Structure and Functions of World Trade Organisation (WTO)

By | April 24, 2018

Structure of the World Trade Organisation:

Ministerial Conference

WTO is headed by the Ministerial Conference who enjoys absolute authority over the institution. It not only carries out functions of the WTO but also takes appropriate measures to administer the new global trade rules. It is integrated by representatives of all WTO Members and shall meet at least once in every two years. It is the chief policy-making body of WTO and any major policy changes, such as a decision to alter competition policy or to rewrite the WTO agreement, require its approval.

General Council

In addition to these, the structure of the WTO consists of a General Council to oversee the WTO agreement and ministerial decisions on a regular basis. It is also formed by the representatives of all WTO Members and acts on behalf of Ministerial Conference whenever the Conference is not in sessions. The General Council also meets as the Dispute Settlement Body and the Trade Policy Review Body. The Council sits in its headquarters Geneva, Switzerland usually once a month.

Trade Councils

Besides General Council, there is the Council for Trade in Goods, the Council for Trade in Services, the Council for Trade-Related Intellectual Property Rights (TRIPS). These Councils and their respective subsidiary bodies perform their respective functions. Each member has one vote. Decision-making is made by consensus. If consensus is not reached then majority voting plays the crucial rate.

In addition to these councils, Working Parties can be established by the General Council in order to deal with specific issues defined by General Council.

Trade Committees

Trade Committees are formed for delegation under four authorities, namely:

  • Under the terms of one of the Multilateral Trade Agreements
  • By one of the Trade Councils
  • By the Ministerial Conference
  • Under the terms of one of the Plurilateral Trade Agreements

Each committee organizes its own procedures and may establish further subsidiary committees if it seems fit. They also serve as the forum for discussions on ways to improve trade. And the Committees meet once every two to three months.

Secretariat

The WTO secretariat (numbering 625 of many nationalities) is headed by Director General who is appointed by Ministerial Conference. The Secretariat of the WTO is responsible for servicing the WTO bodies with respect to negotiations and the implementation of agreements. Since decisions are taken by Members only, Secretariat has no decision making power.

Dispute Settlement Body

The task of ensuring that all Members live up to their commitments and that there is a common understanding of the nature of those commitments is a central part of the work of the WTO. WTO’s procedure is a mechanism which is used to settle trade dispute under the Dispute Settlement Understanding (DSU). A dispute arises when a member government believes that another member government is violating an agreement which has been made in the WTO. And the dispute settlement under WTO not only ensures security and predictability to the multilateral trading system but is also concerned with the situations where a Member seeks remedy for damage to its trade interests caused by the actions/inactions of other members. There are different stages of dispute settlement under WTO which are as follows:

  1. Consultations
  2. Establishing a Dispute Panel
  3. Implementing of Panel and Appellate Body Ruling

Find out more about Dispute Settlement Body Here.

Functions of the World Trade Organisation:

The WTO was founded on certain guiding principles—non-discrimination, free trade, open, fair and undistorted competition, etc. In addition, it has a special concern for developing countries.

At the heart of the Organisation are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. The goal is to help producers of goods and services, exporters, and importers conduct their business. The WTO’s overriding objective is to help trade flow smoothly, frets, fairly, and predictably.

With these objectives in mind, WTO is performing following functions:
  1. It shall facilitate the implementation, administration, nd operation of the WTO trade agreements, such as multilateral trade agreements and plurilateral trade agreements.
  2. It shall provide a forum for liberalization negotiations among its members concerning their multilateral trade relations.
  3. It shall administer the ‘Dispute Settlement Procedure’ so as to handle trade disputes.
  4. It shall monitor national trade policies (including Trade Policy Review Mechanism).
  5. It shall cooperate with various international organizations like the IMF and the World Bank with the aim of achieving greater coherence in global economic policy-making.
  6. It shall provide technical assistance and training for members of the developing countries.

Contributed By – Lakshay Anand

Sources:

  1. SCC Online
  2. Indira Carr and Peter Stone, International Trade Law Paperback – Sixth Edition, 2017


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