The World Trade Organization
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 possible.
The result is assurance. 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.
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.
The agreements were negotiated and signed by governments, but their purpose is to help producers of goods and services, exporters, and importers conduct their business.
The goal is to improve the welfare of the peoples of the member countries.
The multilateral trading system -- past, present and future.
The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.
So while the WTO is still young, the multilateral trading system that was originally set up under GATT is already 50 years old. The system celebrated its golden jubilee in Geneva on 19 May 1998, with many heads of state and government leaders attending.
The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew, on average, by 6% annually. Total trade in 1997 was 14 times the level of 1950. GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth.
The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The latest round -- the 1986-94 Uruguay Round -- led to the WTO's creation.
The negotiations did not end there. Some continued after the end of the Uruguay Round. In February 1997 agreement was reached on telecommunications services, with 69 governments agreeing to wide-ranging liberalization measures that went beyond those agreed to in the Uruguay Round.
In the same year, 40 governments successfully concluded negotiations for tariff-free trade in information technology products, and 70 members concluded a financial services deal covering more than 95% of trade in banking, insurance, securities and financial information.
At the May 1998 ministerial meeting in Geneva, WTO members agreed to study trade issues arising from global electronic commerce.
The next ministerial conference is due to be held in the United States in late 1999.
In 2000, new talks are due to start on agriculture and services and possibly a range of other issues.
The WTO's overriding objective is to help trade flow smoothly, freely, fairly and predictably. …