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WorldTrade

Organization

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History of WTO

Constituted on 1stJanuary, 1995.

WTO took over the GATT.

Membership was 124 nations.

India was one of the founder member.In the year 2004, the no. increased to 148.

Objective was to remove the tariffs and non

tariff barriers.

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Present Position of WTOPresent Membership is 159 Nations.

Headquarter

Center William Rappard,

Geneva, Switzerland

Official LanguageEnglish, French, Spanish

ObjectiveTo encourage free trade of goods

and services.

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Features of WTO

An international organization to promote

multilateral trade.

Replaced the GATT.

Promote free tradeFixed rules and regulations and has a legal

status.

Binding on all members of WTO.It includes trade in goods, trade in services,

protection of intellectual property rights, etc.

One country, one vote.

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Objectives of WTO

To improve the standard of living of people in

the member countries.

To ensure full employment and broad increase

in effective demand.

To enlarge production and trade of goods.To enlarge production and trade in services.

To ensure optimum utilization of world

resources.To accept the concept of sustainable

development.

To protect environment.

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Structure of WTO

1. Ministerial conference2. General council

3. Functional councils under the general council

Council for trade in goods

Council for trade in services

Council for trade related aspects of intellectual

property

4. Committee and management bodies

Committee on trade & developmentCommittee on BOP

Committee on budget, finance and administration

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Framework of WTO

Multilateral

Agreements

on Trade in

Goods

GATS TRIPs DSB TPRM

Agriculture

Textile & Clothing

TRIMs

Anti Dumping

Copyright

Trademarks

Patents

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Agreement on AgricultureThe WTO Agreement on Agriculture contains

provisions in 3 broad areas of agriculture : reductionin domestic subsidies, reduction in export subsidies,

improvement in market access, public distribution

system.

Trade in Textile and ClothingWTO agreement with regard to trade in textile and

clothing provides the following provisions:Elimination of MFA

Reduction in tariff on textile and clothing

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Trade Related Intellectual Property Right

(TRIPs)

Intellectual property right can be with regards to copy

right, patents and trademark.

Under TRIPs life of patents has been fixed as follows:General patents20 years

Copy right50 years

Trade mark10 years

Industrial design

10 yearsMedicines10 years

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Trade Related Investment Measures (TRIMs)

Main features of TRIMs are as:To offer fair treatment and all facilities to all foreign

investors which are available to domestic investors.

To remove restrictions on repatriation of dividend,

interest and royalty of MNCs.

To allow 100% foreign equity participation in certain

cases.

No restriction on any area of foreign investment.

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General Agreement on Trade in Services (GATS)

The GATS defines services as the supply of a service from the

territory of one member country into the territory of another

member country ; in the territory of one member to the service

consumer of any other member ; by a service supply of one

member ; through commercial presence in the territory of any

other member ; or by a service supplier of one member, through

presence of natural persons of a member in the territory of any

other member.

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Disputes Settlement Agreement

In 1ststage, DSB consult parties under disputes.Director general of WTO act as mediator for settlement

of bodies.

DSB takes the final decision on the basis of report

submitted by panel with in 30 days.

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Agreement on Export Subsidies

WTO agreement prohibit export subsidy to promote freeand fair global competition in the world trade.

Developing countries are exempted from giving export

subsidy.

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Anti Dumping Agreement

Dumping :Practice of selling a product in one national market at alower price than it is sold in another national market. Thus

Dumping is the price discrimination b/w national markets.

Tariff duty: The importing country imposes high rate of importtariffs on dumping so that the price of the dumping goods would

be either equal to or more than that of the dumped goods.

No restriction on 1% import of total market sale of that product.

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Trade Policy Review Mechanism

Aims to carry out reviews of the trade policies & practices underthe MTAs & PTAs for the smooth functioning of Multilateral

Trading System.

Trade Policy review body was established for this purpose.

Each member has to report to the TPRB regularly about the trade

policies & practices pursued by it.

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