The World Trade Organization (WTO) was established on January 1, 1995, under an
agreement reached during the Uruguay Round of multilateral trade negotiations.
The Uruguay Round was the last of a series of periodic trade negotiations held
under the auspices of the WTO's predecessor, the General Agreement on Tariffs
and Trade (GATT).
The WTO is the most important international organization that governs world
trade. Decisions are made by the member countries. The WTO has 151 members and
31 observer governments (most of which have applied for membership), and members
represent over 95% of world trade. The highest-level decisions are made at the
Ministerial Conference, which is the meeting of trade ministers from member
countries. The Ministerial Conference must meet at least every two years.
General Council is the body of national representatives that oversees the
day-to-day operations of the WTO. The General Council meets approximately
monthly. It also meets in two other capacities: it reviews national trade
policies, and it oversees the dispute settlement process. Under the General
Council are numerous committees, working groups, and other bodies.
Assisting the members is a WTO Secretariat that numbers about 635 and is located
in Geneva, Switzerland. The top official of the Secretariat is Director-General
Pascal Lamy of France, whose three-year term began on September 1, 2005.
Trade agreements administered by the WTO cover a broad range of goods and
services trade and apply to virtually all government practices that directly
relate to trade, for example tariffs, subsidies, government procurement, and
trade-related intellectual property rights. The WTO agreements are based on the
principle of non-discriminatory treatment among countries. Some exceptions
however, such as preferential treatment for developing countries, are allowed.
Other basic principles of the WTO are open information on rules and regulations,
negotiated limits on trade barriers, and settlement of disputes under specific
The 110th Congress may examine the relationship between the United States and
the WTO in two ways. Congress may consider implementing legislation for a
potential Doha Round agreement. U.S. Trade Promotion Authority (TPA) expired on
July 1, 2007; however, Congress may extend or reauthorize TPA to consider such
an agreement. Secondly, Congress may consider changes to U.S. laws in response
to WTO dispute settlement procedures.
Following World War II, nations throughout the world, led by the United States
and several other developed countries, sought to establish an open and
non-discriminatory trading system with the goal of raising the economic
well-being of all countries. Aware of the role of trade barriers in contributing
to the economic depression in the 1930s, and the military aggression that rose
following the depression, the countries that met to discuss the new trading
system saw open trade as essential for economic stability and peace.
The intent of these negotiators was to establish an International Trade
Organization (ITO), which would address not only trade barriers but other issues
indirectly related to trade, including employment, investment, restrictive
business practices, and commodity agreements. The ITO was to be a United Nations
specialized agency, but the ITO treaty was not approved by the United States and
a few other signatories and never went into effect. Instead, a provisional
agreement on tariffs and trade rules, called the General Agreement on Tariffs
and Trade (GATT) was reached and went into effect in 1948.
This provisional GATT
became the principal set of rules governing international trade for the next 47
The GATT established trade principles that continue to be applied today. Among
the most important of these principles was non-discrimination with regard to the
treatment of trade in goods among countries.
The most-favored-nation principle,
Article I of the GATT, states that any advantage given by a contracting party to
a product of another country must be extended unconditionally to a like product
of all other contracting parties. A second rule of non-discrimination is
national treatment, the principle that imported and domestic goods should be
treated equally. Although non-discrimination is a cornerstone of the GATT, some
exceptions are allowed. For example, customs unions, free-trade areas, and
special treatment for developing countries are permitted.
Another principle is the open and fair application of any trade barriers.
Tariffs were the most common and visible form of trade barrier at the time the
GATT was established. Tariffs are bound,
or set at maximum levels, and not to
increase above the negotiated level. In general, quantitative restrictions such
as quotas were not allowed, since tariffs were much easier to identify and to
The GATT also included a forum and process for countries to follow in trying to
resolve disputes. The dispute process allowed countries to consult with each
other and if that was not successful, a country could ask that a panel hear the
complaint. Although the panel's decision was not enforceable, the panel report
carried some force of opinion and encouraged countries to work toward an
One of the GATT's chief purposes was the reduction of barriers to trade. With
this goal in mind, GATT contracting parties met periodically to negotiate
further reduction of tariffs and other trade barriers and changes to GATT rules.
These negotiations were called "rounds." Early rounds dealt only with tariff
reductions, but later rounds also included nontariff barriers to trade. The most
recent round, the Uruguay Round, lasted from 1986 to 1994 and included the most
encompassing set of negotiations in the history of the GATT.
On the agenda was
reform of the existing GATT system, as well as expansion of rules to cover new
areas such as services trade and the trade aspects of intellectual property
rights (copyrights, trademarks, and patents). The agreements that resulted from
the Uruguay Round also contained a built-in agenda requiring that further
negotiations on agriculture, services, intellectual property rights, and
government procurement begin by the year 2000.
