Comment: Main features of WTO.

Comment: Main features of WTO. (2003, 20 Marks)

The World Trade Organization, created by the Marrakesh Agreement (15 April 1994) and operating from 1 January 1995, turned the provisional GATT of 1947 into a permanent institution. In Stephen D. Krasner’s terms it is a full international regime: principles, norms, rules and decision-making procedures around which expectations converge. Its features show what it added to GATT, and why the same features now strain it.

Institutional features

  • Legal personality and membership: unlike GATT’s “contracting parties”, the WTO is an organisation of members with defined rights. It now has 166 members after Comoros and Timor-Leste joined in 2024, and India has been a founder member.
  • Structure: the Ministerial Conference meets at least every two years. The General Council sits between sessions and also acts as the Dispute Settlement Body and Trade Policy Review Body. Councils for goods, services and TRIPS sit beneath it, with a small Secretariat that has no lending or executive power. Ngozi Okonjo-Iweala is Director-General until 2029.
  • Decision by consensus (Article IX): voting on one member, one vote is permitted, with three-fourths needed for interpretations and waivers, but is almost never used. This makes the WTO member-driven and formally egalitarian, unlike the weighted votes of the IMF and World Bank.

Substantive features

  • Single undertaking: every member accepts all multilateral agreements as one package, ending the “GATT à la carte” of the Tokyo Round codes. Only the plurilateral agreements of Annex 4 (government procurement, civil aircraft) bind signatories alone.
  • Wider coverage: goods (GATT 1994), services (GATS, with four modes of supply), intellectual property (TRIPS), agriculture (AoA), investment measures (TRIMS), SPS/TBT, subsidies and trade remedies.
  • Core principles:
    • Most-favoured-nation treatment (non-discrimination among partners)
    • National treatment (non-discrimination against imports)
    • Bound tariffs for predictability
    • Transparency
    • The preference for tariffs over quotas
  • Permitted exceptions: general (Article XX) and security (Article XXI) exceptions, safeguards, and regional agreements under Article XXIV.
  • Special and differential treatment for developing members, based on Part IV and the Enabling Clause (1979): longer transitions, higher de minimis limits, non-reciprocity.

Enforcement features

  • Dispute Settlement Understanding: compulsory jurisdiction, fixed timelines, a standing Appellate Body, and negative consensus, so a ruling cannot be blocked by the loser. Authorised retaliation, including cross-retaliation, backs it.
  • Trade Policy Review Mechanism: periodic peer review of every member’s policies.

Significance and limits

Liberal institutionalists (Robert O. Keohane) see these features as reducing transaction costs and making cooperation credible. John Gerard Ruggie’s “embedded liberalism” explains the exceptions and S&DT as the price of domestic legitimacy.

Critics from the South see the single undertaking as an unequal bargain: TRIPS and TRIMS accepted for agricultural and textile gains that came late or partially. The year the question was set showed the response: at Cancún (September 2003) a G20 led by Brazil and India held out on farm subsidies, others rejected the “Singapore issues”, and the ministerial collapsed; Amrita Narlikar (2003) shows how such coalitions turn formal equality into bargaining power.

Three features have also become liabilities:

  1. Consensus at 166 members killed the Doha Round, and MC14 (Yaoundé, 2026) ended without a declaration.
  2. The Appellate Body has lacked a quorum since December 2019 because the United States blocks appointments; an interim arrangement (MPIA) covers around sixty members.
  3. The security exception is being stretched by tariffs and sanctions.

Conclusion

The WTO’s defining features (legal personality, single undertaking, broad coverage and binding adjudication) made it the most legalised economic institution of the post-Cold War order. Its present crisis lies in those same features, binding rules and consensus, under great-power rivalry. Reform must preserve them, not abandon them.