Foreign Policy In Focus - What's This Organization (WTO): WTO Structure

What's This Organization (WTO):
An Annotated Glossary of Terms and Concepts
About the World Trade Organization

By Tom Barry, Codirector Foreign Policy In Focus
with research assistance by Julie Schneider, IRC

I. WTO Structure

Part 1 of a new FPIF report, What's This Organization (WTO): An Annotated Glossary of Terms and Concepts about the World Trade Organization, written by Tom Barry, FPIF codirector.

(Editor's Note: The following description of the WTO's structure is part of a larger FPIF document called: "What's This Organization (WTO): An Annotated Glossary of Terms and Concepts about the World Trade Organization." Other parts of this document, whose online version will be constantly updated and revised, include: Key Concepts, Social Issues, WTO Agreements and Related Issues, and Developing Country Issues. Your comments, suggested changes, and criticisms are encouraged.)

Accession:
Despite its name, the World Trade Organization does not include all the world's nations. Countries become WTO members-accession--as a result of negotiations during which the petitioning countries make specific commitments to open markets and abide by WTO rules. For most WTO members, these negotiations occurred under GATT and they automatically became WTO founder-members. Some thirty countries were applying for WTO accession in late 1999, and as part of this process were negotiating the specific details of their liberalization commitments and transition schedules. Overseeing this process is the WTO's Accession Working Party. As became evident in the China accession petition, bilateral negotiations (covering tariff rates, specific market access commitments, and policies on goods, services, and investment) with the Quad countries, mainly the U.S., are a critical step in deciding to admit a country to the WTO and under what terms. Such negotiations set the parameters of the Most Favored Nation trading privileges and obligations of the new WTO member. The Working Committee prepares a package consisting of a protocol of accession, a report on the applicant's trade regime, and lists of the applicant's commitments. A two-thirds majority of WTO members is needed to approve the accession of a new country, and in some cases the applicant's legislature needs to ratify the accession agreement.

Binding or Bound Tariffs:
To bind a tariff means to set a maximum customs duty or tariff. Through GATT/WTO negotiations, tariffs on trade in certain goods are bound. The bound tariff level is not necessarily the actual tariff imposed. Countries, particularly developing countries, oftentimes have bound tariffs considerably higher than those imposed. In developed countries, actual and bound tariffs are generally the same. Binding tariffs are considered a fundamental part of trade liberalization and making international trade conditions predictable for trading nations and governments. Considerable advances in binding national tariffs were made in the Uruguay Round, during which the percentage of bound tariffs in developed countries increased from 78 to 99%, in developing countries from 21 to 78%, and in transition countries from 73 to 98%. The Agreement on Agriculture mandated the end to nontariff barriers (yet to be implemented because of long transition periods) and bound 100% of the tariffs on agricultural trade.

Consensus Decisionmaking:
The WTO describes itself as a "member-driven, consensus-based organization." The practice of rule-making for GATT and the WTO has been one of consensus building. Although an ostensibly democratic system of decisionmaking, in practice the consensus agreements of GATT and the WTO has primarily been the result of negotiations among the Quad powers. If one of the major developed nations opposes a proposal by one of its counterparts, then the proposal cannot go forward without extensive negotiations, deal-making, and compromise. Developing countries have been sidelined in this consensus building process. Certainly, their lack of staff, capacity, and financial resources is a factor. But the primary reason for this system of exclusionary consensus making is that the Quad countries assume that, as the main forces in the global economy, they have the right to formulate its rules. Generally, if there is strong opposition from groups of developing countries, the Quad countries embark on a consensus building campaign that typically involves a combination of granting concessions in the form of special and differential (S&D) treatment and a process of attrition in which opposing voices are worn down and eventually agree, albeit reluctantly, to join the consensus by withdrawing their opposition. On the surface, the consensus system seems a fair and reasonable way to conduct global economic governance. But, as practiced, the consensus system undermines democratic governance. If the WTO is to become more democratic in practice, the majority will need to insist that the institution's structure of "one country, one vote" be realized in key decisions.

