GENEVA -- The United States, Canada and the European Union handed over their formal ratifications of a landmark global trade pact Friday in a final rush to become founding members of the new World Trade Organization.


About 85 countries have now officially signed up to the new body, which will start life Jan. 1 to oversee international commerce and remove barriers to exports.


"The New Year will ring in a new era in world trade,'' said Britain's trade minister, Michael Heseltine.


"The creation of the World Trade Organization provides a firm basis for the future of international trading. This is a vote of confidence for multilateralism and an emphatic rejection of isolationism and protectionism,'' Heseltine said in a written statement from London.


The WTO is part of a mammoth 22,000-page trade agreement thrashed out in eight years of tough negotiations under the auspices of the 125-nation General Agreement on Tariffs and Trade. It cuts import duties on hundreds of thousands of products by more than one third and opens up trade in services like banking and tourism.


The impact will be gradual and there will be few visible changes in the international trading system on New Year's Day. Cutbacks in protection will be phased in over the next few years and lower prices as a result of lower import barriers will not be passed on to the consumer straight away.


Even so, the accord is the most ambitious attempt ever to liberalize global commerce and is forecast to boost world income by $510 billion annually by the year 2005.


Despite the promised benefits, it ran into stiff opposition from European farmers, U.S. textile producers and other previously protected sectors.


"It's remarkable -- when you consider where we came from and the opposition we encountered on the way -- to look at the results,'' said Andrew Stoler, a member of the U.S. negotiating team from the start.


"I can hardly believe I'm standing here,'' Stoler said, clutching a champagne glass at a brief celebratory ceremony. After a cliff-hanger vote, the U.S. Congress ratified the accord in early December. "But nobody knows what the future holds,'' he cautioned.


It is unclear how much authority the WTO will have in settling disputes. The United States has warned it may pull out if there are three "unjustified'' rulings within a five-year period against U.S. trade laws.


The composition of the various mediation bodies has not yet been discussed. There is disagreement on whether issues like human rights and labor standards should be taken into account in future trade policy.


Most immediate is the problem of heading the organization. The United States, Canada and Latin America are pushing former Mexican president Carlos Salinas de Gortari. The EU wants former Italian trade minister Renato Ruggiero, while Asia is backing South Korean Trade Minister Kim Chul-su.


GATT Director-General Peter Sutherland has agreed to stay on as caretaker for three months until a replacement is found. But this may take time because the decision has to be by consensus and none of the three candidates shows any sign of bowing out.


Stoler said the United States would press Salinas to lobby personally in Geneva. Some GATT ambassadors fear he may be too authoritarian for the post, despite his impressive track record in trade liberalization.


China's role is another question. The United States and Europe thwarted Beijing's efforts to join the WTO from the outset arguing that China needed to do more to prove its credentials as a free and fair trader. The Chinese government was furious and has made it clear it will not let the matter drop.