers
to trade are mechanisms devised by national
governments to give their domestic producers an advantage in
their home markets over imports from other nations. Three
principal types of barriers to trade have been recognized by WTO
agreements: |
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Tariffs
(customs duties) are a governmental tax levied on imported goods
or services that is not assessed against similar goods or
services produced within the country. Lowering tariff levels on imports remains a substantial area of
concern, especially among developing nations. |
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"Dumping" refers to the practice of
selling exported goods below-cost with the aid of government
subsidies. Because this tends to drive the importing nation's
own producers out of business, "anti-dumping" agreements are a
contentious issue. |
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Technical barriers to trade are overly-restrictive
government mandates posing as technical specifications for
safety or the protection of human health and the environmental,
but whose real intent is to restrict access to domestic markets. |
The
WTO serves as a sort of clearinghouse for proposed environmental and
safety regulations because the
Agreement on Technical Barriers to Trade (TBT) requires
national governments to notify the WTO Secretariat whenever their
proposed technical regulations or conformity assessment procedures are
not based upon
international standards.
This summary of
the World Trade Organization is designed to
provide you with an accurate, easy-to-understand overview of the
topic and
does not
constitute legal advice. The actual standard in the original language
should be reviewed and used for all business, legal, and product
compliance purposes.
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Technical Consulting
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