The Agreement Establishing the Wto

The agreement establishing the WTO: An in-depth overview

The agreement establishing the World Trade Organization (WTO) is one of the most significant international agreements in modern history. Signed by over 140 member countries in 1994, the WTO replaced the General Agreement on Tariffs and Trade (GATT) as the international organization responsible for regulating trade between nations.

The agreement establishing the WTO is a complex and comprehensive document, covering a wide range of topics related to international trade. In this article, we will provide an overview of some of the key principles and provisions contained in the agreement.

Trade liberalization

At its core, the WTO agreement is designed to promote trade liberalization – that is, the removal of barriers to trade between nations. To this end, the agreement establishes rules governing the use of tariffs, subsidies, and other trade-related policies.

Tariff reductions

One of the most important provisions of the agreement is the commitment by member countries to reduce tariffs on imported goods. This is known as the Most Favored Nation (MFN) principle, which requires that each member country treat all other members equally with respect to tariffs.

Tariff reductions are accomplished through a process of negotiations and agreements, known as trade rounds. The most recent round of negotiations, the Doha Development Agenda, began in 2001 and is still ongoing.


The agreement also contains provisions related to domestic subsidies for industries. The goal of these provisions is to prevent member countries from unfairly subsidizing their own industries, which can lead to distortions in international trade.

Under the agreement, subsidies are categorized according to their effect on trade. Prohibited subsidies are those that directly promote exports, while actionable subsidies are those that cause injury to other member countries.

Intellectual property

The WTO agreement also contains provisions related to intellectual property rights (IPR). These provisions require member countries to adhere to international standards for the protection of patents, trademarks, and copyrights.

One of the most controversial aspects of the IPR provisions is the requirement that member countries allow pharmaceutical companies to patent their products. Critics have argued that this can lead to high drug prices and limit access to essential medicines in developing countries.

Dispute settlement

Finally, the WTO agreement establishes a dispute settlement system, which is designed to enforce the rules and principles contained in the agreement.

The dispute settlement system allows member countries to bring complaints against other members for alleged violations of the agreement. If the complaint is upheld, the offending member must take steps to bring its policies into compliance with the agreement. If it fails to do so, it may be subject to trade sanctions.


The WTO agreement is a complex and comprehensive document, reflecting the diverse interests of the member countries. While the agreement has been subject to criticism from some quarters, it has played an important role in promoting trade liberalization and resolving disputes between member countries.

As the world continues to become more interconnected, the work of the WTO is likely to remain important for the foreseeable future.

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