The World Trade Organization (WTO) was founded as a result of the crucial international trade pact known as the Marrakesh pact. It was negotiated during the multinational trade talks known as the Uruguay Round, which took place between 1986 to 1994. The document’s name comes from the fact that it was signed in Marrakesh, Morocco, on April 15, 1994.
The Marrakesh Agreement, an important international trade agreement, served as the impetus for the creation of the World Trade Organization (WTO). It was negotiated during the Uruguay Round of multilateral trade negotiations, which took place from 1986 to 1994. The name of the agreement refers to the fact that it was signed on April 15, 1994, in Marrakesh, Morocco.
Key objectives and provisions of the Marrakesh Agreement include:
- Trade Liberalization: The agreement intends to promote the lowering of tariffs, non-tariff barriers, and other trade restrictions in order to assist the liberalization of trade among member nations.
- Settlement of Disputes: The WTO provides a clear dispute resolution process that enables member nations to resolve trade disputes through a structured, rules-based procedure, ensuring a just and impartial outcome.
- Market Access: The agreement aims to promote nondiscriminatory market access for products and services from member countries.
- Trade in Services: The General Agreement on Trade in Services (GATS), which intends to liberalize trade in a number of service sectors, including finance, telecommunications, and tourism, is a component of the Marrakesh Agreement.
- Intellectual property: The pact on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which establishes global norms for the protection and enforcement of intellectual property rights, is also a part of the pact.
- Trade and the environment: The agreement acknowledges the need to prioritize trade liberalization while taking environmental issues into account.
- Special and Differential Treatment: The agreement recognizes the differing development levels of member countries and provides special and differential treatment for developing nations to assist them in their integration into the global trading system.
The WTO serves as a venue for member nations to discuss various trade-related topics, negotiate trade agreements, and settle disputes. The General Council, the organization’s top decision-making body, makes decisions under the guiding concept of consensus among its member nations.
While the WTO has played a significant role in promoting global trade and lowering trade barriers, it has also come under fire and faced difficulties from a variety of quarters, particularly when it came to addressing the worries of developing nations and balancing trade rules with social and environmental concerns. At the time of my most recent update in September 2021, the WTO was still a major player in determining international trade policies. Please be aware, though, that changes might have happened since my previous update.
Historical background of the Marrakesh Agreement
The General Agreement on Tariffs and Trade, sometimes known as GATT 1947, was a pact that 23 countries signed in Geneva in 1947. It was principally implemented to phase out imports of the import quota and lower duties on trade in goods when it went into effect on January 1st, 1948.
From 1948 until a legitimate international trade organization was founded, GATT 1947 served as the trade agreement that governed international trade (World Trade Organization, 1995). GATT 1947 was able to conduct eight rounds of multilateral trade negotiations, the last one being the Uruguay Round (1986–1994) that resulted in the Marrakesh Agreement, which in turn established the World Trade Organization. This was accomplished in spite of its many issues, which ranged from the exclusion of some countries to other institutional issues.
A new General Agreement on Trade and Tariffs, or GATT 1994, was established by the Marrakesh Agreement and is listed in Annexe 1A of the Agreement.
Need for the Marrakesh Agreement
GATT 1947 was a treaty between a few nations, although it was not legally enforceable. As long as its provisions were in line with national laws, they were therefore applicable. Additionally, the GATT was signed by 23 countries, which obviated any notion of inclusivity. It became clear that GATT would function better if it had an institutional body to support it better as more and more countries began taking part in trade talks organized under GATT. Consequently, the Marrakesh Agreement, which resulted in the creation of an institutional structure, the WTO, was signed during the Uruguay Rounds.