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World Trade Organization

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.

Context:- 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.

About the WTO

  • Created in 1995, it is an international institution that oversees the rules for global trade among nations.
  • The WTO is based on agreements signed by most of the world’s trading nations.
  • The main function of the organisation is to help producers of goods and services, as well as exporters and importers, protect and manage their businesses.
  • WTO has 164 member countries [with Liberia and Afghanistan the most recent members, having joined in July 2016] and 25 observer countries and governments.
  • The major functions of WTO are:
    • Administering WTO trade agreements.
    • Forum for trade negotiations.
    • Handling trade disputes.
    • Monitoring national trade policies.
    • Technical assistance and training for developing countries.
    • Cooperation with other international organisations. 

Founding Principles of WTO

  • More than 50 years ago, Harvard professor Richard Cooper argued that “trade policy is foreign policy”.
  • The world then valued economic interdependence with the belief that such interdependence would deter security confrontation.
  • The WTO, created in that era, was aimed at legalising, and policing economic interdependence. 

G20’s Role in WTO Reform

First is related to the special and differential treatment (SDT) principle in WTO agreements. SDT provisions give special rights to developing countries and obligate developed countries to treat the former more favourably.

However, only 21% of the SDT provisions in various WTO agreements oblige developed countries to provide differential treatment to developing countries. SDT provisions need to be given more teeth and effort.

Second is related to the appellate body. It remains paralysed since 2019 because of the US.

The remaining G20 countries need to either persuade the US to change its position or resurrect the appellate body without the US.

Third is related to the consensus-based decision-making in the WTO. It is slowing from 2017 onward. There has been a shift away from this principle toward plurilateral discussions on select issues such as investment facilitation.

While the plurilateral approach is a welcome development for rule-making, there is a need to develop a multilateral governance framework for plurilateral agreements.

This governance framework should include key principles of non-discrimination, transparency, and inclusivity. Forcing plurilateral agreements on non-willing members will increase the trust deficit between developed and developing countries.

Fourth is related to addressing the transparency gap in the WTO, especially in terms of notification requirements.

The WTO member countries are obliged to notify all their laws and regulations that affect trade. But, the compliance with this obligation is poor. This increases the cost of trade, especially for developing countries.


Trade multilateralism might be out of fashion, but remains a critical component for developing countries like India. India’s G20 presidency offers an opportunity to drive reformatory interventions for a development-friendly WTO and enable further substantial benefits for developing nations.

Read also:- 12th WTO Ministerial Conference

World Trade Organization

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