ABOUT WTO

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments[5]:fol.9-10 and ratified by their parliaments.[6] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994).

STRUCTURE FROM BOOK FEATURES AND OBJECTIVES - READ FROM THE PRESENTATION AND EXPLAIN

What we do (FUNCTIONS)
The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who usually meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
Trade negotiations 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. These agreements are not static; they are renegotiated from time to time and new agreements can be added to the package. Many are now being negotiated under the Doha Development Agenda, launched by WTO trade ministers in Doha, Qatar, in November 2001. Implementation and monitoring WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented. All WTO members must undergo periodic scrutiny of their trade policies and practices, each review containing reports by the country concerned and the WTO Secretariat. Dispute settlement

The WTOs procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgements by specially appointed independent experts are based on interpretations of the agreements and individual countries commitments. Building trade capacity WTO agreements contain special provision for developing countries, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities, and support to help them build their trade capacity, to handle disputes and to implement technical standards. The WTO organizes hundreds of technical cooperation missions to developing countries annually. It also holds numerous courses each year in Geneva for government officials. Aid for Trade aims to help developing countries develop the skills and infrastructure needed to expand their trade. Outreach The WTO maintains regular dialogue with non-governmental organizations, parliamentarians, other international organizations, the media and the general public on various aspects of the WTO and the ongoing Doha negotiations, with the aim of enhancing cooperation and increasing awareness of WTO activities.

MAJOR TRADE AGREEMENTS 1.) Agreement on agriculture

The WTOs Agriculture Agreement was negotiated in the 198694 Uruguay Round and is a significant first step towards fairer competition and a less distorted sector. WTO member governments agreed to improve market access and reduce trade-distorting subsidies in agriculture. In general, these commitments were phased in over a six years from 1995 (10 years for developing countries). The Agriculture Committee oversees the agreements implementation. Meanwhile, members also agreed to continue the reform. Further talks, which are separate from the committees regular work, began in 2000. They were included in the broader negotiating agenda set at the 2001 Ministerial Conference in Doha, Qatar

2.) GATS
The creation of the GATS was one of the landmark achievements of the Uruguay Round, whose results entered into force in January 1995. The GATS was inspired by essentially the same objectives as its counterpart in merchandise trade, the General Agreement on Tariffs and Trade (GATT): creating a credible and reliable system of international trade rules; ensuring fair and equitable treatment of all participants (principle of non-discrimination); stimulating economic activity through guaranteed policy bindings; and promoting trade and development through progressive liberalization. While services currently account for over 60 percent of global production and employment, they represent no more than 20 per cent of total trade (BOP basis). This seemingly modest share should not be underestimated, however. Many services, which have long been considered genuine domestic activities, have increasingly become internationally mobile. This trend is likely to continue, owing to the introduction of new transmission technologies (e.g. electronic banking, tele-health or teleeducation services), the opening up in many countries of long-entrenched monopolies (e.g. voice telephony and postal services), and regulatory reforms in hitherto tightly regulated sectors such as transport. Combined with changing consumer preferences, such technical and regulatory innovations have enhanced the tradability of services and, thus, created a need for multilateral disciplines.

3.) TRIMs
The Agreement on Trade Related Investment Measures (TRIMs) are rules that apply to the domestic regulations a country applies to foreign investors, often as part of an industrial policy. The agreement was agreed upon by all members of the World Trade Organization. (The WTO wasn't established at that time, it was its predecessor, the GATT (General Agreement on Trade and Tariffs). The WTO came about in 1994-1995.

