WORLD TRADE ORGANIZATION

World Trade Organization



World Trade Organization

Introduction

World Trade Organization (WTO) is the only international body that governs us trade between countries. WTO is a multilateral trading system governed by an agreement which contains the basic rules of international trade as a result of negotiations that have been signed by the state member countries. The agreement is a contract between the state-members that bind the government to comply in the implementation of trade policy. Although signed by the government, its main purpose is to help producers of goods and services, exporters and importers in trade activities.

Origin of WTO

World Trade Organization was created on 1 January 1995 to replace the General Agreement on Tariffs and Trade (GATT - General Agreement on Tariffs and Trade) which included a series of commercial treaties concluded at the end of World War II, in order to facilitate free trade. GATT principles and agreements were adopted by the WTO which was charged with administering and extending them. Unlike GATT, the WTO has a substantial institutional structure.

Effectively, the WTO is long overdue successor to the International Trade Organization which was originally planned to be successor of GATT. International Charter of the International Trade Organization was established in the United Nations conference on trade and occupation, held in Havana in March 1948 but was blocked by the U.S. Senate. Some historians have assumed that the failure may have resulted from fears coming from within the American business community, those that the World Trade Organization (WTO) could be used to regulate rather than to liberalize big business.

History of establishment

The WTO was officially established on January 1, 1995 but the trading system itself has been there half a century ago. Since 1948, the General Agreement on Tariffs and Trade (GATT) - the General Agreement on Tariffs and Trade has made the rules for this system. Since the year 1948-1994 the GATT system includes regulations concerning world trade and generates the highest growth in international trade.

At first the GATT aimed to establish the International Trade Organization (ITO), a UN specialized agency which is part of the system of Breton Woods (IMF and World Bank). Although the ITO Charter was finally approved in the UN Conference on Trade and Development in Havana in March 1948, the process of ratification by the legislative institutions of the state does not run smoothly. The most serious challenge came from the United States Congress, that although as a trigger, the U.S. did not ratify. Havana ITO Charter that cannot be implemented effectively. Nevertheless, the GATT remains a multilateral instrument governing international trade.

Nearly half a century of GATT legal text remained the same as in 1948 with several additions including consent forms (agreed upon by some countries only) and tariff reduction efforts. Trade problems resolved through a series of multilateral negotiations known as the "Round of Trade" (trade round), in an effort to encourage the liberalization of international trade.

Procedure for Dispute Resolution

In disputes between two States, the complaining party may request to enter into consultations with the ...