WORLD TRADE ORGANIZATION (WTO)

Before the establishment of the WTO in 1995, global trade was governed by the General Agreement on Tariffs and Trade (GATT), created in 1947.
The purpose of the GATT was to reduce trade barriers and promote economic growth.
Its scope was limited, focusing mainly on trade in goods and lacking a formal institutional structure.
The Uruguay Round (1986-1994) negotiations addressed these limitations.
It resulted in the creation of the WTO.
It expanded the trade framework to include services, intellectual property, and investment and established a permanent institutional structure for global trade governance.

Formation of the WTO

Established: January 1, 1995
Headquarters: Geneva, Switzerland
Members: 164 countries (as of 2024)
Director-General (2025): Dr. Ngozi Okonjo-Iweala (Nigeria)
The WTO was established under the Marrakesh Agreement signed in April 1994, replacing GATT as the permanent framework for regulating international trade.

Promote free, fair, and predictable trade flows
Serve as a forum for negotiating trade agreements
Provide an effective dispute resolution mechanism
Ensure transparency and non-discrimination in international trade practices
Enhance the integration of developing and least-developed countries into the global economy

Area	GATT (Pre-1995)	WTO (Post-1995)
Focus	Trade in goods	Trade in goods, services, intellectual property
Legal Status	Provisional Agreement	Full-fledged international organization
Dispute Settlement	Slow and non-binding	Binding Dispute Settlement Body (DSB)
Membership Obligations	Flexible	Uniform and enforceable commitments
Coverage of Sectors	Limited	Broader: Includes TRIPS, GATS, etc.

GATT 1994: Continuation of trade in goods with updated provisions.
GATS (General Agreement on Trade in Services): Liberalization of global service sectors.
TRIPS (Trade-Related Aspects of Intellectual Property Rights): Sets minimum standards for IPR protection.
DSU (Dispute Settlement Understanding): Provides rules for resolving trade disputes.
TBT (Technical Barriers to Trade) and SPS (Sanitary & Phytosanitary Measures): Regulate technical standards and health measures affecting trade.

Establishes a rules-based trade order
Aims to reduce trade barriers through negotiations and binding commitments
Facilitates economic cooperation among member nations
Enhances transparency through trade policy reviews
Encourages non-discriminatory treatment via Most Favoured Nation (MFN) and National Treatment principles

Member since: 1995
Advocates for:
- Special and differential treatment for developing countries
- Reforms in agricultural subsidies (AMS)
- Regulation of fisheries subsidies
- Public stockholding for food security
- E-commerce and data localization

The DSU provides a structured process for resolving trade disputes, including consultations, panel proceedings, and appeals.
Ensures that rulings are binding and must be implemented by the concerned parties.

Decision-Making Process: Consensus-based decisions can be slow and cumbersome.
Developing Countries' Concerns: Issues related to agricultural subsidies, intellectual property rights, and market access remain contentious.
Relevance in Modern Trade: The rise of regional trade agreements and bilateral deals raises questions about the WTO's role in the current global trade landscape.