The World Trade Organization (WTO) was created by the Uruguay round of negotiations held between 1986 and 1995. It was formally established on 1st January 1995 and at the moment it had a membership of 98% of world trade and is based in Geneva Switzerland.
WTO’s functions include administering WTO trade agreements; acting as a forum for trade negotiations, handling trade disputes; monitoring national trade policies, providing technical assistance and training for developing countries, and cooperating with other international organizations in matters of international trade.
The WTO is the only global international organization dealing with the rules of trade between nations or what has come to be known as the Multilateral Trading System. It acts as a forum for member states to negotiate trade agreements; settle trade disputes and sort out trade problems they face with each other. WTO operates a system of trade rules. The aim of WTO is to help producers of goods and services, exporters, and importers conduct their business smoothly. WTO also aims to increase international trade by promoting lower trade barriers and providing a platform for the negotiation of trade. However, the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers, for example, to protect consumers, prevent the spread of disease or protect the environment.
WTO being member-driven means that decisions are agreed upon by all member states and operate under the principles of no discrimination meaning that a country should not discriminate between its trading partners hence giving them equally most-favored-nation or MFN status and therefore it should not discriminate between its own and foreign products, services or nationals giving them “national treatment). The other principle is that trade should be freer and trade barriers should come down through negotiation. Trade should also be predictable meaning that foreign companies, investors, and governments should be confident and trade barriers (including tariffs and non-tariff barriers) should not be raised arbitrarily and tariff rates and market-opening commitments are “bound” in the WTO. Trade should also be more competitive hence discouraging unfair practices such as export subsidies and dumping products at below cost to gain market share. Last and most important for developing countries like Africa is the fact that trade should be more beneficial for less developed countries giving them more time to adjust, greater flexibility, and special privileges since trade is an important tool for development.
Developing countries such as those in Africa are a highly diverse group with very different views and concerns. The WTO deals with the special needs of developing countries by making sure that the WTO agreements have special provisions on developing countries such as technical assistance. The WTO Secretariat provides technical assistance mainly through training of various kinds for developing countries. An example of this technical assistance is the WTO Chairs Program. The WTO responds to specific national and regional needs in line with its Progressive Learning Strategy, which provides graduated levels of training to course participants. A results-based management approach is used to monitor and evaluate these activities and to further develop the assistance provided.
Also, the WTO agreements include numerous provisions giving developing and least-developed countries special rights or extra leniency, for example special and differential treatment. These provisions allow developed countries to treat developing countries more favorably than other WTO members.
The General Agreement on Tariffs and Trade (GATT, which deals with trade in goods) has a special section (Part 4) on Trade and Development which includes provisions on the concept of non-reciprocity in trade negotiations between developed and developing countries meaning that when developed countries grant trade concessions to developing countries they should not expect the developing countries to make matching offers in return. This is a provision that African countries can take advantage such that when negotiating trade agreements with developed countries for them to open up their markets for goods from African countries, developing countries should invoke this particular provision so that the developed country does not expect reciprocity since that would tilt the balance of trade in favor of the developed country.
WTO agreements also include other measures such as extra time for developing countries to fulfill their commitments (in many of the WTO agreements); provisions designed to increase developing countries’ trading opportunities through greater market access; provisions requiring WTO members to safeguard the interests of developing countries when adopting some domestic or international measures such as in anti-dumping, safeguards, technical barriers to trade; as well as provisions for various means of helping developing countries, for example, to deal with commitments on animal and plant health standards, technical standards, and in strengthening their domestic telecommunications sectors.
The WTO Secretariat also has special legal advisers for assisting developing countries in any WTO dispute and for giving them, legal counsel. The service is offered by the WTO’s Training and Technical Cooperation Institute. Developing countries regularly make use of it but very few of these are from the African continent.
The WTO’s official business takes place mainly in Geneva and so a country’s presence in Geneva is very important since it is also easy to make unofficial contacts that can be equally important. However, having a permanent office of representatives in Geneva can be expensive. Only about one-third of the 30 or so least-developed countries in the WTO have permanent offices in Geneva, and they cover all United Nations activities as well as the WTO. Kenya is an example of this where the Permanent Representative covers all the UN activities and as well as WTO. To make it easy for WTO members to have permanent missions in Geneva, the Swiss government provides subsidized office space for delegations from least-developed countries. Also, a number of WTO members (developed countries) provide financial support for ministers and accompanying officials from least-developed countries to help them attend WTO ministerial conferences.
It is therefore important for African countries to take advantage of all these provisions and facilities in order to benefit from the multilateral trading system afforded by the WTO.
Prof. Tabitha Kiriti
Chair: WTO Chairs Program
School of Economics