EU and the World Trade Organization

What is the WTO?

The World Trade Organization (WTO) is the global body responsible for international trade rules at multilateral level. The overall objective of the WTO is to expand trade as a means of raising living standards, creating jobs and improving people's lives.

Founded in 1995, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT), which emerged from the post-Second World War negotiations on international economic cooperation.

Today, WTO agreements cover multiple areas of international trade, including:

trade in goods
trade in services
protection of intellectual property

WTO in brief (World Trade Organization)

WTO's main functions

The WTO carries out three main functions:

Acting as a forum for trade negotiations and setting rules for international trade

The WTO serves as a forum where members negotiate trade rules.

Settling trade disputes

When they believe WTO rules have been violated, members use the multilateral system to settle disputes instead of taking unilateral action.

Monitoring members' trade policies

The WTO regularly reviews national trade policies to improve transparency and assess their impact.

All WTO agreements are based on a common set of principles that form the foundation of the multilateral trading system:

conducting trade without discrimination (by following the principles of most-favoured-nation treatment and national treatment )
gradually lowering trade barriers, through negotiations
ensuring predictability through bindings and transparency
promoting fair competition
encouraging development and economic reform

The WTO is the EU's main focus in its multilateral trade policy, and WTO rules provide the basis for the EU's trade relationships. Other EU trade arrangements, such as free trade agreements, build on WTO rules.

Trading principles

The EU in the WTO

The EU has been a WTO member since 1 January 1995. The 27 EU states are also members in their own right. As a customs union with a common commercial policy and common external tariff, the EU acts as a single voice within the WTO, represented by the European Commission.

The Council plays a key role in defining the EU's policy in the WTO. Its main role in relation to the WTO is to:

discuss and coordinate EU trade positions, including through regular consultations with the Commission in the Trade Policy Committee (aka the Article 207(3) TFEU Committee)
authorise the Commission to negotiate, sign and (after the European Parliament has given its consent) conclude any legally binding WTO agreements and take any formal positions in the relevant WTO bodies
adopt EU positions to be taken within the WTO
approve the outcomes of the WTO ministerial conferences, the highest decision-making body within the WTO, which normally meets every two years

EU objectives

The EU's objectives as part of the WTO are to:

sustain and improve rules-based trade through a reformed and strengthened WTO
keep the world's trading system open, fair, predictable and based on common rules
modernise the WTO and make it fit for purpose so that EU trade and investment can continue to benefit from it
ensure that other members also play by the rules, including by restoring a fully functioning dispute settlement system
support the integration of developing countries into the global economy
reinforce the WTO's support for sustainable trade policies worldwide

WTO modernisation

The EU has played a central role in developing the international trading system since World War II. Currently, the EU is exploring the possibility of modernising the WTO to make the organisation fit for purpose in the face of growing challenges to rules-based world trade.