World Trade Organization

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

Mandate over trade restrictions

The WTO does not eliminate every trade restriction. Its covered agreements discipline governmental trade measures through negotiated obligations. For goods, these include most-favoured-nation treatment, national treatment after importation, tariff bindings, and the general prohibition on quantitative restrictions under Article XI of GATT 1994. Services restrictions are governed by general obligations and members' scheduled commitments under the GATS. Trade remedies, technical regulations and sanitary measures are permitted only under the relevant agreements, while Articles XX and XXI of GATT 1994 provide general and security exceptions subject to their conditions.

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

Institutions and decision-making

The WTO has a member-controlled structure. Its Secretariat provides administrative, legal, technical and research support but does not independently determine members' trade policies.

• The Ministerial Conference, comprising all members, is the highest decision-making body and must meet at least once every two years.
• The General Council conducts business between Ministerial Conferences and also meets as the Dispute Settlement Body and Trade Policy Review Body.
• Councils for goods, services and trade-related intellectual property, together with specialised committees, operate under the General Council.
• The Geneva-based Secretariat is headed by the Director-General.
• Consensus is the normal decision-making method, meaning that no member present formally objects.
• If voting occurs, each member ordinarily has one vote, while interpretations, waivers, amendments and accessions follow their prescribed thresholds.

Enforcement through dispute settlement

The Dispute Settlement Understanding provides an integrated process for claims that a member has violated WTO obligations or impaired benefits under a covered agreement.

• Consultations are the first stage and seek a mutually agreed solution; if they fail, an independent panel may examine the dispute.
• The Dispute Settlement Body establishes panels, adopts reports, monitors implementation and may authorise the suspension of concessions.
• The DSU provides for appeals limited to legal issues and interpretations through the Appellate Body.
• Panel and appellate reports are adopted unless the Dispute Settlement Body decides by consensus not to adopt them, known as negative or reverse consensus.
• A member found inconsistent must bring its measure into conformity immediately or within a reasonable period.
• If compliance is not achieved, compensation may be negotiated or suspension of concessions authorised; both are temporary responses rather than substitutes for compliance.
• Rulings cannot add to or diminish rights and obligations contained in the covered agreements.