Marrakesh Agreement: Cornerstone of Global Trade Governance

Understanding the Marrakesh Agreement: The Foundation of the World Trade Organization

The Marrakesh Agreement, signed in April 1994 in Marrakech, Morocco, established the World Trade Organization (WTO), marking a significant evolution in global trade governance. This agreement was the culmination of the Uruguay Round of trade negotiations (1986-1994), which aimed to extend the scope of trade liberalization to sectors not previously covered by General Agreement on Tariffs and Trade (GATT) rules, such as services and intellectual property.

Core Objectives and Structure

• Trade Liberalization: The agreement sought to reduce tariffs and other barriers to trade, aiming to foster a more open and fair global trading system.
• Dispute Resolution: It introduced a more structured process for resolving trade disputes between countries, with the establishment of the Dispute Settlement Body (DSB).
• Monitoring and Transparency: The WTO was tasked with monitoring national trade policies, ensuring transparency, and providing a forum for trade negotiations.

Key Components

• Trade in Goods: Through the General Agreement on Tariffs and Trade (GATT), the Marrakesh Agreement aimed to liberalize trade in goods by reducing tariffs and eliminating quantitative restrictions.
• Trade in Services: The General Agreement on Trade in Services (GATS) was introduced to extend the multilateral trading system to the service sector, addressing issues like access to foreign markets and national treatment.
• Intellectual Property: The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) sought to establish common standards for protecting and enforcing intellectual property rights globally.
• Agriculture and Textiles: Specific agreements were made to address the unique challenges and protections in agriculture and textiles, sectors that had been subject to extensive trade restrictions.

Challenges and Criticisms

Despite its ambitious goals, the WTO has faced criticism and challenges. Accusations of promoting unfair trade practices that benefit wealthier nations have emerged, alongside the difficulty in concluding new global trade agreements due to the diverse interests of its members. Recent issues with its dispute settlement mechanism have also surfaced. The organization’s ability to adapt and address contemporary trade issues continues to be tested in an era of rising protectionism and geopolitical tensions.

By laying the foundation for a rules-based international trading system, the Marrakesh Agreement aimed to promote economic growth and development worldwide. However, the evolving global trade landscape underscores the need for continuous reform and adaptation of the WTO to meet the challenges of the 21st century.

Frequently Asked Questions (FAQs)

Q1. What is the Marrakesh Agreement?
Answer: The Marrakesh Agreement is the treaty that established the World Trade Organization (WTO) in 1994, aiming to create a more open and regulated global trade system.

Q2. What are the main objectives of the WTO?
Answer: The WTO aims to facilitate trade liberalization, resolve trade disputes, and monitor national trade policies to ensure transparency and fairness in international trade.

Q3. What is the role of the Dispute Settlement Body?
Answer: The Dispute Settlement Body (DSB) is responsible for resolving trade disputes between member countries, ensuring compliance with WTO agreements.

Q4. How does the Marrakesh Agreement address intellectual property?
Answer: The Marrakesh Agreement includes the TRIPS agreement, which sets common standards for the protection and enforcement of intellectual property rights among member countries.

Q5. What challenges does the WTO face today?
Answer: The WTO faces challenges such as accusations of bias towards wealthier nations, difficulties in reaching new trade agreements, and issues with its dispute resolution processes.

UPSC Practice MCQs

Question 1: What was the primary purpose of the Marrakesh Agreement?
A) Establishing the International Monetary Fund
B) Creating the World Trade Organization
C) Regulating international monetary policies
D) Enhancing bilateral trade agreements
Correct Answer: B

Question 2: Which agreement focuses on trade in services?
A) TRIPS
B) GATT
C) GATS
D) NAFTA
Correct Answer: C

Question 3: What is one criticism of the WTO?
A) It promotes global trade equality
B) It benefits wealthier nations disproportionately
C) It has too many member countries
D) It simplifies trade agreements
Correct Answer: B

Question 4: Which of the following is a key component of the Marrakesh Agreement?
A) Environmental regulations
B) Trade in textiles
C) National healthcare policies
D) Global warming initiatives
Correct Answer: B

Question 5: What mechanism does the WTO use to resolve disputes?
A) Mediation
B) Arbitration
C) Dispute Settlement Body
D) Trade panels
Correct Answer: C