Decisionmaking Role of Developing Countries:
Theoretically, all WTO members have a role in building the consensus needed for negotiations to advance. In practice, however, the consensus is first arranged among the developed countries, mainly the Quad nations, which have large staffs working on the language of new agreements. Although the WTO is frequently criticized for not being democratic, its structure as an institution of global governance is eminently democratic in that, like the UN General Assembly, the formal division of power is "one country, one vote." Unlike other institutions of global economic governance such as the World Bank and regional development banks or the IMF, WTO decisionmaking power is not structured according to a country's financial contribution (which makes the wealthiest nations the only decisionmakers, and a system that in effect gives the U.S. veto power), the WTO is a more democratic institution. In theory, Uruguay has the same decisionmaking power as the United States. The reality of international trade politics, however, is that this democratic potential is not exercised, either individually or collectively by developing nations. It remains to be seen if this potential to block the elite consensus is ever tapped by developing nations. There are some indications they may, such as the opposition of developing countries to the nomination (forcefully supported by the U.S.) of Michael Moore of New Zealand for the position of Director General of the WTO and its support for Supachai Panitchpakdi of Thailand. After much contention, a nontransparent consensus was reached, splitting the six-year term into two three-year terms, with Supachai following Moore. If the issue had been called for a vote (a suggestion strongly opposed by the U.S. on the grounds that this would set a bad precedent--never before had there been a general WTO vote and that it would seriously damage the decision by consensus system), it was apparent that the majority would have supported Supachai for the full six-year term. Although the depth and extent of the mounting opposition of developing nations to the effective control of the developed countries is still unknown, it is evident that developing nations are increasingly asserting themselves--a trend that the Quad nations find disconcerting. Developing and transition countries comprise nearly three-quarters of the WTO membership. With the accession of China and applications pending from some thirty developing countries, the ability of the developed country minority to control the global economy agenda may be at risk--especially if members break tradition and insist on decision by vote.

Democratic:
The critique that the WTO is undemocratic and needs to be more democratic in its decisionmaking, implementation, and dispute settlement encompasses a wide range of demands. The most extreme positions are that the WTO should not restrict the sovereignty of nations in any way, that nations that are not democratic themselves should not be members, and that NGOs should have a direct decisionmaking voice in WTO negotiations. Moderate demands to make the WTO more democratic or participatory include the following: supporting developing countries with technical assistance to enable them to participate more fully in WTO negotiations and dispute settlement procedures; making draft proposals known to the public well in advance so that the civil society and congressional representatives in each WTO member nation would have time to study the proposals and make recommendations; giving NGOs a place to express their opinions and consulting NGOs about issues in which they have expertise; and ensuring that all WTO members are invited to all discussions and negotiating sessions where key decisions may be made while at the same time discontinuing the practice of exclusive, informal decisionmaking groups, such as those of the Green Room in the Uruguay Round. Another moderate governance proposal, but one that would have sweeping consequences, is that on key questions on which there is not a clear, strong consensus, decisions be made by voting, based on the "one country, one vote" rule that is part of the WTO's charter.

Dispute Resolution Procedures:
When a complaint is leveled against a WTO member, the Dispute Settlement Body (the General Council) sponsors a consultation and mediation process. If this does not resolve the dispute, it establishes a dispute panel that, after reviewing the case and hearing expert opinion, issues a report, which is considered the Dispute Settlement Body's ruling. This ruling can be appealed to an Appellate Body that broadly represents WTO membership. If the losing party does not quickly bring its trade policy in line with the ruling, then the WTO can authorize trade-related sanctions by the complaining/injured party or parties. Panel members (three to five) are chosen in consultation with the disputing countries. If they cannot agree, the WTO Director General appoints the panelists from a list of trade law experts. In the WTO's first five years, more than 170 cases have been brought to the Dispute Settlement Body--with the U.S. and EU being the main complainants. The WTO itself does not enforce its rules. It cannot force a member to change its policies or laws to conform with WTO trade rules, but it can, through dispute settlement, authorize parties to adopt punitive trade-related measures.

