The history of trade relations, international trade or international cooperation can be traced back to the beginning of in its precursor which was the General Agreement on Tariffs and Trade (GATT), otherwise known as the treaty of Utrecht of 1713 (Jackson, 1992). Today, the World Trade Organisation truly represents the full meaning of its label and is a fundamental part of globalisation or trade liberalisation. It administers the trade agreements negotiated by its members from the day of GATT (Hoekman, 2002). It was intended to create an International Trade Organization after the Second World War. However, in 1948 negotiations on the charter of an organisation were concluded but this International Trade Organisation was not successful as the American Congress was expected to refuse to ratify the agreement (Hoekman, 2002).
The multilateral trading system began on 1 January 1947 when GATT was signed by 23 founding members – 12 industrial and 11developing countries (Williams, 2008). The following year, GATT provisionally entered into force and drafting of the International Trade Organisation charter called the Havana charter (Hoekman, & Kostecki, 1995). During the 1950s the decade brought about important issues, some related to the political era of the cold war. Early in the decade, China withdrew from GATT and the US administration abandoned its efforts to seek congressional timeline ratification of the International Trade Organisation (Hoekman, & Kostecki, 1995). In Torque, after a round of tariff negotiations, the inter-seasonal committee established to organise voting
on the issue concerning US trade measures to safeguard the balance of payment, and Germany as well accedes to GATT (Hoekman, & Kostecki, 1995).
Moreover, a review session modified numerous provisions of GATT and a move to transform GATT into a formal International Trade Organisation by establishing an organization for trade cooperation failed (Hoekman, & Kostecki, 1995). America was then granted a waiver from GATT for certain agricultural policies. The 4th round of multi trade negotiations was later hosted in Geneva in 1957 creating the European Economic Community (Hoekman & Kostecki, 1995). Before the International Trade Organisation concluded, and as it never came into being, the GATT was the only result of the negotiations (Williams, 2008). From the GATT, the launching of the Uruguay round started in 1986 and during the two following years a GATT ministerial meeting reviewed progress (Hoekman, & Kostecki, 1995). Canada formally introduced a proposal to create an international organisation and the world converted GATT to GATS but a GATT ministerial meeting in Brussels failed to conclude Uruguay's round (Hoekman, & Kostecki, 1995).
On 15th April, 1994, in Marrakesh, ministers agreed on the final act of establishing the world trade organisation WTO. All the members had reached consensus by the end of the Uruguay Round of trade negotiations from 1986 to1994 in order to take on the greatly enlarged rights and obligations of the new organisation (Williams, 2008). On January 1, 1995, WTO came into force with 128 original members from the year of establishment. Currently there are 153 (www.wto.org) members and this organisation is becoming a universal body which represents a totally a liberal idea (Williams, 2008). In 2005 only, about US$ 24 trillion was traded among WTO’s members – about 96 percent of the entire global trade (Williams, 2008).
THEWTO AGREEMENT
The consequence of the Uruguay Round of Multilateral Trade Negotiations released the legal texts which included about 60 agreements, annexes, decisions and memorandum of understanding undertaking (The WTO, 2010). Fundamentally, there are six main parts to the legal texts: the Agreement establishing the WTO, dispute settlement,
reviews of government, trade policies, the broad principles category - which interprets the principles of liberalization, and legal exceptions (The WTO, 2010).
The broad principles contain three main agreements starting with the General Agreement on Tariffs and Trade (GATT) which offers basic principles for goods. There are twelve sub-agreements; Agreement on Agriculture, Agreement on Sanitary and Phytosanitary Measures, Agreement on Textiles and Clothing, Agreement on Technical Barriers to Trade, Agreement on Trade-Related Investment Measures, Agreement on Implementation of Article VI (Anti-dumping), Agreement on Implementation of Article VII (custom Valuation), Agreement on pre-shipment Inspection, Agreement on Rules of Origin, Agreement on Import Licensing Procedures, Agreement on Subsidies and Countervailing Measures and Agreement on Safeguards (The WTO, 2010).
Secondly, the General Agreement on Trade in Services (GATS) consists of the significant sector of areas such as tourism, communication and finance, which are important in contributing to the national economic growth. For example, service sector covers about 26 percent of the Lao’s national products and currently services accounts for about 60 percent of global production and employment (Department of International Trade Policy, nd). The GATS is the result of the Uruguay Round and was entered into in 1995 in order to force the same the WTO objectives such as creating a credible and reliable system of international trade rules and ensuring fair and equitable trade under the principle of non-discrimination and promoting trade and development through progressive liberalisation (Department of International Trade Policy, nd). The GATS applies, in principle, to all service sectors but there are two exceptions, these being services supplied in the exercise of governmental authority like social security schemes and any other public service and air transport services (Department of International Trade Policy, nd).
Thirdly, while increasing the importance of intellectual property rights in trade, most of the value of new machines and other high technology products lie in the amount of invention, innovation, research, design and testing involved. Agreement on Trade- Related Aspects of the Intellectual Property Rights (TRIPS) negotiated between 1986 and 94 at the Uruguay Round, introduced intellectual property rules into the multilateral trading system or international rules (The Department of Intellectual Property,
Standardisation and Metrology, nd). Following WTO memberships, each government had to give minimum levels of intellectual property protection. Creators could be given the right to prevent others from using their inventions, designs or other creations and to use that right to negotiate payment in return for others using them. These are intellectual property rights and take a number of forms such as books, brand names and product logos (The Department of Intellectual Property, Standardisation and Metrology, nd).
It also now embraces copyright and related rights such as the right of performers, producers of sound recordings and broadcasting organisations. The industrial property involves trademarks, geographical indications, including appellations of origin, industrial designs, patents and petty patents, the layout-designs of integrated circuits and undisclosed information, including test secret and test data as well as the protection of new varieties of plants (The Department of Intellectual Property, Standardisation and Metrology, nd)adheres to an additional important principle that intellectual property protection should contribute to technical innovation and the transfer of technology and both producers and users should benefit, and economic and social welfare should be enhanced (The Department of Intellectual Property, Standardisation and Metrology, nd).
In summary, the political and economic theories adopted by countries shape their governance depending on circumstances. During the past century there were periods of competition between capitalism and socialism but for Laos was a period of adaptation and adjustment. It was also the age of popularity of the liberal ideology. The World Trade Organisation was born with a liberal conception, and it espouses freedom of trade with liberalisation as a framework. The WTO as an organisation is becoming a significant part of the country’s economic development growth and this entails a huge countrywide participation. Laos is among the least developed countries. Additionally, when Laos made a decision to get involved in a liberal world, it thereby changed the theoretical framework it had operated under. The WTO membership is the most significant step to real and full liberalisation and there is still no conclusion about the economic transition until the result of the WTO membership process.