World Trade Organization

The photograph shows a dolphin caught in a controversial type of fish seine in the Pacific in 1966. The World Trade Organization's involvement in the dolphin-safe nets dispute led to changes within the organization in the early 1990s.

Source: National Oceanic and Atmospheric Administration

The World Trade Organization (WTO) is a central player in the process of contemporary globalization. Although its core function is to facilitate trade liberalization (the reduction or removal of tariffs and other trade practices that inhibit the free flow of goods and services) among its member states, the WTO also plays an important role in certain aspects of environmental governance. For example, the WTO is currently discussing how to liberalize trade in environmental goods and services and also plays an important role in adjudicating disputes relating to exemptions to trade rules for environmental protection purposes. This article introduces the organization's history, core principles, and institutional structure before summarizing environmental politics at the WTO.

The two primary functions of the WTO are to provide a forum for trading partners to negotiate legally binding rules to govern international trade liberalization, and to settle disputes among members related to the implementation and interpretation of those rules. The WTO was established in 1995 as the organization responsible for housing and servicing not only a revamped version of its predecessor, the 1947 General Agreement on Tariffs and Trade (GATT), but also a host of new international trade-related agreements. These new agreements, which emerged from the Uruguay Round of GATT negotiations, cover such areas as trade in goods, services, textiles, and agriculture, as well as rules for dispute settlement and intellectual property protection, among many trade-related topics.

The core principle of the WTO is nondiscrimination. This means that all WTO member governments must treat each other equally with respect to international trade. In this context, most-favored-nation treatment means WTO members cannot offer special terms of trade, such as lower tariffs, to one trading partner over another. Similarly, national treatment means that WTO members cannot discriminate between their own products and those imported from other member states. Although there are some exceptions to the principles of nondiscrimination—for example, to facilitate developing-country market access—the WTO agreements only permit these exceptions under strict conditions.