History of the World Trade Organization

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The economists Harry White (left) and John Maynard Keynes at the Bretton Woods Conference. Both had been strong advocates of a central-controlled international trade environment and recommended the establishment of three institutions: the IMF (for fiscal and monetary issues); the World Bank (for financial and structural issues); and the ITO (for international economic cooperation). WhiteandKeynes.jpg
The economists Harry White (left) and John Maynard Keynes at the Bretton Woods Conference. Both had been strong advocates of a central-controlled international trade environment and recommended the establishment of three institutions: the IMF (for fiscal and monetary issues); the World Bank (for financial and structural issues); and the ITO (for international economic cooperation).

The World Trade Organization (WTO) is an intergovernmental organization which regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. [2] The WTO deals with regulation of trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which is signed by representatives of member governments [3] : fol.9–10  and ratified by their parliaments. [4] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986–1994).

Contents

The World Trade Organization's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation – notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund. A comparable international institution for trade named the International Trade Organization was successfully negotiated. The ITO was to be a United Nations specialized agency and would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. But the ITO treaty was not approved by the U.S. and a few other signatories and never went into effect. [5] [6] [7]

In the absence of an international organization for trade, the GATT would over the years "transform itself" into a de facto international organization. [8]

GATT rounds of negotiations

The GATT was the only multilateral instrument governing international trade from 1946 until the WTO was established on 1 January 1995. [9] Despite attempts in the mid-1950s and 1960s to create some form of institutional mechanism for international trade, the GATT continued to operate for almost half a century as a semi-institutionalized multilateral treaty regime on a provisional basis. [10] Eight rounds of negotiations occurred under GATT. [11]

From Geneva to Tokyo

The first real[ clarification needed ] GATT trade rounds concentrated on further reducing tariffs. Then, the Kennedy Round in the mid-sixties brought about a GATT anti-dumping Agreement and a section on development. The Tokyo Round during the seventies was the first major attempt to tackle trade barriers that do not take the form of tariffs, and to improve the system, adopting a series of agreements on non-tariff barriers, which in some cases interpreted existing GATT rules, and in others broke entirely new ground. Because these plurilateral agreements were not accepted by the full GATT membership, they were often informally called "codes". Several of these codes were amended in the Uruguay Round and turned into multilateral commitments accepted by all the WTO members. Only four remained plurilateral (those on government procurement, bovine meat, civil aircraft, and dairy products), but in 1997 WTO members agreed to terminate the bovine meat and dairy agreements, leaving only two. [9]

Uruguay Round

Well before GATT's 40th anniversary, its members concluded that the GATT system was straining to adapt to a new globalizing world economy. [12] [13] In response to the problems identified in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage, etc.), the eighth GATT round – known as the Uruguay Round – was launched in September 1986, in Punta del Este, Uruguay. [12]

It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and reforming trade in the sensitive sectors of agriculture and textiles; all the original GATT articles were up for review. [13] The Final Act concluding the Uruguay Round and officially establishing the WTO regime was signed 15 April 1994, during the ministerial meeting at Marrakesh, Morocco, and hence is known as the Marrakesh Agreement. [14]

The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations (a distinction is made between GATT 1994, the updated parts of GATT, and GATT 1947, the original agreement which is still the heart of GATT 1994). [12] GATT 1994 is not, however, the only legally binding agreement included via the Final Act at Marrakesh; a long list of about 60 agreements, annexes, decisions, and understandings was adopted. The agreements fall into a structure with six main parts:

In terms of the WTO's principle relating to tariff "ceiling-binding" (No. 3), the Uruguay Round has been successful in increasing binding commitments by both developed and developing countries, as may be seen in the percentages of tariffs bound before and after the 1986–1994 talks. [17]

Ministerial conferences

The World Trade Organization Ministerial Conference of 1998, in the Palace of Nations (Geneva, Switzerland). Geneva Ministerial Conference 18-20 May 1998 (9305956531).jpg
The World Trade Organization Ministerial Conference of 1998, in the Palace of Nations (Geneva, Switzerland).

