The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade between nations. It officially commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus replacing the General Agreement on Tariffs and Trade(GATT) that had been established in 1948. The WTO is the world's largest international economic organization, with 164 member states representing over 96% of global trade and global GDP.[6][7][8]
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The WTO facilitates trade in goods, services and intellectual property among participating countries by providing a framework for negotiating trade agreements, which usually aim to reduce or eliminate tariffs, quotas, and other restrictions; these agreements are signed by representatives of member governments[9]:fol.9–10 and ratified by their legislatures.[10] The WTO also administers independent dispute resolution for enforcing participants' adherence to trade agreements and resolving trade-related disputes.[11] The organization prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals.[11]
The WTO is headquartered in Geneva, Switzerland.[12] Its top decision making body is the Ministerial Conference, which is composed of all member states and usually convenes biannually; consensus is emphasized in all decisions.[13] Day-to-day functions are handled by the General Council, made up of representatives from all members.[14] A Secretariat of over 600 personnel, led by the Director-General and four deputies, provides administrative, professional, and technical services.[15] The WTO's annual budget is roughly 220 million USD, which is contributed by members based on their proportion of international trade.[16]
Studies show the WTO has boosted trade and reduced trade barriers.[17][18][11][19] It has also influenced trade agreement generally; a 2017 analysis found that the vast majority of preferential trade agreements (PTAs) up to that point explicitly reference the WTO, with substantial portions of text copied from WTO agreements.[20] Goal 10 of the United Nations Sustainable Development Goals also referenced WTO agreements as instruments of reducing inequality.[21] However, critics contend that the benefits of WTO-facilitated free trade are not shared equally, citing the outcomes of negotiations and data showing a continually widening gap between rich and poor nations.[22][23]