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13.6 World Trade Organization (WTO) (Part I) - Coggle Diagram
13.6 World Trade Organization (WTO) (Part I)
1. Establishment
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 and earlier negotiations under the General Agreement on Tariffs and Trade (GATT).
The WTO is currently the host to new negotiations, under the ‘Doha Development Agenda’ launched in 2001.
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade.
But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers — for example, to protect consumers or prevent the spread of disease.
2. Agreements
At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations.
These documents provide the legal ground rules for international commerce.
They are essentially contracts, binding governments to keep their trade policies within agreed limits.
Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives.
3. Purposes
The system’s overriding purpose is to help trade flow as freely as possible — so long as there are no undesirable side effects — because this is important for economic development and well-being.
That partly means removing obstacles. It also means ensuring that individuals, companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no sudden changes of policy.
In other words, the rules have to be ‘transparent’ and predictable.
Trade relations often involve conflicting interests.
Agreements, including those painstakingly negotiated in the WTO system, often need interpreting.
The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation.
That is the purpose behind the dispute settlement process written into the WTO agreements.
6. Dispute Settlement
The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly.
Countries bring disputes to the WTO if they think their rights under the agreements are being infringed.
Judgments by specially appointed independent experts are based on interpretations of the agreements and individual countries’ commitments.
5. Implementation and Monitoring
WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted.
Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented.
All WTO members must undergo periodic scrutiny of their trade policies and practices, each review containing reports by the country concerned and the WTO Secretariat.
4. Trade Negotiations
The WTO agreements cover goods, services and intellectual property.
They spell out the principles of liberalization, and the permitted exceptions.
They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets.
They set procedures for settling disputes.
These agreements are not static; they are renegotiated from time to time and new agreements can be added to the package.