The highest decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

The WTO General Council, on 26 May 2009, agreed to hold a seventh WTO ministerial conference session in Geneva from 30 November–3 December 2009. A statement by chairman Amb. Mario Matus acknowledged that the prime purpose was to remedy a breach of protocol requiring two-yearly "regular" meetings, which had lapsed with the Doha Round failure in 2005, and that the "scaled-down" meeting would not be a negotiating session, but "emphasis will be on transparency and open discussion rather than on small group processes and informal negotiating structures". The general theme for discussion was "The WTO, the Multilateral Trading System and the Current Global Economic Environment" [19]

Doha Round (Doha Agenda)

The WTO launched the current round of negotiations, the Doha Development Round, at the fourth ministerial conference in Doha, Qatar in November 2001. This was an ambitious effort to make globalization more inclusive and help the world's poor, particularly by slashing barriers and subsidies in farming. [20] The initial agenda comprised both further trade liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing countries. [21]

The negotiations have been highly contentious. Disagreements continue over several key areas including agriculture subsidies, which emerged as critical in July 2006. [22] According to a European Union statement, "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." [23] The position of the European Commission is that "The successful conclusion of the Doha negotiations would confirm the central role of multilateral liberalisation and rule-making. It would confirm the WTO as a powerful shield against protectionist backsliding." [21] An impasse remains and, as of August 2013, the agreement has not been reached, despite intense negotiations at several ministerial conferences and at other sessions. On 27 March 2013, the chairman of agriculture talks announced "a proposal to loosen price support disciplines for developing countries’ public stocks and domestic pp aid." He added: "...we are not yet close to agreement –in fact, the substantive discussion of the proposal is only beginning." [24]

GATT and WTO trade rounds [25] [26] [27]
NameStartDurationCountriesSubjects coveredAchievements
Flag of Switzerland (Pantone).svg GenevaApril 19477 months23TariffsSigning of GATT, 45,000 tariff concessions affecting $10 billion of trade
Flag of France.svg Annecy April 19495 months34TariffsCountries exchanged some 5,000 tariff concessions
Flag of the United Kingdom.svg Torquay September 19508 months34TariffsCountries exchanged some 8,700 tariff concessions, cutting the 1948 tariff levels by 25%
Flag of Switzerland (Pantone).svg Geneva II January 19565 months22Tariffs, admission of Japan$2.5 billion in tariff reductions
Flag of Switzerland (Pantone).svg Dillon September 196011 months45TariffsTariff concessions worth $4.9 billion of world trade
Flag of Switzerland (Pantone).svg Kennedy May 196437 months48Tariffs, anti-dumping Tariff concessions worth $40 billion of world trade
Flag of Japan.svg Tokyo September 197374 months102Tariffs, non-tariff measures, "framework" agreementsTariff reductions worth more than $300 billion achieved
Flag of Uruguay.svg Uruguay September 198687 months123Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc.The round led to the creation of WTO, and extended the range of trade negotiations, leading to major reductions in tariffs (about 40%) and agricultural subsidies, an agreement to allow full access for textiles and clothing from developing countries, and an extension of intellectual property rights.
Flag of Qatar.svg Doha November 2001?159Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, investment, transparency, patents etc.The round has not yet concluded. The last agreement to date, the Bali Package, was signed on 7 December 2013.

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The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis."

<span class="mw-page-title-main">World Trade Organization</span> Intergovernmental trade organization

The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and enforce the rules that govern international trade. 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.

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The Uruguay Round was the 8th round of multilateral trade negotiations (MTN) conducted within the framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986 to 1993 and embracing 123 countries as "contracting parties". The Round led to the creation of the World Trade Organization, with GATT remaining as an integral part of the WTO agreements. The broad mandate of the Round had been to extend GATT trade rules to areas previously exempted as too difficult to liberalize and increasingly important new areas previously not included. The Round came into effect in 1995 with deadlines ending in 2000 under the administrative direction of the newly created World Trade Organization (WTO).

