Representation in the WTO and economic groupings
If you wish to get more information about World Trade Organization, just click WTO. Its URL is: http://www.wto.org. As WTO updates its site periodically, some of these documents are not readily accessible. To assist students, however, some items are copied below. These documents originated in the WTO websites, and Kwan Choi is NOT the author.
Representation in the WTO and economic groupings
The WTO Secretariat and Budget
Assisting developing and transition economic groupings
Specialised help for export promotion
The WTO's part in global economic policy-making
Overseeing national trade Policies
The structure of the WTO is dominated by its highest authority, the Ministerial Conference, composed of representatives of all WTO members, which is required to meet at least every two years and which can take decisions on all matters under any of the multilateral trade agreements.
The day-to-day work of the WTO, however, falls to a number of subsidiary bodies; principally the General Council, also composed of all WTO members, which is required to report to the Ministerial Conference. As well as conducting its regular work on behalf of the Ministerial Conference, the General Council convenes in two particular forms - as the Dispute Settlement Body, to oversee the dispute settlement procedures and as the Trade Policy Review Body to conduct regular reviews of the trade policies of individual WTO members.
The General Council delegates responsibility to three other major bodies - namely the Councils for Trade in Goods, Trade in Services and Trade-Related Aspects of Intellectual Property. The Council for Goods oversees the implementation and functioning of all the agreements (Annex 1A of the WTO Agreement) covering trade in goods, though many such agreements have their own specific overseeing bodies. The latter two Councils have responsibility for their respective WTO agreements (Annexes 1B and 1C) and may establish their own subsidiary bodies as necessary.
Three other bodies are established by the Ministerial Conference and report to the General Council. The Committee on Trade and Development is concerned with issues relating to the developing countries and, especially, to the "least-developed" among them. The Committee on Balance of Payments is responsible for consultations between WTO members and countries which take trade-restrictive measures, under Articles XII and XVIII of GATT, in order to cope with balance-of-payments difficulties. Finally, issues relating to WTO's financing and budget are dealt with by a Committee on Budget.
Each of the four plurilateral agreements of the WTO - those on civil aircraft, government procurement, dairy products and bovine meat - establish their own management bodies which are required to report to the General Council.
The work of the WTO is undertaken by representatives of member governments but its roots lie in the everyday activity of industry and commerce. Trade policies and negotiating positions are formulated in capitals, usually with a substantial advisory input from private firms, business organizations, farmers as well as consumer and other interest groups. Most countries have a diplomatic mission in Geneva, sometimes headed by a special Ambassador to the WTO, whose officials attend meetings of the many negotiating and administrative bodies at WTO headquarters. Sometimes expert representatives are sent directly from capitals to put forward their governments' views on specific questions.
As a result of regional economic integration - in the form of customs unions and free trade areas - and looser political and geographic arrangements, some groups of countries act together in the WTO with a single spokesperson in meetings and negotiations.
The largest and most comprehensive grouping is the European Union and its 15 member states. The EU is a customs union with a single external trade policy and tariff. While the member states coordinate their position in Brussels and Geneva, the European Commission alone speaks for the EU at almost all WTO meetings. The EU is a WTO member in its own right as are each of its member states.
A lesser degree of economic integration has so far been achieved by the countries which are GATT members of the Association of South East Asian Nations (ASEAN) - Malaysia, Indonesia, Singapore, Philippines, Thailand and Brunei Darussalam. Nevertheless, they have many common trade interests and are frequently able to coordinate positions and to speak with a single voice.
Among other groupings which occasionally present unified statements is the Latin American Economic System (SELA) and the African, Caribbean and Pacific Group (ACP). More recent efforts at regional economic integration - for instance, NAFTA (Canada, US and Mexico) and MERCOSUR (Brazil, Argentina, Paraguay and Uruguay) - have not yet reached the point where their constituents frequently have a single spokesperson on WTO issues.
A well-known alliance in the Uruguay Round - bringing together a similarity of trade interests rather than a regional identity - was the Cairns Group which comprised, and still comprises, agricultural exporting nations from developed, developing and East European countries.
The WTO continues a long tradition in GATT of seeking to make decisions not by voting but by consensus. This procedure allows members to ensure their interests are properly considered even though, on occasion, they may decide to join a consensus in the overall interests of the multilateral trading system. Where consensus is not possible, the WTO agreement allows for voting. In such circumstances, decisions are taken by a majority of the votes cast and on the basis of "one country, one vote".
There are four specific voting situations envisaged in the WTO Agreement. First, a majority of three-quarters of WTO members can vote to adopt an interpretation of any of the multilateral trade agreements. Second, and by the same majority, the Ministerial Conference, may decide to waive an obligation imposed on a particular member by a multilateral agreement. Third, decisions to amend provisions of the multilateral agreements can be adopted through approval either by all members or by a two-thirds majority depending on the nature of the provision concerned. However, such amendments only take effect for those WTO members which accept them. Finally, a decision to admit a new member is taken by a two-thirds majority in the Ministerial Conference.
The WTO Secretariat is located in Geneva. It has around 450 staff and is headed by its Director-General, Mr. Renato Ruggiero, and four deputy directors-general. Its responsibilities include the servicing of WTO delegate bodies with respect to negotiations and the implementation of agreements. It has a particular responsibility to provide technical support to developing countries, and especially the least-developed countries. WTO economists and statisticians provide trade performance and trade policy analyses while its legal staff assist in the resolution of trade disputes involving the interpretation of WTO rules and precedents. Much of the Secretariat's work is concerned with accession negotiations for new members and providing advice to governments considering membership.