Dispute Settlement Understanding:
Perhaps the main feature that distinguishes the WTO from GATT is the highly structured process of dispute settlement and enforcement. The process begins when one or more WTO members formally complains that another is violating international trade rules. The main arguments in favor of a strong dispute settlement process are that 1) this procedure bolsters the rule of law and by doing so makes international economic relations more secure, predictable, and fair (in the sense that nations cannot in their pursuit of their own self-interests willfully violated trade agreements to the disadvantage of other trading nations), 2) the process, which involves consultations, rulings, and appeals, helps to better define WTO rules, 3) it channels disputes into a multilateral forum and away from arbitrary unilateral action, and 4) it reduces the risk that bilateral trade disputes will spill over into political or military conflict. Like the critiques of the WTO itself, the arguments against the dispute resolution process include those that have a deep structural critique regarding this new capability to adjudicate and authorize sanctions as a manifestation of a world government that restricts national sovereignty and furthers corporate rule. The structuralists are in the abolitionist camp, calling for the dismantling of any form of world economic governance that constrains national policy options. Most critics of WTO dispute resolution focus on what are seen as the nontransparent and narrow focus of the dispute procedures. They want reforms that make the dispute panels more transparent by having all proceedings open to the nongovernmental community and by extending the scope of deliberations beyond the scope of current WTO rules to considerations of the social and environmental impact of international trade and investment. Among developing countries, there are concerns about being unable to adequately represent their positions because of lack of resources and that the superior litigation capabilities of developed nations may result in the rise of a litigation culture in the WTO through which the most powerful countries may be able to impose their own laws on the international system. A related concern is that dispute settlement may be used by the United States and other industrial nations as the final arbiter in decisions like balance-of-payments crises exemptions that were formerly left to the decisions of special working committees. Similarly, there are concerns that if the WTO acknowledged linkages between global economy and social issues, then the developed countries would seek trade-related sanctions approved by the dispute settlement process against developing countries whose labor and environmental standards would be considered as "trade-distorting" in that they give countries with lower standards a competitive advantage. Although it is recognized among developing countries that an impartial dispute settlement process based on the rule of law may help level the playing field with wealthier nations (by obligating all countries to respect the laws they agreed to), they point out that the poorer nations will be reluctant to mount challenges against the more powerful countries, fearing retaliation in the form of nontariff barriers, reduced market access, and more stringent IMF/World Bank structural adjustment programs.

Early Harvest:
This refers to the items that countries believe should be addressed first in Seattle and any new negotiating round. Commonly, the early harvest wish lists of developing countries include solutions to implementation problems (particularly agriculture and textiles), better market access, reforms to TRIPS and TRIMS, while those of the developed countries included such new issues as investment, competition, and government procurement policy and further liberalization in services. The built-in agenda for the Seattle Ministerial includes further negotiations on agricultural and services liberalization.

G2:
This is the term to label the smallest and most powerful group in the WTO, namely the informal negotiating presence of the U.S. and EU. Because of its dominant influence, the U.S. has been referred to as the Superquad, an allusion to the premier group of developed countries known as the Quad.

General Agreement on Tariffs and Trade (GATT):
Established in 1948 during the deliberations to form the International Trade Organization, GATT was to have been the third Bretton Woods institution, along with the IMF and World Bank. Wanting to jumpstart an economic liberalization agenda to counter the protectionism that had characterized the pre-World War II era, 23 of the 50 nations that were involved in the ITO negotiations decided in 1946 to negotiate a multilateral trade agreement to reduce and bind tariffs (customs duties). The combination of these tariff concessions and some of the trade rules that were part of the proposed ITO Charter became known as GATT. In its evolution, GATT became two entities: a trade agreement that was renewed and expanded through negotiating rounds, and a de facto trade organization that in the 1980s developed its own bureaucracy to monitor trade practices but lacked a charter. The first of these manifestations continues as the main trade accord within the WTO, while the WTO has replaced the second manifestation as a provisional institution with a formal institution that has a larger and more structured bureaucracy, clearer operating procedures, and a strong dispute settlement component. GATT sponsored eight negotiating rounds, the last of which was the Uruguay Round. In the 1980s, during the Uruguay Round, GATT became a springboard for economic liberalization agreements in agriculture, services, and intellectual property rights. In addition, GATT negotiations led to restrictions on nontariff barriers as well as tariffs. The contracting parties to GATT agreed at the end of the Uruguay Round in 1994 to form the WTO.

Green Room:
GATT and WTO have encouraged informal discussions to break deadlocks in negotiations. During the Uruguay Round, most of the agreements were hammered out in the so-called Green Room negotiations, involving as many as forty countries but often considerably fewer. Critics of the lack of transparency in the WTO have objected to the revival of the Green Room forum of informal negotiations. Officially, the informal talks involving WTO members occur under the auspices of Heads of Delegations (HOD) forums to which all members are supposedly invited.

International Trade Organization (ITO):
Although U.S. negotiators supported the 1948 proposal to create the ITO as a specialized agency of the UN, the U.S. refused to ratify the ITO Charter, seeing the proposed new institution of global economic governance as a threat to U.S. sovereignty and dominance. Congressional opponents also objected that its purview extended beyond trade in goods to setting rules on investment, commodity agreements, and services as well as fostering full employment practices among member countries. Many critics of the WTO say that the ITO--with its interest in stabilizing commodity prices and encouraging national full employment practices--should have been the model for the WTO with its narrower focus on economic liberalization.

