Read this article on the World Trade Organization (WTO) to learn about why it was formed, its members and observers, the Doha Development Round, major obstacles, and agreements.
The World Trade Organization (WTO) was created in 1995 and has 157 member countries working together to supervise and liberalize international trade.
Learning Objective: Review the purpose and status of the World Trade Organization (WTO)
Members of the GATT created the World Trade Organization (WTO) with the adoption of the Marrakesh Agreement in April 1994, to supervise and liberalize international trade among participating countries. The WTO provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements signed by representatives of member governments. The main focus of the WTO's latest round of negotiations, the Doha Development Round which began in 2001, is to address the needs of developing countries.
In 2019 the WTO had more than 160 members representing 98 per cent of world trade. More than 20 countries were seeking to join the WTO.
The General Agreement on Tariffs and Trade (GATT) was established after World War II in the wake of several new multilateral institutions dedicated to international economic cooperation. Well before GATTs 40th anniversary, its members concluded their system was straining to adapt to the new global economy. They created the World Trade Organization (WTO) in GATT's final Uruguay Round in 1994. The WTO supervises GATT treaties and 60 other agreements made during the Marrakesh Agreement.
WTO's most important functions:
The WTO has 164 members and 23 observer governments. WTO members do not have to be full sovereign nation-members. Instead, they must be a customs territory with full autonomy in the conduct of their external commercial relations. Iran is the biggest economy outside the WTO. Most observers must start accession negotiations within five years of becoming observers. Fourteen states and two territories so far have no official interaction with the WTO.
The Doha negotiations round was to be an ambitious effort to make globalization more inclusive and help the world's poor, by slashing barriers and subsidies in farming. The initial agenda comprised further trade liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing countries.
According to the European Union, "The 2008 ministerial meeting broke down over a disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports."
The European Commission believes "The successful conclusion of the Doha negotiations would confirm the central role of multilateral liberalization and rule-making. It would confirm the WTO as a powerful shield against protectionist backsliding." An impasse remains and as of January 2019, agreement has not been reached, despite intense negotiations at several ministerial conferences and at other sessions.
The conflict between free trade on industrial goods and services, but retention of protectionism on farm subsidies to the domestic agricultural sector (requested by developed countries) and the substantiation of the international liberalization of fair trade on agricultural products (requested by developing countries) remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiations beyond the Doha Development Round.
The WTO oversees about 60 different agreements which have the status of international legal texts. These include the following.