WTO: Overview of the law and policy – Part 2

Members are not allowed to engage in unilateral conduct towards settlement of trade disputes, but multilaterally, and this is regulated by the Understanding on Rules and Procedures Governing the Settlement of Disputes, popularly referred to as ‘Disputes Settlement Understanding, (DSU)” contained in Annex 2 of the WTO Agreement. The DSU provides for various means of dispute settlement which include amicable means of consultation or negotiation, good offices, conciliation and mediation, arbitration, or through adjudication by Panels and the Appellate Body.

The dispute settlement system is compulsory in nature under DSU Rules, therefore members disputes are settled internally under the exclusive jurisdiction of the WTO. This settlement system is a central element which provides security and predictability to the multilateral trading system. Prompt settlement of these disputes is essential to the effective functioning of the WTO and the maintenance of a proper balance between the rights and obligation of members.

Sometimes, these covered agreements provide for a few special and additional rules and procedures to deal with peculiarities arising from a specific covered agreement, different from the DSU procedures. Nonetheless, they combine with the generally applicable rules and procedures of the DSU to form a comprehensive, integrated dispute settlement system for the WTO covered or multilateral Agreement.

The above settlement system is not wholly applicable to the plurilateral trade agreements. While disputes under the Agreement on Trade in Civil Aircraft cannot be brought to the WTO dispute settlement system for resolution, disputes under the Agreement on Government Procurement are known to have been brought under the WTO dispute settlement system for resolution.

The Functions of WTO
The functions of WTO are specific, but can be broken down into the following:

1.To facilitate the implementation, administration and operation of the WTO Agreement and its Annexes – the multilateral and plurilateral trade agreements.

2.To provide a permanent forum to negotiate new agreements so as to expand trade in goods and services beyond those already covered by the WTO Agreement.

3.To administer the dispute settlement system promptly and maintain a proper balance between the rights and obligations of members as provided for in the WTO agreements

4.To administer the trade policy review mechanism under which individual member’s trade policies and practices are evaluated and periodically reviewed for their impact on the functioning of the multilateral trading system, and contribute to adherence by all members to rules, disciplines and commitments which they made under the WTO agreements.

5. To co-operate with other international organizations like the International Monitory Fund “IMF” and the International Bank for Reconstruction and Development, “the World Bank” to achieve greater coherence in global economic policy-making, because of their natural linkages in these special areas of financial, monetary and trade aspects which constitute the global economic policy.

6. To provide technical assistance to developing countries to enable them exercise their rights and obligations under the WTO agreement so as to reap the benefits of their membership. (as most developing countries need to have more expertise and resources in the area of trade law to enable them participate fully and effectively in trade negotiations of the WTO.

The Structure of WTO
The WTO has well-structured and diverse organs in place to achieve the above functions. The structure comprises the Ministerial Conference, the General Council which also doubles as the Dispute Settlement and the Trade Policy Review Bodies, the Specialized Councils, Committees and Working Groups and also the WTO Secretariat.

The Ministerial Conference (MC) is the highest governing body, usually consisting of Ministers of Trade of all member countries who are all equally represented, regardless of the size of economy or share of global trade of members. This organ takes decisions on all matters of the multilateral aspects of trade agreements, adopts authoritative interpretations of the WTO Agreement, appoints the Director General of the WTO, and delegates some of its powers/functions to the General Council. They can be thought of as the legislative branch of the WTO.  They meet at least once is every two years.  The 12th Ministerial Conference of WTO is slated for June 2021 in Kazakhstan.

The General Council (GC) which is subordinate to the Ministerial Conference, is saddled with the day-to-day work of the WTO, in addition to the functions delegated to it by the MC, which it reports to.  The GC is made up of ambassador-level diplomats of all member countries. In parallel, it carries out the functions of both dispute settlement and trade policy review of its members when it convenes as the Dispute Settlement Body and Trade Policy Review Body respectively.  In other words, the members of the GC are the same in these two other bodies, but perform distinct functions accordingly.

There is also the Specialized Councils of Trade in Goods, Trade in Services and Trade-Related Aspects of Intellectual Property (TRIPS).  They all report to the General Council. The Ministerial Conference has powers to establish Working Committees, and pursuant to this, the Committees of Trade and Development, Trade and Environment, Balance of Payments, Budget, Finance and Administration, and also Trade Negotiation were established accordingly.

There are also other working groups that have been established.

