What is World Trade Organization (WTO)?

Article Summary

Title: “WTO In Brief” Writer: World Trade Organization

Published: 2018 Prepared by: Nurul Izzah Binti Mohd Salim Sources: https://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr_e.pdf This article discussed the World Trade Organization that was established on 1st January1995 by Uruguay Round negotiations to help the trade flow smoothly, freely and predictably. Trade negotiations system by WTO have developed tariff reductions, anti-dumping, non-tariff measures, and later, they included other negotiations such as agricultural tariffs and trade and the environment. Therefore, the WTO has become the successor to the General Agreement on Tariffs and Trade (GATT) and the WTO agreements have been set to ensure that trade is as fair as possible and guaranteed the WTO members’ rights, particularly in build the trade capacity in developing or least-developed economies.

Global trade rules secure the supplies for customers and producers and their greater choice wherein the finished products, components, raw materials and services. Generally, it is functioning in trade to provide assurance and stability to them and lead to an accountable economic world. Besides, the WTO Committee on Trade and Development is responsible for the WTO agreements, technical cooperation and the increased participation of developing economies. The technical assistance and learning have benefited the participants to improve their understanding regarding WTO agreements and global trade rules. Furthermore, the WTO members launched the Aid for Trade initiative to help developing economies build the trade capacity, enhance their infrastructure and improve their ability to benefit from trade-opening opportunities. The WTO’s system known as the multilateral trading system has to lower the trade barriers through negotiations between governments member to improve the welfare of the peoples of the WTO’s members.

Besides that, The Agreement on Trade Facilitation is the first multilateral agreement by the WTO that cut trade costs by more than 14% and enhance the global exports suitable with their aim to reduce the border delays by slashing the red tape. The WTO’s agreements have been set by the Uruguay Round negotiations which a major revision of the original General Agreement on Tariffs and Trade (GATT). These agreements guaranteed WTO’s members rights, their obligations and the exports and imports by them will be treated fairly together with the other member’s markets too. Such agreements were created exclusively with new rules dealing with trade in services and intellectual property and new procedures for dispute settlement. For example, dispute settlement was created to resolve trade conflicts and ensure that trade flows smoothly. Hence, any members can settle their differences through consultation with each other and if it is unsuccessful, a stage-by-stage procedure will be taken by them and a panel of experts will rule the procedure and the chance to appeal the ruling on legal grounds. Next, in negotiating lower tariffs and other trade barriers such as import quotas and subsidies, the WTO agreements set out the Marrakesh Agreement and its annexes that dealing with important rules relating to trade in goods in the specific sectors and issues such as agriculture, product standards and action taken against dumping.

Based on my personal view, I agree that there are some benefits from the World Trade Organization (WTO). Firstly, the WTO was created to ensure the trade flow smoothly and settling the trade disputes that arise or may arise. It is more convenient when WTO is the only international organization that deals with global trade rules and ensure the members follow the rules and avoid non-discrimination among them. Subsequently, the decisions in the WTO are made by the entire membership wherein by consensus and the WTO’s agreements have been ratified in all members’ parliaments. Thus, the decisions can be seen to be more quality and approved by all members without any discrimination issues. Secondly, the WTO’s top-level decision-making body usually meets every two years and it is governed by the Ministerial Conference followed by the General Council, the Goods Council, Services Council and Intellectual Property(TRIPS) Council. There are other specialized committees, working group and working parties that deal with individual agreements associated with global trade rules, for instance, the membership applications of trade matters.

The WTO Secretariat has no decision-making role since the decisions are by the WTO’s members, yet, the Secretariat’s are functioning in providing technical assistance for developing economies and explaining WTO activities to the public and media. Furthermore, the WTO helps the developing economies to build their trade capacity particularly to build the infrastructure that they need to participate in world trade. Therefore, the developing economies can enhance and expand their imports and exports trade with the help of the WTO and this can be seen in the Standards and Trade Development Facility (STDF) where this partnership supported by the WTO are helping the developing economies to meet the international standards, for example, food safety, animal health, and accessing the global markets. The WTO plays an important role to contribute to the developing economies’ trade to grow their economies, reducing the poverty and sustainable development itself. As a result, special provisions have been created for them in the WTO agreements to increase their trade opportunities and give them longer time periods to implement their commitments.

In summary, the World Trade Organization (WTO) is the only international organization that deals with the global trade rules, regulates the trade issues between countries, and the WTO multilateral trading system is regulated by agreements from the members and was ratified in their parliaments. Lastly, global rules of trade provide assurance and stability to consumers, producers and the other members and the WTO guarantees their rights and obligations in their markets.