The World Trade Organization (WTO) is an international organization established through agreements signed by member countries worldwide. Its main purpose is to regulate and facilitate trade between nations by reducing trade barriers and promoting the expansion of global trade. With over 160 member countries, the WTO covers a wide range of trade-related issues, including the trading of goods, services, intellectual property, and the resolution of disputes between member countries.
WTO recognizes the crucial relationship between trade, economic growth, and living standards. It aims to create an environment that promotes sustainable development, protects the environment, and addresses the needs and concerns of countries at various levels of economic development. Additionally, the WTO strives to ensure that developing and least-developed countries have a fair share in the growth of international trade.
(A) Briefs on WTO + also Benefits for India
1. Introduction for WTO
(i) WTO known International Organization established based on signed agreements between member countries across world.
(ii) (a) WTO formed in 1994 for regularizing rules + regulations between member countries for healthy expansion of World’s Trade through reduction in trade barriers + also enhancement in trade between more than 160 member countries (all).
(iii) (b) WTO agreement executed on April 15, 1994 in English + French + also Spanish (all) 3 languages.
(iv) WTO agreement covering trading in goods + trading in services + Intellectual Property + also settlement of disputes between member countries (all).
(v) WTO recognizing relationship for trade + economic + for raising living standards + ensuring 100% employments + large + steadily growing volumes for real incomes + effective demands + expanding productions + trading for goods + services through allowing optimal world resource’s with objective for sustainable developments + to protect + to preserve environment + to enhance methods for doing consistently for needs + also concerns at different levels of economic developments (all).
(vi) WTO recognizing positive efforts for designing to ensure that developing countries + specifically lowest developed countries + to secure appropriate share in international trade’s growth with needs of economic development of WTO’s member countries (all).
(vii) WTO contributing through entering into reciprocal + mutually advantageous arrangements directed to substantial reduction in customs tariffs + other barriers for trade + also elimination of discriminatory treatments in international trade relationships between WTO’s member countries (all).
(viii) WTO required to develop integrated + more viable + durable Multilateral Trading System (MTS) encompassing GAAT based on past trade liberalization efforts + also 100% results of Uruguay Round of Multilateral Trade Negotiations (MTN) (all).
(ix) WTO required to preserve basic principles + also objectives underlying MTS (both).
2. Establishment for WTO (Article I)
(i) WTO established in 1994 by replacing General Agreement on Trade and customs tariffs (GATT) known Global Trade Organization (GTO) to monitor 100% Multilateral Trade Agreements (MTA’s) + also providing fair opportunities to GAAT’s member countries (both).
(ii) GATT initially established starting with 23 member countries in 1948.
(iii) GATT initially dealing in trading of Goods (only).
(iv) WTO established on April 15, 1994 but WTO agreement in operation from Jan 01, 1995 by replacing GATT under Uruguay Round Negotiations (URN) (1986-94)
3. Scopes for WTO (Article II)
(i) WTO required to provide common institutional framework for conducting trade relationships between member countries through agreements + also associated legal instruments be executed (both).
(ii) Agreements + associated legal instruments included in Annexes-1 + 2 + 3 known MTA’s integral part for agreements + also binding on 100% member countries (all).
(iii) (a) Agreements + associated legal instruments which included in Annex-4 known Plurilateral Trade Agreements (PTA) part for agreements be accepted + also binding on member countries (all).
(b) PTA not creating obligations + also rights (both) for member countries those not accepting PTA
(iv) GAAT, 1994 already specified in Annex-1A which legally different from GATT constitution executed on October 30, 1947 but was in operation from Jan 01, 1948.
4. Functions by WTO (Article III)
(i) WTO required to facilitate implementation + administration + operation + objectives of WTO agreements + MTA’s + to provide framework for implementation + administration + also operation of PTA (all).
(ii) (a) WTO required to facilitate for negotiations between member countries for Multilateral Trade Relations (MTR).
(b) WTO required to facilitate for negotiations between member countries for MTR + also framework for implementation of results (both) for negotiations be decided by Ministerial conference.
(iii) WTO required to develop administrate understandings for making rules + also procedures (both) for settlement of disputes.
(iv) WTO required to prepare administrate Trade Policy Review Mechanism (TPRM).
(v) (a) WTO required to achieve bigger co-ordination for global economic policy-making.
(b) WTO required to co-operate with International Monetary Fund (IMF) + International banks for Reconstruction + Development + also its affiliated agencies (all).
(B) Briefs on WTO’s structures (Article IV)
5, WTO’s structures – Ministerial Conference (MC)
(i) WTO’s MC composition representing 100% member countries those meeting for minimum 1 time in 2 years.
(ii) WTO’s MC to carry functions + also to take necessary actions (both).
(iii) WTO’s MC to take decisions for 100% matters required under MTA’s by member countries for their specific requirements.
6. WTO’s structures – General Council (GC)
(i) WTO’s GC composition representing 100% member countries those meeting with appropriate intervals between meetings of MC and GC.
(ii) WTO’s GC to carry functions assigned by WTO’s agreements.
(iii) WTO’s GC to establish + to approve for rules + also procedures for committees formed by MC (all).
(iv) WTO’s GC to discharge responsibilities for Dispute Settlement Body (DSB) established for Dispute Settlement Understanding (DSU) by MC.
(v) WTO’s DSB permitted to have own chairman + to structure own rules + also procedure for fulfillment of assigned responsibilities (all).
(vi) WTO’s GC to discharge responsibilities for Trade Policy Review Body (TPRB).
(vii) WTO’s TPRB permitted to have own chairman + to establish own rules + also procedure for fulfillment of assigned responsibilities (all).
