The Birth of the WTO

In April 1994, an agreement was finally reached in the Uruguay Round of multilateral trade negotiations launched by the General Agreement on Tariffs and Trade (GATT) a decade earlier. The agreement resulted in the creation on January 1, 1995, of the World Trade Organization (WTO), the global organization within which rules on international trade are set and administered. The WTO covers international rules not only of trade in goods but also trade in services as well intellectual property rights and trade-related investment. The expanded scope of commitments relative to the GATT reflects a recognition of the need to address issues resulting from the forces of globalization that would inexorably push for greater integration of the world economies in the 1990s and beyond. The establishment of the WTO brought about a fundamental restructuring of the rules guiding the international trading system as well as a significant increase in the role played by developing countries within the system. This chapter summarizes the main aspects of the new agreements as they affected developing countries and the policy commitments they and developed countries made in the areas covered by the new organization. These commitments are important as they reflect, with very few exceptions, the actual situation at present—more than 25 years later.