One of the most important changes that came about from the Uruguay Round was the
establishment of a new trade structure, the World Trade Organization (WTO),
which incorporated the many changes reached during the Uruguay Round: the former
GATT with its newly negotiated reforms, bodies to oversee the new trade
agreements, a stronger dispute resolution procedure, a regular review of
members' trade policies, and many other committees and councils. In contrast to
the GATT, the WTO was created as a permanent structure, with "members" instead
of "contracting parties." The WTO went into effect on January 1, 1995.
sThe WTO Secretariat assists member countries and numbered 625 in 2007. The WTO
budget for the year 2007 is 182.0 million Swiss Francs (CHF), or about $151.7
million (1.20 CHF = $1, average for 2007). Countries contribute according to
their share of world trade, based on trade in goods, services and intellectual
Countries contribute according to their share of world trade, based on trade in
goods, services and intellectual property rights.The Ministerial Conference
examines current programs and sets the agenda for future work. It must meet at
least every two years. The WTO's Director-General is Pascal Lamy of France,
whose three-year term began on September 1, 2005.
The first meeting of the Ministerial Conference was held in Singapore on
December 9-13, 1996. At that meeting, trade ministers reviewed the work of the
WTO, since its establishment and agreed on a work schedule for the next few
years. They also approved an action plan for least-developed countries, and many
members entered into an agreement to eliminate tariffs on information technology
products by the year 2000.
The second meeting of the Ministerial Conference was
held in Geneva on May 18 and 20, 1998. Again, it reviewed the work of the WTO
and approved a future work program. It called for an examination of issues
related to global electronic commerce and started preparations for the next
The third Ministerial Conference was held in Seattle on November 29-December 3,
1999. That meeting was intended to review an agenda for a new round of trade
negotiations, but trade ministers could not reach agreement and suspended their
work. The WTO Director-General was directed to consult with delegations and
discuss ways in which countries might bridge remaining differences. Known as the
"Battle at Seattle," the Ministerial was characterized by street violence and
The fourth Ministerial Conference was held in Doha, Qatar on November 9-14,
2001. At that meeting, trade ministers agreed to launch a new round of
multilateral trade negotiations, called the Doha Development Agenda, and set a
deadline for final agreements of January 1, 2005. They established a work
program for the new round and agreed to consider numerous developing-country
The fifth Ministerial Conference was held September 10-14, 2003, in Cancun,
Mexico. According to the Ministerial Declaration released two years earlier in
Doha, Qatar, the fifth Ministerial Conference was intended to "...take stock of
progress in the negotiations, provide any necessary political guidance, and take
decisions as necessary." Many trade ministers at the Cancun Ministerial
attempted to reach a framework to guide the remaining negotiations of the new
round, but they could not resolve major differences, and the negotiations
The sixth Ministerial Conference was held in Hong Kong on December 13-18,2005.
Although an original goal of the Ministerial was to agree on a package of
modalities for the ongoing Doha Development Agenda (DDA) round of trade
negotiations, this aim was dropped and members agreed to some modest
advancements in agriculture, industrial tariffs, and duty and quota-free access
for least developed countries.
The body that oversees the day-to-day operations of the WTO is the General
Council, which consists of a representative from each member country. The
Council generally meets monthly and provides a forum for countries to discuss a
range of trade matters. The U.S. delegate to the General Council is the Deputy
U.S. Trade Representative in Geneva.
The General Council also meets in two other, unique capacities. One is the Trade
Policy Review Mechanism (TPRM). The TPRM was established under the Uruguay Round
agreements to allow closer monitoring of national trade policies of member
countries. The four countries with the largest shares of world trade are
reviewed every two years, the next 16 largest traders are reviewed every four
years, and other countries are reviewed every six years, although
least-developed countries might be reviewed less frequently. The trade reviews
provide information on a country's trade policies and comment on whether a
country is pursuing market-opening or market-restrictive policies. This public
examination is a mild form of pressure for a country to avoid practices that
The General Council also meets in the capacity of the Dispute Settlement Body (DSB).
The Uruguay Round agreements greatly strengthened the process for settlement of
disputes. The first stage of the process is consultation between the governments
involved. If consultation is not successful, the complainant may ask the DSB to
establish a dispute panel.
The dispute panel hears the case and reports back to
the DSB. If the complaint is upheld, the respondent must either change its
practice or negotiate an agreeable resolution. Otherwise, the complainant may
request that the DSB authorize suspension of obligations, thereby giving
permission for the complainant to retaliate. For example, a complainant may
receive permission to increase tariffs against a respondent country that
disregards a decision by the DSB. Permission is automatic unless unanimously
disapproved. Procedures are clearly set out with specific timetables at each
More specialized work is done in three major bodies under the General Council.
