A New Multilateral Organization
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Setting the Ground RulesThus it is the WTO which now provides the legal ground-rules for
international commerce. It has extended the reach of multilateral trade rules
far beyond merchandise trade to trade in services and trade related aspects of
intellectual property rights. The rules also deal with numerous other areas
such as dumping, customs procedures, technical barriers to trade and sanitary
and phytosanitary measures. The existing rules have themselves been greatly
strengthened and the effectiveness of the dispute settlement system has
increased greatly. They are contained in multilateral trade agreements which are
essentially contracts binding governments to operate their trade policies in
accordance with what was agreed in the multilateral negotiations.
Why multilateral?Why do we describe these agreements as multilateral agreements as opposed
to global or international agreements? The answer lies in the fact that while
almost 150 countries of the world are members of the WTO, some are not. For
this reason, we refer to the agreements that fall under the umbrella of the WTO
as multilateral trade agreements rather than international or global
agreements. These of course are very different from regional trade agreements -
such as the European Union, NAFTA, or the ASEAN Free Trade Area. Regional
trade agreements have a narrower participation in terms of parties to the
agreements. The WTO system is commonly referred to as the open and liberal
rules-based multilateral trading system. It is open and liberal because of
the process of progressive removal of trade restrictions. It is rules-based as
international trade is conducted according to agreed rules.
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