82 WTO: Multilateral Regulation of Trade
82.1 What is the WTO?
The World Trade Organization (WTO) is the international body that regulates trade between nations. Established on 1 January 1995, the WTO replaced the General Agreement on Tariffs and Trade (GATT) — the post-WWII regime that had governed multilateral trade since 1947 (wto1995?). The WTO has its headquarters in Geneva, Switzerland and currently has 164 member countries (as of 2024).
TipWTO at a Glance
| Item | Detail |
|---|---|
| Established | 1 January 1995 |
| Replaces | GATT (1947) |
| Headquarters | Geneva, Switzerland |
| Members | 164 (as of 2024) |
| Director-General | Ngozi Okonjo-Iweala (since 2021) — the first African and first woman in the role |
| Languages | English, French, Spanish |
82.2 From GATT to WTO
TipFrom GATT to WTO
| Feature | GATT (1947–94) | WTO (1995-) |
|---|---|---|
| Status | Provisional agreement | Permanent organisation |
| Scope | Goods only | Goods · Services · IPR |
| Members | ‘Contracting Parties’ | Members |
| Dispute settlement | Weak; consensus needed to adopt rulings | Strong; binding rulings |
| Coverage | Trade in goods | Goods, services, IP, agriculture, textiles |
82.3 Major Agreements Under WTO
TipMain WTO Agreements
| Agreement | Concerned with |
|---|---|
| GATT (Goods) | Trade in goods — rules on tariffs, NTBs |
| GATS (General Agreement on Trade in Services) | Services trade |
| TRIPS (Trade-Related Aspects of IPR) | Patents, copyrights, trademarks |
| TRIMS (Trade-Related Investment Measures) | Investment measures affecting trade |
| AoA (Agreement on Agriculture) | Agricultural subsidies, market access |
| ATC (Agreement on Textiles & Clothing) | Phased out MFA quotas; ended 2005 |
| SPS (Sanitary and Phyto-Sanitary) | Health and food-safety measures |
| TBT (Technical Barriers to Trade) | Technical regulations and standards |
| Anti-Dumping Agreement | Rules against dumping |
| DSU (Dispute Settlement Understanding) | Dispute-resolution mechanism |
82.4 Core Principles of the WTO
TipFive Core Principles
| Principle | What it captures |
|---|---|
| Most-Favoured Nation (MFN) | Equal treatment to all members — no discrimination |
| National Treatment | Imports treated no less favourably than domestic goods (after entry) |
| Reciprocity | Members exchange concessions of equal value |
| Transparency | Trade rules must be published and predictable |
| Special and Differential Treatment (S&DT) | Developing countries get longer transition, lower commitments |
82.5 WTO Structure
TipWTO’s Major Bodies
| Body | Role |
|---|---|
| Ministerial Conference | Highest body — meets every ~2 years |
| General Council | Day-to-day governance |
| Dispute Settlement Body (DSB) | Resolves disputes |
| Trade Policy Review Body (TPRB) | Reviews member trade policies |
| Council for Trade in Goods | Oversees GATT |
| Council for Trade in Services | Oversees GATS |
| Council for TRIPS | Oversees TRIPS |
| Secretariat | Run by Director-General |
82.6 Major Trade Rounds
TipMajor Trade Rounds — GATT and WTO
| Round | Period | Key outcomes |
|---|---|---|
| Geneva (1947) | First round | Original GATT — 23 countries |
| Annecy (1949), Torquay (1951) | Tariff reduction rounds | |
| Geneva (1956), Dillon (1960–61) | Further tariff cuts | |
| Kennedy Round (1964–67) | Anti-dumping; tariff cuts | |
| Tokyo Round (1973–79) | Non-tariff barriers; codes | |
| Uruguay Round (1986–94) | Created the WTO, GATS, TRIPS, AoA | |
| Doha Development Round (2001–) | Stalled — agricultural subsidies disputes |
The Uruguay Round is the most consequential — it created the WTO. The Doha Round has been deadlocked since the mid-2000s.