One of these is the Council for Trade in Goods, under which committees work on a
number of trade areas. One committee works on trade in agriculture. Another
committee oversees the related topic of sanitary and phytosanitary measures,
which are measures that pertain respectively to animal and plant health and
safety. Some committees monitor practices that are considered "unfair" if not
implemented in accordance with WTO rules (antidumping, subsidies and
Other committees examine practices that are not
necessarily "unfair" but could be trade-distorting nonetheless (rules of origin,
safeguards, technical barriers, customs valuation, and import licensing). One
committee works on the relatively new area of trade-related investment measures,
and another addresses market access issues (tariffs and nontariff measures).
Also under the Council for Trade in Goods is the Information Technology
A second major body under the General Council is the Council for Trade in
Services, which oversees the Uruguay Round agreement on trade in services. The
Uruguay Round services agreement has three parts. The first part lists basic
principles that countries agree to observe, including national treatment,
most-favored-nation treatment, and transparency (open information about relevant
laws and regulations).
The Second Part Contains Four Annexes With Rules On:
- the movement of persons who provide services,
- financial services,
- telecommunications, and
- air transport services.
The third part is a schedule
of country commitments. These commitments are bound and cannot be reduced in
scope, much like the tariff levels on goods, which cannot be increased once they
are bound. The service commitments may include exceptions to the national
treatment and most-favored-nation principles, if countries included these
exceptions when they originally negotiated the commitments.
The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) is
the third major body under the General Council. The TRIPS Council monitors the
agreement on intellectual property rights reached during the Uruguay Round and
supervises members' compliance. The TRIPS agreement has three parts. The first
part outlines basic principles that countries must observe, including national
treatment and most-favored-nation treatment.
The second part establishes
standards for the different types of intellectual property rights such as
patents, trademarks, copyrights, industrial designs, and geographical
indications (e.g., "champagne" indicates a wine from a specific region), and
ensures minimum lengths of time for protections. The third part of the agreement
establishes enforcement processes.
In addition to the bodies discussed above, there are many other committees and
working groups under the General Council. For example, there are working groups
on trade, debt, and finance and on trade and transfer of technology. There are
committees on plurilateral agreements, which are not signed by all WTO members,
on civil aircraft and on government procurement.
The Committee on Trade and
Development often works with other international institutions on special
concerns of countries in development. Working parties on accession meet with
applicant countries to identify changes that are necessary to bring the
applicant's trade regime into line with WTO rules and principles. The Uruguay
Round also established a committee on trade and environment.
GATT Rounds of Negotiations
The GATT was the only multilateral instrument governing international trade from
1946 until the WTO was established on 1 January 1995. Despite attempts in the
mid-1950s and 1960s to create some form of institutional mechanism for
international trade, the GATT continued to operate for almost half a century as
a semi-institutionalized multilateral treaty regime on a provisional basis.
From Geneva to Tokyo
Seven rounds of negotiations occurred under GATT. The first real GATT trade
rounds concentrated on further reducing tariffs. Then, the Kennedy Round in the
mid-sixties brought about a GATT anti-dumping Agreement and a section on
development. The Tokyo Round during the seventies was the first major attempt to
tackle trade barriers that do not take the form of tariffs, and to improve the
system, adopting a series of agreements on non-tariff barriers, which in some
cases interpreted existing GATT rules, and in others broke entirely new ground.
Because these plurilateral agreements were not accepted by the full GATT
membership, they were often informally called codes.
Several of these codes
were amended in the Uruguay Round and turned into multilateral commitments
accepted by all the WTO members. Only four remained plurilateral (those on
government procurement, bovine meat, civil aircraft, and dairy products), but in
1997 WTO members agreed to terminate the bovine meat and dairy agreements,
leaving only two.
Available at https://www.wto.org/english/res_e/booksp_e/historywto_e.pdf
Well before GATT's 40th anniversary, its members concluded that the GATT system
was straining to adapt to a new globalizing world economy,. In response
to the problems identified in the 1982 Ministerial Declaration (structural
deficiencies, spill-over impacts of certain countries' policies on world trade
GATT could not manage, etc.), the eighth GATT round - known as the Uruguay Round
- was launched in September 1986, in Punta del Este, Uruguay.
It was the biggest negotiating mandate on trade ever agreed: the talks were
going to extend the trading system into several new areas, notably trade in
services and intellectual property, and reforming trade in the sensitive sectors
of agriculture and textiles; all the original GATT articles were up for
review. The Final Act concluding the Uruguay Round and officially
establishing the WTO regime was signed 15 April 1994, during the ministerial
meeting at Marrakesh, Morocco, and hence is known as the Marrakesh
The GATT still exists as the WTO's umbrella treaty for trade in goods, updated
as a result of the Uruguay Round negotiations (a distinction is made
between GATT 1994, the updated parts of GATT, and GATT 1947, the original
agreement which is still the heart of GATT 1994). GATT 1994 is not, however,
the only legally binding agreement included via the Final Act at Marrakesh; a
long list of about 60 agreements, annexes, decisions, and understandings was
The Agreements Fall Into A Structure With Six Main Parts:
- The Agreement Establishing the WTO
- Goods and investment - the Multilateral Agreements on Trade in Goods
including the GATT 1994 and the Trade Related Investment Measures (TRIMS)
- Services - the General Agreement on Trade in Services (GATS)
- Intellectual property - the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS)
- Dispute settlement (DSU) 
- Reviews of governments' trade policies (TPRM)
In terms of the WTO's principle relating to tariff "ceiling-binding" (No. 3),
the Uruguay Round has been successful in increasing binding commitments by both
developed and developing countries, as may be seen in the percentages of tariffs
bound before and after the 1986-1994 talks.
