The WTO was established on January 1, 1995. The WTO is the embodiment of the Uruguay Round results and the successor to GATT, 76 Governments became members of the WTO on its first day. As of December 2000, there are 142 members of the WTO and 34 countries have an observer status. There is a waiting list of 28 members. They account for more than 90% of the world trade. The WTO is based in Geneva, Switzerland. Its essential functions are:
* Administering and implementing the multilateral trade agreements which together make up the WTO.
* Acting as a forum for multilateral trade negotiations.
* Seeking to resolve trade disputes;
* Overseeing national trade policies; and
* Cooperating with other international institutions involved in global policy-making.
How is the WTO Different from the GATT?
The World Trade Organization is not a simple extension of GATT. On the contrary, it completely replaces its predecessor and has a very different character. Among the principal differences are the following:
1. The GATT was a set of rules, a multilateral agreement with no institutional foundation, only a small associated secretariat. The WTO is a permanent institution with its own secretariat.
2. The GATT was applied on â€œprovisional basisâ€ even if, after more than forty years, governments chose to treat it as a permanent commitment. The WTO commitments are full and permanent.
3. The GATT rules applied to trade in merchandise goods. In addition to goods, the WTO covers trade in services and trade related aspects of intellectual property.
4. While GATT was a multilateral instrument, by the 1980s many new agreements had been added and therefore selective in nature. The agreements which constitute the WTO are almost all multilateral and, thus, involve commitments for the entire membership.
5. The WTO dispute settlement system is faster, more automatic, and thus much less susceptible to blockages, than the old GATT system.
The implementation of WTO dispute findings will also be more easily assured.
The WTO is more global in its membership than the GATT. Its prospective membership is already around 150 countries and territories, with many others considering accession.
It reverses policies of protection in certain â€œsensitiveâ€ areas which were more or less tolerated in the old GATT. Under various agreements, export restraints on textiles and clothing will be dismantled, trade in agricultural reformed and â€˜grey-areaâ€™ trade measures so-called voluntary export restraints phased out.
WTO is a watchdog of international trade, regularly examining the trade regimes of individual members. In its various bodies members flog proposed or draft measures by others that can cause trade conflicts. Members flog proposed or draft measures by others that can cause trade conflicts. Members are also required to notify various trade measures and statistics, which are maintained by the WTO in a large data base.
As in any partnership, conflicts can arise among members. The WTO, from the very start of these conflicts, provides several conciliation mechanisms for finding an amicable solution. Trade disputes that cannot be solved through bilateral talks are adjudicated under the WTO dispute settlement â€œCourtâ€. Panels of independent experts are established to examine disputes in the light of WTO rules and provided rulings. This tougher streamlined procedure ensures equal treatment for all trading partners and encourages members to live up to their obligations.
The WTO is also a management consultant for World trade. Its economists keep a close watch on the pulse of the global economy, and provide studies on the main trade issues of the day.