World Trade Organization: main features

1. Origin

The Bretton Woods Conference (1944) created the IMF and the World Bank. A third body, the International Trade Organization, was planned in the Havana Charter (1948) but never came into existence because the US Congress did not approve it. What survived was the General Agreement on Tariffs and Trade, 1947 (GATT), a provisional agreement for tariff reduction, which operated as a de facto organisation for almost fifty years through eight rounds of negotiations. The Uruguay Round (1986–1994) ended with the Marrakesh Agreement Establishing the World Trade Organization, signed on 15 April 1994. The WTO came into being on 1 January 1995, with its headquarters in Geneva. India is a founding member, as it was an original contracting party to GATT 1947. The WTO has 166 members.

2. Objectives

The Preamble to the Marrakesh Agreement: relations in trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, and ensuring that developing countries, especially the least developed, secure a share in the growth of international trade commensurate with their needs. The means are reciprocal and mutually advantageous arrangements for the substantial reduction of tariffs and other barriers and the elimination of discriminatory treatment.

3. Functions (Article III)

• To facilitate the implementation, administration and operation of the multilateral trade agreements, and to provide the framework for the plurilateral agreements;
• to provide the forum for negotiations among members on their trade relations;
• to administer the Dispute Settlement Understanding (DSU);
• to administer the Trade Policy Review Mechanism;
• to co-operate with the IMF and the World Bank for greater coherence in global economic policy-making.

4. Structure (Article IV)

• Ministerial Conference: all members, meeting at least once every two years; the highest body, with authority to take decisions on all matters under any of the agreements. The Fourteenth Ministerial Conference was held at Yaoundé, Cameroon, in March 2026.
• General Council: representatives of all members, conducting the WTO's functions between Ministerial Conferences. It also meets as the Dispute Settlement Body (DSB) and as the Trade Policy Review Body (TPRB).
• Councils for Trade in Goods, Trade in Services and Trade-Related Aspects of Intellectual Property Rights, under the General Council.
• Committees (on Trade and Development, Balance-of-Payments, Budget, and others).
• Secretariat headed by a Director-General appointed by the Ministerial Conference (Article VI). Ngozi Okonjo-Iweala has held the office since 2021 and was reappointed for a second term from September 2025.

Decision-making (Article IX): the WTO continues the GATT practice of consensus. Where consensus is not reached, decisions are by majority of votes cast, one member one vote; interpretations and waivers need a three-fourths majority, and amendments follow Article X. In practice voting is almost never used.

5. Basic principles

• Most-favoured-nation treatment (GATT, Article I): any advantage granted by a member to a product of any country must be accorded immediately and unconditionally to the like product of all other members. Non-discrimination between trading partners.
• National treatment (GATT, Article III): imported products, once they have entered, must be treated no less favourably than like domestic products in internal taxes and regulations. Non-discrimination between imported and domestic goods.
• Tariff binding (GATT, Article II): members bind their tariffs in schedules of concessions and may not exceed the bound rate.
• General elimination of quantitative restrictions (GATT, Article XI): protection should be through tariffs, not quotas.
• Transparency: publication of trade regulations (GATT, Article X) and trade policy reviews.
• Exceptions: general exceptions for public morals, human, animal or plant life or health, and conservation of exhaustible natural resources (Article XX), subject to the chapeau against arbitrary or unjustifiable discrimination (US – Shrimp, 1998, brought by India and others); security exceptions (Article XXI); customs unions and free trade areas (Article XXIV); anti-dumping (Article VI) and safeguards (Article XIX).
• Special and differential treatment for developing countries: longer transition periods, technical assistance, and the Enabling Clause (1979) permitting preferences such as the Generalised System of Preferences.

6. The covered agreements

The Marrakesh Agreement has four annexes. Annex 1A: the multilateral agreements on trade in goods (GATT 1994, Agriculture, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade-Related Investment Measures, Anti-Dumping, Subsidies and Countervailing Measures, Safeguards, and others). Annex 1B: the General Agreement on Trade in Services (GATS). Annex 1C: the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Annex 2: the DSU. Annex 3: the Trade Policy Review Mechanism. Annex 4: plurilateral agreements binding only those who accept them (Government Procurement, Civil Aircraft). The agreements in Annexes 1 to 3 are a single undertaking: a member must accept all of them.

7. Dispute settlement

The DSU replaced GATT's weak, consensus-based procedure with a rule-based, compulsory system.

• Consultations (60 days), then a request for a panel of three experts.
• Panel report, then appeal on points of law to the Appellate Body, a standing body of seven members.
• Negative (reverse) consensus: the DSB adopts panel and Appellate Body reports unless all members decide by consensus not to adopt them. This made adoption practically automatic.
• Implementation: if the losing member does not comply within a reasonable period, compensation may be negotiated or the DSB may authorise retaliation (suspension of concessions).

The Appellate Body impasse. Since December 2019 the Appellate Body has been unable to hear appeals, because the United States has blocked the appointment of new members. A losing party can appeal “into the void” and so prevent adoption of a panel report. Some members, the EU among them, use the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) under Article 25 of the DSU as a substitute; India and the US are not participants. The Yaoundé Ministerial Conference in March 2026 did not restore the Appellate Body; consultations on reform continue in Geneva.

8. India and the WTO

• India changed its patent law to comply with TRIPS: the Patents (Amendment) Act, 2005 introduced product patents for pharmaceuticals, while section 3(d) excluded new forms of known substances without enhanced efficacy. The Supreme Court applied section 3(d) to refuse a patent for the beta-crystalline form of imatinib mesylate in Novartis AG v. Union of India, 2013 INSC 198, (2013) 6 SCC 1, treating the provision as a guard against the evergreening of patents.
• India has defended public stockholding for food security in agriculture negotiations; the Bali Ministerial (2013) adopted a peace clause protecting such programmes from challenge.
• India has been both complainant (US – Shrimp) and respondent (India – Quantitative Restrictions, 1999; India – Sugar and Sugarcane, panel report 2021, appealed by India).

How this is examined

For the short note: date and origin, objectives in one sentence, the five functions, the structure, MFN and national treatment with their GATT Articles, and the dispute settlement system with the present Appellate Body impasse. Marks are lost by writing only history; the examiner wants the functions and the principles.