World Trade Organization

Also called: WTO · Topic: International Trade: Patterns, Ports and the WTO · NCERT: Class 12, Ch 8 "International Trade"

Meaning

The World Trade Organization (WTO) is the only international organisation that deals with the global rules of trade between nations. It replaced GATT on 1 January 1995, and its headquarters are in Geneva, Switzerland.

It matters because its 166 members together account for about 98% of world trade [2][3]. Its rules on farm subsidies, food stocks, services, patents and fishing directly affect India's farmers, fishers and industries.

Explanation

How it came about: from GATT to the WTO

• High barriers after the Second World War
• Countries charged high customs tariffs (a tax on goods when they cross a border).

• They also used other limits on trade, such as quotas (a fixed cap on how much of a good can come in).

• GATT (General Agreement on Tariffs and Trade)

• GATT was a set of shared rules for cutting tariffs on goods. It was an agreement, not a full organisation.
• 23 "contracting parties" signed it on 30 October 1947 [2]. It came into force in 1948.

• It held eight rounds of talks. A round is a long series of talks in which members swap tariff cuts.

• The Uruguay Round (1986–94)

• This was the eighth and last GATT round. It led to the creation of the WTO [2].
• It ended with the Marrakesh Agreement (Morocco, April 1994), which set up the WTO as a permanent institution.
• GATT became the WTO on 1 January 1995.

What the WTO does

• Sets rules for trade between nations.
• Settles disputes between member countries.
• Covers more than goods. The Uruguay Round brought new areas under trade rules for the first time:
• GATS (General Agreement on Trade in Services): services such as telecom, banking and transport.
• TRIPS (Trade-Related Aspects of Intellectual Property Rights): patents, copyrights and trademarks, which protect who owns an idea.
• AoA (Agreement on Agriculture): farm subsidies, market access and export support.

Its main parts

• Ministerial Conference: the top decision-making body. Trade ministers of all members attend, and it meets every two years.
• Appellate Body: the WTO's appeal court. It hears appeals against rulings made by dispute panels.
• Appellate Body crisis
• It has been paralysed since December 2019, because the US blocks the appointment of new judges.
• A losing country can now appeal "into the void", so the case stays unsettled.
• As a stop-gap, some members set up the MPIA (Multi-Party Interim Appeal Arbitration Arrangement). Under it, arbitrators chosen by the two sides decide appeals. India has not joined it.

Unfinished business and criticism

• Doha Development Round (2001): it was meant to help developing countries, mainly on farm trade. It has stalled because rich and developing members disagree on farm subsidies and on opening their markets.
• NCERT criticism:
• Free trade has not made ordinary lives better, and powerful nations use the WTO for their own business interests. So the gap between rich and poor countries grows.
• Developed countries have not fully opened their markets to goods from developing countries.
• The WTO ignores health, workers' rights, child labour and the environment.

Where it occurs

• Geneva (Switzerland): WTO headquarters. It hosted the first GATT round (1947, 23 countries) [2] and MC12 (June 2022), which adopted the Agreement on Fisheries Subsidies and a TRIPS waiver for COVID-19 vaccines.
• Marrakesh (Morocco): where the Uruguay Round ended in April 1994 with the agreement that set up the WTO.
• Doha (Qatar): where the Doha Development Round began in 2001.
• Bali (Indonesia): MC9, 2013. It gave the "peace clause", which protects India's public stockholding for food security from challenge at the WTO. India buys grain at a support price and stores it to feed the poor.
• Abu Dhabi (UAE): MC13, February 2024. It made little progress.
• Yaoundé (Cameroon): MC14, 26–30 March 2026. It was the second Ministerial Conference held in Africa [6].
• It adopted three decisions: better integration of small economies, better use of S&DT under the SPS (food safety, animal and plant health) and TBT (technical standards) agreements, and continued talks on fisheries subsidies [6].

• Ministers "ran out of time" on e-commerce and the TRIPS non-violation moratorium [6]. In July 2026, the General Council still had no consensus on the e-commerce moratorium [7].

• India: a founder member of the WTO. India accepted the Fisheries Subsidies Agreement on 20 July 2026 as the 123rd member [5].

• World's oceans: the Fisheries Subsidies Agreement came into force on 15 September 2025, after two-thirds of members accepted it [4]. It bans subsidies for:
• IUU fishing (illegal, unreported and unregulated fishing);
• overfished stocks (fish caught faster than they can breed);
• the unregulated high seas (open ocean outside any country's control).

Don't confuse with

• GATT vs WTO: GATT was an agreement with temporary arrangements. It covered goods only and had a weak dispute system. The WTO is a permanent organisation. It covers goods, services (GATS) and intellectual property (TRIPS), and it has formal dispute panels and an Appellate Body.
• Ministerial Conference vs General Council: the Ministerial Conference is the top body and meets every two years. The General Council carries on the work between conferences, for example the unfinished "Yaoundé package" sent back to Geneva [6].
• Appellate Body vs MPIA: the Appellate Body is the WTO's official appeal court, and it has been paralysed since 2019. The MPIA is a temporary arrangement that only some members use. India is not one of them.
• WTO vs regional trade blocs/FTAs: the WTO makes rules for almost all world trade. Regional trade blocs and FTAs (free trade agreements) cover only a few countries. Countries are turning to them as WTO talks stall.

Prelims Hooks

• Sequence: GATT signed 30 October 1947 (23 contracting parties) → in force 1948 → Uruguay Round 1986–94 → Marrakesh Agreement April 1994 → WTO 1 January 1995 [2].
• WTO headquarters is in Geneva. It has 166 members, who account for about 98% of world trade [3]. India is a founder member.
• Trap: GATT covered goods only. GATS (services) and TRIPS (intellectual property) came with the WTO.
• Top body is the Ministerial Conference, which meets every two years. It is not the General Council.
• Conference–place pairs: MC9 Bali 2013 (peace clause), MC12 Geneva 2022, MC13 Abu Dhabi 2024, MC14 Yaoundé, Cameroon 2026 [6].
• Fisheries Subsidies Agreement: in force 15 September 2025 after two-thirds acceptance [4]. India joined on 20 July 2026 as the 123rd member [5].

Mains Points

• Is the WTO fair to developing countries? (GS-II/GS-III)
• NCERT says the rich–poor gap is growing, rich markets stay closed, and health, labour, child labour and environment are ignored.
• Rich countries' farm subsidies remain. India's food stockholding has only the temporary cover of the Bali peace clause.

• India's response: defend S&DT (softer rules and longer deadlines for developing countries) and ask for a permanent solution on food stocks. India also opposes repeated extensions of the e-commerce moratorium, a ban on customs duties on downloads and streamed content, because it costs developing countries tariff revenue. And it opposes "new issues" such as investment facilitation.

• Crisis of multilateralism (trade rules agreed by many countries together):

• The Appellate Body has been paralysed since 2019, and the Doha Round has stalled since 2001.
• MC13 made little progress, and MC14 "ran out of time" on e-commerce and reform [6][7].

• Result: countries are moving towards regional trade blocs and FTAs.

• Trade and environment (GS-III): the Fisheries Subsidies Agreement is the WTO's first agreement with an environmental goal: protecting marine fish stocks [4]. India joined with safeguards for small fishers [5]. This partly answers the NCERT charge that the WTO ignores the environment.

Related concepts

• General Agreement on Tariffs and Trade
• Criticism of the WTO

Read more

• GATT and the World Trade Organization