In brief, the World Trade Organization (WTO) is the only international organization dealing with the global rules of trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
The overall objective of the WTO is to help its members use trade as a means to raise living standards, create jobs and improves people's lives.
The WTO operates the global system of trade rules and helps developing economies build their trade capacity.
Global rules of trade provide assurance and stability. Consumers and producers know they can enjoy secure supplies and greater choice of the finished products, components, raw materials and services they use. Producers and exporters know foreign markets will remain open to them.
This leads to a more prosperous, peaceful and accountable economic world. Decisions in the WTO are typically taken by consensus among all members and they are ratified by members’ parliaments. Trade frictions are channelled into the WTO’s dispute settlement process, where the focus is on interpreting agreements and commitments and how to ensure that members’ trade policies conform with them. That way, the risk of disputes spilling over into political or military conflict is reduced.
By lowering trade barriers through negotiations among member governments, the WTO�s system also breaks down other barriers between peoples and trading economies.
At the heart of the system � known as the multilateral trading system � are the WTO�s agreements, negotiated and signed by a large majority of the world�s trading economies, and ratified in their parliaments.
These agreements are the legal foundations for global trade. Essentially, they are contracts, guaranteeing WTO members important trade rights. They also bind governments to keep their trade policies transparent and predictable which is to everybody�s benefit.
The agreements provide a stable and transparent framework to help producers of goods and services, exporters and importers conduct their business.
The goal is to improve the welfare of the peoples of the WTO�s members.
The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.
So while the WTO is relatively young, the multilateral trading system that was originally set up under the GATT is over 75 years old.
The past 75 years have seen an exceptional growth in world trade. Merchandise exports have grown on average by 6% annually. This growth in trade has been a powerful engine for overall economic expansion and on average trade has grown by 1.5 times more than the global economy each year. Total exports in 2022 were 250 times the level of 1948. The GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth.
The system was developed through a series of trade negotiations, or rounds, held under the GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The 1986-94 round � the Uruguay Round � led to the WTO�s creation.
The negotiations did not end there. In 1997, an agreement was reached on telecommunications services, with 69 governments agreeing to wide-ranging liberalization measures that went beyond those agreed in the Uruguay Round.
In the same year, 40 governments successfully concluded negotiations for tariff-free trade in information technology products, and 70 members concluded a financial services deal covering more than 95% of trade in banking, insurance, securities and financial information.
In 2000, new talks started on agriculture and services. These were incorporated into a broader work programme, the Doha Development Agenda, launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001.
The new work programme included negotiations and other work on non- agricultural tariffs, trade and the environment, WTO rules on anti-dumping and subsidies, trade facilitation, transparency in government procurement, intellectual property and a range of issues raised by developing economies as difficulties they face in implementing WTO agreements.
Negotiations on these and other topics have resulted in major updates to the WTO rulebook. A revised Government Procurement Agreement � adopted at the WTO�s 8th Ministerial Conference in 2011 � expanded the coverage of the original agreement by an estimated US$ 100 billion a year.
At the 9th Ministerial Conference in Bali in 2013, WTO members struck the Agreement on Trade Facilitation, which aims to reduce border delays by slashing red tape.
When fully implemented, this Agreement � the first multilateral accord reached at the WTO � will cut trade costs by more than 14% and will lift global exports by as much as US$ 1 trillion per year.
The expansion of the Information Technology Agreement � concluded at the 10th Ministerial Conference in Nairobi in 2015 � eliminated tariffs on an additional 200 IT products valued at over US$ 1.3 trillion per year. Another outcome of the Conference was a decision to abolish agricultural export subsidies, fulfilling one of the key targets of the UN Sustainable Development Goal on �Zero hunger�.
An amendment to the WTO�s Intellectual Property Agreement entered into force in 2017, easing poor economies� access to affordable medicines. The same year saw the Trade Facilitation Agreement enter into force.
More recently, the 12th Ministerial Conference in June 2022 saw the adoption of a landmark Agreement on Fisheries Subsidies as well as multilateral responses to the food crisis and the COVID-19 pandemic.
