The World Trade Organization (WTO): History, Achievements, and Challenges

This research paper discusses the history of WTO, achievement of its objectives if at all, and its challenges. It ends with a conclusion.

THE WORLD TRADE ORGANIZATION (WTO)
This research paper discusses the history of WTO, achievement of its objectives if at all, and its
challenges. It ends with a conclusion.
History
The horrors of World War II provided the impetus for pursuance of world peace via political,
social and economic spheres.1 The economic sphere provided the ground for the development of
what has grown to be WTO.
The initial steps were kick-started within the framework and avenues offered by the United
Nations systems.2The conceived plan was to lead to a merger of the International Monetary Fund
and the World Bank; consequently International Trade Organization (hereinafter, ITO) was to be
formed.3
Concomitantly, 15 states that were part of the negotiations for the establishment of ITO began
talks to remove custom tariffs. By the time the arrangement had attracted 23 nations, the group
opted for a protocol dubbed Protocol for Provisional Application hence the birth of General
Agreement on Tariffs and Trade (hereinafter, GATT) at Geneva.4
GATT had a number of achievements, important of all was its contribution towards a twenty
fivefold increase in terms of trade volumes among GATT members.5 On the negative side,
glaring challenges were: it fell short of regulations on trade on textile, intellectual property,
dispute resolution and services, hence the call for its review through negotiation. Consequently,
rounds in the names of: Kennedy Rounds; Tokyo Rounds and lately Uruguay round were
introduced.6
1 World Trade Organization, History of the multilateral trading system (2015)<
https://www.wto.org/english/thewto_e/history_e/history_e.htm>.
2 World Trade Organization, ‘understanding WTO’, (2015) Information and External Relations Division.
3 Ibid
4 World Trade Organization , General Agreement on Tariffs and Trade, (1986)
<https://www.wto.org/english/docs_e/legal_e/gatt47.pdf>
5 Meredith Crowley, ‘An introduction to the WTO and GATT’, (2003), Economic perspective.
6 Ibid

Uruguay round which introduced the new dawn was initiated in 1986.7 It was formally concluded
in Morocco in 1994 during a ministerial conference which came to be known as Marrakesh
declaration. It marked the opening of WTO agreement for signature. In addition to earlier
provisions of GATT, WTO then a formal body composed of members contained in its agreement
inter alia: regulations on services, intellectual property, and dispute resolution.8 The main
purposes of WTO as captured by the preamble of its establishing Charter are as hereunder:
 Improving the standards of living;
 Creating job opportunities;
 Improve wages and demand for goods and services;
 Boosting productivity and at the same time taking into account the needs of the future
generations; and
 Granting poor states an appropriate grounding for trade and leveling the field for all
international trade stakeholders.9
WTO has achieved in the following areas:
It has a revamped its dispute resolution mechanisms. According to WTO 2016 annual report,
whereas its predecessor handled 300 disputes in a span of 52 years, it hit a mark of 500 cases by
2016. Disputes among members of WTO are mediated by a panel of three persons. The
dissatisfied party can appeal failure of which it has to review its laws to comply with WTO
regulations or face a harsh treatment of the affected states having to retaliate.10
It has supported development and built capacity for trade among Least Developed Countries
(LDC). It has done so by introducing a number of programmes aimed at giving LDC an
opportunity to compete at an equal footing with the developed states. For instance, according to
WTO 2016 annual report, a waiver to ease trade among states rules of origin have been relaxed
in favor of poor nations. Additionally, a recent launch of sustainable development goals geared
towards alleviation of poverty, boosting trade and promoting sustainable development is good
7 Sek Lerone, ‘the world trade organization: background and issues’, (2001), Congressional research Service, report
for the congress.
8 ibid
9 World Trade Organization, Introduction to the World Trade Organization (WTO), (2018)
<https://ecampus.wto.org/admin/files/Course_382/Module.../eWTO-M1-R2-E.pdf>
10 Shed Daniel, Murill Brandon, and Smith Jane, ‘Dispute Settlement in the World Trade Organization (WTO): An
Overview’, (2012), Congressional research service.

