The World Trade Organization (WTO) is the largest, most powerful international organization dealing with global rules of trade among nations. It was formed in 1995 following the so-called Uruguay Round of negotiations under the General Agreement on Tariffs and Trade (GATT), the previous multilateral trading system established in 1948. Whereas GATT was primarily concerned with trade in goods, the WTO covers trade in goods and services, banking and finance, intellectual property, dispute settlement, and trade policy reviews. The purpose of the WTO is to provide a negotiating forum for nations to form agreements to lower trade barriers to ensure that trade flows as freely, fairly, and predictably as possible. The WTO regulates trade by administering and negotiating trade agreements, resolving trade disputes, reviewing national trade policies, providing technical assistance and training programs in developing nations, and cooperating with other international organizations. All WTO trade agreements are the result of a consensus among representatives of member governments, ratified by the parliaments of the participating nations. These binding agreements guarantee nations their trade rights and responsibilities. For the 147 member nations, the WTO is the most influential institution of international commerce.
Wto Agreements and Organization
Under WTO agreements, countries should neither discriminate among their trading partners nor should they discriminate between foreign and domestic products and services. Every government should be given "most-favored-nation" status whereby any favor granted to one nation must be granted to every other nation, thus ensuring that all trade partners be treated equally. The WTO aims to make trade more free and more fair by lowering trade barriers such as customs duties (tariffs), eliminating import bans or quotas, and limiting the nontariff trade barriers that nations may implement and enforce, such as domestic laws regulating product standards and liability, environmental protections, use of tax revenues for public services, and other domestic laws regulating investment and trade. The WTO limits the nature of tariffs a nation may impose, as well as what kind of nontariff barriers to trade nations may implement and enforce. Through the WTO Dispute Settlement Process, nations can challenge each other's laws on behalf of their commercial interests if they believe barriers to trade exist. If member nations do not conform to WTO regulations they face possible economic sanctions.
Six main agreements comprise the WTO: the umbrella agreement establishing the WTO, the General Agreement on Tariffs and Trade, the General Agreement on Trade in Services (GATS), and the agreements on Trade-Related Aspects of Intellectual Property (TRIPS), Dispute Settlement, and Trade Policy Reviews. The highest authority is the Ministerial Conference, where delegates from member nations meet every two years to reach consensus on multilateral agreements. The second level of authority, responsible for decisions between Ministerial Conferences, has three branches: the Dispute Settlement Body, the Trade Policy Review Body, and the General Council. The General Council is divided into three more councils, each handling a different area of trade: the Goods Council, the Services Council, and the TRIPS Council. Numerous specialized committees and working groups work on the details of individual agreements, as well as issues relating to the environment, development, finance, and regional trade agreements. The WTO Secretariat is based in Geneva, Switzerland, headed by a director-general with limited authority. The Secretariat's main duties include providing legal and technical support to the various councils and ministerial conferences, conducting research, and performing public affairs activities.
Relation to Science and Technology
Many WTO agreements affect the science and technology laws and practices of member nations. One example is the Sanitary and Phytosanitary Measures Agreement (SPS), which sets food safety and animal and plant health standards, including quarantine, inspection, and testing requirements. The aim of the SPS agreement is to establish standards based on accepted science to allow countries to set reasonable health and safety regulations but only to the extent necessary to protect human, plant, or animal life or health. The SPS agreement prevents countries from using higher sanitary and phytosanitary measures in order to protect domestic producers. WTO members can challenge each other's food health and plant and animal safety regulations if they exceed mandated limits.
The Agreement on Technical Barriers to Trade (TBT) ensures that product standards, regulations, testing, and certification for all goods, including industrial and agricultural products, do not become obstacles to trade. The TBT agreement sets limits on the standards governments may enforce to achieve social, environmental, consumer, or public health objectives. The aim is to prevent technical regulations and industrial standards from being used for protectionism. The WTO recognizes the rights of nations to protect the environment and public welfare but not if standards give domestically produced goods an unfair advantage or so far exceed the standards of other nations that they become an obstacle to trade. The TBT agreement subjects national product standards and regulations to scrutiny under WTO Trade Policy Reviews and challenges in Dispute Settlement Court.
The Agreement on Trade-Related Aspects of Intellectual Property establishes the levels of protection governments have to give the intellectual property rights of other governments. The agreement covers copyright (including computer programs, music recordings, and film), trademarks (signs and slogans), geographical indications (place-names that indicate where a product is from and what it is, such as champagne or tequila), industrial designs (for large-scale technologies), patents (protecting products and processes lasting for twenty years), trade secrets (and other undisclosed information with commercial value), and integrated circuit layout designs. TRIPS extends intellectual property rights to include pharmaceuticals, plant varieties, human and plant cell lines, microorganisms, and genes. The agreement defines what counts as intellectual property, how governments should enforce rights, and how to settle disputes over rights between member nations.
Criticisms of the Wto
The WTO has been dogged by controversy from its inception. It continues to be on the defensive against criticism that its agreements privilege corporate interest goals over public interest goals. Critics maintain that the WTO illegitimately dictates the policies of sovereign nations, promotes free trade at any cost, and gives commercial interests priority over development, the environment, health, safety, and worker rights. They further claim that it eliminates both job security and food security, favors developed nations over underdeveloped nations, and fosters a dispute resolution process that is undemocratic and unaccountable. The WTO maintains that through lowering import tariffs and "harmonizing" the international rules of commerce trade should become more predictable, more competitive, and more beneficial for all nations, especially less-developed nations.
Wallach, Lori, and Michelle Sforza. Whose Trade Organization?: Corporate Globalization and the Erosion of Democracy: An Assessment of the World Trade Organization. Washington, DC: Public Citizen, 1999.
World Trade Organization, ed. The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations. Cambridge, UK, and New York: Cambridge University Press, 1999.
