Enought of fashion, movies, songs and disasters. It´s time for us to go into the politic section!
If you´re not interested, you can walk right out that door because you´re about to get bored (just messing up with you guys hahah).
Now let´s get down to business: what is the WTO and how it was created?
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade between nations. The WTO is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947 in the expectation that it would soon be replaced by a specialized agency of the United Nations (UN) to be called the International Trade Organization (ITO).
Although the ITO never materialized, the GATT proved remarkably successful in liberalizing world trade over the next five decades.
By the late 1980s there were calls for a stronger multilateral organization to monitor trade and resolve trade disputes. Following the completion of the Uruguay Round (1986–1994) of multilateral trade negotiations, the WTO began operations on January 1, 1995.
Workers sewing clothing in a garment factory in Ho Chi Minh City in November 2006, the week before Vietnam was approved to join the World Trade Organization. The Vietnamese economy, already booming, stood to gain even more from the WTO.
Origin
The ITO was initially envisaged, along with the International Monetary Fund (IMF) and the World Bank, as one of the key pillars of post- World War II reconstruction and economic development. In Havana in 1948, the UN Conference on Trade and Employment concluded a draft charter for the ITO, known as the Havana Charter, which would have created extensive rules governing trade, investment, services, and business and employment practices. However, the United States failed to ratify the agreement. Meanwhile, an agreement to phase out the use of import quotas and to reduce tariffs on merchandise trade, negotiated by 23 countries in Geneva in 1947, came into force as the GATT on January 1, 1948.
Although the GATT was expected to be provisional, it was the only major agreement governing international trade until the creation of the WTO. The GATT system evolved over 47 years to become a de facto global trade organization that eventually involved approximately 130 countries. Through various negotiating rounds, the GATT was extended or modified by numerous supplementary codes and arrangements, interpretations, waivers, reports by dispute-settlement panels, and decisions of its council.
GATT & OMC, Uruguay
During negotiations ending in 1994, the original GATT and all changes to it introduced prior to the Uruguay Round were renamed GATT 1947. This set of agreements was distinguished from GATT 1994, which comprises the modifications and clarifications negotiated during the Uruguay Round (referred to as “Understandings”) plus a dozen other multilateral agreements on merchandise trade. GATT 1994 became an integral part of the agreement that established the WTO.
Other core components include the General Agreement on Trade in Services (GATS), which attempted to supervise and liberalize trade; the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which sought to improve protection of intellectual property across borders; the Understanding on Rules and Procedures Governing the Settlement of Disputes, which established rules for resolving conflicts between members; the Trade Policy Review Mechanism, which documented national trade policies and assessed their conformity with WTO rules; and four plurilateral agreements, signed by only a subset of the WTO membership, on civil aircraft, government procurement, dairy products, and bovine meat (though the latter two were terminated at the end of 1997 with the creation of related WTO committees).
These agreements were signed in Marrakech , Morocco, in April 1994, and, following their ratification, the contracting parties to the GATT treaty became charter members of the WTO. By the 2020s the WTO had more than 160 members.
During negotiations ending in 1994, the original GATT and all changes to it introduced prior to the Uruguay Round were renamed GATT 1947. This set of agreements was distinguished from GATT 1994, which comprises the modifications and clarifications negotiated during the Uruguay Round (referred to as “Understandings”) plus a dozen other multilateral agreements on merchandise trade.
GATT 1994 became an integral part of the agreement that established the WTO. Other core components include the General Agreement on Trade in Services (GATS), which attempted to supervise and liberalize trade; the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which sought to improve protection of intellectual property across borders; the Understanding on Rules and Procedures Governing the Settlement of Disputes, which established rules for resolving conflicts between members; the Trade Policy Review Mechanism, which documented national trade policies and assessed their conformity with WTO rules; and four plurilateral agreements, signed by only a subset of the WTO membership, on civil aircraft, government procurement, dairy products, and bovine meat (though the latter two were terminated at the end of 1997 with the creation of related WTO committees).
These agreements were signed in Marrakesh, Morocco, in April 1994, and, following their ratification, the contracting parties to the GATT treaty became charter members of the WTO. By the 2020s the WTO had more than 160 members.
Here's a video of the treaty signed in Morocco:
Objectives and operation
The WTO has six key objectives:
(1) to set and enforce rules for international trade;
(2) to provide a forum for negotiating and monitoring further trade liberalization;
(3) to resolve trade disputes;
(4) to increase the transparency of decision-making processes;
(5) to cooperate with other major international economic institutions involved in global economic management;
(6) to help developing countries benefit fully from the global trading system.
Although shared by the GATT, in practice these goals have been pursued more comprehensively by the WTO. For example, whereas the GATT focused almost exclusively on goods—though much of agriculture and textiles were excluded—the WTO encompasses all goods, services, and intellectual property, as well as some investment policies.
Resolution of trade disputes
The GATT provided an avenue for resolving trade disputes, a role that was strengthened substantially under the WTO.
Dispute resolution begins with bilateral consultations through the mediation, or “good offices,” of the director-general. If this fails, an independent panel is created to hear the dispute. The panel submits a private draft report to the parties for comment, after which it may revise the report before releasing it to the full WTO membership.
Unlike the IMF and the World Bank, both of which use weighted voting, each WTO member has only one vote. As in the earlier GATT system, however, most decisions are made by consenus. Unless one or both of the parties files a notice of appeal or the WTO members reject the report, it is automatically adopted and legally binding after 60 days. The process is supposed to be completed within nine months, and, if an appeal is lodged, the WTO Appellate Body hears and rules on any claim of legal error within 60 days.
Assessment
The pace of international economic intergration via the GATT and WTO rounds of multilateral trade negotiations has been slower and less comprehensive than some members would prefer. Some have suggested that there should be additional intergration among subgroups of (often neighbouring) member economies—e.g., those party to the European Union, the North American Free Trade Agreement (superseded by the United States-Mexico-Canada Agreement, signed in 2018) and the Asia-Pacific Economic Cooperation—for political, military, or other reasons.
Beginning in the late 1990s, the WTO was the target of fierce criticism. Opponents of economic globalization, and in particular those opposed to the growing power of multinational corporations, argued that the WTO infringes upon national sovereignty and promotes the interests of large corporations at the expense of smaller local firms struggling to cope with import competition.
Despite these criticisms, however, WTO admission remained attractive for nonmembers, as evidenced by the increase in the number of members after 1995. Most significantly, China entered the WTO in 2001 after years of accession negotiations. The conditions for Chinese membership were in some ways more restrictive than those for developing countries, reflecting the concerns of some WTO members that the admission of such a large and still somewhat planned economy might have an overall negative effect on free trade.
I hope it didn't hurt your eyes, that wasn't my intention, but to give you knowledge so we could stay all big brains ahaha. See you!
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