The highest decision-making body of the WTO is the Ministerial Conference, which
usually meets every two years. It brings together all members of the WTO, all of
which are countries or customs unions. The Ministerial Conference can take
decisions on all matters under any of the multilateral trade agreements.
- The inaugural ministerial conference (1996) was held in Singapore.
Disagreements between largely developed and developing economies emerged
during this conference over four issues initiated by this conference, which
led to them being collectively referred to as the Singapore issues
- The second ministerial conference (1998) was held in Geneva in
- The third conference (1999) in Seattle, Washington ended in failure,
with massive demonstrations and police and National Guard crowd-control
efforts drawing worldwide attention.
- The fourth ministerial conference (2001) was held in Doha in the Persian
Gulf nation of Qatar. The Doha Development Round was launched at the
conference. The conference also approved the joining of China, which became
the 143rdmember to join.
- The fifth ministerial conference (2003) was held in Canc�n, Mexico,
aiming at forging agreement on the Doha round. An alliance of
22 southern states, the G20 developing nations (led by India,
China, Brazil, ASEAN led by the Philippines), resisted demands from the
North for agreements on the so-called "Singapore issues" and called for an end
to agricultural subsidies within the EU and the US. The talks broke down without
- The sixth WTO ministerial conference (2005) was held in 13-18 December
2005 in Hong Kong. It was considered vital if the four-year-old Doha Development
Round negotiations were to move forward sufficiently to conclude the round in
2006. In this meeting, countries agreed to phase out all their agricultural
export subsidies by the end of 2013, and terminate any cotton export subsidies
by the end of 2006.
Further concessions to developing countries included an
agreement to introduce duty-free, tariff-free access for goods from the Least
Developed Countries, following the Everything but Arms initiative of
the European Union-but with up to 3% of tariff lines exempted. Other major
issues were left for further negotiation to be completed by the end of 2010.
The WTO General Council, on 26 May 2009, agreed to hold a seventh WTO
ministerial conference session in Geneva from 30 November-3 December 2009. A
statement by chairman Amb. Mario Matus acknowledged that the prime purpose was
to remedy a breach of protocol requiring two-yearly regular
had lapsed with the Doha Round failure in 2005, and that the "scaled-down"
meeting would not be a negotiating session, but "emphasis will be on
transparency and open discussion rather than on small group processes and
informal negotiating structures". The general theme for discussion was "The WTO,
the Multilateral Trading System and the Current Global Economic Environment"
Doha Round (Doha Agenda)
The WTO launched the current round of negotiations, the Doha Development Round,
at the fourth ministerial conference in Doha, Qatar in November 2001. This was
an ambitious effort to make globalization more inclusive and help the world's
poor, particularly by slashing barriers and subsidies in farming. The
initial agenda comprised both further trade liberalization and new rule-making,
underpinned by commitments to strengthen substantial assistance to developing
The negotiations have been highly contentious. Disagreements continue over
several key areas including agriculture subsidies, which emerged as critical in
July 2006. According to a European Union statement, "The 2008 Ministerial
meeting broke down over a disagreement between exporters of agricultural bulk
commodities and countries with large numbers of subsistence farmers on the
precise terms of a 'special safeguard measure' to protect farmers from surges in
The position of the European Commission is that "The successful
conclusion of the Doha negotiations would confirm the central role of
multilateral liberalisation and rule-making. It would confirm the WTO as a
powerful shield against protectionist backsliding."
An impasse remains and,
as of August 2013, agreement has not been reached, despite intense negotiations
at several ministerial conferences and at other sessions. On 27 March 2013, the
chairman of agriculture talks announced "a proposal to loosen price support
disciplines for developing countries' public stocks and domestic food aid." He
added: "...we are not yet close to agreement-in fact, the substantive discussion
of the proposal is only beginning."
Objectives of WTO
- To improve the standard of living of people in the member countries.
- To ensure full employment and broad increase in effective demand.
- To enlarge production and trade of goods.
- To increase the trade of services.
- To ensure optimum utilization of world resources.
- To protect the environment.
- To accept the concept of sustainable development.