Ministerial Declaration:
The declaration that sets the agenda for the ministerial meeting represents the merging of common elements of various draft proposals submitted to the WTO General Council. As of early October, there were two draft outlines: one from the Chair of the General Council and a rival proposal from eight developing nations: Cuba, Dominican Republic, Egypt, Honduras, India, Indonesia, Malaysia, and Pakistan. The rival declaration proposal recommended three new initiatives: making the trading system more supportive of the development process; access to technology, trade, and finance; and the trade, debt, and commodity price relationship. In one area, these nations call for accelerated liberalization, namely textiles, on the grounds that access to industrialized markets is unfairly restricted.

Most Favored Nation (MFN):
This refers to the key principle of nondiscriminatory treatment under GATT. If the WTO grants a trading privilege to one country, such as lowering its tariff on a certain import, it has to offer the same deal to other WTO members. Each nation, then, treats all other members as "most-favored nations." The WTO permits some exceptions to the MFN principle. Regional trade agreements such as NAFTA that offer special customs treatment to nations within the region are allowed, as is special treatment of developing countries. A country can also raise tariff barriers against products from certain countries that trade these products unfairly. In the United States, the term has been most frequently used with respect to U.S.-China relations. Since 1980 the U.S. has granted China MFN status subject to congressional review of its human rights practices. The only other nations denied MFN status are Afghanistan, Cuba, Cambodia, Laos, and North Korea. Confusion over the meaning of the term spurred Washington to substitute the term normal trading status for MFN.

National Treatment:
National treatment is the principle that imported goods and services should receive the same treatment as domestic ones. The concept of national treatment is found within the three main WTO agreements: GATT, GATS, and TRIPS. It applies to treatment within a country's borders, not to the treatment of goods and services before they pass through national customs. In other words, national treatment does not restrict a country from changing its customs duties or procedures. As multilateral agreements have extended beyond trade in manufactured goods as a result of the Uruguay Round, the principle of national treatment has also extended to services, agricultural goods, and intellectual property rights. The TRIMS agreement and the establishment of a working group on investment were among the first steps toward extending national treatment to foreign investors. Proposals to create rules on government procurement are also based on this principle of national treatment. Critics believe that the national treatment principle--especially when extended beyond manufactured goods to farm products, investment, services (financial services, for example), and government procurement--restricts a nation's economic development options. Such criticism is strongest among developing countries who believe that their infant industries cannot compete in the international market and who want to foster national economic development.

New Issues:
Proposed new issues for WTO negotiations include establishing rules on investment, competition policy, transparency in government procurement, and trade facilitation. These issues are also known as the Singapore issues because they were advanced by developed countries at the Singapore Ministerial in 1996, and working groups were established on these issues at that meeting. Because of the strong opposition by developing countries to these issues, a consensus agreement advancing them beyond the study process of the working groups may be impossible. Also, developed countries are not united in a strategy to push these new issues forward.

One Country, One Vote:
Although decisionmaking at the WTO is by consensus not by voting, this practice is dictated by tradition not by rules. If consensus is not reached, decisions could be reached by a vote on a "one country, one vote" basis--a vote being won by a majority of the votes cast. The WTO agreement stipulates that, in the absence of consensus, a three-quarters majority of WTO members is needed to adopt major interpretations of WTO agreements and to waive an obligation imposed on a particular member, while a two-thirds majority is required to amend agreements and to admit new members. The Quad, together with the GATT/WTO bureaucracy, has successfully discouraged any move away from consensus decisionmaking to votes.

Quad Countries:
One of the many groupings of GATT/WTO members, the Quad comprises U.S., EU, Japan, and Canada.

Reciprocity/Nonreciprocity:
Reciprocity, which means granting equivalent trade privileges, is the backbone of the international trade rules under GATT/WTO and regional agreements such as NAFTA. Since the late 1980s, the U.S. and other industrial nations are demanding reciprocity with all their trading partners, even developing countries. Nonreciprocity generally refers to preferential treatment, whereby one nation grants special trading privileges to another nation (or group) without expecting these countries to respond with an equivalent liberalization of their tariff schedules. On the surface, preferential treatment, as in the Generalized System of Preferences (GSP), is a strategy for improving the lot of poorer nations by giving them increased market access. In practice, it often is part of a political strategy to link countries more closely with those granting the preferences. During the cold war, preferential treatment, for example, was one component of a political strategy to keep developing nations aligned with the "free world." In the U.S., congressional initiatives to give preferential trading rights to sub-Saharan Africa and to the Caribbean nations was hotly contested and opposed by many activist groups because, among other reasons, they did not include labor rights guarantees.

