World Trade Organization (WTO)

The WTO was established in 1995, replacing the General Agreement on Tariffs and Trade, which had governed international trade since 1948. It is based in Geneva and has 166 members, covering the large majority of world trade.

The WTO’s agreements cover trade in goods, services and intellectual property. Key principles include non-discrimination, where members should not discriminate between trading partners or between foreign and domestic products; lowering trade barriers through negotiation; and predictability, through binding commitments on tariffs.

The WTO’s dispute settlement system allows members to bring complaints when they believe others have broken trade rules. Its Appellate Body, which heard appeals, stopped functioning in 2019 because the United States blocked the appointment of new members, weakening the system.

For example, if one country believes another is unfairly subsidising its exports, it can bring a case at the WTO, and if successful, may be authorised to impose retaliatory tariffs.

Decisions at the WTO are generally made by consensus, which can make reaching new agreements slow. Rising trade tensions and tariffs have challenged its role in recent years.