The Birth of Global Market

THE World Trade Organization 

Agreement Establishing the World Trade Organization 




The agreement establishing the World Trade Organization (WTO) calls for a single institutional framework encompassing the GATT, as modified by the Uruguay Round, all agreements and arrangements concluded under its auspices and the complete results of the Uruguay Round. Its structure is headed by a Ministerial Conference meeting at least once every two years. A General Council oversees the operation of the agreement and ministerial decisions on a regular basis. This General Council acts as a Dispute Settlement Body and a Trade Policy Review Mechanism, which concern themselves with the full range of trade issues covered by the WTO, and has also established subsidiary bodies such as a Goods Council, a Services Council and a TRIPs Council. The WTO framework ensures a “single undertaking approach” to the results of the Uruguay Round — thus, membership in the WTO entails accepting all the results of the Round without exception.



General Agreement on Tariffs and Trade 1994 Back to top



Texts on the interpretation of the following GATT articles are included in the Final Act:



Article II — Schedules of Concessions. Agreement to record in national schedules “other duties or charges” levied in addition to the recorded tariff and to bind them at the levels prevailing at the date established in the Uruguay Round Protocol.



Understanding on the Interpretation of Article XVII — State-trading Enterprises. Agreement increasing surveillance of their activities through stronger notification and review procedures.



Understanding on the Interpretation of Articles XII and XVIII:B



Balance-of-payments provisions. Agreement that contracting parties imposing restrictions for balance-of-payments purposes should do so in the least trade-disruptive manner and should favour price-based measures, like import surcharges and import deposits, rather than quantitative restrictions. Agreement also on procedures for consultations by the GATT Balance-of-Payments Committee as well as for notification of BOP measures.



Understanding on the Interpretation of Article XXIV — Customs Unions and Free-Trade Areas. Agreement clarifying and reinforcing the criteria and procedures for the review of new or enlarged customs unions or free-trade areas and for the evaluation of their effects on third parties. The agreement also clarifies the procedure to be followed for achieving any necessary compensatory adjustment in the event of contracting parties forming a customs union seeking to increase a bound tariff. The obligations of contracting parties in regard to measures taken by regional or local governments or authorities within their territories are also clarified.



Understanding on the Interpretation of Article XXV — Waivers. Agreement of new procedures for the granting of waivers from GATT disciplines, to specify termination dates for any waivers to be granted in the future, and to fix expiry dates for existing waivers. The main provisions concerning the granting of waivers are, however, contained in the Agreement on the WTO.



Understanding on the Interpretation of Article XXVIII — Modification of GATT Schedules. Agreement on new procedures for the negotiation of compensation when tariff bindings are modified or withdrawn, including the creation of a new negotiating right for the country for which the product in question accounts for the highest proportion of its exports. This is intended to increase the ability of smaller and developing countries to participate in negotiations.



Understanding on the Interpretation of Article XXXV — Non-application of the General Agreement. Agreement to allow a contracting party or a newly acceding country to invoke GATT’s non-application provisions vis-à-vis the other party after having entered into tariff negotiations with each other. The WTO Agreement foresees that any invocation of the non-application provisions under that Agreement must extend to all the multilateral agreements.