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World Trade Organization (WTO) / Technical Barriers to Trade (TBT) Agreement

What is the World Trade Organization?

Simply put, the World Trade Organization (WTO) deals with the rules of trade between nations at a global level.

It is a forum for governments to negotiate trade agreements; a place for them to settle trade disputes. It operates a system of trade rules.

Essentially, the WTO is a place where member governments go to try and sort out the trade problems they face with each other. The WTO was born out of negotiations.

At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground-rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits.

The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalisation and the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the secretariat on countries’ trade policies.

Technical regulations and standards

Technical regulations and standards are important, but they vary from country to country. Having too many different standards makes life difficult for producers and exporters. If standards are set arbitrarily, they could be used as an excuse for protectionism. Standards can become obstacles to trade.

The Technical Barriers to Trade (TBT) Agreement tries to ensure that regulations, standards, testing and certification procedures do not create unnecessary obstacles.

The agreement recognises countries’ rights to adopt the standards they consider appropriate – for example, for human, animal or plant life or health, for the protection of the environment or to meet other consumer interests. To prevent too much diversity, the agreement encourages countries to use international standards where these are appropriate, but does not require them to change their levels of protection as a result.

The agreement sets out a code of good practice for the preparation, adoption and application of standards by central government bodies.

It discourages any methods that would give domestically-produced goods an unfair advantage. It also encourages countries to recognise each other’s testing procedures. Manufacturers and exporters need to know what the latest standards are in their markets. To help ensure that this information is made available, all WTO member governments are required to establish national enquiry points.

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