World Trade Organization (WTO)
The Marrakesh Agreement Establishing the World Trade Organization (WTO) or the WTO Agreement entered into force and established the WTO on 01 January 1995, but its multilateral trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT), which was the result of the Bretton Woods Conference convened by the United Nations (UN) following the 2nd World War, had provided the rules for the system. Over the years, the GATT evolved through several rounds of multilateral trade negotiations.
The last and largest GATT round was the Uruguay Round (UR) which lasted from 1986 to 1994 and led to the WTO’s creation. Whereas the GATT had mainly dealt with trade in goods, the WTO and its agreements now additionally cover trade in services, and intellectual property rights or what may be looked into on traded inventions, creations, and designs. It has also a much more strengthened set of dispute settlement procedures, currently proving to be the crown jewel of the multilateral trading system (MTS).
The current round, the Doha Development Agenda (DDA) or the Doha Round with over 20 negotiating topics, is much more complex than its predecessors. The Round takes its name from Doha, Qatar, the place where it was launched on 14 November 2001. The DDA or Doha Round is the 9th Round of international trade negotiations under the auspices of the MTS dating back to the old GATT. It is, however, the 1st Round under the WTO, the organization and agreement that replaced the GATT in 1995 following the completion of the UR.
The Doha Round is stalled but work continues in Geneva and Members remain engaged. The commitment by Members to the preservation of the MTS with the development context central to its continuing relevance also remains strong.
The WTO is both a legal and institutional framework. It is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. It may also be looked at as a multilateral agreement and an organization. It implements and operates the UR legal instruments and acts as a forum for dispute settlement, trade policy review, and cooperation with international economic institutions (i.e. both the World Bank and the IMF) on international economic issues. The goal of the WTO is to ensure that trade flows as smoothly and predictably as possible.
The Ministerial Conference (MC) is the highest decision-making body of the WTO and comprises of trade ministers that meet once every two years to decide on the operation of the WTO Agreement. The General Council (GC), based in Geneva, Switzerland takes care of the day-to-day activities and is comprised of the Members’ ambassadors (or representatives) to the WTO. The WTO has several bodies taking care of the implementation of covered agreements. The most prominent of which would be the Council for Trade in Goods, Council for Trade in Services, Council for Trade-Related Intellectual Property Rights (TRIPS), GC as Dispute Settlement Body (DSB) and GC as Trade Policy Review Body, and the individual Committees, Working Parties and Working Groups.
The WTO decides generally by consensus. However, three-fourths majority is required for the interpretation of any agreements; two-thirds majority for the adoption of any amendments to any provisions; three-fourths majority for temporary waivers of WTO obligations for any country; and two-thirds majority to admit new Members.
The WTO is headed by a Director-General (DG) and assisted by four (4) Deputy DGs approximating geographical representation. There is a Secretariat based in Geneva of varying nationalities from WTO Members.
View further information on the WTO here.
The Philippines in the WTO
The Philippines has been a WTO Member since 1 January 1995 and a Member of the GATT since 27 December 1979.
The Philippines is a signatory to the following subsequent WTO covered agreements:
I. Multilateral Agreements
- 2005 Protocol Amending the TRIPS Agreement
- WTO Members on 6 December 2005 approved changes to the WTO’s intellectual property (TRIPS) agreement in order to make permanent a decision on patents and public health originally adopted in 2003. This was formally built into the TRIPS Agreement after acceptance of the Protocol amending the TRIPS Agreement by two thirds of the WTO’s Members. The amendment took effect on 23 January 2017 and replaced the 2003 waiver for Members who have accepted the amendment. The Philippines accepted the Protocol on 30 March 2007.
- WTO Members on 6 December 2005 approved changes to the WTO’s intellectual property (TRIPS) agreement in order to make permanent a decision on patents and public health originally adopted in 2003. This was formally built into the TRIPS Agreement after acceptance of the Protocol amending the TRIPS Agreement by two thirds of the WTO’s Members. The amendment took effect on 23 January 2017 and replaced the 2003 waiver for Members who have accepted the amendment. The Philippines accepted the Protocol on 30 March 2007.