7. WTO’s structures – CTG + CTS + TRIPS (all)
(i) WTO’s council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) to operate under guidance of GC.
(ii) WTO’s council for Trade in Goods (CTG) to oversee functioning of MTA’s (Annex 1A).
(iii) WTO’s council for Trade in Services (CTS) to oversee functioning of General Agreement on Trade in Services (GATS).
(iv) WTO’s council for TRIPS to oversee functioning of agreement’s aspects.
(v) WTO’s CTG + CTS to carry assigned functions by WTO’s agreement + also by GC (all).
(vi) WTO’s CTG + CTS to structure rules + also procedures after approval from GC (all).
(vii) WTO’s Membership of CTG + CTS (both) be opened for 100% member
(viii) WTO’s CTG + CTS (both) to meet with appropriate needed intervals to carry functions.
8. WTO’s structures – CTG + CTS + Council (all) for TRIPS
(i) These councils permitted to establish needed subsidiary bodies.
(ii) These subsidiary bodies required to structure rules + procedures (both) after approval from GC.
9. WTO’s structures – Functions of MC
(i) MC to establish committee on Trades + Developments + Committees on Balance-of-Payments restrictions + committee on budget + finance + administration to carry assigned functions by WTO’s agreement + also by MTA’s (all).
(ii) MC required additional assigned function by GC + also to establish additional Committees (both).
(iii) Committee on Trades + Developments required to periodically review MTA’s special provisions for least-developed member countries + also to report to GC for action (all).
(iv) Membership in Committees be opened for 100% member
10. WTO’s structures – Function of bodies established under PTA’s
(i) These bodies required to carry assigned functions under agreements + also operate within institutional framework of WTO (both).
(ii) These bodies required to inform to GC for carried activities on regular basis.
11. Relation of WTO with governmental organizations (Article V)
(i) GC required to make appropriate arrangements for effective co-operations with govt.’s organizations in WTO’s member countries responsible for WTO matters.
(ii) GC required to make appropriate arrangements for consultations + also co-operations with govt.’s organizations in WTO’s member countries responsible for WTO matters (both).
12. Secretariat for WTO (Article VI)
(i) WTO’s secretariat be headed by Director-General (DG).
(ii) MC permitted for certain matters like:
(a) To appoint DG
(b) To adopt regulations for powers + duties + conditions for services + also terms for office of DG (all).
(iii) DG permitted to appoint staff for secretariat + to determine duties + also conditions for staff’s services under regulations adopted by MC (both).
(iv) Nature of responsibility for DG + also for staff of secretariat (both) like:
(a) DG + staff for secretariat not permitted to seek + to accept instructions from govt. of member country + also from other external authority (all).
(b) DG + also staff of secretariat (both) required to refrain from actions which adversely reflecting international official’s position.
(c) WTO’s member countries required to obey international characters for DG + also Secretariat staff’s responsibility (both).
(d) WTO’s member countries not permitted to influence DG + also Secretariat staff’s in discharging of duties (both).
13. Budget + member’s Contributions (both) for WTO (Article VII)
(i) (a) DG required to present before budget’s committees constituted for finances + administrations + also to prepare WTO’s financial statements (all).
+ (plus)
(b) Also budget’s committees required to review annual estimates for finances + administration + also preparation for WTO’s financial statements be presented by DG to GC for making recommendations (all).
+ (plus)
(c) Also annual budget’s estimated be approved by GC.
(ii) Committees for budgets + finances + administrations for financial regulations like:
(a) For fixing contribution’s amount for WTO expenses to be apportioned between member countries.
+ (plus)
(b) Also for taking appropriate measures for recovering arrears from member countries.
+ (plus)
(c) Also for regulating financial for practicable regulations + also practices (both) applied under GATT, 1947.
(iii) GC required to adopt financial regulations + also annual budget’s estimates with minimum consent from 66.666% WTO’s member countries.
(iv) Each WTO’s member country required to promptly contribute for expense’s share under financial regulations adopted by GC.
(C) Briefs on WTO’s Miscellaneous Activities for member countries
14. Legal Status for WTO (Article VIII)
(i) WTO’s legal personality be accepted by member countries + also necessary legal capacity for exercising its functions.
(ii) WTO’s privileges + immunities (both) be accepted by member countries necessary for exercising its functions.
(iii) WTO’s privileges + immunities (both) be accepted by member countries necessary for independent exercising its functions.
(iv) WTO’s privileges + immunities (both) be accepted by member countries stipulated in convention for privileges + immunities for specialized agencies approved on November 21, 1947 by General Assembly (GA) of United Nations.
15. Decision Making Process (DMP) for WTO (Article IX)
(i) (a) WTO required to continue best practices for decision-making through consensus which followed under GATT, 1947 except otherwise provided when decision could not arrived through consensus.
+ (plus)
(b) Also WTO required to decide through voting at MC’s meetings + GC’s meetings (both).
+ (plus)
(c) Also WTO’s 1 member permitted to cast 1 vote (only).
+ (plus)
(d) Also MC’s decision + GC’s decision be taken through majority voting except already provided in WTO’s agreement + in MT’s agreements (all).
(ii) (a) MC + GC exclusively permitted to adopt WTO’s agreement + also MT agreement’s interpretations (all).
+ (plus)
(b) Also MT agreement’s interpretation permitted to exercise based on recommendations stipulated by GC for overseeing WTO agreement’s functioning.
+ (plus)
(c) Also permitted to take decision to adopt interpretation through minimum 66.666% voting by WTO’s member countries.
