Which one of the following countries is not a member of WTO?

Correct — C, (c) Iran. Of the four countries listed, Iran is the only one that has never completed accession to the World Trade Organization. It lodged an application, and the General Council agreed to establish a Working Party on its accession on 26 May 2005, but the process has not carried it into membership; Iran remains outside, at the accession stage, with observer status.

The other three joined at three different moments, and holding those three dates is what makes this item quick. Japan was among the members with which the organisation began when it came into being on 1 January 1995, having been a contracting party to the General Agreement on Tariffs and Trade since the 1950s. China acceded on 11 December 2001, at the end of some fifteen years of negotiation that began with its bid to resume its place in the GATT. The Russian Federation was approved for membership in December 2011 and became a member on 22 August 2012, after a negotiation that had run since its first application in 1993 — the last of the world's large economies to come in.

There is a structural point behind the dates, and it is the more useful thing to carry. WTO membership is not automatic and is not a matter of a country's size or its importance in world trade. A government joins either as an original member, by having been a GATT contracting party that accepted the Marrakesh Agreement, or by accession, which means negotiating terms bilaterally with every interested member and then having the package approved. An observer government other than the Holy See is expected to begin accession negotiations within five years of becoming an observer, so observership is a waiting room rather than a status. That is why the largest economies still outside the organisation are outside for political and negotiating reasons, not for want of trade.

The word 'not' is printed in bold italic in this stem, which is the Commission's signal that three of the four countries are members and the task is to find the exception rather than the best fit.

Why the others are wrong

• (a)Japan — Japan is a member and has been since the organisation opened on 1 January 1995. It had been a contracting party to the GATT since the 1950s, so it came into the WTO as an original member rather than through an accession negotiation, and it is among the largest trading economies in the system. There is no plausible reading on which Japan is outside the WTO; the option is here to fill the list.
• (b)China — China acceded on 11 December 2001, and its accession is one of the most consequential events in the organisation's history. The negotiation ran roughly fifteen years and produced an unusually detailed protocol of accession, with transitional commitments on tariffs, trading rights, subsidies and market access that other members could invoke for a defined period. A candidate who half-remembers 'China joined late' may hesitate here, but late is not the same as absent — and 2001 is comfortably earlier than the accession of Russia, which is also a member.
• (d)Russia — Russia is a member, and this is the most tempting wrong answer on the list because its accession was the last of the large economies. It first applied in 1993, negotiated for close to two decades, was approved for membership in December 2011 and became a member on 22 August 2012. A candidate reasoning from a general impression that Russia sits apart from Western economic institutions will land here; the correction is to remember that the WTO is not a Western institution but a near-universal one, and that the countries genuinely outside it are a short and specific list.

The World Trade Organization was established on 1 January 1995 under the Marrakesh Agreement, which concluded the Uruguay Round of GATT negotiations and was signed in April 1994. It succeeded the General Agreement on Tariffs and Trade, which had operated from 1948 as a treaty with contracting parties rather than as an organisation with members. The WTO administers the covered trade agreements, provides the forum for further negotiation, settles disputes between members through a binding procedure, reviews members' trade policies and gives technical assistance to developing members. Its topmost decision-making body is the Ministerial Conference, which meets at least once every two years; between those meetings the General Council acts, and it also sits as the Dispute Settlement Body and as the Trade Policy Review Body. Decisions are normally taken by consensus. Membership comes in two ways: original membership for GATT contracting parties that accepted the Marrakesh Agreement, and accession, under which an applicant negotiates terms with interested members and its package is then approved. Observer status is a stage on that road, not an alternative to it, and an observer government other than the Holy See is expected to start accession negotiations within five years. The organisation has 166 members today. Iran applied and had a Working Party on its accession established on 26 May 2005, but has not become a member.

Key facts

• The World Trade Organization came into being on 1 January 1995 under the Marrakesh Agreement, which concluded the Uruguay Round.
• It succeeded the General Agreement on Tariffs and Trade, in force from 1948, whose participants were contracting parties rather than members.
• Japan was a member from the start in 1995, having been a GATT contracting party since the 1950s.
• China acceded on 11 December 2001, after about fifteen years of negotiation.
• The Russian Federation was approved in December 2011 and became a member on 22 August 2012, the last of the large economies to join.
• Iran is not a member; its Working Party on accession was established on 26 May 2005 and the accession has not been completed.
• The WTO has 166 members today.
• An observer government other than the Holy See must begin accession negotiations within five years of becoming an observer.
• The Ministerial Conference, meeting at least once every two years, is the topmost decision-making body; the General Council acts between its sessions.
• The WTO's core functions are administering trade agreements, hosting negotiations, settling disputes, reviewing trade policies and giving technical assistance.

Common traps

• Answering from an impression of a country's political alignment rather than from its accession record; Russia and China are both members.
• Confusing observer status with membership — an observer is in the accession queue, not in the organisation.
• Dating the WTO from the Marrakesh signing in April 1994 rather than from its entry into force on 1 January 1995.
• Treating the GATT and the WTO as the same body; the GATT was an agreement with contracting parties, the WTO is an organisation with members.
• Missing the bold-italic 'not' and marking the most familiar member on the list.

• practice — not a real PYQ

  The World Trade Organization came into being on

  • (a)1 January 1948
  • (b)15 April 1994
  • (c)1 January 1995
  • (d)11 December 2001

  Answer(c) 1 January 1995

• practice — not a real PYQ

  Which one of the following is the topmost decision-making body of the World Trade Organization?

  • (a)The General Council
  • (b)The Ministerial Conference
  • (c)The Dispute Settlement Body
  • (d)The Secretariat headed by the Director-General

  Answer(b) The Ministerial Conference