Functions and Structure of WTOFunctions
The WTO's overriding objective is to help trade flow smoothly, freely and
predictably. It does this by:
- Administering Trade Agreements
- Acting As A Forum For Trade Negotiations
- Settling Trade Disputes
- Reviewing National Trade Policies
- Building The Trade Capacity Of Developing Economies
- Cooperating With Other International Organizations
The WTO's top level decision- making body is the Ministerial Conference, which
meets usually every two years.The General Council (normally ambassadors and
heads of delegation based in Geneva but sometimes officials sent from members'
capitals) which meets several times a year in the Geneva headquarters. The
General Council also meets as the Trade Policy Review Body and the Dispute
At the next level, the Goods Council, Services Council and Intellectual Property
(TRIPS) Council report to the General Council.
Numerous specialized committees, working groups and working parties deal with
the individual agreements and other areas, such as the environment, development,
membership applications and regional trade agreements.
The WTO's rules - the agreements - are the result of negotiations between the
members. The current set is largely the outcome of the 1986- 94 Uruguay Round
negotiations, which included a major revision of the original General Agreement
on Tariffs and Trade (GATT).
The Uruguay Round created new rules for dealing with trade in services and
intellectual property and new procedures for dispute settlement. The complete
set runs to some 30,000 pages consisting of about 30 agreements and separate
commitments (called schedules) made by individual members in specific areas,
such as lower tariffs and services market-opening.
Through these agreements, WTO members operate a non- discriminatory trading
system that spells out their rights and their obligations. Each member receives
guarantees that its exports will be treated fairly and consistently in other
members' markets. Each promises to do the same for imports into its own market.
The system also gives developing economies some flexibility in implementing
It all began with trade in goods. From 1947 to 1994, the GATT was the forum for
negotiating lower tariffs and other trade barriers; the text of the GATT spelt
out important rules, particularly non- discrimination. Since 1995, the Marrakesh
Agreement Establishing the WTO and its annexes (including the updated GATT) has
become the WTO's umbrella agreement.
It has annexes dealing with specific
sectors relating to goods, such as agriculture, and with specific issues such as
product standards, subsidies and actions taken against dumping. A recent
significant addition was the Trade Facilitation Agreement, which entered into
force in 2017.
Banks, insurance firms, telecommunications companies, tour operators, hotel
chains and transport companies looking to do business abroad enjoy the same
principles of more open trade that originally only applied to trade in goods.
These principles appear in the General Agreement on Trade in Services (GATS).
WTO members have also made individual commitments under the GATS stating which
of their service sectors they are willing to open to foreign competition, and
how open those markets are.
The WTO's Intellectual Property Agreement contains rules for trade in ideas and
creativity. The rules state how copyrights, patents, trademarks, geographical
names used to identify products, industrial designs and undisclosed information
such as trade secrets - intellectual property - should be protected when trade
The WTO's procedure for resolving trade conflicts under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that
trade flows smoothly. Governments bring disputes to the WTO if they think their
rights under the WTO agreements are being infringed. Judgements by specially
appointed independent experts are based on interpretations of the agreements and
individual members' commitments.
The system encourages members to settle their
differences through consultation with each other. If this proves to be
unsuccessful, they can follow a stage- by-stage procedure that includes the
possibility of a ruling by a panel of experts and the chance to appeal the
ruling on legal grounds. Confidence in the system is borne out by the number of
cases brought to the WTO - more than 500 cases since the WTO was established
compared with the 300 disputes dealt with during the entire life of the GATT
The WTO's Trade Policy Review Mechanism is designed to improve transparency, to
create a greater understanding of the trade policies adopted by WTO members and
to assess their impact. Many members see the reviews as constructive feedback on
their policies. All WTO members must undergo periodic scrutiny, each review
containing reports by the member concerned and the WTO Secretariat.
the WTO undertakes regular monitoring of global trade measures. Initially
launched in the wake of the financial crisis of 2008, this global trade
monitoring exercise has become a regular function of the WTO, with the aim of
highlighting WTO members' implementation of both trade- facilitating and
World Trade Organization and Intellectual Property Rights
The WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS), negotiated during the 1986-94 Uruguay Round, introduced intellectual
property rules into the multilateral trading system for the first time.
The idea of trade, and what makes trade valuable for societies, has evolved
beyond simply shipping goods across borders. Innovation, creativity and branding
represent a large amount of the value that changes hands in international trade
today. How to enhance this value and how to facilitate the flow of
knowledge-rich goods and services across borders have become integral
considerations in development and trade policy.
The TRIPS Agreement plays a critical role in facilitating trade in knowledge and
creativity, in resolving trade disputes over intellectual property, and in
assuring WTO members the latitude to achieve their domestic objectives. The
Agreement is legal recognition of the significance of links between intellectual
property and trade.
"Intellectual property" refers to creations of the mind. These creations can
take many different forms, such as artistic expressions, signs, symbols and
names used in commerce, designs and inventions. Governments grant creators the
right to prevent others from using their inventions, designs or other creations
- and to use that right to negotiate payment in return for others using them.
