What is WTO? In what respects it is an improvement over its predecessor the GATT.

The World Trade Organization (WTO) is an international organization established in 1995, succeeding the General Agreement on Tariffs and Trade (GATT) as the principal global institution governing international trade. The WTO serves as a forum for negotiating trade agreements, resolving disputes between member countries, and overseeing the implementation of international trade rules. It encompasses a broader scope of trade issues and has stronger enforcement mechanisms compared to its predecessor, the GATT. Here's how the WTO represents an improvement over the GATT in several key respects:

1. Broader Scope: While the GATT primarily focused on the reduction of tariffs and the elimination of trade barriers in goods, the WTO's mandate extends to various aspects of trade in goods, services, and intellectual property rights. The WTO agreements cover a wide range of trade-related issues, including agriculture, textiles, services, investment, competition policy, and trade facilitation, providing a more comprehensive framework for regulating international trade in the modern global economy.

2. Binding Dispute Settlement Mechanism: One of the most significant improvements of the WTO over the GATT is its binding dispute settlement mechanism. Under the GATT, dispute resolution relied on voluntary negotiations and lacked enforcement mechanisms, leading to prolonged and ineffective dispute resolution processes. In contrast, the WTO's Dispute Settlement Understanding (DSU) provides a structured and rule-based mechanism for resolving trade disputes, with clear timelines, legal procedures, and enforceable rulings. This enhances the credibility and effectiveness of the multilateral trading system by ensuring timely resolution of disputes and compliance with WTO rules.

3. Improved Transparency and Monitoring: The WTO promotes transparency and monitoring of member countries' trade policies through regular trade policy reviews and notifications of trade-related measures. These mechanisms enhance predictability, accountability, and peer pressure among member countries, helping to prevent the adoption of protectionist measures and trade distortions. The GATT lacked comparable mechanisms for monitoring and reviewing trade policies, making it difficult to assess compliance with trade agreements and identify areas for improvement.

4. Inclusion of Services and Intellectual Property: Unlike the GATT, which primarily focused on trade in goods, the WTO addresses trade in services and intellectual property rights through the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). These agreements reflect the growing importance of services and knowledge-based industries in the global economy and provide a framework for regulating trade in services and protecting intellectual property rights on a multilateral basis.

5. Enhanced Institutional Framework: The establishment of the WTO as a permanent institution with a dedicated Secretariat represents a significant institutional improvement over the GATT, which operated as a provisional arrangement without a permanent administrative structure. The WTO Secretariat provides administrative support, technical assistance, and expertise to member countries, facilitating the effective functioning of the organization and the implementation of WTO agreements.

In summary, the WTO represents a substantial improvement over its predecessor, the GATT, by offering a broader scope of trade coverage, a binding dispute settlement mechanism, enhanced transparency and monitoring, inclusion of services and intellectual property, and a more robust institutional framework. These improvements have contributed to the stability, predictability, and fairness of the multilateral trading system, fostering economic growth, development, and prosperity on a global scale.