(iii) Exceptional Circumstances for WTO’s decision making
- MC permitted to waive obligations already imposed on WTO’s member countries through WTO’s agreement + MT’s agreement when decision be taken based on minimum 75% voting by member countries under exceptional circumstances like:
For requesting waiver for concerning matter which be submitted to MC for consideration under routine practice of decision-making through consensus like:
- MC required to prepare time bound program not exceeding 90 day from date of receipt for considering request.
+ (plus)
- MC permitted with minimum 75% voting by WTO’s member countries for decision making when consensus not arrived during time bound program for granting waiver.
+ (plus)
(b) Report be submitted to MC for waiver against concerning MT’s agreement when decision could not be taken during time bound program like within 90 day.
(iv) (a) MC’s decision for granting waiver required to state about exceptional circumstances for justifying decisions + terms + conditions (all) for waiver when date of waiver yet to be terminated.
+ (plus)
(b) Also application for waiver exceeding 1 year to be reviewed by MC.
+ (plus)
(c) Also thereafter annually permitted except waiver terminated.
+ (plus)
(d) Also MC required to examine that exceptional circumstances justified for waiver + terms + also conditions for waiver satisfied (all).
+ (plus)
(e) Also MC permitted to extend + to modify + also to terminate waiver after review annually (all).
(v) Decisions on PTA + decisions on interpretations + also decisions on waivers (all) be governed by WTO agreement’s provisions.
16. Amendments in WTO’s Agreements (Article X)
(i) (a) WTO’s member permitted to initiate amendment proposal in provisions of WTO’s agreement + also MT’s agreement (both) through submitting proposal to MC.
+ (plus)
(b) Also council listed in Article IV permitted to submit MC’s about proposal to amend provisions in MT’s agreement.
+ (plus)
(c) Also MC permitted to decide to extend period exceeding 90 day after proposal tabled formally to him.
+ (plus)
(d) Also MC required to submit proposed amendment to 100% member countries for acceptance through consensus.
+ (plus)
(f) Also MC required to decide with minimum 66.666% voting of member countries when consensus not reached at meeting of MC in 90 day.
(ii) Amendments to provisions of this Article + also to provisions of next Articles (both) applicable after acceptance received from requisites number of member countries.
(iii) (a) Amendments to provisions of WTO’s agreement + MT’s agreement for alteration in rights + also in obligations of member countries (all) applicable after acceptance received from minimum 66.666% voting of member countries
+ (plus)
(b) Also MC required to decide with minimum 75% voting of member countries before amendment applicable when member countries not accepted in 90 day.
+ (plus)
(c) Also member country permitted to withdraw from WTO or to remain as member (only) with consent from MC.
(iv) Amendments to provisions of WTO’s agreement + to MT’s agreement for not altering rights + also obligations (all) for member countries applicable with minimum 66.666% voting of member countries.
(v) Member countries required to deposit instrument for acceptance to WTO’s DG during period of acceptance specified by MC.
(vi) MC permitted to decide to amend in trade agreement after receiving request from member countries.
(vii) MC permitted to decide to amend in PT’s agreement after receiving request from member countries.
(viii) WTO’s agreement empowered for amendments in provisions of PT’s agreement.
17. Original Membership for WTO (Article XI)
(i) (a) 100% contracting parties under GATT, 1947 + European Communities automatically permitted to take WTO’s membership + also MT’s agreement (all)
+ (plus)
(b) Also abovementioned countries be known original members.
(ii) Least-developed countries already recognized by United Nations (UN) permitted to enjoy commitments + concessions under individual’s development + financial + trade’s needs + administrative + also institutional capabilities (all)
18. Accession for WTO (Article XII)
(i) (a) 100% countries + 100% separate customs territories with possessing 100% autonomy for conducting external commercial’s relations + other matters permitted for accession of WTO membership + also MT’s agreement (all).
+ (plus)
(b) Also abovementioned countries + custom territories permitted to apply for WTO’s membership + also MT’s agreement (all)
(ii) (a) MC permitted to take decision after receiving request for accession
+ (plus)
(b) MC permitted to approve accession’s terms with minimum 66.666% voting of WTO’s member countries.
(iii) PT’s agreement accession already governed by WTO agreement’s provision.
19. Non-Application of MTA’s for Specific Members for WTO (Article XIII)
(i) WTO’s agreement + also MT’s agreement (both) not applicable for member when member not consenting to application.
(ii) MC permitted to review Article’s operation for specific case when request of member + also recommendation (both) pending till date.
(iii) WTO agreement’s provisions applicable for non-application of PT’s agreement.
20. Acceptance + Entry into Force + Deposit (all) for WTO (Article XIV)
(i) (a) WTO’s agreement be opened for acceptance through signature + otherwise by contracting parties under GATT, 1947 + also European Communities (all) known original members under Article XI.
+ (plus)
(b) Also acceptance be applied for WTO’s agreement + also MT’s agreement (both)
(ii) New member country that accepting WTO’s agreement permitted for concessions + also obligations (both) for MT’s agreement to be applied from date of entry for WTO’s agreement.
(iii) (a) New member country required to deposit text of WTO’s agreement + MT’s agreement with DG for contracting parties under GATT, 1947 when entry into force for WTO’s agreement + also MT’s agreement (all) not accepted
+ (plus)
(b) Also DG required to furnish certified true copy for WTO’s agreement + MT’s agreement + acceptance’s notification to contracting parties under GATT, 1947 + also European Communities’ acceptance for WTO’s agreement (all).
+ (plus)
(c) Also WTO’s agreement + MT’s agreement + also amendment for entry into force for WTO’s agreement (all) be deposited with WTO’s DG.
(iv) (a) Acceptance + also entry into force for PT’s agreement be governed by WTO agreement’s provisions.
