Structure, Objectives and Functions of WTO
World Trade Organisation (WTO) is a permanent international organisation dealing with global rules of trade between nations. It came into existence in 1995. It is the successor of General Agreement on Tariffs and Trade (GATT) established aftermath of Second World War. The last round 1986-94 Uruguay round led to creation of WTO. At the heart of WTO is multilateral trading system. It consists of WTO agreements negotiated and signed by majority world’s trading nations and their parliaments. One of important functions of WTO is smooth trade flow between nations.
Objective of WTO
The objective of WTO is to ensure that trade flows as smoothly, predictably and smoothly as possible. Some of the other objectives of WTO are:
- To lower trade barriers between nations and its people
- The purpose is to help producers of goods and services, exporters, importers conduct their business
Functions of WTO
- Administering trade agreements
- Acts as forum for trade negotiations
- Settling trade disputes
- Reviewing national trade policies
- Assisting developing countries in trade policy issues, through technical assistance and training programmes
- Cooperating with other international organisations
Members of WTO
WTO has about 160 members which accounts for 95% of world trade. There are 25 other negotiating memberships.
Structure of WTO
- Ministerial Conference:
The topmost decision making body WTO is Ministerial Conference. It meets once in two years.
- General Council: The second level of WTO is General Council. It consists of members, ambassadors and heads of delegations. It meets several times a year in Geneva.
- Other Councils: There are many other types of council like Goods Council, Services Council, IP Council etc. These councils deal with specific issues.
Secretariat of WTO
The secretariat of WTO is based in Geneva, Switzerland headed by Director General. The present Director General of WTO is Roberto Azevêdo.
How WTO works?
The decisions at WTO are made by entire membership with consensus. These decisions are ratified in member nation parliaments as well. GATT is principal rule book of WTO for trade in goods.
Trading principles under WTO
Trade without discrimination:
- Most Favoured Nation
If a member country of WTO grants special favour in trade to some favoured country, then all other WTO countries will be given the same favour. Thus all countries become the most favoured nation in all other countries, thereby making every country equal.
- National Treatment
It means treating foreign goods and services at par with local equally by all members of WTO
How WTO is difference from GATT?
- GATT was agreement between contracting parties and was not an international organisation dealing in global trade
- GATT deals with trade in good only while WTO covers trading of services as well as Intellectual Property (IP)
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