Why Should You Care About the WTO?

By Toby B. Gooley -- Logistics Management, 3/1/2000

The World Trade Organization (WTO) is a complex association of 135 member countries. According to the organization, its overriding objective is to "help trade flow smoothly, freely, fairly, and predictably."

The WTO attempts to achieve its goal through the following activities:

- Administering trade agreements;

- Acting as a forum for trade negotiations;

- Settling trade disputes;

- Reviewing national trade policies;

- Assisting developing countries with trade-policy issues through technical assistance and training programs; and

- Cooperating with other international organizations.

The WTO's decisions on process harmonization and trade policies can affect day-to-day import/export operations. What goes on at the WTO, therefore, is important to anyone involved in international logistics. Here's a brief overview of some of the areas the WTO is involved in. For more details, consult the WTO's Web site (www.wto.org).

Rules of origin--The WTO, with the technical assistance of the World Customs Organization, is developing harmonized definitions and standard rules of origin that will be applied by all member countries.

Trade facilitation--Meetings have been held on such issues as excessive documentation, harmonizing import/export procedures, and electronic facilitation of trade processes. Members disagree on whether the WTO should issue rules regarding customs procedures or if private industry and individual customs administrations are making sufficient progress without WTO intervention.

Information technology--Signatories to the WTO's Ministerial Declaration on Trade in Information Technology agree to reduce in stages and eventually eliminate tariffs on a wide range of information-technology products.

Preshipment inspection--A WTO agreement sets dispute-resolution guidelines and limits the procedural discretion of private organizations that classify, value, and approve cargo before shipment on behalf of foreign customs authorities.

Textiles and clothing--Members have agreed to eliminate the current quota system that regulates trade in textiles between developing and developed countries by 2005. It will be replaced by a new system that follows GATT rules; the WTO is administering transitional rules until then.

Maritime, air, and land transportation--Informational papers on the economic, trade, and regulatory characteristics of road and rail transport have been written in preparation for an eventual round of negotiations. Revived negotiations regarding maritime transportation, including discussions about harmonizing access to and use of port facilities, auxiliary services, and ocean transportation, are scheduled for later this year.