What are the main agreements signed by all member countries under the WTO?

The WTO agreements are trading rules dealing with trade in physical goods, services and intellectual property.

These rules include individual countries’ commitments to:

• lower customs tariffs and other trade barriers
• open local markets to outside manufacturing and service industries.

The agreements require governments to make all their trade policies open and transparent by making all laws and policies available to the WTO, hence other countries. The agreements also contain procedures for settling disputes and prescribe special treatment for developing countries.

These agreements are:

• The General Agreement on Tariffs and Trade (GATT) for general goods
• The General Agreement on Trade in Services (GATS) for services and service-based industries
• Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for intellectual property.

Within these big agreements are specifics dealing with individual products or sectors such as textiles or agriculture. There are some agreements that are not signed by all countries, only by those concerned with that product. For example, there is one such agreement dealing with civil aircraft. No agreement is completely ‘finished’; negotiations are always ongoing as situations change.

What are the salient features of each of these agreements?

GATT and GATS can be seen as made up of three parts.

First, there are the broad principles that both have as their basis -- that trade will be freed up. Then come the extra agreements and annexes which deal with whatever needs to be done for specific trade sectors. Finally, there are the schedules of commitments made by individual countries allowing specific foreign products or service-providers access to their markets. For GATT, these are binding commitments on tariffs for goods in general, and combinations of tariffs and quotas for some agricultural goods. For GATS, the schedules state how much access foreign service-providers are allowed for specific sectors. Underpinning these are dispute settlement systems and country trade policy reviews.

GATT was the first and most fundamental of the WTO agreements and dealt with reducing tariffs and other protectionist anti-trade measures relating to a wide variety of products. The point was that none of a country’s laws pertaining to these could be used by governments to block imports from another country. These agreements are not ‘complete’; they are renegotiated and new agreements can be added to the package.

GATS, meanwhile, is the first and only set of multilateral rules governing international trade in services. It was developed in response to the huge growth of the services economy. (Services represent the fastest growing sector of the global economy and account for 60% of global output, 30% of global employment and nearly 20% of global trade). Yet, there is still a lot of fear in developing countries that GATS may undermine their own governments’ ability to pursue national policy objectives and may be too ‘big business' oriented.

TRIPS has a slightly different framework and covers these broad issues:

• How basic principles of the trading system and other international intellectual property agreements should be applied.
• How to give adequate protection to intellectual property rights.
• How countries should enforce those rights adequately in their own territories.
• How to settle disputes on intellectual property between members of the WTO.

There is also a section of the agreement dealing with transitional arrangements for the time the TRIPS system is being introduced. The areas covered by TRIPS include copyright, trademarks, geographical indications, industrial designs, patents, designs of integrated circuits, and trade secrets.

Have all these agreements already been implemented in full?

See the next question.

What are the different deadlines for implementation?

All WTO agreements came into force on January 1, 1995 , when the WTO became an official entity. However, several agreements provide for transition periods, particularly for developing, transition economies and least developed countries. For instance, the Agreement on Trade-Related Aspects of Intellectual Property Rights stipulated transition periods of one year for developed countries, five years for developing and transition countries, and 11 years, i.e. January 2006, for least developed countries.

How do regional trade agreements fit in the WTO framework? Can these agreements go against WTO agreements?

Under its charter, the WTO does not approve or disapprove of any regional trading agreements and does not get involved in any regional trade association disputes. Yet, the WTO agreements recognise that regional arrangements and economic integration of neighbouring countries can benefit countries, so it permits preferential trade agreements between its members as long as they facilitate trade between their constituent countries, and are trade-creating not trade-limiting. And, of course, such agreements should not raise trade barriers with other WTO members.

All such regional agreements, which frame some kind of preferential treatment, must be submitted to the WTO that can recommend changes after which it can it be put into force. So far over 100 regional trade agreements have been accepted, including ASEAN and SAARC.

How are disputes settled in the WTO? What happens if a country does not abide by a WTO agreement?

Each WTO member has the right to fight back when its trading interests are compromised by what it sees as an illegal measure taken by another country. The country then makes use of the WTO dispute settlement system. The different phases of the dispute settlement process are:

First, the country making the complaint holds bilateral consultations with the other country about the violations, trying to find a mutually acceptable solution. If this doesn’t work, the WTO dispute settlement body (DSB) will establish a panel to examine the case. The panel hears the arguments from both sides and presents a report to the DSB stating whether in fact any rights of the complaining country have been violated. In cases between a developing and a developed country, the panel includes at least one panellist from another developing country. The DSB is actually the entire membership of the WTO.

The DSB will normally accept the report, including any recommendations for action from the panel. But one or both of the parties may appeal to the WTO appellate body. This body then examines any issue of law contained in the panel report and submits its own report to the DSB.

Finally, after the DSB accepts the report of either the panel or the appellate body it checks that the recommendations made are adhered to -- for example, the withdrawal of the trading policy found to be in violation of an agreement.

If it does not correct the policy within a reasonable period of time, the violating country is obliged to provide compensation to the affected country by specific tariff reductions. Or the complaining country can take retaliatory action by dropping a trade agreement with the other country.