What Is International Trade?

Exchange of capital goods and services across international boundaries or territories

In most countries it represents a significant share of GDP

Why International Trade?

Diverse Economic Resources

Differences In Productive Resources

Difference in cost: Absolute and comparative

Important for Countries’ well being

Importance for citizen

What do you know?

• WTO Formation?• No. of Members• Latest member• General Secretary• Head Quarters• Indian Head Quarters• Last Summit• India’s representative to

WTO

WTO

• Why WTO was formed? – The History• Problems with GATT• Principles of WTO• Functions of WTO• Organizational Structure of WTO• WTO and India

History

GATT formed in 1947 Focus on multilateralism Uruguay Round Final Act of 1994 WTO incepted on 1st Jan,

1995

Problems with GATT

• Failed to liberalize trade in agricultural products.• Experienced partial success in regulating trade

practices • Steady erosion of MFN principle by the EC. • Only a gentlemen's agreement with no teeth, no

enforcement power.

What is WTO

“WTO is an International body designed to play the role of a watchdog in spheres of trade in Goods, services foreign investments, IPR etc.”

Principles

To help trade flow as freely as possible

To achieve further liberalization gradually through negotiation

To set up an impartial means of settling disputes

Functions

Administering the WTO trade agreements Forum for trade negotiations Administering the mechanism for settling trade

disputes among members Monitoring national trade policies Assisting developing countries with training and

technical assistance Cooperation with other Internationals

organizations.

Organizational Structure

Level 1: Ministerial Conference

Level 2: General Council

Level 3: Goods, Service and intellectual property council

All Members participate in all committees (Except Dispute settlement and Textiles monitoring body)

Organizational Structure

GENERAL COUNCIL

GOODS COUNCIL SERVICES COUNCIL TRIPS COUNCIL

MINISTERIAL COUNCIL

India and WTO

Contribution of 0.747% to WTO’s Budget ’08

68% contribution to world’s total manufacture exports in 2006

India’s Commitments To WTO

Tariff Lines

Quantitative Restrictions (QRs)

Tariff Lines

“It is when a country ‘binds’ a tariff rate by committing that it will not raise tariff on that product beyond the ‘bound’ level.”

Tariff Lines

73.8% of Indian Tariff lines are bound

36.2% for non agro goods

Quantitative Restrictions:

• It is the restrictions imposed by WTO on the quantities that a country can import or export. Such restrictions are also imposed on India but looking at the fast growing economy of India WTO has removed this restrictions from a number of items like the Quantitative restriction on 714 items was removed in Exim Policy on 31st March 2000 and again the Quantitative restriction on 715 items was removed on 31st March 2001.

Quantitative Restrictions

QRs on 714 items removed in Exim Policy on 31st March 2000

QRs on 715 items removed on 31st March 2001

Benefits to India

Benefits from Phasing out of MFA (Multi Fiber Arrangements)

Expansion in trade

Improved prospects for Agro exports

Thank You !!!

Presented By Group 5 Ashish Khera Jasmine Framjee Manish Baradia Nidhi Goyal Pallavi Khanna Pradeep Singh Shreshtha Varun Khurana