World Trade Organisation Meaning, Origin, Rounds and Objectives

World trade organsation

WTO: World Trade Organisation

The primary purpose of the founders in establishing the World Trade Organisation (WTO) was to monitor and foster international trade, providing a framework for the global trading system. The organisation officially commenced on January 1, 1995, under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1947. 76 Governments became members of the WTO on its first day.

The World Trade Organisation deals with the regulation of trade between participating countries; it provides a framework for negotiating and formalising trade agreements, and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on are derived from previous trade negotiations, particularly from the Uruguay Round held in 1986-1994.

The WTO has 153 member countries, representing more than 97% of total world trade and 30 observers, most seeking membership. The Ministerial Conference governs the WTO, convening every two years to set policy directions; the General Council implements these decisions and handles daily administration; and the Ministerial Conference appoints the director-general. The headquarter of WTO is at the Centre William Rappard, Geneva, Switzerland.

Difference between GATT and WTO

1The main focus of GATT was on trade in goods. Although trade in services was included in the Uruguay round, no agreement about services was arrived at.The focus of WTO is on trade in goods and services.
2GATT was less powerful and its dispute settlement system was slow and inefficient.WTO is more powerful and its dispute settlement system is fast, strong and efficient.
3 In GATT, there was no pre-decided regular time for holding sessions.In WTO, meet is held after every two years.
4GATT had a small secretariat managed by a Director General.WTO has a large secretariat and a huge organisational set-up.
5TRIPS and TRIMs were not given much emphasis in GATT.WTO laid special emphasis on TRIPS and TRIMS.

Origin and Rounds of WTO

The international community recognized the necessity for a world trade organization long before its establishment. The Bretton Woods Conference in 1944 recommended the establishment of the International Trade Organisation (ITO) along with the World Bank and the IMF. GATT emerged in 1947 as a creation of the US, UK, and several other countries, taking the place of the unrealized ITO. GATT earned its nickname as the “rich men’s club” due to its skewed preference for developed countries.

The developing countries insisted on setting up ITO but opposition to the proposal came from the US. To solve the issue, the UN appointed a committee in 1963; the committee recommended, via media, the UNCTAD (United Nations Conference on Trade and Development). UNCTAD came into being in 1964. It could manage to secure some concessions for the developing countries. In the meantime. Negotiations conducted in a sequence of steps made GATT increasingly liberal, as depicted in the Exhibit. The proposal for the establishment of WTO emerged during the Uruguay Round of negotiations, and it officially materialized on January 1, 1995.

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The Uruguay Round was the 8th round of Multilateral Trade Negotiations (MTN) which was conducted within the framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986-1994 and embracing 110 countries as “contracting parties”. The Round transformed the GATT into the World Trade Organisation. The implementation of the Round began in 1995 and continued until 2000 (2004 for developing country contracting parties) with the administration of the newly founded World Trade Organisation (WTO).


Name (Round) Date Outcome
Geneva round194745,000 tariff concessions representing half of world trade
Annecy round1949Modest tariff reductions
Torquay round1950-5125 per cent tariff reductions about 1948 level.
Geneva round1955-56Modest tariff reductions.
Dillon round1961-62Modest tariff reductions.
Kennedy round1963-67Average tariff reduction of 35 per cent of industrial products, only modest reduction for agricultural products, anti-dumping code.
Tokyo round1973-79Average tariff reduction of 34 per cent for industrial products. Non-tariff trade barrier code.
Uruguay Round1986-94Tariffs and non-tariff measures, rules, services, intellectual property, dispute settlement creation of WTO, etc.

Ministerial Conferences

After the formation of WTO and the 8th round of GATT, Ministerial Conferences came into to picture as the topmost decision-making body of the WTO, which usually meets every two years. It brings together all WTO members, all of which are countries or customs unions. The Ministerial Conference can make decisions on all matters under any of the agreements related to multilateral trade.

In 1996, Singapore hosted the inaugural ministerial conference. Its primary purpose was to initiate an international effort among global trading nations to overhaul the structure and mechanisms of the General Agreement on Tariffs and Trade (GATT) while preserving the considerable success and progress achieved by that system since its inception in 1948. Disagreements, largely between developed and developing economies, emerged over four issues initiated by this conference; afterwards, these were collectively referred to as the “Singapore issues”.

At the Fourth WTO Ministerial Conference held in Doha, Qatar on 9-14 November 2001, Ministers agreed to launch a new round of WTO trade liberalisation negotiations. Following the 1986-1994 Uruguay Round, these negotiations will represent the ninth round since the GATT era. The 9th round of multilateral trade negotiations started in 2001 and continues today. The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001. The World Trade Organisation (WTO) initiated the Doha Development Round, also known as the Doha Development Agenda (DDA), in November 2001. Its objective was to lower trade barriers around the world, which would help to facilitate the increase of global trade.

Ministerial Conferences Dates

1)Singapore Ministerial Conference
2) Geneva Ministerial Conference 1998
3)Seattle Ministerial Conference 1999
4)Doha Ministerial Conference (Doha Round) 2001 to today
5) Cancun Ministerial Conference 2003
6) Hong Kong Ministerial Conference2005
7) Geneva Ministerial Conference 2009
8)Geneva Ministerial Conference 2011
9) Bali (Indonesia) Ministerial Conference 2013

Objectives of WTO

As an international organisation to promote multilateral trade, WTO has the following main objectives: 

1) To improve the standard of living of people of the member countries in effective demand.

2) To ensure full employment and a broad increase. 

3) To improve production and trade of goods.

4) Realising these aims consistently with sustainable development and environmental protection. 

5) Ensuring that developing countries, especially the least developed countries (LDCs), secure a proper share in the growth of international trade.

GATT incorporated the above objectives, and WTO further encompassed additional objectives, outlined as follows:

1) To enlarge production and trade of services. 

2) To ensure optimum utilisation of world resources.

3) To accept the concept of sustainable development. 

4) To protect the business environment.

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