WTO

The multilateral trading system—past, present and future

The WTO was established in 1995 as a result of the Uruguay Round of multilateral trade negotiations (1986-1994). It is an international organization that sets global rules of trade between nations. The core of the WTO system, referred to as the multilateral trading system, are the WTO agreements which lay down the legal ground rules for international trade as well as the market-opening commitments taken up by its Members. These agreements are negotiated and signed by all Members of the WTO, and ratified in their parliaments.

The WTO is composed of governments and political entities (such as the EU) and is a member-driven organisation with decisions mainly taken on a consensus basis. Membership implies a balance of rights and obligations. By October 2004, 149 countries had joined the WTO, with around 25 negotiating to sign up. A vast majority of Members are developing countries. The largest and most comprehensive entity is the European Union with its 25 Member States. Indeed, while the Member States co-ordinate their positions in Brussels and Geneva, the European Commission alone speaks for the EU at almost all WTO meetings.

The WTO’s top level decision-making body is the Ministerial Conference, which meets at least once every two years. The latest conferences were Seattle (1999), Doha (2001 - which launched the DDA), Cancun (2003) and Hong Kong (2005). Below this, the General Council meets several times a year in the Geneva headquarters. Both are composed of representatives of all Member States. At the next level, the Goods Council, Services Council and Intellectual Property Council as well as numerous specialised committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and trade agreements. Finally, the WTO Secretariat located in Geneva supplies technical support for various councils and committees and the ministerial conferences, analyses world trade and explains WTO affairs to the public and media. See more info on the WTO.

The WTO and Developing Countries - Over three quarters of WTO members are developing or least-developed countries. All WTO agreements contain special provision for them, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities and support to help them build the infrastructure for WTO work, handle disputes, and implement technical standards. The 2001 Ministerial Conference in Doha set out tasks, including negotiations, for a wide range of issues concerning developing countries. It is commonly referred to as the ‘Doha Development Round’.

Changes within the multilateral trading system will affect developing countries; on the one level, the effects will come through changes in world commodity prices, on another, through new multilateral rules that constrain domestic trade policy (in general, countries are obliged to be less protectionist).

Is the WTO too complicated? Or not complicated enough? 11 January 2006, by Simon Maxwell, ODI.

Making the WTO more supportive of development DFID, Global Trade and Financial Architecture project - Background Paper 01/03/2005 - 152kb
Do developing countries have their rightful place in WTO priorities? Speech of Pascal Lamy at the World Economic Forum, Southern Africa Economic Summit, Durban, South Africa, 22 June 2000.

The Doha Round
Doha Development Agenda: Negotiations, implementation and development The November 2001 declaration of the Fourth Ministerial Conference in Doha, Qatar, provides the mandate for negotiations on a range of subjects and other work. The negotiations include those on agriculture and services, which began in early 2000. In Doha, Ministers also approved a linked decision on implementation — problems developing countries face in implementing the current WTO agreements.
The original mandate has now been refined by work at Cancún in 2003, Geneva in 2004, and Hong Kong in 2005. See a brief summary of these negotiations.

EU website Doha development agenda

NGO participation in trade talks

Issues for poor countries in Doha:
The Doha Development Agenda - Impacts on Trade and Poverty A Study by the Overseas Development Institute (ODI) funded by the Department for International Development, UK, October 2004. A collection of papers summarising assessments of the principal issues of the WTO round, how the outcome might affect poverty, the progress of the negotiations, and the impact on four very different countries.

Bilateral trade deals
If Doha fails, an increasing number of bilateral deals will be both a cause and a consequence.