These are intellectual property rights. They take a number of forms.
example, books, paintings and films come under copyright; eligible inventions
can be patented; brand names and product logos can be registered as trademarks;
and so on. Governments grant creators these rights as an incentive to produce
and spread ideas that will benefit society as a whole.
The extent of protection and enforcement of these rights varied widely around
the world; and as intellectual property became more important in trade, these
differences became a source of tension in international economic relations. New
internationally-agreed trade rules for intellectual property rights were seen as
a way to introduce more order and predictability, and to settle disputes more
The Uruguay Round achieved that. The WTO's TRIPS Agreement is an attempt to
narrow the gaps in the way these rights are protected and enforced around the
world, and to bring them under common international rules. It establishes
minimum standards of protection and enforcement that each government has to give
to the intellectual property held by nationals of fellow WTO members.
Under the TRIPS Agreement, WTO members have considerable scope to tailor their
approaches to IP protection and enforcement in order to suit their needs and
achieve public policy goals. The Agreement provides ample room for members to
strike a balance between the long-term benefits of incentivizing innovation and
the possible short term costs of limiting access to creations of the mind.
Members can reduce short term costs through various mechanisms allowed under
TRIPS provisions, such as exclusions or exceptions to intellectual property
rights. And, when there are trade disputes over the application of the TRIPS
Agreement, the WTO's dispute settlement system is available.
The TRIPS Agreement covers five broad areas:
Basic Principles: National Treatment, MFN, And Balanced Protection
- What general provisions and basic principles of the multilateral trading
system apply to international intellectual property
- What The Minimum Standards Of Protection Are For Intellectual Property
Rights That Members Should Provide
- Which Procedures Members Should Provide For The Enforcement Of Those
Rights In Their Own Territories
- How To Settle Disputes On Intellectual Property Between Members Of The
- Special Transitional Arrangements For The Implementation Of TRIPS
As in the General Agreement on Tariffs and Trade (GATT) and the General
Agreement on Trade in Services (GATS), the starting point of the TRIPS Agreement
is basic principles. And as in the two other agreements, non-discrimination
features prominently: national treatment (treating foreign nationals no less
favourably than one's own nationals), and most-favoured-nation (MFN) treatment
(not discriminating among nationals of trading partners). National treatment is
also a key principle in other intellectual property agreements outside the WTO.
The TRIPS Agreement has an additional important general objective: intellectual
property protection should contribute to technical innovation and the transfer
of technology. Both producers and users should benefit, and economic and social
welfare should be enhanced, the TRIPS Agreement says.
Protection of Intellectual Property
The second part of the TRIPS Agreement looks at different kinds of intellectual
property rights and how to protect them. The purpose is to ensure that minimum
standards of protection exist in all WTO members. Here the starting point is the
obligations of the main international agreements of the World Intellectual
Property Organization (WIPO) that already existed before the WTO was created:
- The Paris Convention for the Protection of Industrial Property (patents,
industrial designs, etc).
- The Berne Convention for the Protection of Literary and Artistic Works
Some areas are not covered by these agreements. In some cases, the standards of
protection prescribed were thought inadequate. So the TRIPS Agreement adds
significantly to existing international standards.
Intellectual Property Rights
Intellectual property (IP) refers to creations of the mind, such as inventions;
literary and artistic works; designs; and symbols, names and images used in
Intellectual property rights refer to the general term for the assignment of
property rights through patents, copyrights and trademarks. These property
rights allow the holder to exercise a monopoly on the use of the item for a
specified period.By restricting imitation and duplication, monopoly power is
conferred, but the social costs of monopoly power may be offset by the social
benefits of higher levels of creative activity encouraged by the monopoly
IP is protected in law by, for example, patents, copyright and trademarks, which
enable people to earn recognition or financial benefit from what they invent or
create. By striking the right balance between the interests of innovators and
the wider public interest, the IP system aims to foster an environment in which
creativity and innovation can flourish.
Copyright usually refers to the rights of authors in their literary and artistic
works. In a wider sense, copyright also includes 'related rights': the rights of
performers, producers of phonograms and broadcasting organizations.
During the Uruguay Round negotiations, members considered that the standards for
copyright protection in the Berne Convention for the Protection of Literary and
Artistic Works were largely satisfactory.
The TRIPS Agreement provisions on
copyright and related rights clarify or add obligations on a number of points:
- The TRIPS Agreement ensures that computer programs will be protected as
literary works under the Berne Convention and outlines how databases must be
protected under copyright;
- It also expands international copyright rules to cover rental rights.
Authors of computer programs and producers of sound recordings must have the
right to prohibit the commercial rental of their works to the public. A
similar exclusive right applies to films where commercial rental has led to
widespread copying, affecting copyright-owners' potential earnings from
their films; and
- It says performers must also have the right to prevent unauthorized
recording, reproduction and broadcast of live performances (bootlegging) for
no less than 50 years. Producers of sound recordings must have the right to
prevent the unauthorized reproduction of recordings for a period of 50
A trademark is a sign or a combination of signs used to distinguish the goods or
services of one enterprise from another.
