The World Trade Organization
A new chapter to global life.
Before I read about the World Trade Organization, I knew that WTO stands for World Trade Organization. I knew Canada was probably included because the W stands for World, and Canada is one of the major countries in the World. Canada exports a lot to the United States, in fact, they actually export more than two thirds of their total export. These are just some brief facts about Canada’s Export.
Canada’s Top 10 Export Countries
- United States 81.6% of total exports
- United Kingdom 2.8% of total exports
- Japan 2.1% of total exports
- China 1.7% of total exports
- Mexico 1.0% of total exports
- Germany 0.9% of total exports
- France 0.7% of total exports
- Netherlands 0.7% of total exports
- South Korea 0.7% of total exports
- Belgium 0.5% of total exports
- Top of Total 10 92.7% of total exports
Discovery and Purpose
The World Trade Organization came in to effect on January 1, 1995 is the new form of GATT (General Agreement on Tariffs and Trades) which was created in 1947 and continued to function for over 50 years. The WTO obviously is at the global level, deals with the rules of trade between global and international levels, and is responsible for negotiating and making new trade agreements. They help settle trade disputes. When countries have faced trade barriers, their government comes to the WTO fro negotiations.
They also provide technical assistance for developing countries. The main staffs consist of 625 people and the head of the organization is Pascal Lamy (Director-General). The export of merchandise grew over 6% annually. The WTO is the cause for over 97% of the world’s trade. The total amount of trade that happened due to the WTO was 22 times the amount that happened in 1950.
The WTO agreements are signed by most of the major trading partners of the world and others too. They have different rounds and negotiations. The WTO headquarters are in Geneva, Switzerland. Most of WTO`s work right now comes from the Uruguay round however the current negotiation and round is called the Doha round.
Current members of the WTO in Green
| The Rounds of (GATT as formerly known as) World Trade Organization | |||||
| Name | Start | Duration | Countries | Subjects covered | Achievements |
| Geneva | April 1947 | 7 months | 23 | Tariffs | Signing of GATT, 45,000 tariff concessions affecting $10 billion of trade |
| Annecy | April 1949 | 5 months | 13 | Tariffs | Countries exchanged some 5,000 tariff concessions |
| Torquay | September 1950 | 8 months | 38 | Tariffs | Countries exchanged some 8,700 tariff concessions, cutting the 1948 tariff levels by 25% |
| Geneva II | January 1956 | 5 months | 26 | Tariffs, admission of Japan |
$2.5 billion in tariff reductions |
| Dillon | September 1960 | 11 months | 26 | Tariffs | Tariff concessions worth $4.9 billion of world trade |
| Kennedy | May 1964 | 37 months | 62 | Tariffs, anti-dumping |
Tariff concessions worth $40 billion of world trade |
| Tokyo | September 1973 | 74 months | 102 | Tariffs, non-tariff measures, “framework” agreements | Tariff reductions worth more than $300 billion dollars achieved |
| Uruguay | September 1986 | 87 months | 123 | Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc | The round led to the creation of WTO, and extended the range of trade negotiations, leading to major reductions in tariffs (about 40%) and agricultural taxes and problems, an agreement to allow full access for textiles and clothing from developing countries, and an extension of intellectual property rights. |
| Doha | November 2001 | ? | 141 | Tariffs, non-tariff measures, agriculture, labour standards, environment, competition, investment, transparency, patents etc | The round is not yet concluded. |
The second WTO meeting was in 1998 in Geneva, Switzerland. It has been promoting its “Free Trade“ symbol. One of the differences between GATT and WTO was that GATT had mainly had experience and helped with just trade in goods but WTO and its negotiations deal with creations, designs, services and in trade inventions. As I already mentioned that, the WTO was created during the Uruguay round. The budget for 2006 was 175 million Swiss Francs and since 11 January 2007, the membership consists of 150 countries.
But WTO isn’t all about free trade and making negotiations, sometimes it helps and support maintain trade barriers for example to protect the environment or stop the spread of diseases.
The System
A good fact about WTO is that there is trade without racism, or favouritism. The organization has a system called MFN (Most Favoured Nation) which means in the WTO agreements a country cannot treat their other trading partners unfairly. For example, lower custom duty rates for one of their products they have to do that for all of the WTO members.
Some exceptions are that they can start a free trade agreement for a good within their country or a certain group to stop goods from outside their group or to help and offer tax cuts to developing countries only. Also with services, the members of WTO are given an exception if the services are under a certain limit. But these exception are under strict conditions such as to allow to do this a country must do something like open up a trade barrier of decrease a custom trade duty by a certain amount.
One of the main concerns of WTO is reducing and lowering trade barriers such as import bans, custom duties or importing in a restricted quantity. Since GATT, there have been eight rounds of trade negotiations and the ninth round, which is still going, is called the Doha round. The first few rounds were focused on reducing tariffs (custom duties) and by about 1994 on wards the taxes and duties on industrial goods have fallen to less than 4%.
By about the mid- 1980s, the rounds covered such as services and non-tariff barriers on goods. WTO allows countries to gradually open new markets and lets it develop new ideas. Most of the time developing countries are given longer periods of time to fulfill their obligations.
When WTO means “Free Trade Agreements”, it is not only free trade, the countries are allowed to put tariffs and taxes on their goods but in limited amounts. These rules are there to help maintain secure and fair-trade conditions.
More than three quarters of the WTO members are developing countries, which have a big impact on the organization and at the end of the Uruguay; round most of the obligations were still pending on the developing countries. However, the agreements did give them periods of time to slowly uplift the burden of the obligations. Very recently, many developed countries have started to allow duty-free and quota-free imports for almost all the products and goods but only for some of the least-developed countries.
The Uruguay Round
The Uruguay round lasted over seven and half years and that was actually twice the amount of time the round was supposed to last. The base of this round was made in November 1982 at a meeting for the ministers at Geneva, Switzerland. Even though the meeting was held to create a new major negotiation round but they wanted to extend this round to cover further agricultural trade so it was thought to be a complete failure.
Then four years later after a heap full of researching, observing, organizing and analyzing issues. The ministers decided to launch a new round. They did so in September 1986 at Punta del Este, Uruguay. This was the biggest global trade negotiation so the ministers gave up over four years to complete.
Then again, two years later in 1988 at Montreal, Canada the ministers had a meeting for an assessment of the round’s scheduled halfway point. In addition, it was held to make plans for the next two years of the remaining round but the talks did not come to a bottom line so they continued it in a quiet manner in Geneva the next April. Although the problems in the Montreal meeting the ministers did come up with some early results including assisting developing countries and market-access on tropical products as well as better trade dispute problem solutions.
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