+ (plus)
(b) Also WTO’s agreement be deposited with WTO’s DG for contracting parties under GATT, 1947 after entry into force for WTO’s agreement.
21. Withdrawal from Membership for WTO (Article XV)
(i) (a) Member country permitted to withdraw from WTO’s agreement.
+ (plus)
(b) Also same withdrawal be applied for WTO’s agreement + MT’s agreement (both)
+ (plus)
(c) Also same withdrawal be effected after 6 month’s expiry from date of written notice for withdrawal received by WTO’s DG.
(ii) Withdrawal from PT’s agreement be governed by WTO agreement’s provisions.
22. Miscellaneous Provisions for WTO (Article XVI)
(i) WTO’s agreement + MT’s agreement guiding for decisions + procedures + customary practices being followed by contracting parties under GATT, 1947 + also through bodies established under GATT, 1947 (all).
(ii) GATT, 1947 secretariat be treated WTO’s secretariat + also DG for contracting parties under GATT, 1947 be treated WTO’s DG until MC to appoint new DG under Article VI(2) of WTO’s agreement (both).
(iii) WTO’s agreement be superseded over MT agreement’s provisions when conflict existed between WTO agreement’ provisions and MT agreement’s provisions.
(iv) WTO’s member countries required to ensure conformity of laws + regulations + administrative procedures + rights + also obligations (all) provided in WTO agreement’s annexure.
(v) (a) Reservations not permitted against WTO agreement’s provisions.
But
(b) Reservation permitted against MT agreement’s provisions.
+ (plus)
(c) Also reservation permitted against PT agreement’ provisions which governed through WTO agreement’s provisions.
(vi) WTO’s agreement be registered under Article 102 of UN’s Charter.
(vii) Meaning of country
(a) Country under WTO’s agreement + MT’s agreement (both) to include 100% separate customs territories.
+ (plus)
(b) Also 100% separate customs territories be qualified for term country (national).
23. Multilateral Agreements for Trade in Goods (Annex 1A)
(i) General Agreement for Customs Tariffs and Trade 1994
(ii) Agreement for Agriculture
(iii) Agreement for Application of Sanitary + also Phytosanitary Measures (both)
(iv) Agreement for Textiles + also Clothing (both)
(v) Agreement for Technical Barriers for Trades
(vi) Agreement for Trade-Related Investment’s Measures
(vii) Agreement for Implementation for Article VI of General Agreement for Customs Tariffs and Trade 1994
(viii) Agreement for Implementation for Article VII of General Agreement for Customs Tariffs and Trade 1994
(ix) Agreement for Preshipment Inspection
(x) Agreement for Rules of Origin
(xi) Agreement for Import Licensing Procedures
(xii) Agreement for Subsidies + also Countervailing Measures (both)
(xiii) Agreement for Safeguards
24. General Agreements for Trade in Services (Annex 1B)
- View detailed on page number 41
25. Trade-Related Aspects for Intellectual Property Rights (IPR) (Annex IC)
- View detailed on page number 41
26. Rules + Procedures governing for settlement of disputes (Annex 2)
- View detailed on page number 41
27. Trade Policy Review Mechanism (TPRM) for WTO (Annex 3)
- View detailed on page number 41
28. Plurilateral Trade Agreements (PTA) for WTO (Annex 4)
- View detailed on page number 41
29. Comparisons between GATT and WTO
(i) WTO
(a) WTO having more member countries than GATT like more than 160 WTO’s member countries (including India).
+ (plus)
(b) Also WTO known GATT’s extension.
+ (plus)
(c) Also WTO taken Trade agreements from GATT + extended General agreement on Trade Services (GATS) + also agreement for Trade related aspects on Intellectual Property rights (TRIPS) (all).
+ (plus)
(d) Also WTO constituted corporate + also recognized under International laws (both).
(ii) GATT
- GATT had agreements between contracting parties + also not recognized independent existence under international laws (both).
30. WTO’s Advantages + disadvantages (both) for India
- WTO’s advantages for India
(i) (a) India made substantial growth for merchandise exports + also increased in export earnings (both).
+ (plus)
(b) Also India’s merchandise exports increased from US$32 billons (1995) to US$ 291 billion during year ending on March 31, 2021 (2020-21).
(ii) (a) WTO’s introduction after GATT’s with beneficial for India.
+ (plus)
(b) Also India’s service exports increased from US$5 billion (1995) to US$ 203 billion during year ending on March 31, 2021 (2020-21).
(iii) (a) WTO reduced trade barriers for agriculture’s exports + also eliminated domestic subsidies for agriculture’s products by other countries in international markets (both)
+ (plus)
(b) Also India’s exports for agriculture’s products increased substantially.
(iv) (a) WTO removed Multi-Fiber Arrangement (MFA)
+ (plus)
(b) Also India’s exports for textiles + also clothing increased substantially (both).
(v) (a) WTO withdrawn restrictions for Foreign Investments (FIs) in India under TRIM’S agreement.
+ (plus)
(b) Also India’s net Foreign Direct Investments (FDIs) increased to US$ 81.72 billion during year ending on March 31, 2021 (2020-21)
- WTO’s disadvantages for India
(i) (a) Trade related aspect of Intellectual Property (TRIPS) major challenge for protection of Intellectual Property Rights (IPRs) for India.
+ (plus)
(b) Also India being member countries of WTO to comply TRIPS standards.
+ (plus)
(c) Also India’s pharmaceuticals sector be affected due to product’s patenting be granted therefore India required to raise medicine’s price for poor public living in India.