Policies such as local content requirements and trade balancing rules that have traditionally been used to both promote the interests of domestic industries and combat restrictive business practices are now banned.Trade Related Investment Measures is the name of one of the four principal legal agreements of the WTO trade treaty.TRIMs are rules that restrict preference of domestic firms and thereby enable international firms to operate more easily within foreign markets

TRIPs
The TRIPS Agreement, which came into effect on 1 January 1995, is to date the most comprehensive multilateral agreement on intellectual property.
The three main features of the Agreement are: Standards. In respect of each of the main areas of intellectual property covered by the TRIPS Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. Each of the main elements of protection is defined, namely the subject-matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection. The Agreement sets these standards by requiring, first, that the substantive obligations of the main conventions of the WIPO, the Paris Convention for the Protection of Industrial Property (Paris Convention) and the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) in their most recent versions, must be complied with. With the exception of the provisions of the Berne Convention on moral rights, all the main substantive provisions of these conventions are incorporated by reference and thus become obligations under the TRIPS Agreement between TRIPS Member countries. The relevant provisions are to be found in Articles 2.1 and 9.1 of the TRIPS Agreement, which relate, respectively, to the Paris Convention and to the Berne Convention. Secondly, the TRIPS Agreement adds a substantial number of additional obligations on matters where the preexisting conventions are silent or were seen as being inadequate. The TRIPS Agreement is thus sometimes referred to as a Berne and Paris-plus agreement. Enforcement. The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights. The Agreement lays down certain general principles applicable to all IPR enforcement procedures. In addition, it contains provisions on civil and administrative procedures and remedies, provisional measures, special requirements related to border measures and criminal procedures, which specify, in a certain amount of detail, the procedures and remedies that must be available so that right holders can effectively enforce their rights. Dispute settlement. The Agreement makes disputes between WTO Members about the respect of the TRIPS obligations subject to the WTO's dispute settlement procedures. In addition the Agreement provides for certain basic principles, such as national and mostfavoured-nation treatment, and some general rules to ensure that procedural difficulties in acquiring or maintaining IPRs do not nullify the substantive benefits that should flow from the Agreement. The obligations under the Agreement will apply equally to all Member countries, but developing countries will have a longer period to phase them in. Special transition arrangements operate in the situation where a developing country does not presently provide product patent protection in the area of pharmaceuticals. The TRIPS Agreement is a minimum standards agreement, which allows Members to provide more extensive protection of intellectual property if they so wish. Members are left free to determine the appropriate method of implementing the provisions of the Agreement within their own legal system and practice.

Advantages of WTO
World Trade Organization helps member states in various ways and this enables them to reap benefits such as: Helps promote peace within nations: Peace is partly an outcome of two of the most fundamental principle of the trading system; helping trade flow smoothly and providing countries with a constructive and fair outlet for dealing with disputes over trade issues. Peace creates international confidence and cooperation that the WTO creates and reinforces. Disputes are handled constructively: As trade expands in volume, in the numbers of products traded and in the number of countries and company trading, there is a greater chance that disputes will arise. WTO helps resolve these disputes peacefully and constructively. If this could be left to the member states, the dispute may lead to serious conflict, but lot of trade tension is reduced by organizations such as WTO. Rules make life easier for all: WTO system is based on rules rather than power and this makes life easier for all trading nations. WTO reduces some inequalities giving smaller countries more voice, and at the same time freeing the major powers from the complexity of having to negotiate trade agreements with each of the member states. Free trade cuts the cost of living: Protectionism is expensive, it raises prices, WTO lowers trade barriers through negotiation and applies the principle of non-discrimination. The result is reduced costs of production (because imports used in production are cheaper) and reduced prices of finished goods and services, and ultimately a lower cost of living. It provides more choice of products and qualities: It gives consumer more choice and a broader range of qualities to choose from. Trade raises income: Through WTO trade barriers are lowered and this increases imports and exports thus earning the country foreign exchange thus raising the country's income. Trade stimulates economic growth: With upward trend economic growth, jobs can be created and this can be enhanced by WTO through careful policy making and powers of freer trade. Basic principles make life more efficient: The basic principles make the system economically more efficient and they cut costs. Many benefits of the trading system are as a result of essential principle at the heart of the WTO system and they make life simpler for the enterprises directly involved in international trade and for the producers of goods/services. Such principles include; non-discrimination, transparency, increased certainty about trading conditions etc. together they

make trading simpler, cutting company costs and increasing confidence in the future and this in turn means more job opportunities and better goods and services for consumers. Governments are shielded from lobbying: WTO system shields the government from narrow interest. Government is better placed to defend themselves against lobbying from narrow interest groups by focusing on trade-offs that are made in the interests of everyone in the economy. The system encourages good governance: The WTO system encourages good government. The WTO rules discourage a range of unwise policies and the commitment made to liberalize a sector of trade becomes difficult to reverse. These rules reduce opportunities for corruption.

