The WTO: Its history and role

More background on the Cancun meeting:
The WTO at Cancun: What’s at stake?
The grassroots agenda at Cancun

The World Trade Organization (WTO) was established on January 1, 1995, by one of the agreements negotiated under the General Agreement on Tariffs and Trade (GATT) Uruguay Round (1986 to 1994). The WTO establishes a permanent multilateral forum for trade negotiations and dispute settlement.

The WTO is home to a series of trade agreements covering agriculture, services, intellectual property rights and other issues never before included in international trade rules. A Dispute Settlement Body was created to give this multilateral trade system an enforcement mechanism. The WTO was established with a commitment to raising standards of living, ensuring full employment and expanding trade while upholding the objective of sustainable development.

The WTO negotiates by consensus. It is governed by the General Council, where all 144 member countries are represented. Conferences are held at the Ministerial level within two years of the last Ministerial to review the work program and direction of the organization. The first Ministerial was held in Singapore in 1996, the second in Geneva in 1998, the third in Seattle in 1999 and the fourth in Doha in 2001. The fifth Ministerial Conference is being held in Cancun from September 10-14, 2003.

What Happened at the Doha Ministerial?

Celebrating fair trade in Cancun and the world over.

Negotiations were very contentious at the Doha Ministerial Conference in 2001. An additional 24 unscheduled hours were required to reach a final declaration. The heated negotiations included a failed attempt by the U.S., Australia and Switzerland to block otherwise unanimous support for a Declaration on Intellectual Property and Health that clarified the supremacy of public health concerns over pharmaceutical companies’ patent rights. The victory reflected the consolidated strength of a broad coalition of public interest groups, working with concerned governments, that insisted that trade expansion cannot and should not trump public interest concerns.

Other results were less hopeful. A commitment to reform the practices that contribute to agricultural dumping (exporting crops at below the cost of production) was very weak, while a number of issues that many developing countries opposed were inserted, including a new negotiation on the legal relationship between the WTO and Multilateral Environmental Agreements (MEAs). Governments ought properly to address that relationship in a more neutral forum, not as trade negotiators at the WTO. Also troubling is the commitment to negotiate the outcome of all the negotiations as a single package rather than negotiating agreements such as agriculture and services independently. This puts developing countries, particularly the smallest delegations, at a considerable disadvantage because they must negotiate all of the agreements, even if only a few are relevant for their own commercial interests. Developing countries now face multiple, complex negotiations in Geneva, where one or two diplomats are obliged to cover three or more simultaneous meetings on any given day.

The most contentious fight in Doha was over whether to include the so-called Singapore issues (because they were initially raised at the WTO Ministerial in Singapore): investment, competition, government procurement and trade facilitation. The first two areas are particularly controversial, with a wide variety of development institutions, including bilateral aid agencies and World Bank economists, joining many developing country governments in resisting their inclusion in the current round of negotiations. The compromise was a decision to review whether to formalize negotiations in these areas at the fifth Ministerial in Cancun.

Between Doha and Cancun

The tension between rules and agreements set up by the United Nations (UN) and those established by the WTO has grown in recent years. Several important questions are being asked in the international community: Could UN agreements, such as the Kyoto Protocol on Climate Change, the Cartagena Protocol on Biosafety or the Basel Convention on Hazardous Waste, conflict with WTO agreements designed to facilitate trade? And if there is a conflict, how do we reach a resolution?

At the recently completed World Summit on Sustainable Development in Johannesburg, many governments tried to negotiate a procedure within the UN system to evaluate how trade rules can be a barrier to environmental protection and when a Multilateral Environmental Agreement might appropriately trump the WTO. Within the UN system, the Office of the High Commissioner for Human Rights has similarly noted that “actual or potential conflict exists” between the WTO’s agriculture and intellectual property rights agreements and international human rights laws, including, the right to food, housing, work, health, education and self-determination. After heated debate in Johannesburg on how to reconcile different international agreements, the final documents merely call for “mutual supportiveness” among trade, environment and development. The challenge of finding a more definitive approach will be revisited in Cancun.

Reprinted with permission of the Institute for Agricultural Trade Policy.