Regional Trade Agreements:
The WTO's nondiscrimination or Most Favored Nation principle does not automatically give WTO members the trading rights granted in regional trade agreements. Only members of those agreements benefit from common trade privileges. The various regional trade agreements recognized by the WTO include: European Union (EU) or European Community (EC), European Free Trade Association (EFTA), Central European Free Trade Association (CEFTA), North American Free Trade Agreement (NAFTA), Mercosur or Southern Common Market, EC/Certain Non-European Countries and Territories (PTOM II), Closer Economic Relations Trade Agreement (ANZCERTA), Caribbean Community and Common Market (CARICOM), and Central American Common Market (CACM). See Appendix I for members of these agreements.

Rule-Based System:
The WTO is a rule-based system of international trade in that members subscribe to common rules. Unlike GATT, the WTO has a dispute settlement process that provides for the hearing of complaints and for sanctions against countries that violate the rules. Most members and observers agree that, in theory, a rule-based system is a fair and effective structure for international trade. Some critics, however, complain that such rules are a form of world government that limits national sovereignty and local democracy. Other critics, especially from developing countries, have no problem with a rule-based system but complain that the system in fact is based more on power than on rules--that the powerful nations make the rules at the WTO (just as they do at the IMF and World Bank, the two other institutions of global economic governance) and because of their market power are able to act unilaterally to skirt the rules so as to promote their own interests and protect their own markets. In other words, rather than helping to balance the playing field in the interests of the disadvantaged and less powerful South, the rule-based WTO functions to maintain Northern privilege and power while failing to address the structural obstacles to Southern development. Another common criticism is that only insiders make and judge the rules--and that the expertise of nongovernmental organizations should be tapped in formulating rules and in dispute settlement processes.

Seattle WTO Meeting:
This is the third Ministerial Conference of the WTO. There were two previous ministerials--meetings of the trade ministers of all member countries--one in Singapore in 1996 and another in Switzerland in 1998. Many countries, led by the U.S. and EU, hope to launch a new negotiating round at Seattle that would set rules on a new set of global economy issues. Ministerial Conferences, the highest level in the WTO structure, occur every two years. There was little consensus as the Seattle ministerial approached, given strong differences between developed and developing countries. The apparent failure of the Quad to agree on a strategy to move new negotiations make it unlikely that there will be an extensive new negotiating round immediately following Seattle. If there is to be a new round, there is consensus that it should be short, limited to three years.

Single Undertaking:
In the Uruguay Round, the operative principle was instituted that no country could opt out of any part of the agreement negotiated. Previously, countries participating in GATT could sign some agreements and not others. Countries opposing certain agreements have the option of dropping out of the WTO but commonly decide that the benefits of remaining inside the WTO system outweigh the adverse consequences of any one agreement. There are, however, two plurilateral agreements that countries can choose to sign: Trade in Civil Aircraft and Government Procurement.

Transparency:
When the issue of transparency is raised, it most often refers to the lack of openness in the process of rule making and dispute settlement in the WTO. Complaints that the WTO is nontransparent are routinely coupled with criticism that the WTO is not participatory. Responding to critics, the WTO has through its website and forums started providing more information about its internal process to the public, NGOs, and member governments, although there is still much dissatisfaction, particularly among NGOs and developing country members who believe that decisionmaking occurs in cloakroom discussion among the major trading nations. The term transparency also occurs in discussions of the closed-bidding and secret government procurement processes many governments use to select their suppliers.

Uruguay Round (UR):
The eighth round of GATT negotiations, the UR was the longest (1986-94) and also the most far-reaching. Differing perspectives of the Quad countries (mainly the U.S. and EU) on liberalization of the agriculture sector was the main obstacle in launching the round and the main obstacle in terminating it. The Blair House accord in 1992 in which the EU and U.S. resolved most of their differences allowed the negotiations to proceed. And once the Quad reached consensus in 1993 during informal negotiations on tariff reductions and market access, the round moved quickly to conclusion, with its Marrakesh declaration signed by 123 participating governments. The UR highlighted the elite and nontransparent character of GATT's consensus process in that only after the major developed countries had worked out an agreement in informal meetings outside the GATT structure did the negotiations move forward. Previous negotiating rounds were limited to agreements on liberalizing (freeing from national restrictions) the trade in manufactured goods, while the Marrakesh declaration included agreement in two new areas: trade in services and trade in inventions, creations, and designs (intellectual property). Another distinguishing feature of UR was the large number of developing countries that were contracting parties to the resulting agreements.