<span class="mw-page-title-main">Doha Development Round</span> International trade negotiations

The Doha Development Round or Doha Development Agenda (DDA) is the trade-negotiation round of the World Trade Organization (WTO) which commenced in November 2001 under then director-general Mike Moore. Its objective was to lower trade barriers around the world, and thus facilitate increased global trade.

<span class="mw-page-title-main">Trade and Investment Framework Agreement</span>

A Trade and Investment Framework Agreement (TIFA) is a trade pact that establishes a framework for expanding trade and resolving outstanding disputes between countries.

The Fourth Ministerial Conference of the World Trade Organization, also known as the WTO Fourth Ministerial Conference, was held at the Sheraton Doha Hotel and Resort, Doha, Qatar from November 9–13, 2001. At this conference, ministers from all WTO members launched the Doha Development Agenda.

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<span class="mw-page-title-main">World Trade Organization Ministerial Conference of 1999</span> Meeting of the World Trade Organization

The WTO Ministerial Conference of 1999 was a meeting of the World Trade Organization, convened at the Washington State Convention and Trade Center in Seattle, Washington, USA, over the course of three days, beginning Tuesday, 30 November 1999. A week before the meeting, delegates admitted failure to agree on the agenda and the presence of deep disagreements with developing countries. Intended as the launch of a new round of multilateral trade negotiations that would have been called "The Millennium Round", the negotiations were marred by poor organization and controversial management of large street protests. Developing country representatives became resentful and uncooperative on being excluded from talks as the United States and the European Union attempted to cement a mutual deal on agriculture. The negotiations collapsed and were reconvened in Doha, Qatar, in November 2001. The Doha venue enabled on-site public protest to be excluded. Necessary agenda concessions were made to include the interests of developing countries, which had by then further established their own negotiation blocs, such as the Non-Aligned Movement and the Shanghai Co-operation Organisation. Thus, the current round is called the Doha Development Round, which has since 2008 remained stalled as a result of diverging perspectives regarding tariffs, agriculture, and non-tariff barriers such as agricultural subsidies.

<span class="mw-page-title-main">Trade Act of 1974</span> Comprehensive United States trade law

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This is a timeline of the World Trade Organization (WTO).

<span class="mw-page-title-main">Criticism of the World Trade Organization</span> Criticism directed at the World Trade Organization

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At the World Trade Organization Ministerial Conference of 2003, trade ministers from 146 members of the World Trade Organization, representing 93 percent of global commerce, convened in Cancún, Mexico, in September 2003. The goal of this meeting was to set a direction for nations among the World Trade Organization to come to agreements and negotiations about agriculture, non agricultural market access, services, and special treatment for developing countries. The negotiations were supposed to be reached by January 1, 2005. Although the agreements had a set date to come to terms, the Cancun Ministerial Conference ended up failing in their mission and did not come to any firm decisions to fix the problem. They failed to make global trade negotiations concrete and founded at that time, so the next steps were uncertain. Although the intentions of this Organization were noble, they were unsuccessful but opportunity was sought after to learn from this failure. Within the committee, there exists a hierarchy within the World Trade Organization. It is made up of trade Administrators that come from all the different sectors of the WTO. The Fifth Ministerial Conference of the World Trade Organization, also known as the WTO Fifth Ministerial Conference and abbreviated as MC5, was held at the Cancún Centro de Convenciones, Cancún, Mexico from September 10 to September 14, 2003.

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The Bali Package is a trade agreement resulting from the Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia on 3–7 December 2013. It is aimed at lowering global trade barriers and is the first agreement reached through the WTO that is approved by all its members. The package forms part of the Doha Development Round, which started in 2001.

Afghanistan received membership to the World Trade Organization (WTO) at the 10th WTO Ministerial Conference in Nairobi, Kenya, December 17, 2015. Afghanistan is 164th in the world and 36th among the less-developed countries that have received WTO membership.

