World Trade Organization (WTO)

History, Structure, and Function

The WTO was created in 1995 by the “Uruguay Round” of talks held by member nations of the General Agreement on Tariffs and Trade (GATT), which includes the United States. GATT was established by the United Nations (UN) Conference on Trade and Employment in Havana in 1948 to promote free international trade. The WTO is in effect, the longdelayed successor to the anticipated International Trade Organization (ITO), which was intended to follow GATT when its charter was agreed on at the Havana UN conference of 1948. However, creation of the ITO was subsequently blocked by the United States, in fear that such a regulating body might compromise rather than benefit American commercial interests.

The WTO is a voluminous trade pact, now totaling more than 30,000 pages. Its primary objective is to help trade flow smoothly, freely, fairly, and predictably. It does this by

• administering trade agreements;
• acting as a forum for trade negotiations;
• settling trade disputes;
• reviewing national trade policies;
• assisting developing countries in trade policy issues, through technical assistance and training programs;
• cooperating with other international organizations.

WTO decisions are generally made by consensus. Its agreements are then ratified by all member states. Although majority vote is an option, it is rarely used. The WTO's top decisionmaking body is the Ministerial Conference, which meets at least once every 2 years in a given member state. Its next governing body is the General Council, which includes ambassadors and heads of delegation in the Geneva headquarters, as well as officials sent from member states to Geneva. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. The third governing body consists of the Goods Council, Services Council, and Intellectual Property Council (TRIPS), which all report to the General Council. Finally, numerous specialized committees, working groups, and working parties deal with individual agreements and areas such as the environment, development, membership applications, and regional trade agreements.

Originally, GATT only dealt with trade-in goods. But the WTO also facilitates trade-in services. This includes banks, insurance firms, telecommunications companies, tourist agencies, hotels, transportation companies, and so on. The rules governing such trade appear in the General Agreement on Trade in Services. WTO members have thereby made individual commitments, stating which of their services sectors they are willing to open to foreign competition, and how open those markets are.

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