The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. Its purpose was the reduction of tariffs and other trade barriers and also elimination of preferences. It’s main commitment was to ensure international economic cooperation.
In 1993, the GATT was updated (GATT 1994) to include new obligations upon its signatories. One of the most significant changes was the creation of the World Trade Organization (WTO).
International trade liberalization is considered the biggest leap which came into existence with to the signing of multilateral trade agreements.
World Trade Organization was established in 1995 after the distress of General Agreement on Tariff and Trade (GATT). The main objective of WTO is to assist and support trade flow smoothly, freely, fairly and predictably.
These objectives are achieved by −
The WTO has 162 countries as member states reckoning for over 97% of world trade. All the members play an active role in decision-making. And, a consensus is finally drawn. A majority franchise is possible in WTO but it has never been used. The WTO’s settlements have by far been considered by all the parliaments of the member states.
The top most level in WTO is the decision-making body. It is the Ministerial Conference which meets at regular intervals once in every two years. The next level is the General Council. The general council meets every year at the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. Goods Council, Services Council and Intellectual Property (TRIPS) Council is the next level and all these level report to the General Council.
Various specialized committees, working groups and working parties handle the individual settlements and other regions like the surrounding, development, membership applications and regional trade settlements.
The WTO Secretariat, established in Geneva, has a head count of 600 and is led by a director general. Its annual budget is close to 160 million Swiss francs. There are no branch offices outside Geneva. As decisions are made by the members themselves, the Secretariat has no role in the decision-making process that other international bureaucracies are given with.
The WTO is governed by its member government. The members i.e. the ministers who meet at least once every two years or ambassadors or delegates who frequently meet in Geneva make all the major decisions.