deal and opportunity for least developed nations. For example, developing countries now
contribute 48% of the world trade as compared to 33% in 2000; the number of persons living
below poverty line has also reduced to half since 1990.11
WTO has worked to smoothen international trade. In so doing, it has not only facilitated entry
into bilateral and multilateral agreements among states, but also negotiated formation of global
alliance for trade facilitation.12 These have worked to ensure smooth movement of goods and
services across the borders of states. Moreover, elimination of trade barriers achieved through
the above agreements have increased the volumes of trade among states. China for example has
had a consistent increase in trade since it joined WTO to date.13
WTO has amended intellectual property agreement (TRIPS) in favor of least developed states.
TRIPS agreement at its enactment under compulsory licensing granted poor states a leeway to
produce generic medicine without the consent of patent owners albeit for domestic use.
Importing such medicines was however hence was however an arduous affair hence a temporary
waiver in 2003, which was converted in a permanent in 2005 and renewed in 2017.14 Access to
drugs for deceases such as HIV/AIDS has been facilitated.
Lately, under a programme dubbed Nairobi Packages, efforts were made to eliminate subsidies
on the exports. This was aimed at improving profitability for the exporting nations and striking a
balance in that the importing nations are also not disadvantaged.
The challenges are
Its dispute resolution system has a number of flaws. First, the process is slow. For instance, even
though alternative disputes resolution mechanism such as good offices, mediation and
negotiations are employed,15 empanelling persons charged with assisting parties to resolve their
11 The world Bank, ‘the role of trade in ending poverty’, (2018), <
www.worldbank.org/en/topic/trade/publication/the-role-of-trade-in-ending-poverty>
12 Dona Das, Islam Sharmin, and Ahmed Emram, ‘The effectiveness of the GATT through its major achievements
and failures as well as the performance of the creation of WTO’ (2015), 5 International Journal of Economics,
Commerce and Management United Kigndom, 3.
13 Bodin Saskia, ‘WTO Membership and Trade
A Study of the Effect of China’s WTO Accession on Chinese Trade’, (2017), School of Social Sciences
Master’s Thesis, 30 credits Economics Spring.
14 Miles Tom, ‘poor countries allowed to import generic drugs –WTO’, (2017), Reuters.
15 World Trade Organization, resolving disputes between WTO members, (2018)
<https://www.wto.org/english/thewto_e/20y_e/dispute_brochure20y_e.pdf>.

disputes takes unnecessarily long time. A case in point is a consultation request lodged in
January 2018 as regards United States Anti-Dumping Measures on Fish Fillets from Vietnam
whose panel has not been composed.16 Also in DS 483, a case that was on China anti-dumping
measures against imports from Canada, the proceedings by the panel took two years, and a
further 4 months for translation of the report.17 This is unprecedented delay which denies justice
to the parties
Second, the decisions and the participation in the process is voluntary. This grants the parties to
the disputes an unacceptable leeway to drag and unreasonably frustrate the process. Even after
going through traumatizing and elongated process, the implementation of the outcome of the
dispute resolution process is dependent on exercise of good faith by parties.
The mechanism for review of WTO Charter is slow. Amendments do not take effect until 2/3 of
the members have ratified them, this unnecessarily elongates the whole process. For instance, it
took 7 years for introduction of Uruguay round after Tokyo round, and another 8 years for Doha
amendments to be effected.18 Such a long time may mean that an amendment may materialize
after its whole essence has been extinguished.
Conclusion
From the above discussion it is clear that WTO has not veered off the path heralded under its
establishing Charter. It has realized a number of successes which have gone a long way in
cementing its role within the global plane. It is however not bereft of challenges; though the
challenges are not quite pronounced, they still take aback the steps so far realized by WTO.
Programmes must therefore be initiated to curb the challenges otherwise they may grow into
strong walls permeation of which will require massive efforts.
16 World Trade Organization, Chronological list of disputes cases (2018)
<https://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm>.
17 Bhatia Singh, ‘ the problems of plenty: challenging times for the WTO’s dispute settlement system’, (2017),
release of the appellate body annual report 2016
18 Moore Mike, ‘Ten Years of the WTO: A Success Story of Global Governance’ (2005) IPG 2

Bibliography
Articles
Bhatia Singh, ‘the problems of plenty: challenging times for the WTO’s dispute settlement
system’, (2017), release of the appellate body annual report 2016.
Bodin Saskia, ‘WTO membership and trade: a study of the Effect of China’s WTO Accession on
Chinese Trade’, (2017), School of Social Sciences Master’s Thesis, 30 credits Economics Spring.
Dona Das, Islam Sharmin, and Ahmed Emram, ‘The effectiveness of the GATT through its
major achievements and failures as well as the performance of the creation of WTO’ (2015), 5
International Journal of Economics, Commerce and Management United Kigndom, 3.
Meredith Crowley, ‘An introduction to the WTO and GATT’, (2003), Economic perspective
Miles Tom, ‘poor countries allowed to import generic drugs –WTO’, (2017), Reuters.
Moore Mike, ‘Ten Years of the WTO: A Success Story of Global Governance’ (2005) IPG 2
Sek Lerone, ‘the world trade organization: background and issues’, (2001), Congressional
research Service, report for the congress.
Shed Daniel, Murill Brandon, and Smith Jane, ‘Dispute Settlement in the World Trade
Organization (WTO): An Overview’, (2012), Congressional research service.
World Trade Organization, ‘understanding WTO’, (2015) Information and External Relations
Division.
Others
World Trade Organization, History of the multilateral trading system (2015)<
https://www.wto.org/english/thewto_e/history_e/history_e.htm>.
World Trade Organization, General Agreement on Tariffs and Trade, (1986)
<https://www.wto.org/english/docs_e/legal_e/gatt47.pdf>
World Trade Organization, Introduction to the World Trade Organization (WTO), (2018)
<https://ecampus.wto.org/admin/files/Course_382/Module.../eWTO-M1-R2-E.pdf>

World Trade Organization, resolving disputes between WTO members, (2018)
<https://www.wto.org/english/thewto_e/20y_e/dispute_brochure20y_e.pdf>.
World Trade Organization, Chronological list of disputes cases (2018)
<https://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm>.