In 1947, during the first round of tariff negotiation in a conference on the proposed International Trade Organization (ITO) in Geneva, GATT an international organization was established. GATT comprised of 132 members states and it was created to reduces or eliminate tariffs and other barriers to world trade (Zeile, 1999). GATT advance through periodic rounds of multilateral negotiations on tariff cuts and non-tariff reductions. The initial negotiations were very successful and this resulted in reduction of tariffs. Postwar trade liberalization was immensely facilitated by these reductions, as a result the average trade growth increased to 8.1% per annum (Zeile, 1999). In 1979, during the Tokyo Round, the member states saw the need to tackle the increasing use of non-tariff barriers, especially by developed countries. This lead to the adoption of several codes that dealt with specific practices. The Member States during the Uruguay Round saw the need to widen the scope of GAAT and introduced the idea of a comprehensive international trade organization to coordinate international economic activities including those involving a large number of developing countries (Epstein, 1995).
The World Trade Organization (WTO) was created in1995 (Gallagher, 2005). The main objective of WTO as GATT's successor was to establish rules on trade policy that will facilitate in the expansion of international trade and also to raise the living standards of its member states. The established rules were to promote predictability, transparency, and non-discrimination in carrying out the trade policy. For WTO to achieve these objectives it had to:
Of the entire trade in the world, WTO accounts for approximately 95% (Gallagher, 2005). The ministerial conference is top decision making body of WTO and it convenes once in every two years. During the period before the ministerial conference convenes, the General Council takes the highest level of WTO decision-making body. In that body each member state is represented by either the heads of delegations or ambassadors. In addition, the General council also to review trade policies and settles trades disputes. Under the General council, there are the Trade Related Aspects of Intellectual Property Council, Service Council, and the goods Council. In addition, various specialized committees and working groups that contend with individual as well as significant areas like membership application and regional trade agreements, development, environment, trade and investments, trade and competition policy, and government transparency on procurements. If a state wishes to be a member of WTO, The admission decision is not made by the WTO itself but also includes the entire membership (Gallagher, 2005).