+ (plus)
(d) Also India presently manufacturing of drugs being made without product’s patenting therefore India required to raise medicine’s price for poor public living in India.
+ (plus)
(e) Also India’s agricultural sector be affected due to patenting under TRIP’S agreement extended to micro-organisms (also).
+ (plus)
(f) Also MNCs having huge financial resources therefore they may start seed’s productions + also may control food’s production in India (both).
+ (plus)
(g) Also most of Indian public depended on agriculture’s production for livelihood therefore abovementioned developments will have serious consequences for India.
(ii) TRIMS advantageous to developed countries where no rules existing for controlling business’s practices for FIs when our objective for self-reliance based on locally available technology + also resources (both).
(iii) (a) GATS favoring developing countries for growing service’s sectors to compete with giant foreign corporate in India.
+ (plus)
(b) Also foreign corporate may remit profits + dividends + also royalties (all) consequently reducing foreign exchange reserves for India.
(iv) (a) Trade + non-Tariff barriers (both) for exporting India’s products effected due to non-tariff barriers imposed by other countries.
+ (plus)
(b) Also India’s products like textiles + marine + floriculture + basmati rice + leather goods + carpets + pharmaceutical + also etc. (all) be effected.
31. Conclusion for WTO
(i) (a) WTO established for taking integrated approach for trade related matters + securing employments + reducing custom tariffs + helping weaker economies + accessing to capital + technologies + also allowing for countries’ economic growth (all).
+ (plus)
(b) Also WTO making rules for economic developments against limitations + loopholes in inter country transactions like safeguards + also anti-dumping rules which being frequently used to stop competition (all).
+ (plus)
(c) Also contributing for unequal competition in different areas
(ii) WTO encouraging developed countries to give access for products from developing countries + to avoid imposing of high custom tariffs for products from developing countries like clothing + leather + fish + agriculture + also etc. (all).
(iii) WTO motivating through TRIPS for technology + essential goods like expensive medicines + seeds + also to stop bio-piracy by foreign corporate (all).
(iv) WTO increasing agenda for economic development for member countries + globalization of trades + also to enable developing countries to fight for their rights against market accessibility from developed countries for equitable economic growth (all).
- WTO’s agreement executed on April 15, 1994
1. Parties to agreement
(i) Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development,
(ii) Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development,
(iii) Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations,
(iv) Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations,
(v) Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, Agree as follows:
2. WTO’s Establishment of Organization (Article-I)
- The World Trade Organization (hereinafter referred to as “the WTO”) is hereby established.
3. WTO’s Scope (Article-II)
(i) The WTO shall provide the common institutional framework for the conduct of trade relations among its Members in matters related to the agreements and associated legal instruments included in the Annexes to this
(ii) The agreements and associated legal instruments included in Annexes 1, 2 and 3 (hereinafter referred to as “Multilateral Trade Agreements”) are integral parts of this Agreement, binding on all Members.
(iii) The agreements and associated legal instruments included in Annex 4 (hereinafter referred to as “Plurilateral Trade Agreements”) are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create either obligations or rights for Members that have not accepted
(iv) The General Agreement on Tariffs and Trade 1994 as specified in Annex 1A (hereinafter referred to as “GATT 1994”) is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as “GATT 1947”)
4. WTO’s Functions (Article-III)
(i) The WTO shall facilitate the implementation, administration and operation, and further the objectives, of this Agreement and of the Multilateral Trade Agreements, and shall also provide the framework for the implementation, administration and operation of the Plurilateral Trade Agreements.
(ii) The WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement. The WTO may also provide a forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference.
(iii) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter referred to as the “Dispute Settlement Understanding” or “DSU”) in Annex 2 to this Agreement.
(iv) The WTO shall administer the Trade Policy Review Mechanism (hereinafter referred to as the “TPRM”) provided for in Annex 3 to this Agreement.
(v) With a view to achieving greater coherence in global economic policy-making, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.
5. WTO’s Structure (Article-IV)
(i) There shall be a Ministerial Conference composed of representatives of all the Members, which shall meet at least once every two years. The Ministerial Conference shall carry out the functions of the WTO and take actions necessary to this effect. The Ministerial Conference shall have the authority to take decisions on all matters under any of the Multilateral Trade Agreements, if so requested by a Member, in accordance with the specific requirements for decision-making in this Agreement and in the relevant Multilateral Trade Agreement.
(ii) There shall be a General Council composed of representatives of all the Members, which shall meet as appropriate. In the intervals between meetings of the Ministerial Conference, its functions shall be conducted by the General Council. The General Council shall also carry out the functions assigned to it by this Agreement. The General Council shall establish its rules of procedure and approve the rules of procedure for the Committees provided for in paragraph 7.
(iii) The General Council shall convene as appropriate to discharge the responsibilities of the Dispute Settlement Body provided for in the Dispute Settlement Understanding. The Dispute Settlement Body may have its own chairman and shall establish such rules of procedure as it deems necessary for the fulfillment of those responsibilities.
(iv) The General Council shall convene as appropriate to discharge the responsibilities of the Trade Policy Review Body provided for in the TPRM. The Trade Policy Review Body may have its own chairman and shall establish such rules of procedure as it deems necessary for the fulfilment of those responsibilities.
(v) There shall be a Council for Trade in Goods, a Council for Trade in Services and a Council for Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the “Council for TRIPS”), which shall operate under the general guidance of the General Council. The Council for Trade in Goods shall oversee the functioning of the Multilateral Trade Agreements in Annex 1A. The Council for Trade in Services shall oversee the functioning of the General Agreement on Trade in Services (hereinafter referred to as “GATS”). The Council for TRIPS shall oversee the functioning of the Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the “Agreement on TRIPS”). These Councils shall carry out the functions assigned to them by their respective agreements and by the General Council. They shall establish their respective rules of procedure subject to the approval of the General Council. Membership in these Councils shall be open to representatives of all Members. These Councils shall meet as necessary to carry out their functions.
