World Trade Organization
1 January 1995
Round Negotiations (1986-1994)
countries (on 23rd of July 2008)
million Swiss francs for 2008
2007 Secretariat staff
Director-General, Pascal Lamy
Administering WTO trade agreements - Forum for trade
negotiations - Handling trade disputes - Monitoring national
trade policies - Technical assistance and training for
developing countries - Cooperation with other international
WTO in Brief:
The World Trade
Organization WTO is the only international organization dealing with
the global rules of trade between nations. Its main function is to
ensure that trade flows as smoothly predictably and freely as
Consumers and producers know that they can enjoy secure supplies and
greater choice of the finished products, components, raw materials
and services that they use. Producers and exporters know that
foreign markets will remain open to them.
The result is
also a more prosperous, peaceful and accountable economic world.
Decisions in the WTO are typically taken by consensus among all
member countries and they are ratified by members’ parliaments.
Trade friction is channeled into the WTO’s dispute settlement
process where the focus is on interpreting agreements and
commitments, and how to ensure that countries’ trade policies
conform with them. That way, the risk of disputes spilling over into
political or military conflict is reduced.
By lowering trade
barriers, the WTO’s system also breaks down other barriers between
peoples and nations.
At The Heart
of the system – known as the multilateral trading system – are the
WTO’s agreements, negotiated and signed by a large majority of the
world’s trading nations, and ratified in their parliaments. These
agreements are the legal ground-rules for international commerce.
Essentially, they are contracts, guaranteeing member countries
important trade rights. They also bind governments to keep their
trade policies within agreed limits to everybody’s benefit.
were negotiated and signed by governments. But their purpose is to
help producers of goods and services, exporters, and importers
conduct their business.
improve the welfare of the peoples of the member countries.
WTO’s overriding objective is to help trade flow smoothly, freely,
predictably. It does this by:
Administering trade agreements.
Acting as a forum for trade negotiations
Settling trade disputes
Reviewing national trade policies
Assisting developing countries in trade policy issues, through
technical assistance and training programs
Cooperating with other international organizations
WTO has 153 members, accounting for over 97% of world trade. Around
others are negotiating membership.
made by the entire membership. This is typically by consensus. A
majority vote is also possible but it has never been used in the
WTO, and was extremely rare under the WTO’s predecessor, the General
Agreement on Tariffs and Trade (GATT). The WTO’s agreements have
been ratified in all members’ parliaments
top level decision-making body is the Ministerial Conference which
meets at least once every two years.
this is the General Council (normally ambassadors and heads of
delegation in Geneva, but sometimes officials sent from members’
capitals) which meets several times a year in the Geneva
headquarters. The General Council also meets as the Trade Policy
Review Body and the Dispute Settlement Body.
next level, the Good Council, Services Council and Intellectual
Property (TRIPS) Council report to the General Council.
Specialized Committees, Working Groups and Working Parties deal with
the individual agreements and other areas such as the environment,
development, membership applications and regional trade agreements.
WTO Secretariat, based in Geneva, has around 625 staff and is headed
by a director general. It
does not have branch offices outside Geneva. Since decisions are
taken by the
Members themselves, the Secretariat does not have the
decision-making role that other international bureaucracies are
Secretariat’s main duties are to supply technical support for the
various councils and committees and the ministerial conferences, to
provide technical assistance for developing countries, to analyze
world trade, and to explain WTO affairs to the public and media.
Secretariat also provides some forms of legal assistance in the
dispute settlement process and advises governments wishing to become
members of the WTO. The annual budget is roughly 185 million Swiss
Dispute Settlement in WTO:
Dispute Settlement Body:
The DSB is, in
effect, a session of the General Council of the WTO: that is, all of
the representatives of the WTO member governments, usually at
ambassadorial level, meeting together. It decides the outcome of a
trade dispute on the recommendation of a
and (possibly) on a report from the
of WTO, which may have amended the Panel
recommendation if a party chose to appeal. Only the DSB can make
these decisions: Panels and the Appellate Body are limited to making
Administration as stated in the DSU:
1. The Dispute
Settlement Body is established to administer the DSU rules and
procedures and, except as otherwise provided in a covered agreement,
the consultation and dispute settlement provisions of the covered
agreements. Accordingly, the DSB shall have the authority to
establish panels, adopt panel and Appellate Body reports, maintain
surveillance of implementation of rulings and recommendations, and
authorize suspension of concessions and other obligations under the
covered agreements. With respect to disputes arising under a covered
agreement which is a Plurilateral Trade Agreement. Only those
Members that are parties to that Agreement may participate in
decisions or actions taken by the DSB with respect to that dispute.
2. The DSB shall
inform the relevant WTO Councils and Committees of any developments
in disputes related to provisions of the respective covered
3. The DSB shall
meet as often as necessary to carry out its functions within the
time-frames provided in the Understanding.
4. Where the
rules and procedures of the Understanding provide for the DSB to
take a decision, it shall do so by consensus.
Principles: Equitable, fast, effective,
WTO members have agreed that if they believe fellow-members are
violating trade rules, they will use the multilateral system of
settling disputes instead of taking action unilaterally. That means
abiding by the agreed procedures, and respecting judgments.
Typically, a dispute arises when one country adopts a trade policy
measure or takes some action that one or more fellow-WTO members
considers to be breaking the WTO agreements, or to be a failure to
live up to obligations. A third group of countries can declare that
they have an interest in the case and enjoy some rights.
A procedure for settling disputes existed under the old GATT, but it
had no fixed timetables, rulings were easier to block, and many
cases dragged on for a long time inconclusively. The Uruguay Round
agreement introduced a more structured process with more clearly
defined stages in the procedure. It introduced greater discipline
for the length of time a case should take to be settled, with
flexible deadlines set in various stages of the procedure. The
agreement emphasizes that prompt settlement is essential if the WTO
is to function effectively. It sets out in considerable detail the
procedures and the timetable to be followed in resolving disputes.
If a case runs its full course to a first ruling, it should not
normally take more than about one year — 15 months if the case is
appealed. The agreed time limits are flexible, and if the case is
considered urgent (e.g. if perishable goods are involved), then the
case should take three months less.
The Uruguay Round agreement also made it impossible for the country
losing a case to block the adoption of the ruling. Under the
previous GATT procedure, rulings could only be adopted by consensus,
meaning that a single objection could block the ruling. Now, rulings
are automatically adopted unless there is a consensus to reject a
ruling — any country wanting to block a ruling has to persuade all
other WTO members (including its adversary in the case) to share its
Although much of the procedure does resemble a court or tribunal,
the preferred solution is for the countries concerned to discuss
their problems and settle the dispute by themselves. The first stage
is therefore consultations between the governments concerned, and
even when the case has progressed to other stages, consultation and
mediation are still always possible.