The WTO Secretariat is a very important organ of the WTO. Among the duties of the Secretariat are the provision of technical and professional support for the various WTO bodies; provision of technical assistance to developing countries, and monitoring and analyzing developments in world trade. The Secretariat can be rightly described as the engine room of WTO, as it is the administrative hub or centre for most of the WTO activities and the organ responsible for providing communication strategies across government and national departments.

The Secretariat which is based in Geneva and made up of over 600 international staff, is headed by a Director-General (DG). The DG and the staff of the Secretariat are independent and impartial international officials.  They shall not seek or accept instructions from any government or other authority external to WTO. WTO members are obligated to respect the international character and responsibilities of the DG and the Secretariat staff, and not seek to influence them in the discharge of their duties.

The WTO Secretariat is organized into Divisions, each with a functional role, for example, the Rules division and the Market Access division. Each division is headed by a Director who reports to either the Deputy DG or directly to the DG.

The Role of the Director-General of the WTO
It is trite to understand the role of the Director-General (DG) of the WTO Secretariat. The DG, who is the head of the WTO and the head of the Secretariat, is appointed by the Ministerial Conference for a renewable 4-year term. The DG appoints the Deputy DG working with her and some other political appointees, in consultation with WTO members, to form the senior management of the WTO Secretariat.  The DG also appoints the staff of the secretariat and determines their duties and conditions of service in accordance with the Staff Regulations adopted by the MC.

As stated earlier, unlike other international organisations such as the International Monetary Fund (IMF), World Bank or the Security Council, the WTO does not have an executive body or organ, or a core group of WTO members to facilitate the process of deliberation and decision-making on behalf of the entire membership of the Organization.

However, the office of the DG is strategic to the proper functioning of the Organization and its smooth operation.

The DG is the accounting officer of the WTO and as the Manager also, is responsible for supervising and directing the administrative operations of the Organization. With all these enormous responsibilities, the DG is rightly referred to as the Chief Executive Officer of the WTO.

Although the DG is not expected to act as an initiator of proposals for actions or reforms, nor force consensus, yet, the DG facilitates the Organization for cohesion, and brokers the decision-making processes within the WTO, and makes important input or contributions to the building of consensus amongst members on a specific decision or agreement.

Additionally, the DG has no autonomous decision-making power in terms of matters of policy and decisions of the WTO, nor unplug blockages when members’ positions are intractable, because in WTO member governments negotiate directly with each other, and not with the DG.  In this regard, the role of the DG is merely advisory.

It is also not uncommon for members to elect the DG in an ex officio capacity to Chair a committee, like the Trade Negotiation Committee (TNC), the body overseeing the Doha Development Round Negotiations.

In this regard, the DG plays the role of a facilitator and a mediator to bring all members on board. Similarly, the DG can also be appointed in an ex officio capacity by the parties concerned, to mediate in a trade dispute between them towards an amicable settlement, using the means of good offices, mediation and conciliation.

Other roles of the DG include defending the objectives of the Organisation, particularly the integration of the developing and least developed countries into the global trading system to enable these enjoy the benefits therefrom, also helping them to prepare for trade negotiation through technical assistance programmes.

The DG attends the Ministerial Conferences, but does not express views publicly.  The DG also attends the General Council meetings and where necessary, may hold a joint press conference with the Chairperson of the General Council after the meeting. The DG also plays an important role in contacting national or regional parliamentarians through regular visits and various seminars or briefings on WTO-related matters.  In addition, through personal initiative, the DG is known to have established informal advisory bodies to provide a platform for dialogue on issues relating to WTO, especially on civil society issues and global business organizations from developed and developing countries, all aimed at facilitating mutual understanding.

The DG is an international bureaucrat. The newly appointed DG, Dr. Ngozi Okonjo-Iweala, who assumed office on 1st March 2021, is the first female ever to be so appointed, and also the first African, first from sub-Saharan West Africa, proudly Nigerian, and the 7th DG of WTO since its inception in 1995.

Conclusion

Today, the WTO boasts of 164 members, majority of which are developing countries, including Nigeria, which became a member since 1995. WTO members control 98% of the global trade, with 85% of United Nations current members, while more countries are currently negotiating to join the WTO.  Without doubt therefore, it is correct to say that the WTO is the only international organization that not only regulates global trade with rules between countries, but is also the central body that facilitates global trade by providing a platform for negotiating multilateral trade agreements amongst member countries and resolves  trade disputes resulting therefrom.  It is also intergovernmental as its activities are between the government of member countries and not with individuals, while working with other international organizations to liberalize trade and grow the world economy for the benefit of its members.

Concluded

Barrister Udoh, PhD, studied WTO Law at the University of Edinburgh, United Kingdom.