(vi) The Council for Trade in Goods, the Council for Trade in Services and the Council for TRIPS shall establish subsidiary bodies as required. These subsidiary bodies shall establish their respective rules of procedure subject to the approval of their respective Councils.
(vii) The Ministerial Conference shall establish a Committee on Trade and Development, a Committee on Balance-of-Payments Restrictions and a Committee on Budget, Finance and Administration, which shall carry out the functions assigned to them by this Agreement and by the Multilateral Trade Agreements, and any additional functions assigned to them by the General Council, and may establish such additional Committees with such functions as it may deem appropriate. As part of its functions, the Committee on Trade and Development shall periodically review the special provisions in the Multilateral Trade Agreements in favour of the least-developed country Members and report to the General Council for appropriate action. Membership in these Committees shall be open to representatives of all Members.
(viii) The bodies provided for under the Plurilateral Trade Agreements shall carry out the functions assigned to them under those Agreements and shall operate within the institutional framework of the WTO. These bodies shall keep the General Council informed of their activities on a regular basis.
6. WTO’s Relations with other organization (Article-V)
(i) The General Council shall make appropriate arrangements for effective cooperation with other intergovernmental organizations that have responsibilities related to those of the WTO.
(ii) The General Council may make appropriate arrangements for consultation and cooperation with non-governmental organizations concerned with matters related to those of the WTO.
7. WTO’s Secretariat (Article-VI)
(i) There shall be a Secretariat of the WTO (hereinafter referred to as “the Secretariat”) headed by a Director-General.
(ii) The Ministerial Conference shall appoint the Director-General and adopt regulations setting out the powers, duties, and conditions of service and term of office of the Director-General.
(iii) The Director-General shall appoint the members of the staff of the Secretariat and determine their duties and conditions of service in accordance with regulations adopted by the Ministerial
(iv) The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO. They shall refrain from any action which might adversely reflect on their position as international officials. The Members of the WTO shall respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their
8. WTO’s Budget and Contribution (Article-VII)
(i) The Director-General shall present to the Committee on Budget, Finance and Administration the annual budget estimate and financial statement of the WTO. The Committee on Budget, Finance and Administration shall review the annual budget estimate and the financial statement presented by the Director-General and make recommendations thereon to the General Council. The annual budget estimate shall be subject to approval by the General Council.
(ii) The Committee on Budget, Finance and Administration shall propose to the General Council financial regulations which shall include provisions setting out:
(a) the scale of contributions apportioning the expenses of the WTO among its Members and
(b) the measures to be taken in respect of Members in arrears.
- The financial regulations shall be based, as far as practicable, on the regulations and practices of GATT 1947.
(iii) The General Council shall adopt the financial regulations and the annual budget estimate by a two-thirds majority comprising more than half of the Members of the WTO.
(iv) Each Member shall promptly contribute to the WTO its share in the expenses of the WTO in accordance with the financial regulations adopted by the General Council.
9. WTO’s Status (Article-VIII)
(i) The WTO shall have legal personality, and shall be accorded by each of its Members such legal capacity as may be necessary for the exercise of its functions.
(ii) The WTO shall be accorded by each of its Members such privileges and immunities as are necessary for the exercise of its functions.
(iii) The officials of the WTO and the representatives of the Members shall similarly be accorded by each of its Members such privileges and immunities as are necessary for the independent exercise of their functions in connection with the WTO.
(iv) The privileges and immunities to be accorded by a Member to the WTO, its officials, and the representatives of its Members shall be similar to the privileges and immunities stipulated in the Convention on the Privileges and Immunities of the Specialized Agencies, approved by the General Assembly of the United Nations on 21 November 1947.
(v) The WTO may conclude a headquarters agreement.
10. WTO’s Decisions making (Article-IX)
(i) The WTO shall continue the practice of decision-making by consensus followed under GATT 1947.1 Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. At meetings of the Ministerial Conference and the General Council, each Member of the WTO shall have one vote. Where the European Communities exercise their right to vote, they shall have a number of votes equal to the number of their member States2 which are Members of the WTO. Decisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant Multilateral Trade Agreement.
(ii) The Ministerial Conference and the General Council shall have the exclusive authority to adopt interpretations of this Agreement and of the Multilateral Trade Agreements. In the case of an interpretation of a Multilateral Trade Agreement in Annex 1, they shall exercise their authority on the basis of a recommendation by the Council overseeing the functioning of that Agreement. The decision to adopt an interpretation shall be taken by a three-fourths majority of the Members. This paragraph shall not be used in a manner that would undermine the amendment provisions in Article X.
(iii) In exceptional circumstances, the Ministerial Conference may decide to waive an obligation imposed on a Member by this Agreement or any of the Multilateral Trade Agreements, provided that any such decision shall be taken by three fourths4 of the Members unless otherwise provided for in this paragraph.
(a) A request for a waiver concerning this Agreement shall be submitted to the Ministerial Conference for consideration pursuant to the practice of decision-making by consensus. The Ministerial Conference shall establish a time-period, which shall not exceed 90 days, to consider the request. If consensus is not reached during the time-period, any decision to grant a waiver shall be taken by three fourths 4 of the Members.
(b) A request for a waiver concerning the Multilateral Trade Agreements in Annexes 1A or 1B or 1C and their annexes shall be submitted initially to the Council for Trade in Goods, the Council for Trade in Services or the Council for TRIPS, respectively, for consideration during a time-period which shall not exceed 90 days. At the end of the time-period, the relevant Council shall submit a report to the Ministerial Conference.
