The Marrakesh Agreement, manifested by the Marrakesh Declaration, was an agreement signed in Marrakesh, Morocco, by 123 nations on 15 April 1994, marking the culmination of the 8-year-long Uruguay Round and establishing the World Trade Organization, which officially came into being on 1 January 1995.
The agreement developed out of the General Agreement on Tariffs and Trade (GATT), supplemented by a number of other agreements on issues including trade in services, sanitary and phytosanitary measures, trade-related aspects of intellectual property and technical barriers to trade. It also established a new, more efficient and legally binding means of dispute resolution. The various agreements which make up the Marrakesh Agreement combine as an indivisible whole; no entity can be party to any one agreement without being party to them all.
Origin of WTO
The WTO’s creation was agreed to at the end of the 1986-93 Uruguay Round of international trade negotiations. The agreement was formalised in the Final Act of the Round, which was signed by trade ministers in Marrakesh, Morocco, in April 1994.
Launched on January 1, 1995, it replaced the old General Agreement on Tariffs and Trade (GATT), which had acted as an “interim” world trade watchdog since 1948.
It is officially defined as “the legal and institutional foundation of the multilateral trading system.” Unlike GATT, the WTO is a permanent organisation created by international treaty ratified by the governments and legislatures of member states.
As the principle international body concerned with solving trade problems between countries and providing a forum for multilateral trade negotiations, it has global status similar to that of the International Monetary Fund and the World Bank. But unlike them, it is not a United Nations agency although it has a “co-operative relationship” with the United Nations.
Its underlying documents are the General Agreement — a 38-article code aimed at ensuring open and fair trade in goods, services, agricultural produce and textiles — and 500 pages of specific accords reached in the Uruguay Round.
Most-favoured-nation (MFN): Article 1 of the General Agreement which binds all members to give equal treatment to the products and services of all other WTO states. But there are let- outs.
The WTO is headed by a director-general (currently Renato Ruggiera, former Italian Trade Minister) who has four deputies from different member states. The WTO’s ruling body is the General Council, comprising each member country’s permanent envoys. It sits in Geneva an average of once a month. Its supreme authority is the Ministerial Conference, to be held every two years.
The General Council appoints the director-general to a four-year term after consultations among member countries.
Mandate of WTO
In November 2001, Trade Ministers at the WTO’s Fourth Ministerial Conference in Doha, Qatar, agreed to launch the “Doha Round” of negotiations and more specifically, to commence negotiations on a number of environment and trade issues. These negotiations are to be conducted “with a view to enhancing the mutual supportiveness of trade and environment
In accordance with paragraphs 31, 32 and 33 of the Doha Ministerial Declaration adopted on 14 November 2001, members of the WTO agreed, within their work programme, on a trade and environment mandate focusing on three related legal and policy areas: (i) clarifying the relationship between WTO rules and trade measures in MEAs; (ii) developing procedures for information exchange between MEA Secretariats and relevant WTO Committees and criteria for granting observer status; and (iii) liberalization of trade in environmental goods and services.
Since the beginning of the Doha Round negotiations, Trade Ministers met again several times in Cancún (2003), Honk Kong (2005) and Geneva (2008 and 2009), on the occasion of Ministerial Conferences, which are the WTO highest decision-making body as per the 1994 Marrakesh Agreements establishing the WTO. The Ninth Ministerial Conference is to be held in Bali in December 2013 to continue the trade negotiations launched in 2001.
Membership of WTO
Currently, 125 countries. But three more are expected to join during the Singapore Ministerial Conference. Members range from the “Quad Group” of top four world trade powers the United States, the European Union, Japan and Canada to the increasingly influential emerging economies of Asia to some of the world’s poorest countries, like Bangladesh, Guinea and Solomon Islands.
The membership applications of 28 others are being examined by working parties of present members to see if applicants’ domestic trade laws and practices conform to WTO rules.
Notable among these are China, Russia, Taiwan, Saudi Arabia and Ukraine. The entry of all pending applicants will bring in practically every state that engages in foreign trade.
The possible memberships of Iran, Iraq, Libya, Syria and North Korea have been cast in doubt, mainly due to pressure from the United States, which sees them as “rogue states.”
Two key units are the Dispute Settlement Body (DSB) and the Trade Policy Review Body (TPRB). The DSB, on which all member countries can sit, usually meets twice a month to hear complaints of violations of WTO rules and agreements. It sets up expert panels to study disputes and decide if the rules are being broken. The DSB’s final decisions, unlike those of a similar but less powerful body in the old GATT, cannot be blocked.
The TPRB is a forum for the entire membership to review the trade policies of all WTO states. Major trading powers are reviewed every two years, others every four years.
Other major bodies are the Council for Trade in Goods, the Council for Trade in Services and the Council for Trade-Related Aspects of Intellectual Property Rights.
Institutional structure of the WTO
The Ministerial Conference (MC) is at the top of the structural organisation of the WTO. It is the supreme governing body which takes ultimate decisions on all matters. It is constituted by representatives of (usually, Ministers of Trade) all the member countries.
The General Council (GC) is composed of the representatives of all the members. It is the real engine of the WTO which acts on behalf of the MC. It also acts as the Dispute Settlement Body as well as the Trade Policy Review Body.
There are three councils, viz.: the Council for Trade in Services and the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) operating under the GC. These councils with their subsidiary bodies carry out their specific responsibilities
Further, there are three committees, viz., the Committee on Trade and Development (CTD), the Committee on Balance of Payments Restrictions (CBOPR), and the Committee on Budget, Finance and Administration (CF A) which execute the functions assigned to them by e WTO Agreement and the GC.