The TRIPS Agreement defines what types of signs must be eligible for protection
as trademarks, and what the minimum rights conferred on their owners must be. It
says that service marks must be protected in the same way as trademarks used for
goods. Marks that have become well-known in a particular country enjoy
A name or indication associated with a place is sometimes used to identify a
product. This geographical indication does not only say where the product
comes from. More importantly, it identifies the product's special
characteristics, which are the result of the product's origins.
Well-known examples include:
- Scotch Whiskey
- Darjeeling and
- Roquefort cheese.
Using the indication when the product was made elsewhere or when it does not
have the usual characteristics can mislead consumers, and can lead to unfair
competition. The TRIPS Agreement says members have to provide ways to prevent
such misuse of geographical indications.
For wines and spirits, the TRIPS Agreement provides higher levels of protection,
i.e. even where there is no danger of the public being misled.
Some exceptions are allowed, for example if the term in question is already
protected as a trademark or if it has become a generic term.
The TRIPS Agreement provides for further negotiations in the WTO to establish a
multilateral system of notification and registration of geographical indications
for wines, which was subsequently extended to include spirits. The question of
whether to negotiate extending this higher level of protection beyond wines and
spirits is also being discussed in the WTO.
Industrial design is generally understood to refer to the ornamental or
aesthetic aspect of an article rather than its technical features.
Under the TRIPS Agreement, original or new industrial designs must be protected
for at least 10 years. Owners of protected designs must be able to prevent the
manufacture, sale or importation of articles bearing or embodying a design which
is a copy or substantially a copy of the protected design for commercial
The TRIPS Agreement says patent protection must be available for eligible
inventions in all fields of technology that are new, involve an inventive step
and can be industrially applied. Eligible inventions includee both products and
processes. They must be protected for at least 20 years. However, governments
can refuse to issue a patent for an invention if its sale needs to be prohibited
for reasons of public order or morality. They can also exclude diagnostic,
therapeutic and surgical methods, plants and animals (other than
micro-organisms), and biological processes for their production (other than
microbiological processes) from patent protection.
Plant varieties, however, must be protectable by patents or by a special system
(such as the breeder's rights provided in the conventions of UPOV - the
International Union for the Protection of New Varieties of Plants) or by both.
The TRIPS Agreement describes the minimum rights that a patent owner must enjoy,
and defines the conditions under which exceptions to these rights are permitted.
The Agreement permits governments to issue compulsory licences, which allow a
competitor to produce the product or use the process under licence without the
owner's consent. But this can only be done under specific conditions set out in
the TRIPS Agreement aimed at safeguarding the interests of the patent-holder.
If a patent is issued for a process invention, then the rights must extend to
the product directly obtained from the process. Under certain conditions alleged
infringers may be ordered by a court to prove that they have not used the
Layout Designs Of Integrated Circuits
An integrated circuit is an electronic device that incorporates individual
electronic components within a single 'integrated' platform configured to
perform an electronic function.
The protection of layout designs of integrated circuits (topographies) in the
TRIPS Agreement is provided through the incorporation of the Washington Treaty
on Intellectual Property in Respect of Integrated Circuits, a treaty that was
concluded under the World Intellectual Property Organization in 1989, but has
not yet entered into force. The TRIPS Agreement adds a number of provisions: for
example, protection must be available for at least 10 years.
In practice, layout designs of integrated circuits are commonly protected under
Undisclosed information includes trade secrets and test data. Trade secrets must
be protected against unauthorized use, including through breach of contract or
confidence or other acts contrary to honest commercial practices. Such
protection is conditional upon the information being secret, having commercial
value and reasonable steps having been taken by its owner to keep the
Test data submitted to governments in order to obtain marketing approval for new
pharmaceutical or agricultural chemicals must also be protected against unfair
commercial use and disclosure. Extended transition periods continue to apply to
least developed country members (see section below on transitional
Anti-Competitive Practices In Licensing
One way for a right holder to commercially exploit his or her intellectual
property rights includes issuing a licence to someone else to use the rights.
Recognizing the possibility that right holders might include conditions that are
anti-competitive, the TRIPS Agreement says that under certain conditions,
governments have the right to take action to prevent anti-competitive licensing
practices. It also says governments must be prepared to consult each other on
controlling anti-competitive licensing practices.
More generally, the TRIPS Agreement recognizes that right holders could use
their rights to restrict competition or impede technology transfer. The
Agreement gives governments the right to take action against anti-competitive
practices. In certain situations, the TRIPS Agreement also waives some
conditions required for the compulsory licence of a patent in cases where the
government grants the compulsory licence in order to remedy a practice
determined to be anti-competitive.
