The World Trade Organization

In one line

The World Trade Organization was established by the Marrakesh Agreement of 15 April 1994 as the common institutional framework for trade relations among its Members, with a single undertaking of binding agreements, a Ministerial Conference and General Council, and a compulsory dispute settlement system.

Origin: from GATT 1947 to the WTO

The General Agreement on Tariffs and Trade was concluded in 1947 as a provisional arrangement, pending the entry into force of a charter for an International Trade Organization that was negotiated at Havana and never came into force. The GATT accordingly operated for nearly fifty years as a treaty applied provisionally, with no organisation behind it, its parties calling themselves contracting parties rather than members.

The Uruguay Round of multilateral trade negotiations, concluded at Marrakesh on 15 April 1994, created the Organization, which began work on 1 January 1995.

The Preamble records the objects: relations in the field of 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, seeking both to protect and preserve the environment; recognising further the need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development; and being desirous of contributing to those objectives by reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations.

Sustainable development and the environment appear in the Preamble of a trade agreement in 1994, which is why they can be used in interpreting the covered agreements under article 31(1) of the Vienna Convention, the preamble being part of the text.

Scope, and the single undertaking: article II

Article I is one sentence: the World Trade Organization is hereby established.

Article II(1). The WTO shall provide the common institutional framework for the conduct of trade relations among its Members in matters related to the agreements and associated legal instruments in the Annexes.

Article II(2), the single undertaking. The agreements in Annexes 1, 2 and 3, the Multilateral Trade Agreements, are integral parts of this Agreement, binding on all Members.

That paragraph is the largest structural change from GATT 1947. Under the old system a contracting party could pick which side agreements to join, so obligations differed from party to party. Under article II(2) a Member takes the whole package or none of it.