The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible.
The WTO has many roles: it operates a global system of trade rules, it acts as a forum for negotiating trade agreements, it settles trade disputes between its members and it supports the needs of developing countries.
The WTO has over 160 members representing 98 per cent of world trade. Over 20 countries are seeking to join the WTO.
To join the WTO, a government has to bring its economic and trade policies in line with WTO rules and negotiate its terms of entry with the WTO membership.
In agriculture, a category of domestic support. Green box: supports considered not to distort trade and therefore permitted with no limits. Blue box: permitted supports linked to production, but subject to production limits, and therefore minimally trade-distorting. Amber box: supports considered to distort trade and therefore subject to reduction commitments.
On 23 January 2017, the amendment to the WTO Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement marks the first time since the organization opened in 1995 that WTO accords have been amended, and this change should secure for developing countries a legal pathway to access affordable remedies under WTO rules.
Trade-Related Investment Measures (TRIMs) Agreement, negotiated during the Uruguay Round, applies only to measures that affect trade in goods. Recognizing that certain investment measures can have trade-restrictive and distorting effects, it states that no Member shall apply a measure that is prohibited by the provisions of GATT Article III (national treatment) or Article XI (quantitative restrictions).
The WTO and the Sustainable Development Goals
How trade contributes to delivering key Sustainable Development Goals
SDG 1: No Poverty
There is increasing evidence that well planned and strategically executed trade policy initiatives can impact positively on sustainable poverty reduction. Trade opening has also generated higher living standards through greater productivity, increased competition and more choice for consumers and better prices in the marketplace.
SDG 2: Zero Hunger
Eliminating subsidies that cause distortions in agriculture markets will lead to fairer more competitive markets helping both farmers and consumers while contributing to food security. The WTO’s 2015 decision on export competition eliminated export subsidies in agriculture, thereby delivering on Target 2.B of this goal.
SDG 3: Good Health and Well-being
One of the main objectives under SDG 3 is to ensure access to affordable medicines for all. An important amendment to the WTO’s TRIPS Agreement recently entered into force. This measure will make it easier for developing countries to have a secure legal pathway to access affordable medicines in line with Target 3.B of this goal.
SDG 5: Gender Equality
Trade can create opportunities for women’s employment and economic development. Through trade, job opportunities for women have increased significantly. Jobs in export sectors also tend to have better pay and conditions. Export sectors are an important job provider for women in developing countries.
SDG 8: Decent Work and Economic Growth
Trade-led inclusive economic growth enhances a country’s income-generating capacity, which is one of the essential prerequisites for achieving sustainable development. The WTO’s Aid for Trade initiative can make a big difference in supplementing domestic efforts in building trade capacity, and SDG 8 contains a specific target for countries to increase support under this initiative.
SDG 9: Industry, Innovation and Infrastructure
Trade produces dynamic gains in the economy by increasing competition and the transfer of technology, knowledge and innovation. Open markets have been identified as a key determinant of trade and investment between developing and developed countries allowing for the transfer of technologies which result in industrialization and development, helping to achieve SDG 9.
SDG 10: Reduced Inequalities
At the global level, changes in development patterns have been transforming prospects of the world’s poorest people, decreasing inequality between countries. WTO rules try to reduce the impact of existing inequalities through the principle of Special and Differential Treatment for Developing Countries. This allows the use of flexibilities by developing and least-developed countries to take into account their capacity constraints.
SDG 14: Life Below Water
The WTO plays an important role in supporting global, regional and local efforts to tackle environmental degradation of our oceans under SDG 14. The Decision on Fisheries Subsidies taken by WTO members in December 2017 is a step forward in multilateral efforts to comply with SDG Target 14.6, committing members to prohibit subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to illegal, unreported and unregulated fishing, with special and differential treatment for developing and least-developed countries. Members committed to fulfilling this commitment by the 12th Ministerial Conference.
SDG 17: Partnerships for the Goals
SDG 17 recognizes trade as a means of implementation for the 2030 Agenda. The targets under this goal call for: countries to promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system; the increase of developing countries’ exports and doubling the share of exports of least-developed countries (LDCs); and the implementation of duty-free and quota-free market access for LDCs with transparent and simple rules of origin for exported goods. The WTO is the key channel for delivering these goals.