WTO

WORLD TRADE ORGANIZATION

CHANAKYA

ARUN SPOORTHI ANUSHRI DEEPAK DEEPA PRATIBA MARUTI

WTO

WTO is the only international organization dealing with the global rules of trade between nations.

One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.

Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.

Why WTO came to existence

3 MAIN REASONS First, the economic success of Japan

strained the world trading system Second, the world trading system was

strained by the persistent trade deficit in the world’s largest economy, the United States.

Third reason for the trend towards greater protectionism was that many countries found ways to get around GATT regulations

Why WTO came to existence…….In 1995 WTO came into

existence because of all the factors mentioned above. WTO is a more prominent body.

Fact file Established: 1st January 1995 Created by: Uruguay Round

Negotiations (1986-1994)

Location: Geneva, SwitzerlandMembership: 149 countries (on 11 Dec. 2005)

Budget: 175 million Swiss francs for 2006

Head: PASCAL LAMY (Director General)

Fact file……….

A WTO was to created to implement the GATT agreement

GATT………?

GATT: General Agreement on Tariffs and Trade. WTO starts its life on 1st Jan 1995, but its

trading system is started since 1948,GATT

General Agreement on Tariffs and Trade was born, with 23 founding members.

The WTO is currently the host to new negotiations, under the “Doha Development Agenda” launched in 2001.

STRUCTURE

1. Ministerial Conference

2. General Council

3. Goods council, services council, intellectual property rights councils

Help trade flow as freely as possible  Serve as a forum for trade negotiations  Set up an impartial means of settling disputes  To increase the transparency and

understanding of countries’ trade policies  To improve the quality of public and inter

governmental issues

OBJECTIVES

FUNCTIONS

Acting as a forum for trade negotiations Reviewing national trade policies Administering trade agreements Settling trade disputes Assisting developing countries in trade

policy issues, through technical assistance and training programs

Cooperating with other international organizations

Principles

1 Without discrimination2 Freer3 Predictable4 More competitive5 More beneficial for Less Developed

Countries (LDC)

WTO Agreements

The Agreements of WTO cover : Goods Services Intellectual Property Dispute Settlement Trade policy review

DEVELOPING COUNTRIES

The special provisions include :

1. Longer time periods for implementing agreements and comments,

2. Measures to increase trading opportunities for these countries,

3. Provisions requiring all WTO members to safeguard the trade interests of developing countries

4. Support to help developing countries build the infrastructure for WTO work, handle disputes, and implement technical standards

10 Benefits of the WTO

1. The system helps promote peace2. Disputes are handled constructively3. Rules make life easier for all4. Freer trade cuts the costs of living5. It provides more choices of products and

qualities6. Trade raises incomes7. Trade stimulates economic growth8. The basic principles make life more efficient9. Governments are shielded from lobbying10. The system encourages good government

Misunderstandings about WTO

1. WTO dictates policy2. WTO is for free trade at any cost:3. Commercial interests take priority over

development4. Over the environment5. Over health and safety6. WTO destroys jobs, worsens poverty7. Small countries are powerless in WTO8. WTO is the tool for powerful lobbies9. Weaker countries are forced to join WTO

Arguments for joining up WTO

After liberalization it was the best option to join WTO for India. As post liberalization the international trade was bound to increase. And WTO ensures free and fair trade.

Once a country joins WTO, the exports rise certainly. There arise ample job opportunities for unemployed

people and better job opportunities for talented and skilled people.

With the onset of international trade a country also observes technological development.

Arguments for joining up WTO………….. By joining WTO, the country enjoys all the facilities

and benefits given by International Trade Center. ITC gives various facilities to become more competitive and helps in solving procedural issues.

The benefit of intellectual capital can also be availed. India already has got comparative advantage in the sectors that are growing at a fast pace like Software.

Once a part of WTO, no two nations have to get into different bilateral agreements among them for trade.

Arguments against joining WTO

MNCs take away the major chunk of the profits earned in the host country to their home country.

They give lesser salary to the employees of the host countries.

Though tariff concessions are given but with some kind of harassment. It was observed when India signed the nuclear deal with U.S.

Arguments against joining WTO……….. Security may also be compromised in the

longer run.

The impact of product patent is lesser felt now, but in the longer run it is bound to create problems. In India the cost of medicines is still very cheap, the foremost reason being the huge pharma industry. But in the next 20-30 years, when newer diseases and health problems will be on rise then its impact will sure be seen and felt

TRIMS is a council of WTO that ensures the member countries do not impose any restrictions on investment. No country can have laws with the conditions like- If one country export ‘X’ quantity then they must import ‘Y’ quantity from the other country and vice a versa. No condition on quantity should be imposed that hampers investment

TRIMS- Trade related investment measures

TRIPS- Trade related Intellectual property rights

The TRIPS regulations oblige WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting at least 50 years. Rich countries had to comply with the rules within a year.

Poor countries, in which such protection generally was much weaker, had 5 years grace and the very poorest had 10 years. The basis for this agreement was a strong belief among signatory nations that the protection of intellectual property through patents, trademarks, and copyrights must be an essential element of the international trading system.

TRIPS……………

Inadequate protections for intellectual property reduce the incentive for innovation. Because innovation is a central engine of economic growth and rising living standards, the argument has been that a multilateral agreement is needed to protect intellectual property.

Without such an agreement, there has been a fear that producers might market imitate the patented innovations pioneered in a different country

DOHA CONFERENCE

The 4th WTO Ministerial Conference was held in Doha, Qatar from 9 to 14 November 2001.

The agenda included:-

1 Cutting tariffs on industrial goods and services

2 Phasing out subsidies to agricultural producers

3 Reducing barriers to FDI4 Limiting the use of

Antidumping laws

Other Implications

Duty-free market access for LDC’s and measures to improve market access for these exports.

1. Faster and easier negotiations for WTO membership

2. Technical assistance for LDCs

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