World Trade Organization (WTO)
The Marrakesh Agreement Establishing the World Trade Organization (WTO) or the WTO Agreement entered into force and established the WTO on 1 January 1995, but its multilateral trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT), which was the result of the Bretton Woods Conference convened by the United Nations (UN) following the 2ndWorld War, had provided the rules for the system. Over the years GATT evolved through several rounds of multilateral trade negotiations.
The last and largest GATT round, was the Uruguay Round (UR) which lasted from 1986 to 1994 and led to the WTO’s creation. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now additionally cover trade in services, and intellectual property rights or what may be looked into on traded inventions, creations, and designs. It has also a much more strengthened set of dispute settlement procedures, currently proving to be the crown jewel of the multilateral trading system (MTS).
The current round, the Doha Development Agenda (DDA) with over 20 negotiating topics, also referred to as the Doha Round of multilateral trade negotiations is much more complex than its predecessors. The Round takes its name from Doha, Qatar, the place where it was launched on 14 November 2001. The DDA or Doha Round is the 9th Round of international trade negotiations under the auspices of the MTS dating back to the old GATT. It is, however, the 1st Round under the WTO, the organization and agreement that replaced the GATT in 1995 following the completion of the UR.
The Doha Round is stalled but work continues in Geneva and Members remain engaged. The commitment by Members to the preservation of the multilateral trading system with the development context central for its continuing relevance also remains strong.
The WTO is both a legal and institutional framework. It may be looked at as a multilateral agreement and an organization. It implements and operates the UR legal instruments and acts as a forum for dispute settlement, trade policy review, and for cooperation with international economic institutions (i.e., both the World Bank and the IMF) on international economic issues.
The Ministerial Conference (MC) is the highest authority in the WTO and comprises trade ministers that meets once every two years to decide on the operation of the WTO Agreement. The General Council (GC) based in Geneva takes care of day-today activities and is comprised of the Members’ ambassadors (or representatives) to the WTO. The WTO has several bodies taking care of the implementation of covered agreements the most prominent of which would be the: Council for Trade in Goods, Council for Trade in Services, Council for Trade-Related Intellectual Property Rights (TRIPS), GC as Dispute Settlement Body (DSB) and GC as Trade Policy Review Body, and the individual committees, Working Parties and Working Groups.
The WTO decides generally by consensus. However, three fourths majority is required for the interpretation of any agreements; two thirds majority for the adoption of any amendments to any provisions; three fourths majority for temporary waivers of WTO obligations for any country; and two thirds majority to admit new Members.
The WTO is headed by a Director-General (DG) and assisted by four (4) Deputy DGs approximating geographical representation. There is a Secretariat which is based in Geneva of varying nationalities from Member countries.
The Philippines in the WTO
The Philippines has been a WTO Member since 1 January 1995 and a Member of the GATT since 27 December 1979.
The Philippines is a signatory to the following subsequent WTO covered agreements:
I. Multilateral Agreements
- 2005 Protocol Amending the TRIPS Agreement
WTO Members on 6 December 2005 approved changes to the WTO’s intellectual property (TRIPS) agreement in order to make permanent a decision on patents and public health originally adopted in 2003. This was formally built into the TRIPS Agreement after acceptance of the Protocol amending the TRIPS Agreement by two thirds of the WTO’s Members. The amendment took effect on 23 January 2017 and replaced the 2003 waiver for Members who have accepted the amendment.
The Philippines accepted the Protocol on 30 March 2007.
- 2014 Protocol concerning the Trade Facilitation Agreement
On 27 November 2014, the GC adopted the Protocol of Amendment to insert the WTO Trade Facilitation Agreement into Annex 1A of the WTO Agreement (“the Protocol”), and opened it for acceptance by Members. According to the WTO Agreement, a Member formally accepts the Protocol by depositing an “Instrument of Acceptance” for the Protocol with the WTO.
As stipulated in the Protocol, it shall enter into force in accordance with Article X:3 of the WTO Agreement. Namely, the Protocol shall take effect upon acceptance by two thirds of the Members for the Members that have accepted the Protocol; thereafter, the Protocol shall take effect for each other Member upon acceptance by it.
The Philippines accepted the Protocol on 27 October 2016.
II. Plurilateral Agreement
- Information Technology Agreement
The Information Technology Agreement (ITA) was concluded by 29 participants at the Singapore Ministerial Conference in December 1996. Since then, the number of participants has grown to 82, representing about 97 per cent of world trade in IT products. The participants are committed to completely eliminating tariffs on IT products covered by the Agreement. At the Nairobi Ministerial Conference in December 2015, over 50 members concluded the expansion of the Agreement, which now covers an additional 201 products valued at over $1.3 trillion per year.
The Philippines, as an active Member of the WTO, ensures that its stakeholders are consulted through the WTO National Advocacy and Consultations Programme. Furthermore, the country has been actively supporting an advocacy on Micro, Small and Medium-sized Enterprises (MSMEs) with the vision to enable MSMEs to be active players in the global market via continuing discussions on the role and importance of the MSMEs in the economic environment.
The Philippines is of the view that the WTO given its multilateral nature offers the widest possibility for stronger sets of alternatives to fully address trade issues while factoring in capacity constraints brought about by differences in the levels of economic development among its Members. Thus, the country, together with the other developing countries, is committed to the preservation of the DDA mandates and to eventually complete an ambitious and balanced agenda with the economic development of its Members being made central. This necessarily includes keeping the principle of the single undertaking intact.
Important WTO Documents
- The World Trade Organization
- Philippines and the WTO
- WTO Legal Texts
- WTO Ministerial Declarations and Decisions
For more details, contact the DTI WTO Desk at BITRWTODesk@dti.gov.ph