Functions of the WTO

The functions 

The overriding objective of the WTO is to help international trade flow as freely as possible while also making it predictable. To achieve this objective, it carries out several functions which serve to reach the ultimate objective of providing common institutional framework for the conduct of trade relations among its member countries. 

These functions of the WTO can be summed up as follows: 

Function 1 

WTO is a system based on rules. Its trade rules consist of approximately 60 agreements covering different areas of trade in goods, customs, agriculture, quality infrastructure, services, intellectual property rights etc. Having rules without implementation would not help. Thus, implementation of these multilaterally agreed rules is vital to assure the proper functioning of the system. With this in mind, WTO facilitates the implementation, administration, and operation of the multilateral trade agreements while furthering the objectives of such agreements. The WTO also provides the framework for the implementation, administration and operation of the plurilateral agreements to which only a handful of WTO members are parties. Read more

Function 2

WTO was established as a result of negotiations and everything it does is the result of negotiations.

As a member driven organization, it is the members who decide for the WTO on different questions through negotiations. WTO provides for a forum where Members go and try to solve the trade problems they encounter with one another. These problems can be related to issues covered by already existing agreements or issues not addressed yet in the WTO. 

Although it covers a great deal of trade-related matters, there are issues that agreement could not be achieved at the time of WTO’s establishment or new issues that came up since the establishment. Thus, it is logical that WTO also provides for further negotiations with a view to expanding the multilateral trading system and adapting it to the new realities. Read more

Function 3 

Imagine a system based on rules without an appropriate enforcement mechanism. Would such a system be effective and respected by the members? The answer is most probably, not. Therefore, the dispute settlement mechanism is an essential part of the WTO as it ensures that the trade rules are respected and it guarantees the security and predictability to the multilateral trading system. The achievements of the WTO dispute settlement mechanism have been celebrated for years by the members making it the “crown jewel” of the organization. Needless to say, that it is one of the most active and highly effective state-to-state dispute settlement mechanisms in the world. Read more

Function 4

Taking commitments in the multilateral level is not the end of story, of course. Members have to follow their multilateral commitments at home.

The WTO monitors the domestic policies and regulations of the members to make sure that they are in compliance with WTO requirements. The Trade Policy Review Mechanism ("TPRM") exists for this purpose. The function of the TPRM is to examine the impact of a country’s trade policies and practices on the multilateral system. The review tries to increase the transparency of Members’ trade policies and practices and to improve the quality of public and interstate debate on the trade-related issues. Around 24 countries are reviewed each year. Read more

Function 5

Not all WTO members are in the same level of development. The organization has highly developed, developing and least-developed country members. Apart from special and differential provisions offering more convenient rules for developing countries and LDCs, WTO also developed several tools, both on its own and in cooperation with other organizations, to support developing and least-developed country members in participating more fully in the global trading system. These include different technical assistance and training programs offering human, institutional and infrastructural capacity building to members which are in need of this. The assistance helps developing and least-developed country members to benefit from trade more and achieve economic growth and poverty reduction through trade. Read more

Function 6

The WTO does not exist in isolation from the international community. It cooperates with international organizations and non-governmental organizations when conducting its activities. To assure coherent and mutually supportive policies in global economic sphere, WTO cooperates with the International Monetary Fund and World Bank. In the quality infrastructure, food safety, sanitary and phytosanitary area, the WTO cooperates with several standard-setting international organizations. It is also worth mentioning WTO’s cooperation with the United Nations on the achievement of Millennium Development Goals through trade. Read more