What is the WTO and what does it do?
How are decisions made in the WTO?
What is the MFN principle (most-favoured-nation principle)
What is meant by the principle of 'national treatment'?
Why is the WTO important for Switzerland?
Does the WTO only benefit larger countries?
What is the difference between multilateral and plurilateral agreements?
- The WTO is a forum in which all members can discuss trade issues on an equal footing.
- Within the framework of the WTO, members administer international trade agreements. They are supported in this by the WTO Secretariat.
- The WTO is also a forum for renegotiating existing agreements and adding new agreements on the global rules of trade.
- Thanks to the WTO dispute settlement procedure, WTO rules can be efficiently enforced for all members.
- In the WTO, members review each other's trade policies.
- In principle, decisions in the WTO are taken by consensus.
- In theory, WTO rules provides for decision-making by voting in certain cases. In practice, however, voting has never actually been used
- The 'most-favoured-nation' (MFN) principle means that all WTO members must be treated equally: if a WTO member grants trade facilitation to another state (WTO member or a third country), it must then grant it to all WTO members. (Important exceptions: free trade agreements and customs unions that meet the requirements of Art. XXIV GATT or Art. V GATS as well as tariff preferences for developing countries.)
- In addition to the MFN principle, the principle of national treatment is part of the guiding principle of non-discrimination within the WTO. The principle of national treatment means not discriminating between similar domestic and foreign goods. For example, each WTO member is required to apply the same rules to an imported product as to a similar product produced domestically.
- The WTO with its 164 member states forms the foundation of Swiss foreign economic policy.
- Every second Swiss franc is earned abroad, meaning Switzerland is highly integrated into the global economy.
- However, Switzerland only has a share of not quite 2% of world trade. That is why Switzerland has a vital interest in reliable international rules of trade.
- Thanks to the WTO, the Swiss export industry can export to the territories of 164 WTO members under clear conditions and internationally agreed and enforceable rules and thus with a high degree of legal certainty.
- For Switzerland as a medium-sized economic power, multilaterally agreed rules offer the best protection. These rules are negotiated in the WTO.
- The WTO rules also form the basis of Switzerland's free trade agreements. As a matter of principle, Switzerland only concludes free trade agreements with partner countries that are also WTO members.
- WTO rules were also largely adhered to during the recent financial and economic crisis. Furthermore, the WTO has created transparency regarding protectionist measures, thus largely managing to prevent protectionism.
- No. On the contrary, the WTO mainly benefits the smaller and medium-sized economies which, unlike the big trading powers, have less political and economic clout to negotiate market access concessions in third countries bilaterally.
- In addition, the WTO gives every member the means to assert its rights in a dispute settlement procedure. In fact, many panel rulings have been to the disadvantage of the USA and the EU. For example, in 2005, the Caribbean islands of Antigua and Barbuda won a panel ruling against the USA concerning the licensing of foreign gambling companies in the USA.
- A WTO agreement is referred to as multilateral when all WTO members are party to the agreement. A plurilateral agreement is one between a subset of WTO members.
- A distinction is made between plurilateral agreements where the benefits also accrue to non-members on the basis of the most-favoured-nation principle (e.g. the Information Technology Agreement) and those where this principle does not apply (e.g. the Government Procurement Agreement).
Last modification 15.03.2023