The WTO budget is around US$83 million (105 million Swiss Francs) with individual contributions calculated on the basis of shares in the total trade conducted by WTO members. Part of the WTO budget also goes to the International Trade Centre.
Most WTO members are previously GATT members who have signed the Final Act of the Uruguay Round and concluded their market access negotiations on goods and services by the Marrakesh meeting in 1994. A few countries which joined the GATT later in 1994, signed the Final Act and concluded negotiations on their goods and services schedules, also became early WTO members. Other countries that had participated in the Uruguay Round negotiations concluded their domestic ratification procedures only during the course of 1995, and became members thereafter.
Aside from these arrangements which relate to "original" WTO membership, any other state or customs territory having full autonomy in the conduct of its trade policies may accede to the WTO on terms agreed with WTO members.
In the first stage of the accession procedures the applicant government is required to provide the WTO with a memorandum covering all aspects of its trade and economic policies having a bearing on WTO agreements. This memorandum becomes the basis for a detailed examination of the accession request in a working party.
Alongside the working party's efforts, the applicant government engages in bilateral negotiations with interested member governments to establish its concessions and commitments on goods and its commitments on services. This bilateral process, among other things, determines the specific benefits for WTO members in permitting the applicant to accede. Once both the examination of the applicant's trade regime and market access negotiations are complete, the working party draws up basic terms of accession.
Finally, the results of the working party's deliberations contained in its report, a draft protocol of accession, and the agreed schedules resulting from the bilateral negotiations are presented to the General Council or the Ministerial Conference for adoption. If a two-thirds majority of WTO members vote in favour, the applicant is free to sign the protocol and to accede to the Organization; when necessary, after ratification in its national parliament or legislature.
Developing countries accounted for 97 of the total GATT membership of 128 at the end of 1994 and, together with countries currently in the process of "transition" to market-based economies, they are expected to play an increasingly important role in the WTO as the Organization's membership expands. As a consequence, much attention is paid to the special needs and problems of developing and transition economies. For instance, the WTO Secretariat, alone or in cooperation with other international organizations, conducts missions and seminars and provides specific, practical technical cooperation for governments and their officials dealing with accession negotiations, implementing WTO commitments or seeking to participate effectively in multilateral negotiations. Courses and individual assistance is given on particular WTO activities including dispute settlement and trade policy reviews. Moreover, developing countries, especially the least-developed among them, are helped with trade and tariff data relating to their own export interests and to their participation in WTO bodies.
The WTO Secretariat has also continued GATT's programme of training courses. These take place in Geneva twice a year for officials of developing countries. Since their inception in 1955 and up to the end of 1994, the courses have been attended by nearly 1400 trade officials from 125 countries and 10 regional organizations. Since 1991, special courses have been held each year in Geneva for officials from the former centrally-planned economies in transition to market economies.
The International Trade Centre was established by GATT in 1964 at the request of the developing countries to help them promote their exports. It is jointly operated by the WTO and the United Nations, the latter acting through UNCTAD (the UN Conference on Trade and Development).
The Centre responds to requests from developing countries for assistance in formulating and implementing export promotion programmes as well as import operations and techniques. It provides information and advice on export markets and marketing techniques, and assists in establishing export promotion and marketing services and in training personnel required for these services. The Centre's help is freely available to the least-developed countries.
An important aspect of the WTO's mandate is to cooperate with the International Monetary Fund, the World Bank and other multilateral institutions to achieve greater coherence in global economic policy-making. A separate Ministerial Declaration was adopted at the Marrakesh Ministerial Meeting in April 1994 in order to underscore this objective.
The declaration envisages an increased contribution by the WTO to achieving greater coherence in global economic policy-making. It recognizes the interlinkages between different aspects of economic policy and calls on the WTO to develop its cooperation with the international organizations responsible for monetary and financial matters - the World Bank and the International Monetary Fund..
The declaration also recognizes the contribution that trade liberalization makes to the growth and development of national economies. It views such liberalization as an increasingly important component in the success of the economic adjustment programmes which many WTO members are undertaking, even though it may often involve significant transitional social costs.
Surveillance of national trade policies is a fundamentally important activity running throughout the work of the WTO. At the centre of this work is the Trade Policy Review Mechanism (TPRM).
The objectives of the TPRM are, through regular monitoring, to increase the transparency and understanding of trade policies and practices, to improve the quality of public and intergovernmental debate on the issues, and to enable a multilateral assessment of the effects of policies on the world trading system. In this way member governments are encouraged to follow more closely the WTO rules and disciplines and to fulfil their commitments.
Reviews are conducted on a regular, periodic basis. The four biggest traders - the European Union, the United States, Japan and Canada - are examined approximately once every two years. The next 16 countries in terms of their share of world trade are reviewed every four years; and the remaining countries every six years, with the possibility of a longer interim period for the least-developed countries.
Reviews are conducted in the Trade Policy Review Body (TPRB) - established at the same level as the General Council - on the basis of two documents: a policy statement prepared by the government under review, and a detailed report prepared independently by the WTO Secretariat. These two reports, together with the proceedings of the TPRB are published after the review meeting,.
In addition to the TPRM, many other WTO agreements contain obligations for member governments to notify the WTO Secretariat of new or modified trade measures. For example, details of any new anti-dumping or countervailing legislation, new technical standards affecting trade, changes to regulations affecting trade in services, and laws or regulations concerning the TRIPs agreement all have to be notified to the appropriate body of the WTO. Special groups are also established to examine new free-trade arrangements and the trade policies of acceding countries.