The Online Encyclopedia and Dictionary






World Trade Organization

For other uses of the initials WTO, see WTO (disambiguation).

The World Trade Organization (WTO) is an international organization which oversees a large number of agreements defining the "rules of trade" between its member states (WTO, 2004a). The WTO is the successor to the General Agreement on Tariffs and Trade, and operates with the broad goal of reducing or abolishing international trade barriers.

WTO headquarters are located in Geneva, Switzerland. Its current Director-General is Supachai Panitchpakdi. As of 12 December 2004, there are 148 members in the organization (WTO, 2004a). All WTO members are required to grant one another most favoured nation status, such that (with some exceptions) trade concessions granted by a WTO member to another country must be granted to all WTO members (WTO, 2004c).

In the late 1990s, the WTO became a major target of protests by the anti-globalization movement. See critique.



The WTO was created on 1 January 1995 to replace the General Agreement on Tariffs and Trade (GATT), a series of post-war trade treaties intended facilitate free trade. The GATT principles and agreements were adopted by the WTO, which was charged with administering and extending them. Unlike the GATT, the WTO has a substantial institutional structure.

The WTO is effectively the long-delayed successor to the anticipated International Trade Organization , which was originally intended to follow the GATT. The International Trade Organization charter was agreed at the UN Conference on Trade and Employment in Havana in March 1948, but was blocked by the U.S. Senate (WTO, 2004b). Some historians have argued that that failure may have resulted from fears within the American business community that the ITO could be used to regulate, rather than liberate, big business (Wilkins, 1997).


The WTO has two basic functions: as a negotiating forum for discussions of new and existing trade rules, and as a trade dispute settlement body.


Where most international organizations operate on a one country, one vote or even a weighted voting basis, many WTO decisions, such as adopting agreements (and revisions to them) are determined by consensus. This does not necessarily mean that unanimity is found: only that no Member finds a decision so unacceptable that they must insist on their objection. Voting is only employed as a fall-back mechanism or in special cases.

The advantage of consensus is that it encourages efforts to find the most widely acceptable decision. Main disadvantages include large time requirements and many rounds of negotiation to develop a consensus decision, and the tendency for final agreements to use ambiguous language on contentious points that makes future interpretation of treaties difficult. Richard Steinberg (2002) argues that although the WTO's consensus governance model provides law-based initial bargaining, trading rounds close through power-based bargaining favouring Europe and the United States, and may not lead to Pareto improvement. The most notable recent failures of consensus, at the Ministerial meetings at Seattle (1999) and Cancún (2003), were due to the refusal of some developing countries to accept proposed decisions.

The WTO agreed to begin the current round of negotiations, the "Doha Development Agenda", at the Fourth Ministerial Conference in Doha, Qatar in November 2001 (WTO, 2004d).

Dispute resolution

Unlike many other international organizations, the WTO has significant power to enforce its decisions, through the operation of its Dispute Settlement Body, an international trade court with the power to authorize sanctions against states which do not comply with its rulings.


The WTO had 76 members at its creation. A further 72 members joined over the following ten years, the latest (as of 12 December 2004) being Cambodia on 13 October 2004. A current list of members can be found here.

A number of non-members have observers at the WTO: Algeria, Andorra, Azerbaijan, Bahamas, Belarus, Bhutan, Bosnia and Herzegovina, Cape Verde, Equatorial Guinea, Ethiopia, Holy See (Vatican), Iraq, Kazakhstan, Lao People's Democratic Republic, Lebanese Republic, Libya, Russian Federation, Samoa, Sao Tome and Principe, Saudi Arabia, Serbia and Montenegro (each republic is applying for separate membership), Seychelles, Sudan, Tajikistan, Tonga, Ukraine, Uzbekistan, Vanuatu, Vietnam and Yemen. Many of these countries are seeking membership.

Iran, which first asked to join the WTO in 1996, has seen its request repeatedly blocked by the United States, which lists Iran as a state sponsor of terrorism. Russia is also not yet a member, having first applied to join GATT in 1993.



The WTO promotes economic globalization and free trade, which some consider problematic. WTO treaties have been accused of a partial and unfair bias toward multinational corporations and wealthy nations. While membership is voluntary, not joining practically places the recalcitrant nation under embargo. The WTO therefore creates an international system of forced economic rules which discourage change and experimentation.

Decision making in and related to the organization has faced much criticism as well. The "big three" members - the United States, the European Union, and Japan - have been accused of using the WTO to exert undue influence over less powerful member states. In addition, some believe that member states have adopted WTO treaties undemocratically or to the detriment of their citizens.

See also

External links

Anti-WTO links

References & Further Reading

Last updated: 08-07-2005 22:26:29
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