- 2014 Protocol concerning the Trade Facilitation Agreement (TFA)
- The negotiations of the WTO TFA were concluded at the 9th WTO Ministerial Conference held on 3-7 December 2013 in Bali, Indonesia. On 27 November 2014, the GC adopted the Protocol of Amendment to insert the WTO Trade Facilitation Agreement (TFA) into Annex 1A of the WTO Agreement (“the Protocol”) and opened it for acceptance by Members.
The TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues, as well as provisions for technical assistance and capacity building in this area.
The Agreement allows developing and least-developed countries (DCs/LDCs) to set their own timetables for implementing the TFA depending on their capacities to do so. A Trade Facilitation Agreement Facility (TFAF) was created to help ensure DCs/LDCs receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all Members.
The Agreement entered into force on 22 February 2017 when the WTO obtained two-thirds acceptance from its 164 Members. To date, 156 WTO Members have accepted the Protocol of Amendment to insert the TFA into Annex 1A of the WTO Agreement.
The Philippines was the 95th WTO member to accept the TFA when it deposited its Instrument of Acceptance to the WTO on 27 October 2016. On 30 January 2018, the Philippines submitted to the WTO Secretariat its notification on the TF commitments under Categories A, B and C.
- The negotiations of the WTO TFA were concluded at the 9th WTO Ministerial Conference held on 3-7 December 2013 in Bali, Indonesia. On 27 November 2014, the GC adopted the Protocol of Amendment to insert the WTO Trade Facilitation Agreement (TFA) into Annex 1A of the WTO Agreement (“the Protocol”) and opened it for acceptance by Members.
- 2022 WTO Agreement on Fisheries Subsidies (FSA)
- The 12th WTO Ministerial Conference (MC12) in June 2022 concluded the Agreement on Fisheries Subsidies (FSA). The Agreement represents a historic achievement for the WTO as the first Sustainable Development Goal (SDG) target to be fully met (i.e., SDG 14.6) through a multilateral agreement, the first WTO binding agreement to focus on the environment and ocean sustainability, and only the second agreement next to the TFA reached at the WTO since its inception in 1995.
The Agreement prohibits support for illegal, unreported and unregulated (IUU) fishing. It also bans support for fishing in overfished stocks and ends subsidies for fishing on unregulated high seas. The FSA contains provisions on notification and transparency, requiring Members to provide information relevant to the implementation of the Agreement. The Agreement also recognizes the needs of developing LDC members and provides a ‘peace clause’ under which dispute settlement will not apply for two (2) years from the date of entry into force of the Agreement.
The Philippines deposited its instrument of acceptance of the FSA on 27 February 2024 at the 13th WTO Ministerial Conference (MC13) in Abu Dhabi, United Arab Emirates. The Agreement (FSA 1) will enter into force once 2/3 of the WTO Members (or 110 WTO Members) have ratified the Agreement.
The second wave of fisheries subsidies negotiations is ongoing in Geneva (FSA 2). Negotiations focus on the outstanding issues as stipulated in paragraph 4 of the FSA 1 such as further disciplines on certain forms of subsidies that contribute to OCOF, including appropriate and effective special and differential (SDT) provisions.
- The 12th WTO Ministerial Conference (MC12) in June 2022 concluded the Agreement on Fisheries Subsidies (FSA). The Agreement represents a historic achievement for the WTO as the first Sustainable Development Goal (SDG) target to be fully met (i.e., SDG 14.6) through a multilateral agreement, the first WTO binding agreement to focus on the environment and ocean sustainability, and only the second agreement next to the TFA reached at the WTO since its inception in 1995.
