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World Trade Organisation (WTO)

The Uruguay round of GATT (1986-93) gave birth to World Trade Organisation. The members of the GATT signed on an agreement of Uruguay round in April 1994 in Morocco for establishing a new organization named WTO. It was officially constituted on January 1, 1995 which took place of GATT as an effective formal organization. GATT was an informal organization which regulated world trade since 1948. Like GATT, WTO’s headquarter is also in Geneva. Contrary o the temporary nature of GATT, WTO is a permanent organization which has been established on the basis of an international treaty approved by participating countries. It achieved the international status like IMF and IBRD but it is not an agency of the UNO. WTO has a General Council for its administration, which includes one permanent representative of each member nation. Generally, it has one meeting per month which is held at Geneva. The highest authority of policy making is WTO’s Ministerial Conference which is held after every 2 years.
The present strength of WTO membership is 160. This includes China & Nepal whose accession was approved by the WTO Ministerial conferences held in Doha & Cancun in November 2001 and Sept. 2003 respectively. There are presently 30 countries in the process of accession to the WTO. WTO is headed by Pasacal Lamy.
There are number of important committees for administration of WTO, out of which, 2 committees play the pivotal role in WTO. They are:
  1. Dispute Settlement Body – DSB - DSB considers the complaints of members countries against violation of rules by any member country. This body appoints a group of experts to investigate into such complaints. This body meets twice a month for such cases
  2. Trade Policy Review Body – TPRB - TPRB reviews the trade policy of member countries. The trade policy of all big trade powers of the World are reviewed after every 2 years. All the members of WTO are the members of TPRB
Other important bodies of WTO are:
  1. Council for Trade in Goods
  2. Council for Trade in Services
  3. Council for Trade related aspects of Intellectual Property Rights.

Objectives of WTO

  1. To improve standard of living of people in member countries.
  2. To ensure full employment and broad increase in effective demand.
  3. To enlarge production and trade of goods.
  4. To enlarge production and trade of service.
  5. To ensure optimum utilization of world resources.
  6. To accept the concept of sustainable development.
  7. To protect environment.

Functions of WTO

  1. To provide facilities for implementation, administration and operation of multilateral and bilateral agreements of the world trade.
  2. To provide a platform to member countries to decide future strategies related to trade and tariff.
  3. To administer the rules and processes related to dispute settlement.
  4. To implement rule and provisions related to trade policy review mechanism.
  5. To assist IMF and IBRD for establishing coherence in universal economic policy determination.
  6. To ensure the optimum use of world resources.

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