In order for the protection of intellectual property rights to be meaningful,
WTO members must give right holders the tools to ensure that their intellectual
property rights are respected. Enforcement procedures to do so are covered in
part III of the TRIPS Agreement. The Agreement says governments have to ensure
that intellectual property rights can be enforced to prevent or deter
violations. The procedures must be fair and equitable, and not unnecessarily
complicated or costly. They must not entail unreasonable time-limits or
unwarranted delays. People involved must be able to ask a court to review an
administrative decision or to appeal a lower court's ruling.
The TRIPS Agreement is the only international agreement that describes
intellectual property rights enforcement in detail, including rules for
obtaining evidence, provisional measures, injunctions, damages and other
penalties. It says courts must have the right, under certain conditions, to
order the disposal or destruction of goods infringing intellectual property
rights. Wilful trademark counterfeiting or copyright piracy on a commercial
scale must be subject to criminal offences. Governments also have to make sure
that intellectual property rights owners can receive the assistance of customs
authorities to prevent imports of counterfeit and pirated goods.
Transitional Arrangements: One Year, 5 Years Or More
While the WTO agreements entered into force on 1 January 1995, the TRIPS
Agreement allowed WTO members certain transition periods before they were
obliged to apply all of its provisions. Developed country members were given one
year to ensure that their laws and practices conform to the TRIPS Agreement.
Developing country members and (under certain conditions) transition economies
were given five years, until 2000. Least-developed countries initially had 11
years, until 2006 - now extended to 1 July 2034 in general.
In November 2015, the TRIPS Council agreed to further extend exemptions on
pharmaceutical patent and undisclosed information protection for least-developed
countries until 1 January 2033 or until such date when they cease to be a
least-developed country member, whichever date is earlier. They are also
exempted from the otherwise applicable obligations to accept the filing of
patent applications and to grant exclusive marketing rights during the
Developing country members in particular see technology transfer as part of the
bargain in which they have agreed to protect intellectual property rights. The
TRIPS Agreement aims for the transfer of technology (see above) and requires
developed country members to provide incentives for their companies to promote
the transfer of technology to least-developed countries in order to enable them
to create a sound and viable technological base.
The main forum for work on the TRIPS Agreement is the Council for TRIPS, which
was created by the WTO Agreement. The TRIPS Council is responsible for
administering the TRIPS Agreement. In particular, it monitors the operation of
the Agreement. In its regular sessions, the TRIPS Council mostly serves as a
forum for discussion between WTO members on key issues. The TRIPS Council also
meets in special sessions. These are for negotiations on a multilateral system
for notifying and registering geographical indications for wines and spirits.
Cooperation With Other Intergovernmental Organizations
The preamble to the TRIPS Agreement calls for a mutually supportive relationship
between the WTO and WIPO as well as other relevant international organizations.
Cooperation between the WTO and WIPO covers notifications of laws, technical
assistance and implementing the TRIPS obligations that stem from Article 6ter of
the Paris Convention for the Protection of Industrial Property.
The WTO also coordinates with a wide range of other international organizations,
in particular as regards the organization of symposia, training activities and
other events on intellectual property and trade and how these relate to other
policy dimensions, such as public health and climate change.
Written By: Sayed Qudrat Hashimy
- The total WTO budget includes CHF176.9 million CHF for the WTO
Secretariat and CHF 5.1 million for the Appellate Body and its Secretariat.
See WTO Annual Report 2007, p. 112.
- In FY2007, the U.S. share was 14.9% of total contributions to the WTO
budget, which came to CHF 26.8 million ($22.3 million) in 2007. Ibid, p.
- The institution of the WTO is examined in a 2004 report by leading
experts to Director-General Supachai Panitchpakdi. See, Consultative Board,
Peter Sutherland (Chair). The Future of the WTO: Addressing Institutional
Challenges in the New Millennium. World Trade Organization, 2004. 86 p.
Available at the WTO website http://www.wto.org.
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CRS Report RL31206, The WTO Doha Ministerial: Results and Agenda for a New
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RS20088, Dispute Settlement in the World Trade Organization: An Overview, by
[author name scrubbed].
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- Supra Note 6
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- Supra Note 10
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Clara Journal of International Law. 2 (1): 40.
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of "The Uruguay Round Agreements," see WTO legal texts, WTO official site,
and Uruguay Round Agreements, Understandings, Decisions, and Declarations,
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Membership. EU and US Perspectives about China's Compliance with
Transparency Commitments and the Transitional Review Mechanism".
Papers.ssrn.com. SSRN 916768
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Available at https://www.economist.com/special-report/2006/07/27/in-the-twilight-of-doha
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- Supra Note 20
- Members start negotiating proposal on poor countries' food stockholding.
WTO official website. 27 March 2013. Retrieved 2 May 2021, Available at
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- Student of LLM (International Law),
Department of Studies in Law, University of Mysore
Email: [email protected]