Getting to know the WTO

The General Agreement on Tariffs and Trade (GATT) regulating trade in goods came into force in 1948 with 23 signatories, of which 12 were developing countries. Conceived as a temporary agreement, the intention was for GATT to be overseen by a broader United Nations agency, the International Trade Organization (ITO), which would be responsible for the rules of world trade and international investment. However, the proposed ITO lacked the political support of the United States, thus leaving GATT as the real basis of the post-war trading system.

During GATT's first 25 years, negotiations cut developed countries' tariffs on industrial goods from an average of 40 percent to around four percent. Important products from developing countries' (namely agricultural products and textiles), however, were largely excluded from negotiations. Originally, GATT did not distinguish between developed countries and developing countries. Over time, however, developing countries became eligible for special treatment, in as much as they have not been expected to liberalise their trade at the same rate and to the same extent as developed countries.

The Uruguay Round (1986-1994) was the last set of negotiations under GATT. It resulted in a new institutional framework for the multilateral trading system, the World Trade Organisation (WTO). Trade rules were extended to include trade in services and intellectual property rights, and trade in agricultural products, textiles and clothing were brought under GATT's scope. Another important change was the requirement that all WTO member countries sign up to all agreements, regardless of their level of development.

The WTO was established in January 1995. Its agreements can be divided into three areas - trade in goods (GATT and supplementary agreements); the General Agreement on Trade in Services (GATS); and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The WTO also administers a mechanism for dispute settlement covering all agreements.

The highest decision making body in the WTO is the ministerial conference, convened at least every two years. Since the establishment of the WTO, five ministerial conferences have been held: Singapore (1996), Geneva (1998), Seattle (1999), Doha (2001) and Cancún (2003). The Sixth WTO Ministerial Conference is due to take place in Hong Kong, December 2005. At the 2001 Doha Ministerial Conference members initiated a new round of negotiations under the name of the 'Doha Development Agenda', also known as the 'Doha Round'. The Doha Round is scheduled to conclude at the end of 2006.

Dominic Furlong
The International Centre for Trade and Sustainable Development (ICTSD)
International Environment House
1219 Geneva, Switzerland
T +41 (0)22 917 8459
F +41 (0)22 917 8093
dfurlong@ictsd.ch

See also

Practical Guide to the WTO A publication by 3D, Geneva
www.3dthree.org/en/complement.php? IDcomplement=36&IDcat=4&IDpage=14

Views expressed on these pages are not necessarily those of DFID, IDS, id21 or other contributing institutions. Copyright remains with the original authors but (unless stated otherwise) any article may be copied or quoted without restriction, provided both source (id21, insights) and authors are properly acknowledged and informed. Copyright © 2004 id21. All rights reserved.