It's a set of rules ...
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.
The system's overriding purpose is to help trade flow as freely as possible
-- so long as there are no undesirable side-effects. 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.
And it helps to settle disputes ...
This is a third important side to the WTO's work. 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.
Born in 1995, but not so young
The WTO began life on 1 January 1995, but its trading system is half a
century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had
provided the rules for the system. (The second WTO ministerial meeting, held in
Geneva in May 1998, included a celebration of the 50th anniversary of the
It did not take long for the General Agreement to give birth to an
unofficial, de facto international organization, also known informally as GATT.
Over the years GATT evolved through several rounds of negotiations.
The last and largest GATT round, was the Uruguay Round which lasted from 1986
to 1994 and led to the WTO's creation. Whereas GATT had mainly dealt with trade
in goods, the WTO and its agreements now cover trade in services, and in traded
inventions, creations and designs (intellectual property).
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