World Trade Organization: History, Roles and Organizational Structure

This article provides an in-depth analysis of the World Trade Organization, including its history, roles, and organizational structure. It also discusses the composition of geographical and economic groupings and the contribution of WTO to globalization and marginalization.

The World Trade Organization

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Table of Contents
Introduction................................................................................................................................2
Creation of World Trade Organization..................................................................................3
History of World Trade Organization....................................................................................5
Organizational Structure........................................................................................................6
The composition of Geographical and Economic Groupings................................................7
Roles Performed by World Trade Organization..................................................................12
Role of World Trade Organization in globalization and marginalization........................14
The contribution of WTO is to the unequal competition.................................................14
Conclusion................................................................................................................................15
References................................................................................................................................16

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Introduction
Policymakers and scholars believe that the interdependence is being influenced by the trade
relations and trade relations influence the peaceful relations and trust. In this paper, the
analysis of the concept of World trade organization, its history, and roles will be done.
Though the World trade organization is created on the concept that peace is stimulated
through trade, the makers of the policy do not understand how the trade influence the trade
conditions of different countries and formation of different policies to stimulate smooth
functioning of the business and relations (Aaronson & Abouharb, 2013).
The only institution in the world that looks after the international trades, rules among two or
more than two nations is the World Trade Organization. The WTO is dependent on the
contract signed by the most of the trading countries of the world. The key activity of the
organization is to assist manufacturer of the services or goods, importers, and exporters
manage and protect their businesses. The World Trade Organization’s Protagonists, mostly
multinational corporations, be certain of that the World Trade Organization is valuable to the
business organization. Cynics rely on that the World Trade Organization destabilizes the
organic democracy’s principles and broadens the worldwide wealth gap.
The World Trade Organization is majorly a mediation organization that supports the
international guidelines of trade between different nations. However, the WTO has powered
globalization with both the effects i.e. negative and positive. The efforts of WTO have
enlarged the global expansion of trade; however, there is an adverse impact on the local
society and human rights. Supporters of the WTO consider the encouragement of free trade
and debility in trade arguments as advantageous to the worldwide economy. Detractors of the

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World Trade Organization point to the drop in local industries and cumulative foreign effect
as adverse influences on the economy of the whole world.
World Trade Organization- The Creation
The WTO origin can be outlined back to the formation in 1944 of the International
Organization of Trade (ITO) at the Conference of Bretton Wood. Though the ITO terms
contract were being discussed and drafted (it is a procedure which started in 1946 and ended
up until when the final draft was created in 1948) and nations they will join the main
organization or not (Stewart, 2010). The legislatures from 17 countries group gathered in
Geneva and decided an interim agreement which is also known as GATT in order to reduce
the barriers of trade and tariffs among themselves. The contract, which was decided to come
into effect in 1948, was not for the enduring trade body but was an agreement of stop-gap to
offer service till the time the ITO will come into existence (Barton, Goldstein, Josling &
Steinberg, 2010).
Though, when the administration of Truman definite not to succumb the contract making the
ITO to the US Council for approval (as there were not sufficient votes in the Council in
support of approval) the strategy to make the ITO was unrestrainedly leaving the Treaty i.e.
GATT in its place (Narlikar & Stern, 2012).
While the GATT worked well enough, the foremost members desired to substitute it with an
international trade body such as WTO for various reasons. First, the rules of GATT applied to
the trade in merchandise properties. Along with goods, the World Trade Organization
involves trade in the service area and associated features to the trade of intellectual property
(by the contract on the aspects of related to trade of Intellectual Property Rights-TRIPs).
Second, though GATT was a multifaceted mechanism, by the 1980s there were various new
contracts of a plurilateral, and therefore discerning nature has been added. The contracts that