disadvantages of wto
1.) Increased dependence on multinational corporations : It is apprehended that by including agriculture in wto , Indian farmers will become dependent on multinational companies for improved seeds and agriculture technology.Farmers will have to pay a huge amount to MNCs for branded seeds , fertilizers and pesticides. 2.) LOSS TO SMALL FARMERS Only rich farmers can take advantage of costly farm technology , branded seeds , fertilizers and pesticides . the small farmers who are large in no.

cannot afford these costly inputs. They will not be able to survive and will be forced to sell their land. 3.) INCREASE IN RURAL UNEMPLOYMENT The small farmers will be forced to sell their land and will have to search for alternative employment. Moreover, new farm technology is capital intensive in nature which will further reduce the demand for agriculture labour and render the farmers/agriculture labourers unemployed.

4.)REDUCTION IN SUBSIDY
Critics are of the opinion that in consequence to wto agreements,subsidy to agriculture sector will be slashed. It will adversely affect the poor farmers. 5.)IMPORT OF FOODGRAINS It is apprehended that by entering into wto agreements, surplus food grains of developed

countries will be imported on large scale. The domestic farmers will face competition from imported foodgrains. 6.)PLANT BREEDING PROTECTION According to wto ,protection of breeding has been determined by sui generis system. Indian farmers will have to spend large amount of money to get new and improved variety of plants and there dependence on multinational companies will further increase. 7.) PATENT OF INDIAN HERBS BY FOREIGN COMPANIES Some foreign companies have taken patent of Indian herbs/foodgrains like haldi,neem tulsi , basmati rice ,etc,an American company had taken part of haldi in 1995.India challenged it, then wto cancelled the patent of haldi to American company. Another American company has already taken the patent of basmati rice in the

name of kasmati and texmati and has got the patent of neem.So there is risk of Indian herbs/grains being patented by foreign co.s. So Indians will have to make heavy payments as royalty to patentholders for using these herbs / grains. 8.) EFFECT ON PRICES If patents for common products like seeds, foodgrains, pesticides, etc are recognized, then developing countries like India will have to pay huge royalty to the patent holders. It will result in the price rise. Small farmers will be hit by patent agreements. 9.) INCREASED LITIGATION COST Multinational companies may file a claim against Indian farmers for copying of any patent before WTO.Indian farmers will have to face difficulties to prove their non-involvement in copying case.

They will have to waste their time and money to prove their innocence. 10.) ISSUE OF SOCIAL COST , ENVIRONMENT COST AND LABOUR COST Developed countries are trying to link these matters with trade matters.developed countries argue that social cost , labour cost and envrnmnt cost are high in developed countries in comparison to the developing countries. They argue that cost of production in developed countries is high because of high labour cost and high social cost; while labour cost and social cost are low in developing countries. So developed countries should be allowed to impose tariff on imports to neutralize the difference in such costs. If this decision Is taken,then developing countries will be at disadvantage as they will find it difficult to export their products to developed countries , because of tariff barriers imposed by developed countries.

World trade in recent years

World (goods and services) exports grew by 9 per cent in volume terms and by 15 per cent in value terms in 2006. This was up slightly from 2005, but below the very high 21 per cent increase in 2004. Regional developments Growth in the global economy over recent years has been broad-based. United States GDP grew by 2.9 per cent in 2006. Growth was mainly driven by domestic consumption, although the weak housing sector increasingly weighed on growth over the year. US export growth has improved in recent years, benefiting from a lower US dollar, and reached 12.7 per cent in 2006. Trade in 2007 The world economy has continued to support strong export growth in 2007 WTO membership rises to 157 with the entry of Russia and Vanuatu

 The Doha Round is the latest round of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The work programme covers about 20 areas of trade. The Round is also known semi-officially as the Doha Development Agenda as a fundamental objective is to improve the trading prospects of developing countries.