II. Plurilateral Agreement
- Information Technology Agreement
- The Information Technology Agreement (ITA) was concluded by 29 participants at the Singapore Ministerial Conference in December 1996. Since then, the number of participants has grown to 82, representing about 97% of world trade in IT products. The participants are committed to completely eliminating tariffs on IT products covered by the Agreement. At the Nairobi Ministerial Conference in December 2015, over 50 members concluded the expansion of the Agreement, which now covers an additional 201 products valued at over $1.3 trillion per year.
The Philippines, as an active Member of the WTO, ensures that its stakeholders are consulted through the WTO National Advocacy and Consultations Programme. Furthermore, the country has been actively supporting an advocacy on Micro, Small and Medium-sized Enterprises (MSMEs) with the vision to enable MSMEs to be active players in the global market via continuing discussions on the role and importance of the MSMEs in the economic environment.
The Philippines is of the view that the WTO given its multilateral nature offers the widest possibility for stronger sets of alternatives to fully address trade issues while factoring in capacity constraints brought about by differences in the levels of economic development among its Members. Thus, the country, together with the other developing countries, is committed to the preservation of the DDA mandates and to eventually complete an ambitious and balanced agenda with the economic development of its Members being made central. This necessarily includes keeping the principle of the single undertaking intact.
- The Information Technology Agreement (ITA) was concluded by 29 participants at the Singapore Ministerial Conference in December 1996. Since then, the number of participants has grown to 82, representing about 97% of world trade in IT products. The participants are committed to completely eliminating tariffs on IT products covered by the Agreement. At the Nairobi Ministerial Conference in December 2015, over 50 members concluded the expansion of the Agreement, which now covers an additional 201 products valued at over $1.3 trillion per year.
- Investment Facilitation for Development Agreement
- The Philippines is among the 123 WTO Members, or three-fourths of the membership, that has adopted the Investment Facilitation for Development Agreement (IFDA) that was finalized and announced at the sidelines of the 13th WTO Ministerial Conference in Abu Dhabi, United Arab Emirates.
The IFD Agreement aims to facilitate the flow of foreign direct investments (FDIs) among participants, especially in developing countries like the Philippines as well as least-developed members, by addressing challenges related to bureaucracy and lack of transparency. The IFD Agreement explicitly excludes market access, investment protection, and Investor-State Dispute Settlement (ISDS). Government procurement and certain subsidies are also excluded from the scope of the Agreement.
The key pillars of the IFD Agreement are its Sections on transparency of investment measures, streamlining and speeding up investment-related authorizations procedures, enhancing international cooperation, information sharing, and the exchange of best practices, as well as on sustainable investment.
The IFD Agreement is the second investment-related deal in the WTO, following the 1995 Agreement on Trade-Related Investment Measures. The IFD is a plurilateral agreement, binding only on those members that accepted it, but is still open to all WTO Members that would like to adopt the agreement.
- The Philippines is among the 123 WTO Members, or three-fourths of the membership, that has adopted the Investment Facilitation for Development Agreement (IFDA) that was finalized and announced at the sidelines of the 13th WTO Ministerial Conference in Abu Dhabi, United Arab Emirates.
Important WTO Documents
Updates
The WTO’s 13th Ministerial Conference (MC13) took place from 26 February to 2 March 2024 in Abu Dhabi, United Arab Emirates. Ministers from across the world attended to review the functioning of the multilateral trading system and to take action on the future work of the WTO. The Conference was co-chaired by WTO Director General H.E. Ngozi Okonjo-Iweala and United Arab Emirates’ Minister of State for Foreign Trade H.E. Dr Thani bin Ahmed Al Zeyoudi.
During MC13, ministers took a number of decisions, approved the membership terms for Comoros and Timor-Leste, and agreed to continue negotiations in all areas where convergence was elusive at MC13, such as the second part of the Agreement on Fisheries Subsidies and agriculture. Other outcomes include the entry into force of new disciplines for services domestic regulation, the conclusion of the Agreement on Investment Facilitation for Development, and a series of successful side events.
View further information on the MC13 here.