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establish the WTO are all multifaceted and so; include promises for the complete
membership. Third, the World Trade Organization system of argument settlement is quicker,
more automatic, and therefore much less vulnerable to obstructions, as compared to old
GATT system.
But beyond these applied and useful motives for forming the WTO, there were some extra-
logical and representative reasons. The GATT was said to be the set of regulations and rules,
a multi-dimensional agreement, with no official basics, only a minor related secretariat which
possessed its roots in the effort to create an ITO in the 1940s. By agreement, the World Trade
Organization is a perpetual organization with its individual secretariat. Furthermore, the
GATT was functional on a "temporary basis" even, after forty years; administrations selected
to give it as a perpetual commitment through the WTO promises are completely and
functionally enduring (Alimova, 2017).
Moreover, for the above-mentioned reasons, the formation of a fresh, enduring body of trade
became the main purposes of half-way through the GATT's Uruguay round, which operated
from 1986 to 1994. A draft was drafted for the fresh body of international trade, the World
Trade Organization, and officially accepted at the ancient trade center in the Ministerial
Conference in 1994. Below the word "Final Act" contracted there, the GATT was substituted
by the World Trade Organization in 1995 (Matsushita, Schoenbaum, Mavroidis & Hahn,
2015).
The Introduction of the Contract Founding the World Trade Organization states that
associates must conduct their economic relations and trade with an opinion to improving the
living standards, confirming full employment opportunities and a big and progressively rising
volume of actual revenue and actual demand, and increasing the trade and creation of the
services and products, while permitting for the best usage of the funds of the world in

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agreement with the objective of justifiable growth, looking for both to defend and reserve the
atmosphere and to improve the reasons for acting in such a way reliable with their individual
wants and anxieties at diverse development stages.
Besides this, members identify the desire for the optimistic efforts intended to confirm that
emerging nations, and particularly least established among all of them, locked a portion in
global trade proportionate with the wants of their financial growth. In order to add to the
attainment of these purposes, the members of WTO have decided to enter into "mutual and
commonly beneficial preparations focussed to the considerable decrease of barriers and
tariffs to trade and to the removal of biased behavior in international trade relations."
(Baldwin, 2011)
World Trade Organization- The History
The WTO is an intercontinental body which controls worldwide trade. The WTO formally
initiated on 1 January 1995 in the Marrakesh Agreement, contracted by 123 countries in
1994. This body replaced the GATT, which was established in 1948. The WTO take care of
trade regulations among participating nations by offering an outline for discussing the
agreements for trade and procedure of dispute resolution-focused towards implementing
participants devotion to World Trade Organization agreements, which are signed by the
member government representatives and approved by their assemblies. Maximum of the
concerns that are focused by WTO on derive from preceding trade negotiations, particularly
from the Uruguay Round (Baldwin, 2016).
The prototype of WTO, the GATT, came into existence after the 2nd World war in the rouse
of fresh multifaceted institutions fanatical to international economic cooperation- principally
the Bretton Woods organizations called as the International Monetary Fund and the World
Bank. A similar international body for trade called the International Trade Organization was

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successfully conveyed. The International Trade Organization was used to be the United
Nations committed agency and used to consider not just barriers of trade but indirectly trade-
related issues, comprising investment, commodity agreements, employment, and restrictive
practices of business. However, the ITO contract was not acknowledged by the U.S. and
other parties and not even once it went into influence (WTO, 2013).
Organizational Structure
Source [(Pinterest, 2018)]
The WTO possesses around 153 members who are comprised of world trade's 97%. Approx.
30 others are assigning association. Verdicts are provided by the complete association. This is
characteristically by agreement. Majority of the vote is possible however it is never utilized
in the World Trade Organization and has tremendously infrequent under the predecessor of
WTO, GATT (Mukher, 2018). The agreement of WTO has been sanctioned in all the
members' associations. The highest body of decision making of WTO is known as the
Ministerial Conferences which conduct meetings at least one time in two years. Under this,
there is a General Council (usually involves representatives and delegation supervisors in
Geneva, however sometimes bureaucrats are sent from the members’ capitals) who conduct
meetings numerous times in every year in headquarters of Geneva. The General Council also

