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Africa and the WTO Regime

Written by: African Development Bank

Article Overview: GATT and WTO

Africa and the WTO Regime

The World Trade Organization (WTO) is the successor to the General Agreement on
Tariffs and Trade (GATT). GATT was established in 1947, after the 2nd World War -- as
part of the architecture of the post-war economic landscape. The two Bretton Woods
Institutions (the International Monetary Fund or IMF and the International Bank for
Reconstruction and Development or World Bank, and the International Labour
Organization (ILO) were all created at that time. The International Trade Organization
was also to be created to oversee world-trading activities and settle trade disputes, but
agreement could not be reached. GATT was therefore created as an interim organization
to oversee world trade issues. It ended up existing for almost 50 years. Finally, at the
conclusion of the Uruguay Round of multilateral trade negotiations (MTN) in 1994, an
agreement to create the WTO was reached, and it then took off in 1995.
The legal instrument establishing the WTO consists of GATT 1994 (which includes
GATT 1947), twelve Multilateral Trade Agreements (MTAs) on goods, the General
Agreement on Trade in Services (GATS), the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPs), the Understanding on Rules and Procedures
Governing the Settlement of Disputes, and an agreement on a Trade Policy Review
Mechanism.
The main functions of the WTO, as contained in article III of the Agreement are:(i) to
facilitate the implementation, administration and operation of the Uruguay Round
Agreements; and (ii) to provide a forum for negotiations among members concerning
their multilateral trade relations. Many signatories to the Agreement, especially Canada,
the European Community (EC; now the EU), and many developing countries saw WTO
not only as a mechanism for implementing the results of the Uruguay Round of trade
negotiations within a common institutional framework but also as a device for imposing
more stringent discipline to preclude unilateral trade measures. According to UNCTAD’s
Trade and Development Report 1994, the successful completion of the Uruguay Round
of MTN and the signing of the WTO Agreement would lead to a substantial
strengthening of the multilateral trading system by
· providing much more detailed rules to govern the application of a variety of
trade policy measures;
· devising new multilateral trade rules to cover intellectual property and trade in
services;
· achieving a substantial degree of tariff liberalization so as to maintain the
momentum towards ever freer multilateral trade;
· reducing the discriminatory aspects of regional trade agreements;
· effectively raising the multilateral obligations of all countries to broadly
comparable levels, with differential and more favourable treatment for
developing countries being delineated in a more specific, contractual manner;
and
· linking together the various agreements concluded within a formal
institutional framework (i.e., WTO), subject to an integrated dispute
settlement mechanism, see UNCTAD (1994: 119 and 121).

African Development Bank
Economic Research Working Paper Series
Enhancing Africa’s Trade: From Marginalization
to an Export-Led Approach to Development
Milton A. Iyoha
Professor, Department of Economics & Statistics
University of Benin, Nigeria
Economic Research Working Paper
No 77 (August 2005)

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Article Tags: bretton woods institutions, economic landscape, gatt 1947, gatt 1994, general agreement on tariffs and trade gatt, institutional framework, intellectual property rights, international bank for reconstruction and development, international labour organization, international monetary fund, international trade organization, legal instrument, multilateral trade agreements, multilateral trade negotiations, trade related aspects of intellectual property, trade related aspects of intellectual property rights, unctad, unilateral trade measures, world trade organization, world trade organization wto



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