WTO

Introduction

The Agreement Establishing the World Trade Organisation Agreement, popularly known as the Marrakesh Agreement, set up a multilateral organisation, and together with the Multilateral Trade Agreements of the Uruguay Round of negotiations, entered into force on 1 January 1995.

The World Trade Organisation (WTO) provides the framework for the conduct of international trade in goods and services and for the protection of intellectual property rights (IPRs). It administers the implementation of a set of agreements, including the General Agreement on Tariffs and Trade (GATT), some agreements in the goods sector and, in addition, agreements in services and IPRs. The WTO also contains a framework for the enforcement of rights and obligations in these areas. The agreements generally contain disciplines on governments and, in some cases, even on enterprises.

The basic approach of the GATT has been that goods, when exported from a country, should generally have free entry into the importing country. Customs duty (tariff) can, however, be imposed at the border. The GATT provides a framework for negotiations on the levels of tariff. It also permits countries to apply, under certain situations, some non-tariff measures to directly restrain imports. Besides, it provides for protection against unfair trade and disguised obstructions to trade. The objective is that such trade-distorting measures should not be permitted to erode the benefit which a country gets by the reduction of tariff levels in other countries.
Up until the beginning of the seventies, the main concern of the GATT had been to reduce the tariff levels in various countries, so that trade in goods was facilitated. Thereafter the concerns have been wider.

Seven rounds of multilateral trade negotiations (MTNs) have taken place in the GATT: Geneva (1947), Annecy (1948), Torquay (1950), Geneva (1956), Dillon (1960-1961), Kennedy (1964-1967), Tokyo (1973-1979) and Uruguay (1986-1994).
The problems of development came up for consideration in the GATT in the late fifties and early sixties. It was appreciated that the poor countries that did not have much production and trading capacity needed special consideration within the framework of the GATT. With this problem in view, Part IV on Trade and Development was incorporated into the GATT in the early sixties. Later in the Tokyo Round, differential and more favourable treatment to developing countries as a departure from the normal GATT rules was given formal recognition.

Up to the sixties, the various Rounds of the MTNs were almost exclusively devoted to the exercise of tariff reduction. ... In the Tokyo Round, apart from the reduction of tariffs, a major exercise was undertaken to strengthen disciplines on non-tariff measures, on counter-action against unfair trade and on the prevention of disguised obstructions to trade. The result was a number of agreements called Tokyo Round Codes which covered the areas of subsidy, dumping, government procurement, tehcnical barriers to trade, customs valuation, import licensing, civil aircraft, dairy products and bovine meat.

Members of the GATT were not obliged to join these new agreements of the Tokyo Round. The final position was that developed countries, with very few exceptions, joined these agreements, but only very few developing countries joined them. Many of them probably thought that the new obligations were too severe, or that the benefit flowing out of them was not great enough.

Soon after the conclusion of the Tokyo Round, some major developed countries showed rapidly enhancing interest in the trade of knowledge-intensive goods, in services and in the protection of IPRs and in the expansion of their investment opportunities. These new issues were increasingly becoming more important for their economies than the traditional trade of goods.

Besides, some developed and developing countries which were major exporters of agricultural products had been strongly feeling for some time that the normal GATT disciplines should also cover the agricultural sector, an area which had earlier been under soft discipline.

All this led to the launching of the Uruguay Round of MTNs in 1986. It resulted in a comprehensive set of agreements in the areas of goods, services and IPRs. The agreements of the Uruguay Round came into force in 1 January 1995. In this process, the GATT, which had traditionally been dealing with the trade in goods, got changed into the WTO, with a much wider coverage, including those areas having no direct link with the trade in goods.

All these areas have been integrated within a common framework of enforcement through the dispute settlement process which is meant to ensure the protection of rights and the discharge of obligations of Members. They have also been linked through the possibility of cross-retaliation in the dispute settlement process.

HOW TO READ WTO AGREEMENTS

The agreements are contained in the WTO publication, The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts.

On some subjects it is not sufficient to just read the text of the agreements in order to know the obligations of Members. Some schedules should also be consulted for this purpose. These schedules are contained in separate volumes, which are available as WTO publications. For example, the commitments of Members on tariffs are in their tariff schedules, those in respect of subsidies in agriculture are in their respective schedules on agriculture, and the limitations to their obligations in the services sector are in their services schedules.

[Extracted from "The World Trade Organisation: A Guide to the Framework for International Trade" by Bhagirath Lal Das, an UNCTAD guide published by Third World Network, 1999.