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conduct meeting being as the Disputes Settlements Body and the Review body of Trade
Policy (Chand, 2018).
At subsequent level, the Council of Intellectual property, the Council of Services, and the
Council of Goods, report to the General Council. Many dedicated groups, working parties,
and working groups covenant with the separate agreements and former areas like membership
applications, regional trade, development, and environment agreement (Legal Bites, 2018).
The composition of Geographical and Economic Groupings
The members of World Trade Organization are mostly mentioned as "countries", though
some associates are not said to be as countries normally but are formal "customs territories"
(WTO, 2011).

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Source [(WTO, 2011)]

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Source [(WTO, 2011)]
The operations of the World Trade Organization is carrying out by the legislatures of the
member governments then its origins lie in the dairy industry's activity and commerce. The
negotiating positions and policies of trade are framed in capitals, commonly with a
considerable review input from businesses, farmers, private companies, along with customers
and all other interest groups. Maximum countries have a political mission in Geneva,
occasionally controlled by a superior Legate to the WTO, whose spokespersons join

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conferences of the numerous bodies of negotiating and administrative at headquarter of
WTO. Every so often expert legislatures are directed directly from capitals to keep the views
of their government on particular questions. As an outcome of regional economic integration
in terms of free trade areas, customs unions, geographic arrangements and looser political
arrangement, certain countries groups work together in the World Trade Organization with a
sole representative in negotiations and meetings.
The most inclusive and largest groupings are the European Union along formed with its 15
member states. It is said to be a customer unions who have external tariff and trade policies.
While the states which are a member of the association organize their place in Brussels and
Geneva, the commission of Europe unaccompanied voices for the EU in nearly every meeting
of WTO. The European is the member of WTO and possesses some rights same as its
member states (Foxley, 2010).
A less important economic integration degree has been attained by the nations which are
members of GATT of the South East Asian Nations Association (ASEAN)- Indonesia,
Thailand, Malaysia, Brunei Darussalam, Philippines, and Singapore. However, they have
various interests of common trade and are regularly capable to organize places and to express
with a sole voice (Kaberia, 2016).
Among other assemblages which sometimes present united reports is the SELA (Latin
American Economic System) and the ACP (African, the Caribbean and Pacific Group). More
modern exertions at local economic integration, for example, NAFTA (Mexico, U.S, and
Canada) and MERCOSUR (Argentina, Uruguay, Brazil, and Paraguay) have not touched the
point where their components regularly have a sole representative on issues of WTO.
A renowned association in the Uruguay Round carry a resemblance of the interest of trade in
place of a county individuality – it was called as the Cairns Group which encompassed, and

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still includes, nations of agricultural exporting from developing, East European, and
developed countries (ECON, 2018).
Roles Performed by World Trade Organization
 Enabling the application, management, and process and advancing the goals of the
agreement forming it and other Multidimensional Agreements of Trade and offering
the outline for the execution, management, and procedure of the Plurality Trade
Agreements. (Establishing WTO agreement Article III)
 Offering the forum for the discussions between its associates regarding their
multifaceted relations of trade in the aspects dealt with below the contracts in the
Annexes to the Contract locating it up and for the consequences of these discussions
as might be definite by the Ministerial Conference. (Establishing WTO Agreement
Article III)
 Managing the sympathetic on procedures and rules leading the dispute settlement
understanding or settlement of a dispute that is Annex 2 to the setting agreement
(Establishing WTO Agreement Article III)
 Managing the Mechanism of Trade Policy Review in Annex 3 of the setting up
contract (Establishing WTO Agreement Article III)
 Collaborating suitably with the International Bank and the International Monetary
Fund for the Development and Reconstruction with an opinion to attaining superior
consistency in worldwide financial policy creation (Establishing WTO Agreement
Article III)
It is focused at making improved coordination and understanding between associations of
trade like World Trade Organization and monetary organizations such as World Bank and
IMF. It might be called in transitory that these are the only two financial organizations
deprived of decent status within the developing countries and that are considered by them to

