WTO (World Trade

Organization)

SUBMITTED BY: SUBMITTED TO:Juhi Siddhqui Prof. Sneha RajputNeetika Singhal PIMG, FacultySujeet Chauhan

CONTENT LAYOUTWhat is WTO?

Introduction of WTO

Functions of WTO

Objectives of WTO

Arguments in favor of WTO

Principles of WTO

Structure of WTO

Recent issues

WTO Agreements

conclusion

What is the World Trade Organization?

“The World Trade Organization is ‘member-driven’, with decisions taken by General agreement among all member of governments and it deals with the rules of trade between nations at a global or near-global level. But there is more to it than that.”

They deal with: agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property, and much more.

The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities.

INTRODUCTION OF WTO

The predecessor to the WTO, GATT( General agreement on trades & tariff) began in 1947 with only 23 members; today it has 159 members as on 2nd march 2013, comprising approximately 97 percent of world trade.

WTO , World Trade Organization was established in 1995 with its origins in the Bretton Woods Conference at the end of World War II.

The headquarter is situated in Geneva , Switzerland . India join WTO in 1st January 1995.

Two of the most important international economic institutions of the postwar period: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (the World Bank) was established.

FUNCTIONS OF WTO

The WTO agreements cover goods, services and intellectual property.

They spell out the principles of liberalization, and the permitted exceptions.

They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets.

They set procedures for settling disputes.

They prescribe special treatment for developing countries.

They require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the secretariat on countries’ trade policies

OBJECTIVES OF WTOThe primary aim of WTO is to implement the new world trade agreement.

To promote multilateral trade .

To promote free trade by abolishing tariff & non-tariff barriers.

To enhance competitiveness among all trading partners so as to benefit consumers.

To increase the level of production & productivity with a view to increase the level of employment in the world.

To expand & utilize world resources in the most optimum manner.

To improve the level of living for the global population & speed up economic development of the member nations.

To take special steps for the development of poorest nations.

OBJECTIVES OF WTO

ARGUMENT IN FAVOUR OF WTO

Increase in foreign trade.

Increase in agricultural exports.

Increase in inflow of foreign investment.

Improvement in services.

Inflow of better technology & better quality products.

Benefits of multilateral trade system.

Benefits of using quality seeds & new varieties of plants.

Restricts dumping.

PRINCIPLES OF WTO

1.Non-Discrimination:

It has two major components: the most favored nation (MFN) rule, and the national treatment policy. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members

2.Reciprocity:

• It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialize.

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3.Binding and enforceable commitments: The tariff commitments made by WTO members in a multilateral trade negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade.

4.Transparency: The WTO members are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO.

5.Safety valves: In specific circumstances, governments are able to restrict trade. There are three types of provisions in this direction: articles allowing for the use of trade measures to attain noneconomic objectives; articles aimed at ensuring "fair competition"; and provisions permitting intervention in trade for economic reasons

STRUCTURES OF WTO

WTO has nearly 150 members, around 30 other countries are negotiating members.

WTO’S top level decision making body is the “Ministerial Conference”.

The second level is the “General Council’( normally head by the ambassadors & delegations ).

The General Council also meets the Trade policy Review Body and the ‘Dispute settlement body’

The third level is “The goods council”, “Services Council” & “Intellectual Property Council” , which reports to the General Council.

RECENT ISSUES

• Trade to expand by 9.5% in 2010 after a dismal 2009, WTO reports

• Why was the trade decline so large?

• Trade prospects for 2010

• 32 WTO members take anti-dumping actions during first half of 2010

• Transparency mechanism for preferential trade arrangements set for approval

• Market access for LDCs

• Trade agreements between developing countries

• Overseeing national trade policies: the TPRM

WTO AGREEMENTS

The agreements are the outcome of negotiations between the members.

The current set of agreements are the result of 1986-1994 Uruguay round of negotiations , which is a revision of GATT.

A non-discriminatory trading system is operated through these agreements, which enlist the rights & obligations of the members.

Following are the various WTO agreements in different sectors:

a. In case of Goodsb. In case of Servicesc. In case of Intellectual property

IN CASE OF GOODS

GATT was the forum for negotiating lower customs duty rates and other trade barriers , since 1947 to 1994.

The main objective is emphasis on non discrimination.

The GATT has become WTO’s umbrella agreement for trade in goods.

It also deals with sectors such as agriculture and textiles, and with specific issues such as State trading, product standards, subsidies and anti-dumping actions.

NOTE:

Nondiscrimination: The policy of treating all of one’s trading partners equally. A country is practicing nondiscrimination if it charges the same tariff on imports of a product (for example, 5 percent on shoes) without regard to where the product is made.

CONTINUED…………

IN CASE OF SERVICES:

This agreement helps the Banks, insurance firms, telecommunications companies, tour operators, hotel chains and transport companies, who wants to do business abroad.

It helps to enjoy free and fair trade that originally not applied to trade in goods.

IN CASE OF INTELECTUAL PROPERTY:

WTO agreement deals with intellectual property in terms of amounts invested in ideas and creativity.

Intellectual property includes copyrights, patents, trademarks

CONCLUSION

It is the place where the member country comes and talks together and shares their grievance in order to resolve their problem related to International trade.

The countries make their decisions through various councils and committees, whose membership consists of all WTO members.

The system helps promote peace, by handling Dispute of member countries. It provides free trade which cuts the costs of living and provides more choice of products and qualities and stimulates economic growth.

The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent.

WTO deals with the special needs of developing countries as two thirds of the WTO members are developing countries and they play an increasingly important and active role in the WTO because of their numbers, because they are becoming more important in the global economy, and because they increasingly look to trade as a vital tool in their development efforts.

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