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The World Trade Organisation (WTO) is the international organisation of countries that deals with global rules of trade - it determines and oversees the multilateral trade rules that underpin New Zealand's trading relationships with the 152 other member countries.
The main function of the WTO is to ensure that international trade flows as smoothly, freely and predictably as possible, as long as there are no undesirable side-effects. It aims to raise standards of living and ensure full employment in countries that are members by enabling the expansion of trade in goods and services in a sustainable manner.
When making decisions, WTO members are guided by the fundamental principles that international trade should be:
New Zealand became a founding member of the GATT on 30 July 1948 and became a WTO member when it was created on 1 January 1995. We have a Permanent Mission in Geneva representing New Zealand on WTO issues.
New Zealand benefits from clear trade rules that are applicable to all. Without the multilateral forum of the WTO New Zealand would have to negotiate trade agreements with every country we wanted to trade with, resulting in different agreements with each country.
Our exporters would then have a huge and expensive task keeping up to date with any trading scheme changes each country makes. In the WTO, New Zealand is kept informed via trade policy reviews of each member country.
Without the WTO, New Zealand would be disadvantaged making deals with larger economies. With the weight of other member countries behind us, New Zealand can make more ambitious demands of larger countries. There is also an effective dispute settlement regime. WTO decisions are by consensus which means that all members have an equal say.
The WTO evolved from the trading system set up by the General Agreement on Tariffs and Trade (GATT). The GATT came into being in 1948 after World War II and was made up of 23 predominantly developed and European countries. The GATT architects believed 1930s protectionism had been a disaster for the world economy and that freer trade was essential.
The Uruguay Round negotiations from 1986 to 1994 led to a number of agreements, including a revision of the General Agreement on Tariffs and Trade (GATT) in 1994, and the General Agreement on Trade in Services (GATS) in 1995. These agreements are the basis of the rules-based WTO system which aims to increase economic growth and raise standards of living by making trade as free as possible and more predictable. The WTO, formed 1 January 1995, has a much broader scope than GATT which dealt with trade in goods. The WTO agreements also cover trade in services and intellectual property.
A new round of trade negotiations was launched in November 2001 during the WTO's Fourth Ministerial Conference in Doha, Qatar. In September 2003 negotiations suffered a setback at the Fifth Ministerial Conference in Cancun, Mexico, when ministers could not agree on a way forward. In July 2004 WTO members agreed to a package of frameworks that enabled negotiations to advance.
The Sixth Ministerial Conference was held in Hong Kong, 13-18 December 2005.
The WTO has four management tiers. The Ministerial Conference is the highest decision-making authority. The conference is held in various locations around the world at least once every two years, and is attended by government ministers responsible for international trade from each member and observer country.
Decisions about the WTO's daily work are made by its General Council, which is made up of senior representatives from each member and observer country. The General Council also meets as the Dispute Settlement Body and the Trade Policy Review Body, which respectively oversee trade dispute settlement procedures and examine each member's trade policies.
Councils - the Council for Trade in Goods (CTG), the Council for Trade in Services (CTS) and the Council for Trade-Related Aspects of Intellectual Property (TRIPS) report to the General Council on the WTO agreements dealing with their respective areas of trade.
Each of these councils has subsidiary bodies dealing with specific subjects. For example, the Council for Trade and Goods has committees and working groups reporting to it on agriculture, market access, subsidies and anti-dumping, among others. The Council for Trade in Services has committees and working groups on professional services, the General Agreement on Trade in Services (GATS) rules and GATS specific commitments.
All WTO members can participate in these subsidiary bodies and the councils they report to.
The General Council, councils for each broad area of trade and their subsidiary bodies meet at the WTO headquarters in Geneva, Switzerland, where its secretariat is also located.
With a staff of more than 600, the secretariat provides:
Surveillance of national trade policies is an important WTO activity and all WTO members are subject to trade policy reviews. The objectives of the WTO Trade Policy Review Mechanism (TPRM) are to contribute to improved adherence by all WTO members to WTO rules, disciplines and commitments, and hence to the smoother functioning of the multilateral trading system, by achieving greater transparency in and understanding of the trade practices and policies of members.
New Zealand’s trade and economic policies are reviewed every six years - the last review took place in May 2003. After a series of meetings with officials, academics, businesses and non-governmental organisations in 2002, the WTO Secretariat prepared a report on New Zealand's trade policy.
The New Zealand Government prepared a policy statement, and these two documents formed the basis for the meeting of the WTO Trade Policy Review Body on 12 and 14 May 2003. WTO members were able to put written questions to New Zealand about our trade policy prior to the meeting. These questions and written answers are collated together with any statements made at the meeting in an official Minute of the Meeting.
Negotiations with the WTO are undertaken by the Trade Negotiations Division of the Ministry of Foreign Affairs and Trade on behalf of the government. Input from businesses and individuals is welcomed.
