World Trade Organization

The World Trade Organization (WTO) is the international institution that administers agreed rules governing trade among its members. Established on 1 January 1995 under the Marrakesh Agreement, it provides a common institutional framework for agreements covering trade in goods, trade in services and trade-related aspects of intellectual property rights. It is member-driven: governments negotiate rules, take decisions and enforce obligations through its institutional mechanisms.

Mandate and functions

The WTO facilitates the implementation and administration of its covered trade agreements while providing a forum for managing and developing the multilateral trading system.

• It administers the WTO agreements and supports their implementation and operation.
• It provides a forum for negotiations concerning members’ multilateral trade relations.
• It administers the rules and procedures for settling trade disputes between members.
• It administers the Trade Policy Review Mechanism, which promotes transparency through periodic examination of members’ trade policies.
• It cooperates, where appropriate, with the International Monetary Fund and the World Bank institutions to improve coherence in global economic policymaking.

Institutional structure

The WTO has a hierarchical but member-controlled structure; its Secretariat supports members but does not independently make trade policy decisions.

• The Ministerial Conference, composed of representatives of all members, is the highest decision-making body and must meet at least once every two years.
• The General Council conducts WTO business between Ministerial Conferences and is also composed of representatives of all members.
• The General Council convenes under separate mandates as the Dispute Settlement Body and the Trade Policy Review Body.
• The Council for Trade in Goods, the Council for Trade in Services and the Council for Trade-Related Aspects of Intellectual Property Rights operate under the General Council.
• Specialised committees and working bodies deal with subjects covered by individual agreements and institutional responsibilities.
• The Geneva-based Secretariat is headed by the Director-General and provides administrative, legal, technical and research support.

Decision-making procedure

Consensus is the WTO’s normal method of decision-making, reflecting its character as a member-driven organisation.

• A decision is treated as taken by consensus when no member present at the meeting formally objects to it.
• Each member ordinarily has one vote when a matter is put to voting.
• Voting remains available when consensus cannot be reached, subject to the specific rules and thresholds governing matters such as interpretations, waivers, amendments and accession.
• The Ministerial Conference and General Council exercise decision-making authority within the limits laid down by the WTO Agreement and the relevant trade agreements.

Dispute-settlement functions

The Dispute Settlement Understanding provides an integrated procedure for resolving claims that a member has violated WTO obligations or impaired benefits available under the covered agreements.

• The Dispute Settlement Body establishes panels, adopts panel and appellate reports, supervises implementation and may authorise suspension of trade concessions.
• Consultations are the first stage and are intended to secure a mutually agreed solution.
• If consultations fail, an independent panel examines the dispute and submits findings and recommendations.
• The Dispute Settlement Understanding provides for appeals limited to issues of law and legal interpretation through the standing Appellate Body.
• Panel and appellate reports are adopted unless the Dispute Settlement Body decides by consensus not to adopt them, a procedure commonly called negative or reverse consensus.
• A member found inconsistent with WTO obligations is expected to bring its measure into conformity, immediately or within a reasonable period.
• The Dispute Settlement Body monitors implementation of its recommendations and rulings.
• If compliance is not achieved, compensation may be negotiated or the complainant may receive authorisation to suspend concessions; these are temporary responses rather than substitutes for compliance.
• Dispute-settlement rulings cannot add to or diminish the rights and obligations contained in the covered agreements.

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