UNITED STATES INFORMATION SERVICE
FACT SHEET: THE WORLD TRADE ORGANIZATION
(Background for the WTO ministerial conference) (960)
Washington -- Trade, finance, agriculture and foreign policymakers from more than 120
countries will be participating in the first ministerial conference of the World Trade
Organization (WTO) in Singapore from 9 to 13 December 1996.
The meeting will be the first since the WTO -- the successor to the General Agreement on
Tariffs and Trade -- entered into force on January 1, 1995.
The following fact sheet, made available on the Internet by the WTO, provides background
on the WTO, its objectives and functions:
(Begin fact sheet)
About the WTO
The World Trade Organization (WTO), established on 1 January 1995, is the legal and
institutional foundation of the multilateral trading system. It provides the principal contractual
obligations determining how governments frame and implement domestic trade legislation and
regulations. And it is the platform on which trade relations among countries evolve through
collective debate, negotiation and adjudication.
The WTO is the embodiment of the results of the Uruguay Round trade negotiations and the
successor to the General Agreement on Tariffs and Trade (GATT).
The Preamble of the "most-favored nation" (MFN) clause, members are bound to grant to the
products of other members no less favorable treatment than that accorded to the products of
any other country. The provision on "national treatment" requires that once goods have
entered a market, they must be treated no less favorably than the equivalent
- Predictable and growing access to markets. While quotas are generally outlawed, tariffs or
customs duties are legal in the WTO. Tariff reductions made by over 120 countries in the
Uruguay Round are contained in some 22,500 pages of national tariff schedules which are
considered an integral part of the WTO. Tariff reductions, for the most part phased in over
five years, will result in a 40 per cent cut in industrial countries' tariffs in industrial products
from an average of 6.3 per cent to 3.8 per cent. The Round also increased the percentage of
bound product lines to nearly 100 per cent for developed nations and countries in transition
and to 73 per cent for developing countries. Members have also undertaken an initial set of
commitments covering national regulations affecting various services activities. These
commitments are, like those for tariffs, contained in binding national schedules.
- Promoting fair competition. The WTO extends and clarifies previous GATT rules that laid
down the basis on which governments could impose compensating duties on two forms of
"unfair" competition: dumping and subsidies. The WTO Agreement on agriculture is designed
to provide increased fairness in farm trade. That on intellectual property will improve
conditions of competition where ideas and inventions are involved, and another will do the
same thing for trade in services.
- Encouraging development and economic reform. GATT provisions intended to favor
developing countries are maintained in the WTO, in particular those encouraging industrial
countries to assist trade of developing nations. Developing countries are given transition
periods to adjust to the more difficult WTO provisions. Least-developed countries are given
even more flexibility and benefit from accelerated implementation of market access
concessions for their goods.
The essential functions of the WTO are:
- administering and implementing the multilateral and plurilateral trade agreements which
together make up the WTO;
- acting as a forum for multilateral trade negotiations;
- seeking to resolve trade disputes;
- overseeing national trade policies; and
- cooperating with other international institutions involved in global economic policy-making.
The highest WTO authority is the Ministerial Conference which meets every two years. The
day-to-day work of the WTO, however, falls to a number of subsidiary bodies, principally
the General Council, which also convenes as the Dispute Settlement Body and as the Trade
Policy Review Body. The General Council delegates responsibility to three other major
bodies - namely the Councils for Trade in Goods, Trade in Services and Trade-Related
Aspects of Intellectual Property Rights.
Three other bodies are established by the Ministerial Conference and report to the General
Council: the Committee on Trade and Development, the Committee on Balance of Payments
and the Committee on Budget, Finance and Administration. The General Council formally
established, in early 1995, a Committee on Trade and Environment, which will present a
report on its work to the first meeting of the WTO Ministerial Conference, scheduled for
December 1996 in Singapore.
Each of the plurilateral agreements of the WTO - those on civil aircraft, government
procurement, dairy products and bovine meat - have their own management bodies which
report to the General Council.
Secretariat and budget
The WTO Secretariat is located in Geneva. It has around 450 staff and is headed by its
Director-General, Renato Ruggiero, and four Deputy Directors-General. Its responsibilities
include the servicing of WTO delegate bodies with respect to negotiations and the
implementation of agreements. It has a particular responsibility to provide technical support to
developing countries, and especially the least-developed countries. WTO economists and
statisticians provide trade performance and trade policy analyses while its legal staff assist in
the resolution of trade disputes involving the interpretation of WTO rules and precedents.
Other Secretariat work is concerned with accession negotiations for new members and
providing advice to governments considering membership.
The WTO budget is around US$83 million with individual contributions calculated on the
basis of shares in the total trade conducted by members. Part of the budget also goes to the
International Trade Centre.
Director-General: Mr. Renato Ruggiero
Contact information: World Trade Organization Centre William Rappard 154, rue de
Lausanne CH-1211 Geneva, Switzerland Telephone: 7395111 Fax: 7395458 Internet
(End fact sheet)
(This fact sheet is available on the Internet at http://www.wto.org/wto/aboutwpf.html) NNNN
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