(iv) A decision by the Ministerial Conference granting a waiver shall state the exceptional circumstances justifying the decision, the terms and conditions governing the application of the waiver, and the date on which the waiver shall terminate. Any waiver granted for a period of more than one year shall be reviewed by the Ministerial Conference not later than one year after it is granted, and thereafter annually until the waiver terminates. In each review, the Ministerial Conference shall examine whether the exceptional circumstances justifying the waiver still exist and whether the terms and conditions attached to the waiver have been met. The Ministerial Conference, on the basis of the annual review, may extend, modify or terminate the waiver.
(v) Decisions under a PTA, including any decisions on interpretations and waivers, shall be governed by the provisions of that Agreement.
11. WTO’s Amendments (Article-X)
(i) Any Member of the WTO may initiate a proposal to amend the provisions of this Agreement or the Multilateral Trade Agreements in Annex 1 by submitting such proposal to the Ministerial Conference. The Councils listed in paragraph 5 of Article IV may also submit to the Ministerial Conference proposals to amend the provisions of the corresponding Multilateral Trade Agreements in Annex 1 the functioning of which they oversee. Unless the Ministerial Conference decides on a longer period, for a period of 90 days after the proposal has been tabled formally at the Ministerial Conference any decision by the Ministerial Conference to submit the proposed amendment to the Members for acceptance shall be taken by consensus. Unless the provisions of paragraphs 2, 5 or 6 apply, that decision shall specify whether the provisions of paragraphs 3 or 4 shall apply. If consensus is reached, the Ministerial Conference shall forthwith submit the proposed amendment to the Members for acceptance. If consensus is not reached at a meeting of the Ministerial Conference within the established period, the Ministerial Conference shall decide by a two-thirds majority of the Members whether to submit the proposed amendment to the Members for acceptance. Except as provided in paragraphs 2, 5 and 6, the provisions of paragraph 3 shall apply to the proposed amendment, unless the Ministerial Conference decides by a three-fourths majority of the Members that the provisions of paragraph 4 shall apply.
(ii) Amendments to the provisions of this Article and to the provisions of the following Articles shall take effect only upon acceptance by all Members:
(a) Article IX of this Agreement;
(b) Articles I and II of GATT 1994;
(c) Article II:1 of GATS;
(d) Article 4 of the Agreement on TRIPS.
(iii) Amendments to provisions of this Agreement, or of the Multilateral Trade Agreements in Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would alter the rights and obligations of the Members, shall take effect for the Members that have accepted them upon acceptance by two thirds of the Members and thereafter for each other Member upon acceptance by it. The Ministerial Conference may decide by a three-fourths majority of the Members that any amendment made effective under this paragraph is of such a nature that any Member which has not accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw from the WTO or to remain a Member with the consent of the Ministerial Conference.
(iv) Amendments to provisions of this Agreement or of the Multilateral Trade Agreements in Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would not alter the rights and obligations of the Members, shall take effect for all Members upon acceptance by two thirds of Members.
(v) Except as provided in paragraph 2 above, amendments to Parts I, II and III of GATS and the respective annexes shall take effect for the Members that have accepted them upon acceptance by two thirds of the Members and thereafter for each Member upon acceptance by it. The Ministerial Conference may decide by a three-fourths majority of the Members that any amendment made effective under the preceding provision is of such a nature that any Member which has not accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw from the WTO or to remain a Member with the consent of the Ministerial Conference. Amendments to Parts IV, V and VI of GATS and the respective annexes shall take effect for all Members upon acceptance by two thirds of the Members.
(vi) Notwithstanding the other provisions of this Article, amendments to the Agreement on TRIPS meeting the requirements of paragraph 2 of Article 71 thereof may be adopted by the Ministerial Conference without further formal acceptance process.
(vii) Any Member accepting an amendment to this Agreement or to a Multilateral Trade Agreement in Annex 1 shall deposit an instrument of acceptance with the Director-General of the WTO within the period of acceptance specified by the Ministerial Conference.
(viii) Any Member of the WTO may initiate a proposal to amend the provisions of the Multilateral Trade Agreements in Annexes 2 and 3 by submitting such proposal to the Ministerial Conference. The decision to approve amendments to the Multilateral Trade Agreement in Annex 2 shall be made by consensus and these amendments shall take effect for all Members upon approval by the Ministerial Conference. Decisions to approve amendments to the Multilateral Trade Agreement in Annex 3 shall take effect for all Members upon approval by the Ministerial Conference.
(ix) The Ministerial Conference, upon the request of the Members parties to a trade agreement, may decide exclusively by consensus to add that agreement to Annex 4. The Ministerial Conference, upon the request of the Members parties to a Plurilateral Trade Agreement, may decide to delete that Agreement from Annex 4.
(x) Amendments to a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.
12. WTO’s Original membership (Article-XI)
(i) The contracting parties to GATT 1947 as of the date of entry into force of this Agreement, and the European Communities, which accept this Agreement and the Multilateral Trade Agreements and for which Schedules of Concessions and Commitments are annexed to GATT 1994 and for which Schedules of Specific Commitments are annexed to GATS shall become original Members of the WTO.
(ii) The least-developed countries recognized as such by the United Nations will only be required to undertake commitments and concessions to the extent consistent with their individual development, financial and trade needs or their administrative and institutional capabilities.
13. WTO’s Accessions (Article-XII)
(i) Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. Such accession shall apply to this Agreement and the Multilateral Trade Agreements annexed thereto.
(ii) Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the WTO.
