World Trade Organization

(redirected from Organizacion Mundial del Comercio)
Also found in: Dictionary, Thesaurus, Encyclopedia, Wikipedia.
Related to Organizacion Mundial del Comercio: WTO, Organisation mondiale du commerce

World Trade Organization (WTO)

A multilateral agency that administers world trade agreements, fosters trade relations among nations, and solves trade disputes among member countries.

World Trade Organization

An international organization with the goal of liberalizing international trade. It was established in 1995, succeeding the General Agreement on Tariffs and Trade. The WTO aims to reduce tariff barriers and promote global economic integration. It sponsors periodic gatherings of representatives of member states to discuss trade issues and further integration, though talks have been marked by disagreement and little resolution. Particularly notorious were the protests and riots at the WTO meeting in Seattle in 1999. See also: Doha Round, Globalization.

World Trade Organization (WTO).

The WTO was formed in 1995 to enforce the regulations established by the General Agreement on Tariffs and Trade (GATT) and several other international trade agreements.

Composed of representatives from 150 nations and observers from additional nations, it regulates international trade with the goal of helping it to flow as smoothly and freely as possible.

Advocates praise the WTO for helping create an increasingly global economy and bringing prosperity to developing nations through increased trade.

Critics, however, assert that industrialized nations such the United States, Canada, and the countries of the European Union have used the WTO to open trade with developing nations while disregarding these nations' environmental and labor-related practices.

World Trade Organization (WTO)

an international organization which was established in 1995 to administer the international trading system. The WTO took over the activities and responsibilities of its predecessor the ‘General Agreement on Tariffs and Trade’ (GATT) which was set up in 1947 to promote FREE TRADE. The change of name partly reflects the wider responsibilities the WTO has assumed for managing INTERNATIONAL TRADE and the new name more accurately reflects what the organization stands for as opposed to the ‘cumbersome’ title of its predecessor.

The essential functions of the WTO are

  1. administering and implementing the multilateral trade agreements which collectively make up the WTO;
  2. acting as a forum for multilateral trade negotiations;
  3. seeking to resolve trade disputes;
  4. reviewing national trade policies and
  5. cooperating with other international institutions involved in global economic policy-making. The highest authority of the WTO is the Ministerial Conference, which is composed of representatives of all WTO member countries and meets every two years to determine the general policies of the WTO, while the day-to-day work of the WTO is undertaken by a number of subsidiary bodies, in particular the General Council and Dispute Settlement Body. In 2005, 148 countries were members of the WTO which is headquartered in Geneva.

The WTO embraces the two main operational principles of the original GATT:

(1) reciprocity – arranging for countries to receive foreign tariff reductions in return for TARIFF cuts of their own and (2) the ‘most favoured nation’ rule – requiring that a country should apply its lowest tariff for any particular product to all of its suppliers.

The GATT supervized 11 major multilateral ‘rounds’ of tariff negotiations, including the ‘Kennedy Round’ of 1962-67 which secured an average cut in tariffs of around 35% and the ‘Tokyo Round’ of 1973-79 which provided further significant cuts in tariffs. In the main these tariff cuts applied only to manufactured goods. The last ‘round’ supervized by GATT – the ‘Uruguay Round’ of 1988-93 also led to tariff cuts on manufacturers but concessions were also agreed on agricultural products, the liberalization of trade in commercial services, and protection of INTELLECTUAL PROPERTY RIGHTS. See PROTECTIONISM.

Currently, a new round (the ‘Doha Round’) has been set in motion.

While the WTO has sought to liberalize international trade on a global, multilateral basis, trade liberalization has also taken place on a more limited basis through the formation of various ‘free trade areas’ and ‘common markets’ (see TRADE INTEGRATION entry).

World Trade Organization (WTO)

an international organization that was established in 1995 to administer the international trading system. The WTO took over the activities and responsibilities of its predecessor, the General Agreement on Tariffs and Trade (GATT), which was set up in 1947 to promote FREE TRADE. The change of name partly reflects the wider responsibilities that the WTO has assumed for managing INTERNATIONAL TRADE, and the new name more accurately reflects what the organization stands for as opposed to the cumbersome title of its predecessor. The essential functions of the WTO are:
  1. administering and implementing the multilateral trade agreements that collectively make up the WTO;
  2. acting as a forum for multilateral trade negotiations;
  3. seeking to resolve trade disputes;
  4. reviewing national trade policies; and
  5. cooperating with other international institutions involved in global economic policy making.

The highest authority of the WTO is the Ministerial Conference, which is composed of representatives of all WTO member countries and meets every two years to determine the general policies of the WTO, while the day-to-day work of the WTO is undertaken by a number of subsidiary bodies, in particular the General Council and Dispute Settlement Body. In 2005, 148 countries were members of the WTO, which is headquartered in Geneva.

The WTO embraces the two main operational principles of the original GATT:

  1. reciprocity - arranging for countries to receive foreign tariff reductions in return for TARIFF cuts of their own;
  2. the ‘most favoured nation’ rule -requiring that a country should apply its lowest tariff for any particular product to all its suppliers.

The GATT supervised 11 major multilateral rounds’ of tariff negotiations, including the Kennedy Round of 1962–67, which secured an average cut in tariffs of around 35%, and the Tokyo Round of 1973–79, which provided further significant cuts in tariffs. In the main, these tariff cuts applied only to manufactured goods. The last round supervised by GATT, the Uruguay Round of 1988–93, also led to tariff cuts on manufacturers but concessions were also agreed on agricultural products, the liberalization of trade in commercial services and protection of INTELLECTUAL PROPERTY RIGHTS.

The WTO met in Seattle, USA, in 1999 to draw up an agenda for a new round of trade concessions, but the talks were terminated without progress being made after rioters took to the streets protesting at the WTO's alleged lack of concern for the interests of developing countries (see UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT).

In 2001, supervised by the WTO, a new round of trade negotiations, the Doha Round, was initiated but quickly stalled on the issue of the liberalization of trade in agricultural produce. In 2004, however, an ‘interim accord’ was reached, with the rich countries agreeing to eliminate export subsidies on agricultural produce, together with the removal of internal farming subsidies. All this, coupled with measures to further reduce tariffs on manufactured goods and remove obstacles to trade in services, is yet to be finalized.

The GATT initiatives, together with the work of the INTERNATIONAL MONETARY FUND, the formation of FREE TRADE BLOCS (in particular, the EUROPEAN UNION and the EUROPEAN FREE TRADE ASSOCIATION) and high growth rates in the industrial countries led to a record expansion of world trade up to the 1970s. The OPEC oil increases of 1973 and 1979 and the subsequent onset of recessionary conditions in the world economy, however, reduced the impact of GATT and led to a renaissance of PROTECTIONISM based on national self-interest. The ‘new protectionism’, as it is called, is based not on tariffs but on various measures that are much less transparent and diffuse and therefore more difficult to control, including EXPORT RESTRAINT AGREEMENTS, LOCAL CONTENT RULES, import licensing restrictions and subsidies given to domestic industries. As a consequence, a prominent feature of the WTO's work in recent years has been as an arbiter in settling trade disputes between its members. In 1998, for example, it officiated in the celebrated ‘bananas’ dispute, finding in favour of US companies and their Latin American suppliers, which had complained that the European Union (EU) had unfairly restricted their access to the EU market in favour of banana exports from EU associates (LOMÉ AGREEMENT countries). Nevertheless, there has been a substantial expansion of world trade in the 1990s. See INTERNATIONAL TRADE for details.

Full browser ?