World Trade Organisation – Objectives, Functions, Structure, Membership and Council

The WTO is the umbrella Organisation responsible for overseeing the implementation of all the multilateral Agreements, which have been negotiated in the Uruguay Round, and those Agreements, which will be negotiated in the future.

Its basic objectives are similar to the ‘old’ GATT which has ceased to exist as a separate Institution and has become part of the WTO. These objectives have been expanded to give the WTO a mandate to deal with trade in service.

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Furthermore, in promoting economic development through the expansion of trade, adequate attention has to be given to protecting and preserving the environment.

In this respect, WTO adopts the principle of ‘sustainable development’ as agreed on in Rio de Janeiro during the United Nations Conference on Environment and Development (UNCED, June 1992).

Functions of the WTO:

The Agreement establishing the WTO distinguishes four different function of the WTO, viz:

i. It shall facilitate the implementation, administration and operation if the Uruguay Round legal instruments, as well as any new agree­ments that may be negotiated in the future.

ii. It shall provide a forum for further negotiations among member coun­tries on matters covered by the Agreements, as well as on new issues falling within its mandate.

iii. It shall be responsible for the settlement of differences and disputes among its member countries.

iv. It shall be responsible for carrying out periodic reviews of the trade policies of its member countries.

Structure of the WTO:

The main WTO Body responsible for decision-making is the Ministerial Conference which is expected to meet every two years. The first of such meetings was held in December, 1996 in Singapore.

During the two years between the meetings, the functions of the conference are performed by the General Council, which meets as a dispute settlement body when it considers complaints and takes necessary steps to settle disputes between member countries.

It is also responsible for carrying out reviews of the trade policies of individual countries, on the basis of the reports prepared by the WTO Secretariat.

The General Council is assisted in its work by the:

i. Council for trade in goods, which oversees the implementation and operation of GATT 1994, and its associate agreements;

ii. Council for trade in service, which oversees the implementation of GATS.

iii. Council for trade-related aspects of Intellectual Property Rights (TRIPS) which oversees the operation of the Agreement on TRIPS.

WTO Membership:

By the end of 1996, 129 countries had joined WTO. Former GATT members that have not so far acceded to WTO could do so until the end of 1997 (the end of the transition period).

Countries, which are at present not GATT members, can become members of WTO by negotiating for accession.

When negotiating, they have to agree to take steps to align their national legislation with the rules of the multilateral agreements. In addition, they have to make commitments to reduce tariffs and modify their regulations, so as to prove improved access for foreign goods and service.

These commitments are often referred to as the price of the ‘entry ticket’ entitling the acceding country to benefit on a Most Favoured Nation (MFN) basis from all tariff reductions and other commitments undertaken by member countries in the past.

The WTO Councils:

As stated, the WTO covers goods, service and trade-related intellectual property rights. A description of these three groups follows below. Note that these, councils came into existence in their current shape only in 1995, after the official establishment of the WTO (a result of the Uruguay Round).

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