World Trade Organization (WTO)

• The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible.
• It officially commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus replacing the General Agreement on Tariffs and Trade (GATT) that had been established in 1948.
• The WTO is the world’s largest international economic organization, with 164 member states representing over 98% of global trade and global GDP.

Functions

• The WTO has many roles: it operates a global system of trade rules, it acts as a forum for negotiating trade agreements, it settles trade disputes between its members and it supports the needs of developing countries.
• The WTO facilitates trade in goods, services and intellectual property among participating countries by providing a framework for negotiating trade agreements, which usually aim to reduce or eliminate tariffs, quotas, and other restrictions.
• All major decisions are made by the WTO’s member governments: either by ministers (who usually meet at least every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
• The WTO derives most of the income for its annual budget from contributions by its members. These contributions are based on a formula that takes into account each member’s share of international trade.

Decision Making

• The WTO’s top decision-making body is the Ministerial Conference. Below this is the General Council and various other councils and committees.
• Ministerial conferences usually take place every two years.
• The General Council is the top day-to-day decision-making body. It meets a number of times a year in Geneva.

Members

• The WTO has over 160 members representing 98 per cent of world trade. Over 20 countries are seeking to join the WTO.
• To join the WTO, a government has to bring its economic and trade policies in line with WTO rules and negotiate its terms of entry with the WTO membership.
• Ngozi Okonjo-Iweala is the seventh Director-General of the WTO. She took office on 1 March 2021, becoming the first woman and the first African to serve as Director-General. Her term of office will expire on 31 August 2025.