The WTO, established in 1995 as successor to GATT, serves as the principal multilateral framework regulating international trade. Its consensus-based governance and binding dispute settlement distinguish it from most international bodies.
GATT, operational since 1948, was a provisional agreement lacking a permanent institutional structure. The Uruguay Round negotiations culminated in the Marrakesh Agreement, formally establishing the WTO in January 1995 with a permanent secretariat, broader mandate, and legally binding commitments covering goods, services, and intellectual property.
WTO decisions are generally reached by consensus, meaning no member formally objects to a proposed decision. This structure gives every member, including developing nations, a formal voice, but it also renders negotiations slow and susceptible to gridlock, as evidenced by the prolonged stalling of the Doha Development Round.
The Dispute Settlement Body adjudicates trade disputes through panels and an Appellate Body. Crucially, the DSB does not directly impose sanctions; rather, it authorises the aggrieved member to suspend equivalent trade concessions against the violating party, making compliance ultimately state-driven rather than centrally enforced.
The Appellate Body has been non-functional since 2019 due to the blocking of new appointments, undermining the two-tier dispute system. Simultaneously, rising unilateralism and plurilateral agreements outside WTO frameworks challenge its centrality in global trade governance.
Strengthening the WTO requires restoring a functional appellate mechanism and reforming consensus rules to accommodate diverse development interests—balancing the sovereign equality of members with the institutional agility that effective global trade governance demands.
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