GENEVA, July 17 — The World Trade Organization operates today as it has for three decades: a framework for negotiating trade agreements and a tribunal for disputes. The mechanics here are precise. Established on 1 January 1995 by the 1994 Marrakesh Agreement, the WTO succeeded the General Agreement on Tariffs and Trade, or GATT, which was created in 1948.
The claim is that the WTO regulates and facilitates international trade. The catch is that its own machinery has been showing cracks.
The numbers are straightforward. The WTO has 166 members, representing over 98% of global trade and global GDP. Its annual budget is approximately 200 million USD, contributed by members based on their share of international trade.
The organization is headquartered in Geneva, Switzerland. The highest decision-making body is the Ministerial Conference, which convenes biennially and makes decisions by consensus.
Day-to-day business is managed by the General Council, composed of representatives from all member states. The Secretariat is led by the Director-General; since 2021, that position has been held by Ngozi Okonjo-Iweala of Nigeria. The organization’s agreements cover trade in goods, services, and intellectual property.
It operates on the principle of non-discrimination, enshrined in most-favoured-nation and national treatment provisions. But the source material notes exceptions are allowed for environmental protection, national security, and other objectives. On closer reading, those exceptions have become flashpoints in major trade disputes.
The WTO’s predecessor, GATT, was created in 1948. Economic studies generally find that the WTO has boosted trade and reduced trade barriers.
Follow the money, and the evidence supports that. But criticisms have mounted. The source material states that benefits of WTO-facilitated free trade are not shared equally, that its agreements may disadvantage developing countries, and that commercial interests have been prioritised over environmental and labour concerns.
The organization has been central to stalled negotiations and paralysis. The Doha Development Round remains unfinished.
The Appellate Body, the WTO’s appeals court for disputes, has been effectively paralysed. These are not minor procedural hiccups. They raise questions about the organization’s future efficacy.
The machinery that was supposed to keep global trade orderly is now itself the subject of debate about whether it can still deliver. What to watch next: whether the Ministerial Conference, the biennial gathering that makes decisions by consensus, can break the logjam on the Appellate Body and the Doha Round. The WTO’s structure — consensus-based, with 166 members — makes decisive action difficult.
The catch is that the same non-discrimination principles that underpinned decades of trade liberalisation now face pressure from national security exceptions and bilateral deals outside the WTO framework. The organization’s future may depend on whether its members can agree to update the rules for a trade landscape that has changed since 1995.
