International trade is the trade agreement of buying and selling of goods and services and is entered into by parties from different countries that have businesses that cut across international borders; this involves the exportation and importation of goods from one country to another or trans-boundary trade. The World Trade Organization (WTO) has the aim of liberalizing and supervising these international trades; it regulates trade between member states by providing a framework for negotiation and formalization of trade agreements. It also provides a dispute resolution process that is aimed at enforcing member states adherence to its agreements. It was first started in 1st January, 1995 and replaced the General Agreement on Tariffs and Trade, under the Marrakech Agreement. Its current Director General is known as Roberto Azevedo, from Geneva, Switzerland and leads a staff of over 600 people.
Member who join the WTO have a balance of rights and obligation; they all enjoy the privileges provided by other member states and the security guaranteed by the trading rules, and in return they make commitments to open their markets and to abide by the rules. The procedure for joining the WTO requires the state applying for membership to describe its trade in all aspects and its economic policies with regards to the WTO. Thereafter, the applicant state is required to have a parallel discussion with the individual countries, where the talks will cover tariff rates, specific market access commitments and other policies in goods and services. After the discussion has taken place, a membership treaty is then drafted. Finally a general report, protocol and lists of commitment is then handed into the WTO General Council, where voting will take place. If two-thirds of the members vote in favour, the applicant state may then sign the protocol and accede to the organization. However, in most instances, the country’s own parliament usually has to ratify the agreement before membership is complete.
The WTO has representatives of the member states who carry out duties that entail the organization. Trade policies and negotiations are usually prepared in capitals by taking advices from private firms, business groups or other interested groups into account. Various countries who are members of the WTO have their diplomatic mission in Geneva, which is headed by a special selected ambassador to the WTO, where their officials attend meetings at the WTO headquarters to represent their countries and forward their government’s concerns on specific questions. There could also be a coalition formed so as to represent a group of countries at the WTO, for instance the European Union (EU)
The WTO has a secretariat in Geneva that has around six hundred and thirty staff whose main responsibilities include giving the WTO delegate bodied administrative and technical support. It is also responsible for analysing the trade performance and trade policies and get assistance form the legal staff in the resolution of trade disputes between member states. In addition, it is also responsible for dealing with the accession negotiations for new members and to provide advice to states considering applying for membership. It also gives technical support to developing countries.
Before WTO, the General Agreement on Tariffs and Trade was in place and had been established after the Second World War, whereby other multilateral institutions had already been formed. As a result, the International Trade Organization was formed; whose main purpose was to address trade barriers and other trade related matters such as employment or investment, as the United Nations agency (Alexandroff, 2011). However, the ITO treaty did not take effect because it was not approved by the U.S.A and other signatories. Thereafter, the GATT took over and was used to order the international trade and financial transactions' relationships of the signatories. At the time, various rounds of multilateral negotiations such as the Uruguay Round took place. The Uruguay Round was responsible for the formation of the World Trade Organization. It, therefore, can be concluded that the WTO is an international organization that arose from out the Uruguay Round of the GATT negotiations, in 1995, which ended up replacing the GATT.
Among the many roles of the WTO includes the facilitation of commercial transactions between nations provides a framework for the implementing, administrating and operating of the multilateral trade agreement. In addition, it provides a forum for negotiations among the member states concerning their trade relationships on issues concerned with under the agreements. Furthermore, the WTO has the role of administering the Trade Policy Review Mechanism and the Understanding on Rules and Procedure that are important in Governing the Settlement of Dispute, both found under Annexes three and two to the agreement setting it up. It also is expected to cooperate with the IMF and the World Bank with the prime purpose of achieving great and futuristic coherence in the global economic policy making; the major reason for this is to achieve a comprehensive understanding and coordination between trade organizations and monetary institutions. The WTO has been majorly involved in promoting international trade; for instance an agreement to put the organization’s meetings to the public that was put across in 2010.
Regional trade agreements are most of the time contradictory, but they may also seem to support the WTO’s multilateral trading system. These agreements have in one way or another paved way for countries to negotiate the rules and commitments that supersede what is possible and, as a result, the rules have somehow given room for agreement in the WTO. Their roles include providing an opportunity to prescribe international best practice policy to assist developing countries in boosting their economy. It also has a Regional Trade Agreements Committee formed under the WTO whose purpose is to examine regional groups and assess whether they are consistent with the WTO rules. The regional organization also have the role of incorporating practice regulation that would help in regional trade by steering emerging economics away from the risk of breaching contracts between member states. The WTO committee also has the duty and the responsibility of examining how regional arrangements may affect multilateralism. Like the WTO, regional organizations also handle trade disputes that may arise between member states. They also provide technical assistance to their members so as to promote regional trade. It also creates rules and regulations that are to be followed by member states so as to provide a good environment during trading between the countries involved. The trade regulations created by the regional organizations are transparent, and once the members enter into an agreement, they are legally and morally bound by those rules and regulations. The member states to a regional organization are, therefore, guaranteed protection and safety during their trade period.
References
Alexandroff, A. (2011). Trends in World Trade. New York: Carolina Academic Press.
