The World Trade Organization | UPSC Mains: International Relations PDF Download

World Trade Organization (WTO)

• One of the most important features is that it is a forum where results come out after serious negotiations.
• Essentially, the WTO is a place where governments who are members go, in order to sort out the trade problems they face with each other.
• The first step is to talk. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations.
• The bulk of the WTO’s current work comes from the 1986-94 negotiations called the Uruguay Round.

The negotiations have helped to liberalize trade where countries have faced trade barriers and wanted them to be lowered. But the WTO is not just about liberalizing trade, and in some cases, its rules are such that trade barriers get support— for example, to protect consumers.

History of WTO

• It did not take long for the General Agreement to give birth to an unofficial, extant international organization, also known informally as GATT.
• Over the years, GATT evolved through several rounds of negotiations.
• The General Agreement on Tariffs and Trade (GATT) had its last round in 1986 and it lasted till 1994.
• This was known as the Uruguay Round and it led to the formulation of the World Trade Organization (WTO).

While GATT mostly dealt with trade in goods, the WTO and its agreements could not only cover goods but also trade in services and other intellectual properties like trade creations, designs, and inventions.
The WTO has 164 members and 23 observer governments. Afghanistan became the 164th member in July 2016. In addition to states, the European Union, and each EU country in its own right is a member.

Functions of the World Trade Organization (WTO)

• Administering WTO trade agreements
• Conducting forum for trade negotiations
• Handling trade disputes
• Monitoring national trade policies
• Providing technical assistance and training for developing countries
• Cooperation with other international organizations

Ministerial Conferences of WTO

Doha Declaration

• The Doha Declaration is the November 2001 declaration that came out of the 4th Ministerial Conference of the WTO, that took place in Doha, Qatar.
• This declaration gives the mandate for negotiations on an array of topics including issues concerning the implementation of the previous agreements.
• This is called the Doha Declaration on the TRIPS Agreement and Public Health.
• There were disagreements between developed and developing countries.
• The major bones of contention were agriculture, non-tariff trade barriers, industrial tariffs, services, and trade remedies.
• The Bali Ministerial Declaration was achieved in 2013 which is the first agreement under the Doha Round, and also the first unanimous agreement under WTO.

Dispute Settlement of the World Trade Organization 

• WTO is an international body that also deals in Dispute Settlements.
• The member country will approach the WTO’s dispute settlement body when a country fails to comply with WTO rules.
• All the members are encouraged to settle the disputes through consultation or a panel if the consultation fails.
• The constituted panel will circulate the verdict of the dispute settlement amongst WTO members who can decide to reject the ruling.
• If the ruling is approved, the member country that violated the rules must change rules in line with the WTO Agreement.
• In the case of failure to do so, the complaining country and the violating country may determine a mutually-acceptable compensation, failing which, the complaining country may retaliate suitably.

Is India a founding member of the WTO?

• India has been a member of the World Trade organization since the beginning of 1995.
• India was also a member of GATT since 1948.

What is the WTO and what are its functions?

• The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.
• Its main functions are to maintain smooth trade globally and resolve issues or disputes that can affect world trade.

What are the advantages of WTO?

• With WTO, member countries get a provision of a legal framework to process negotiations and disputes amongst them. Other advantages are:
• Better stability in trade
• Predictability
• The WTO is also an administrative organization that allows trade under certain conditions for global ease.