References

  1. ↑ A.E. Eckes Jr., US Trade History, 73
    * A. Smithies, Reflections on the Work of Keynes, 578–601
    * N. Warren, Internet and Globalization, 193
  2. ↑ World Trade Organization – Understanding the WTO: Basics
  3. ↑ Understanding the WTO Handbook at WTO official website. (Note that the document's printed folio numbers do not match the pdf page numbers.)
  4. ↑ Malanczuk, P. (1999). "International Organisations and Space Law: World Trade Organization". Encyclopaedia Britannica. Vol. 442. p. 305. Bibcode:1999ESASP.442..305M.
  5. ↑ P. van den Bossche, The Law and Policy of the World Trade Organization, 80
  6. ↑ Palmeter-Mavroidis, Dispute Settlement, 2
  7. ↑ Fergusson, Ian F. (9 May 2007). "The World Trade Organization: Background and Issues" (PDF). Congressional Research Service. p. 4. Retrieved 15 August 2008.
  8. ↑ It was contemplated that the GATT would be applied for several years until the ITO came into force. However, since the ITO was never brought into being, the GATT gradually became the focus for international governmental cooperation on trade matters with economist Nicholas Halford overseeing the implementation of GATT in members' policies. (P. van den Bossche, The Law and Policy of the World Trade Organization, 81; J.H. Jackson, Managing the Trading System, 134).
  9. 1 2 The GATT Years: from Havana to Marrakesh, WTO official site
  10. ↑ Footer, M. E. Analysis of the World Trade Organization, 17
  11. ↑ World Trade Organization, GATT bilateral negotiating material by Round, accessed 13 January 2024
  12. 1 2 3 P. Gallagher, The First Ten Years of the WTO, 4
  13. 1 2 The Uruguay Round, WTO official site
  14. ↑ "Legal texts – Marrakesh agreement". WTO. Retrieved 30 May 2010.
  15. ↑ Erskine, Daniel (January 2004). ""Resolving Trade Disputes, the Mechanisms of GATT/WTO Dispute Resolution" by Daniel H. Erskine". Santa Clara Journal of International Law. 2 (1): 40. Retrieved 3 April 2016.
  16. ↑ Overview: a Navigational Guide, WTO official site. For the complete list of "The Uruguay Round Agreements", see WTO legal texts, WTO official site, and Uruguay Round Agreements, Understandings, Decisions, and Declarations, WorldTradeLaw.net
  17. ↑ Principles of the Trading System, WTO official site
  18. ↑ Farah, Paolo Davide (4 August 2006). "Five Years of China WTO Membership. EU and US Perspectives about China's Compliance with Transparency Commitments and the Transitional Review Mechanism". Papers.ssrn.com. SSRN   916768.{{cite journal}}: Cite journal requires |journal= (help)
  19. ↑ WTO to hold 7th Ministerial Conference on 30 November–2 December 2009 WTO official website
  20. ↑ "In the twilight of Doha". The Economist . 27 July 2006. p. 65.
  21. 1 2 European Commission The Doha Round
  22. ↑ Fergusson, Ian F. (18 January 2008). "World Trade Organization Negotiations: The Doha Development Agenda" (PDF). Congressional Research Service. Retrieved 13 April 2012. p.8 9 [ page needed ](folio CRS-6)[ dead link ]
  23. ↑ WTO trade negotiations: Doha Development Agenda Europa press release, 31 October 2011
  24. ↑ "Members start negotiating proposal on poor countries' food stockholding". WTO official website. 27 March 2013. Retrieved 2 September 2013.
  25. ↑ The GATT years: from Havana to Marrakesh, World Trade Organization
  26. ↑ Timeline: World Trade Organization – A chronology of key events, BBC News
  27. ↑ Brakman-Garretsen-Marrewijk-Witteloostuijn, Nations and Firms in the Global Economy, Chapter 10: Trade and Capital Restriction
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