World Trade Organization (WTO):
Founded in 1995 after conclusion of the GATT's Uruguay Round, the WTO is one of the three main institutions of global economic governance, together with the International Monetary Fund (IMF) and World Bank. In the late 1940s, the U.S. unilaterally squashed a Bretton Woods initiative to establish an International Trade Organization (ITO) as a rule-based global trading organization because it regarded such an institution as a possible threat to its imperial economic ambitions. Instead, the much-weaker GATT system of multilateral trade agreements (with no adjudication process) was established with the blessings of the Truman administration. Facing increased competition from other Northern countries and rising imports from the South, the U.S. sought to expand the GATT system of international free trade in the 1980s. During the UR negotiations, the U.S. promoted the concept of a global trading organization that would provide a forum to settle trade differences with its economic rivals and that would more closely integrate developing countries into a global free-market economy.

WTO Main Agreements:
The WTO has rules for the global economy in three main areas: trade in goods through the General Agreement on Tariffs and Trade (GATT), trade in services through the General Agreement on Trade in Services (GATS), and intellectual property rights through the Trade-Related Intellectual Property Rights (TRIPS) agreement. The latter two agreements, negotiated during the Uruguay Round, significantly expanded the purview of the WTO.

WTO Members:
By late 1999, the WTO had 134 members, with another 30 petitioning for accession. To join (accede to) the WTO, a nation must agree to subscribe to its rules and agree to the principle of nondiscrimination in trade through most-favored nation and national treatment. Members include 30 developed countries, 92 developing countries (including 30 least developed countries or LDCs), 9 transition countries (former Soviet bloc nations), and 3 newly industrialized nations. See Appendix II for members in each development category [Ed. Note: soon to be posted on the FPIF website].

WTO Principles:
The officially stated operating principles of the WTO are the following: 1) there should be no discrimination either among trading nations (most favored nation status) or between national and foreign products and services (concept of national treatment); 2) international trade should be made progressively freer through agreements that reduce barriers to foreign goods and services, 3) governments and businesses should expect predicable conditions when engaged in trade relations with other member countries, 4) international rules aim to create improved conditions for fair economic competition by discouraging unfair trade practices such as export subsidies and dumping products at below cost to gain market share; and 5) rules and conditions should be more beneficial for less developed countries, giving them more time to adjust to new rules (transition periods), greater flexibility, and special privileges.

WTO Structure:
At the top of the WTO structure is the Ministerial Conference, a meeting of the chief trade ministers of all member countries that occurs every two years. In the interim, the WTO has a multilayered structure of formal and informal councils, committees, working groups, and working committees. All WTO members are invited to participate in these forums. Working directly on behalf of the Ministerial Conference is the General Council, which, among other charges, prepares the agenda and declaration for the ministerial conferences. At the same level of authority are two other councils, also including all members: Dispute Settlement Body and Trade Policy Review Body. (Perhaps the most important component of the WTO structure is Dispute Settlement Body, which reviews disputes, attempts to reconcile opposing parties, and then sends complaints to the dispute settlement panel of experts.) Under this tripartite manifestation of ministerial authority are three subsidiary councils that address the three broad areas of WTO rules: Good Council, Services Council, and TRIPS (Intellectual Property Rights) Council. Covering a smaller scope are the WTO Committees, including Trade and Environment, Trade and Development, Regional Trade Agreements, Balance-of-Payments Restrictions, Market Access, Agriculture, Antidumping Practices, Trade-Related Investment Measures, and numerous others. At the next level of authority are the following Working Groups, which serve as the first stage of discussion about including new issues into WTO rules: Trade and Investment, Trade and Competition Policy, Trade in Financial Services, Specific Commitments in Services, and Transparency in Government Procurement. In addition, there are several Working Parties: Accession, State-Trading Enterprises, Professional Services, GATS Rules, and Preshipment Inspection. The WTO structure makes ample room for informal discussions that are used to test new proposals and hammer out consensus. These informal meetings, which the WTO acknowledges play a "vital role," take place under the auspices of the Heads of Delegations (HODs). All WTO members may participate in all councils, committees, working groups, and working committees except the Appellate Body and Dispute Settlement Panels of the Dispute Settlement Body, Textile Monitoring Body, and plurilateral committees.