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have been endorsing financial reforms and programmes of operational adjustment that
abolish, in place of rebuilding, their economies.
The eventual objective of the multifaceted association of WTO and GATT is the
establishment of free international trade and economic relationship between members and
that GATT is intended to attain free trade and to expand market access through
 Possessing overall protection that makes tariffs;
 Maintaining multifaceted intercession at which tariffs are dropped and bound;
 Confirming that these contracts are executed by demanding that any upsurge in a
bound tariff need to be compensated by the decline of another;
 Offering a instrument by which parties can resolve disagreements
The success in the roles performed by WTO in increasing international trade is evaluated in
terms of growth and volume of world trade and though this lifted up in last 8 years by 25%,
the advantages of that augmentation are not justifiably which is shared between the member
states. For example, the world trade’s only 0.03% is signified by the smallest industrialized
countries which are comprised of 20% of the population of the world (Sally, 2016).
Till 2003, the World Trade Organization possessed 145 members, as well as China who
joined in the last time period of 2001. An additional, other 25 countries, comprising Saudi
Arabia and Russian Federation, were discussing for the membership into the institution. As
its creator, the WTO has continued at the leads of efforts to endorse worldwide free trade. Its
makers have spoken the confidence that the implementation device approved to the WTO
will make it an operative policeman of worldwide rules of trade as compared to GATT. The
maximum expectation was that the World Trade Organization can appear as an operative
backer and organizer of upcoming deals of trade, predominantly in the areas like services.

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The knowledge till now has been influencing, though the failure of WTO discussions in
Seattle in late 1999 elevated various queries in terms of the future path of the WTO.
Role of World Trade Organization in globalization and marginalization
In the Ministerial Conference of Singapore, various ecstatic declarations were provided about
the attainments of the globalization and the contribution of the WTO in this procedure.
Globalization is not just the outcomes of the mechanical inventions, capital attentiveness, the
topographical feast of manufacture procedures and other business policies to recover profit-
making international 24 hours a day. Governments Political decisions to eliminate official
obstacles to worldwide trade and capital movements and to offer incentives for businesses
have also reinforced the globalization procedure: at national level through independent
liberalization and mechanical alteration for export-led development, and by reforms of labor
and social policy; at multilateral and regional levels, through trade contracts and investment
liberalization (Woolcock, 2018).
The WTO is the significant supervisory body of trade at the global level and makes terms in
which district contracts can be sign up. In this method, globalization is handled at the
international level from the perspective of trade.
The contribution of WTO is to the unequal competition
Industrialized countries offer fewer accesses to market to the services and products from the
countries that are developing as compared to those that are part of it and try to enforce high
tariffs on the goods that are valuable to minimum industrialized countries (agriculture,
leather, clothing, and fish). (WTO, 2018)
The concentration of measurable limitations for the exports of clothing and textiles to the
North is slow and might make it problematic for poor and small manufacturers to compete.

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The agreement related to the agriculture has resulted in the rivalry between (indirectly)
subsidized products of the farm of the North and unsubsidized products of agriculture in
emerging countries (Sharma, 2012).
Conclusion
In the conclusion, it can be said that World Trade Organization is the global association
which not just consider the global trade but it also participates in the improvisation of the
business. It always indulges its necessary efforts to maintain the nonviolent trans-boundary
trades and to resolve the arguments if rises between the different associate countries. It
cannot be thought of performing global trade taking place in the WTO absence and every
member are subsequent procedures created by the WTO. Though there are numerous
opinions on WTO role, however, World Trade Organization performs the essential and
operative role for the global trades and it is constantly advantageous for the nations to trade
trans-boundary as the WTO member.

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