World Trade Organization: Meaning, Agreements & Governance, Principles | Management

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MEANING
The World Trade Organization (WTO) is the global international organization dealing with the rules of trade between nations.

At its core are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.
FORMATION
General Agreements on tariffs and trade(GATT) which existed before its formation was just a set of agreements covering only tariff barriers and also did not deal in services.

WTO was therefore formed in Jan, 1995 Through Marrakesh Agreement as an International Organization dealing with Trade in goods and services and Non tariff barriers as well
It is headquartered in Geneva, Switzerland and currently has 164 members representing 98% of the world population.

Afghanistan became its latest member by joining the organization in 2016.

Its current head(Director General) is Ngozi Okonjo- Iweala and has a secretariat staff of 623.
PRINCIPALS
Reciprocity: It implies mutual lowering of trade barriers thus meaning that countries that lower their tariffs could expect their trading partners for the same.

Most Favored Nation: It implies that tariff preference granted to one state should be granted to other. However there are expectations through Economic Integration
National Treatment: It implies that the foreign goods are treated equally with domestic goods and that countries are not able to enact such policies that give the advantage to their domestic products.
Functions of WTO
Reduce various barriers in International trade through several unanimously formed agreements.

It acts as a platform for solving various disputes between the countries, if agreements are violated

Ensure that the developing countries do not face discrimination and benefit equally from the trade
AGREEMENTS ESTABLISHING WTO
The agreements are divided in 4 Annexures namely:

Annexure 1: It talks about the General Agreements on Tariffs and trade(GATT), General Agreement on Trade in Services(GATS) and Trade Related Intellectual Property Rights(TRIPS)
Annexure 2: It mentions about the Dispute settlement body’s mechanism of resolving disputes in the Organization.

Annexure 3: It has all the agreements pertaining to the Trade policies (which are implemented by various countries ) review mechanism.

Annexure 4: It talks about all the Plurilateral agreements


GOVERNANCE
The highest institutional body of WTO is ministerial conference which meets in every two years.

Its subsidiary bodies are councils, committees, and sub committees.

General council is its decision making body which meets regularly to carry out daily functions.