WORLD TRADE ORGANIZATION (WTO)

• Before the establishment of the WTO in 1995, global trade was governed by the General Agreement on Tariffs and Trade (GATT), created in 1947.
• The purpose of the GATT was to reduce trade barriers and promote economic growth.
• Its scope was limited, focusing mainly on trade in goods and lacking a formal institutional structure.
• The Uruguay Round (1986-1994) negotiations addressed these limitations.
• It resulted in the creation of the WTO.
• It expanded the trade framework to include services, intellectual property, and investment and established a permanent institutional structure for global trade governance.

Formation of the WTO 

• Established: January 1, 1995
• Headquarters: Geneva, Switzerland
• Members: 164 countries (as of 2024)
• Director-General (2025): Dr. Ngozi Okonjo-Iweala (Nigeria)​
• The WTO was established under the Marrakesh Agreement signed in April 1994, replacing GATT as the permanent framework for regulating international trade.​

Objectives of the WTO

• Promote free, fair, and predictable trade flows
• Serve as a forum for negotiating trade agreements
• Provide an effective dispute resolution mechanism
• Ensure transparency and non-discrimination in international trade practices
• Enhance the integration of developing and least-developed countries into the global economy​

Expanded Scope Compared to GATT

Key Agreements under the WTO Umbrella

• GATT 1994: Continuation of trade in goods with updated provisions.
• GATS (General Agreement on Trade in Services): Liberalization of global service sectors.
• TRIPS (Trade-Related Aspects of Intellectual Property Rights): Sets minimum standards for IPR protection.
• DSU (Dispute Settlement Understanding): Provides rules for resolving trade disputes.
• TBT (Technical Barriers to Trade) and SPS (Sanitary & Phytosanitary Measures): Regulate technical standards and health measures affecting trade.​

WTO as a Multilateral Trading System

• Establishes a rules-based trade order
• Aims to reduce trade barriers through negotiations and binding commitments
• Facilitates economic cooperation among member nations
• Enhances transparency through trade policy reviews
• Encourages non-discriminatory treatment via Most Favoured Nation (MFN) and National Treatment principles​

India and the WTO

• Member since: 1995
• Advocates for:
  • Special and differential treatment for developing countries
  • Reforms in agricultural subsidies (AMS)
  • Regulation of fisheries subsidies
  • Public stockholding for food security
  • E-commerce and data localization

Dispute Settlement Mechanism (DSM)

• The DSU provides a structured process for resolving trade disputes, including consultations, panel proceedings, and appeals.
• Ensures that rulings are binding and must be implemented by the concerned parties.​

Challenges and Criticisms

• Decision-Making Process: Consensus-based decisions can be slow and cumbersome.
• Developing Countries' Concerns: Issues related to agricultural subsidies, intellectual property rights, and market access remain contentious.
• Relevance in Modern Trade: The rise of regional trade agreements and bilateral deals raises questions about the WTO's role in the current global trade landscape.​