(iii) Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.
14. WTO’s Non-Application of MT’s Agrmt. between Particular Members (Article-XIII)
(i) This Agreement and the Multilateral Trade Agreements in Annexes 1 and 2 shall not apply as between any Member and any other Member if either of the Members, at the time either becomes a Member, does not consent to such application.
(ii) Paragraph 1 may be invoked between original Members of the WTO which were contracting parties to GATT 1947 only where Article XXXV of that Agreement had been invoked earlier and was effective as between those contracting parties at the time of entry into force for them of this Agreement.
(iii) Paragraph 1 shall apply between a Member and another Member which has acceded under Article XII only if the Member not consenting to the application has so notified the Ministerial Conference before the approval of the agreement on the terms of accession by the Ministerial Conference.
(iv) The Ministerial Conference may review the operation of this Article in particular cases at the request of any Member and make appropriate recommendations.
(v) Non-application of a Plurilateral Trade Agreement between parties to that Agreement shall be governed by the provisions of that Agreement.
15. WTO’s Acceptance entry into Force + Deposit (Article-XIV)
(i) This Agreement shall be open for acceptance, by signature or otherwise, by contracting parties to GATT 1947, and the European Communities, which are eligible to become original Members of the WTO in accordance with Article XI of this Agreement. Such acceptance shall apply to this Agreement and the Multilateral Trade Agreements annexed hereto. This Agreement and the Multilateral Trade Agreements annexed hereto shall enter into force on the date determined by Ministers in accordance with paragraph 3 of the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations and shall remain open for acceptance for a period of two years following that date unless the Ministers decide otherwise. An acceptance following the entry into force of this Agreement shall enter into force on the 30th day following the date of such acceptance.
(ii) A Member which accepts this Agreement after its entry into force shall implement those con- cessions and obligations in the Multilateral Trade Agreements that are to be implemented over a period of time starting with the entry into force of this Agreement as if it had accepted this Agreement on the date of its entry into force.
(iii) Until the entry into force of this Agreement, the text of this Agreement and the Multilateral Trade Agreements shall be deposited with the Director-General to the CONTRACTING PARTIES to GATT 1947. The Director-General shall promptly furnish a certified true copy of this Agreement and the Multilateral Trade Agreements, and a notification of each acceptance thereof, to each government and the European Communities having accepted this Agreement. This Agreement and the Multilateral Trade Agreements, and any amendments thereto, shall, upon the entry into force of this Agreement, be deposited with the Director-General of the WTO.
(iv) The acceptance and entry into force of a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement. Such Agreements shall be deposited with the Director-General to the CONTRACTING PARTIES to GATT 1947. Upon the entry into force of this Agreement, such Agreements shall be deposited with the Director-General of the WTO.
16. WTO’s Withdrawal (Article-XV)
(i) Any Member may withdraw from this Agreement. Such withdrawal shall apply both to this Agreement and the Multilateral Trade Agreements and shall take effect upon the expiration of six months from the date on which written notice of withdrawal is received by the Director-General of the WTO.
(ii) Withdrawal from a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.
17. WTO’s Miscellaneous provisions (Article-XVI)
(i) Except as otherwise provided under this Agreement or the Multilateral Trade Agreements, the WTO shall be guided by the decisions, procedures and customary practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies established in the framework of GATT 1947.
(ii) To the extent practicable, the Secretariat of GATT 1947 shall become the Secretariat of the WTO, and the Director-General to the CONTRACTING PARTIES to GATT 1947, until such time as the Ministerial Conference has appointed a Director-General in accordance with paragraph 2 of Article VI of this Agreement, shall serve as Director-General of the WTO.
(iii) In the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict.
(iv) Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.
(v) No reservations may be made in respect of any provision of this Agreement. Reservations in respect of any of the provisions of the Multilateral Trade Agreements may only be made to the extent provided for in those Agreements. Reservations in respect of a provision of a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.
(vi) This Agreement shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations.
DONE at Marrakesh this fifteenth day of April one thousand nine hundred and ninety-four, in a single copy, in the English, French and Spanish languages, each text being authentic.
- Explanatory Notes:
(i) The terms “country” or “countries” as used in this Agreement and the Multilateral Trade Agreements are to be understood to include any separate customs territory Member of the WTO.
(ii) In the case of a separate customs territory Member of the WTO, where an expression in this Agreement and the Multilateral Trade Agreements is qualified by the term “national”, such expression shall be read as pertaining to that customs territory, unless otherwise specified.
18. List of Annexure
(i) ANNEX 1A: Multilateral Agreements on Trade in Goods
(a) General Agreement on Tariffs and Trade 1994
(b) Agreement on Agriculture
(c) Agreement on the Application of Sanitary and Phytosanitary Measures
(d) Agreement on Textiles and Clothing Agreement on Technical Barriers to Trade Agreement on Trade-Related Investment Measures
(e) Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
(f) Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994
(g) Agreement on Preshipment Inspection
(h) Agreement on Rules of Origin
(i) Agreement on Import Licensing Procedures
(j) Agreement on Subsidies and Countervailing Measures
(k) Agreement on Safeguards
(ii) ANNEX 1B: General Agreement on Trade in Services and Annexes
(iii) ANNEX 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
(iv) ANNEX 2 – Understanding on Rules and Procedures Governing the Settlement of Disputes
(v) ANNEX 3 – Trade Policy Review Mechanism
(vi) ANNEX 4 – Plurilateral Trade Agreements
(a) Agreement on Trade in Civil Aircraft
(b) Agreement on Government Procurement
(c) International Dairy Agreement
(d) International Bovine Meat Agreement.
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