82.7 Ministerial Conferences
TipMajor WTO Ministerial Conferences
| MC | Year | Highlights |
|---|---|---|
| MC1 | 1996 — Singapore | First MC |
| MC4 | 2001 — Doha | Launched Doha Development Round |
| MC9 | 2013 — Bali | Trade Facilitation Agreement |
| MC11 | 2017 — Buenos Aires | Inconclusive |
| MC12 | 2022 — Geneva | Agreed on fisheries subsidies, COVID waiver |
| MC13 | 2024 — Abu Dhabi | Continued reforms |
82.8 WTO Dispute Settlement
The Dispute Settlement Understanding (DSU) is the WTO’s enforcement engine. The standard procedure:
TipWTO Dispute-Settlement Procedure
| # | Stage | Time |
|---|---|---|
| 1 | Consultations | Up to 60 days |
| 2 | Panel established | Within ~45 days |
| 3 | Panel report | Up to 9 months |
| 4 | Appellate Body | If appealed |
| 5 | Implementation | Reasonable period of time |
| 6 | Compensation / Sanctions | If non-compliance |
The Appellate Body has been crippled since 2019 due to the US blocking new appointments — a major institutional crisis.
82.9 India and the WTO
TipIndia and the WTO
| Item | Details |
|---|---|
| Membership | Founder member (1995) |
| Negotiating stance | Voice of developing countries; G33, G20 (trade); pro-S&DT |
| Sensitive sectors | Agriculture, public stockholding, services |
| Major disputes | EU agricultural subsidies; US sugar / cotton; export incentives ruling 2019 |
| TRIPS impact | Compulsory-licensing flexibility — used for cancer drug Nexavar (2012) |
| Public stockholding | Bali “peace clause”; permanent solution still pending |
82.10 Practice Questions
Q 01
WTO
Easy
The WTO replaced GATT on:
View solution
Correct Option: B
WTO came into being on 1 January 1995 as the outcome of the Uruguay Round. HQ: Geneva.
Q 02
MFN
Medium
"Most-Favoured Nation (MFN)" treatment means:
View solution
Correct Option: B
MFN = no discrimination — equal treatment to all members. Coupled with National Treatment (no discrimination after entry).
Q 03
TRIPS
Medium
The WTO's TRIPS agreement covers:
View solution
Correct Option: C
TRIPS = Trade-Related Aspects of Intellectual Property Rights — patents, copyrights, trademarks.
Q 04
Uruguay
Medium
The trade round that created the WTO was the:
View solution
Correct Option: B
Uruguay Round (1986–94) created the WTO, GATS, TRIPS, AoA.
Q 05
HQ
Easy
The WTO is headquartered in:
View solution
Correct Option: B
WTO HQ: Geneva, Switzerland. UN HQ: New York. EU: Brussels. IMF/World Bank: Washington DC.
Q 06
Doha
Medium
The WTO's Doha Development Round was launched in:
View solution
Correct Option: B
Doha Round launched at the 4th Ministerial Conference in 2001; has stalled since the mid-2000s.
Q 07
Body
Medium
The highest decision-making body of the WTO is the:
View solution
Correct Option: B
The Ministerial Conference meets every ~2 years and is the highest decision-making body. The General Council runs day-to-day affairs.
Q 08
India
Easy
India's membership of the WTO is:
View solution
Correct Option: B
India is a founder member of the WTO since 1 January 1995 (and was a member of GATT before).
ImportantQuick recall
- WTO replaced GATT on 1 January 1995, after the Uruguay Round (1986–94). HQ: Geneva. 164 members. Current DG: Ngozi Okonjo-Iweala (2021).
- Major agreements: GATT (goods), GATS (services), TRIPS (IPR), TRIMS, AoA, ATC, SPS, TBT, Anti-Dumping, DSU.
- Five core principles: MFN · National Treatment · Reciprocity · Transparency · Special & Differential Treatment.
- Bodies: Ministerial Conference (top) → General Council → Specialised councils + DSB + TPRB.
- Major rounds: Geneva 1947 → Kennedy → Tokyo → Uruguay (1986-94) → Doha (2001-, stalled).
- Ministerial conferences: MC1 Singapore 1996 → MC4 Doha 2001 → MC9 Bali 2013 (TFA) → MC12 Geneva 2022 (fisheries, COVID waiver) → MC13 Abu Dhabi 2024.
- Appellate Body crippled since 2019 (US blocks).
- India: founder member; voice of developing countries; sensitive on agriculture, public stockholding.