Subject: Commerce

Class: M. Com.
Year: II Semester
Name of Paper: Business Environment

BUSINESS
Topic: World Trade Organization (WTO)
Sub Topic: Emergence, Objectives, Structure,

ENVIRONMENT
Agreement, Functions and Dispute Settlement Process
Keywords: WTO, GATT

Assistant Professor
Department of Commerce
Faculty of Commerce & Management Studies
Mahatma Gandhi Kashi Vidyapith, Varanasi- 02
email: ayushkumar@mgkvp.ac.in
WORLD TRADE ORGANIZATION (WTO)
▪ The World Trade Organization (WTO) is an international organization

designed to supervise and liberalize international trade.

▪ The WTO came into being on January 1, 1995, and is the successor to

the General Agreement on Tariffs and Trade (GATT), which was

created in 1947, and continued to operate for almost five decades as a

de facto international organization.

 CONT…
▪ The World Trade Organization deals with the rules of trade between nations
at a near-global level; it is responsible for negotiating and implementing new
trade agreements and is in charge of policing member countries’.

▪ The Director General of WTO is Roberto Azevêdo

▪ WTO Headquarters is situated in Geneva, Switzerland

▪ Membership: 164 members representing 98 per cent of world trade

Source: https://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm
EMERGENCE OF WTO
• The WTO's predecessor, the General Agreement on Tariffs and Trade
(GATT), was established after World War II in the wake of other new
multilateral institutions dedicated to international economic cooperation notably
the

Bretton Woods
institutions

International Bank International International Trade

for Reconstruction Monetary Fund Organisation (ITO)
and Development
(IBRD) General Agreement
on Tariff and Trade
World Bank (GAAT) in 1948
World Trade
Organisation
(WTO) in 1994
 ROUNDS OF GATT NEGOTIATION
• In the absence of an international organization for trade, the GATT would over the years
transform itself into a international organization.

Rounds of GATT
Multilateral Trade Negotiations
No. Years Place Accomplishments
1-5 1947-61 Reduced tariffs
6 1964-67 Geneva Tariffs + Anti-dumping duties
(Kennedy Round)

7 1973-79 Geneva Tariffs + Non Tariffs Barriers

(Tokyo Round)

8 1986-93 Uruguay Round Tariffs, NTBs, Services, Intellectual Property Right, Textiles,
Agriculture, Dispute Settlement, Creation of WTO signed
April 1994 and officially constituted in 1st Jan.1995
 MEMBER COUNTRIES OF WTO

Source: https://www.wto.org/english/thewto_e/countries_e/org6_map_e.htm
ORGANISATIONAL STRUCTURE OF WTO
OBJECTIVES OF WTO
• Trade without discrimination
• To set and enforce rules for international trade,
• To provide forum for negotiating and monitoring the international trade.
• To resolve trade disputes,
• To increase the transparency of decision-making processes
• To cooperate with other major international economic institutions
involved in global economic management
• To help developing countries benefit fully from the global trading
system.
FUNCTIONS OF WTO
Among the various functions of the WTO, these are regarded by
analysts as the most important:

• It oversees the implementation, administration and operation of the

covered agreements.
• It provides a forum for negotiations and for settling disputes.
• Additionally, it is the WTO's duty to review the national trade
policies, and to ensure the coherence and transparency of trade
policies through surveillance in global economic policy-making.
CONT..
• Another priority of the WTO is the assistance of developing, least-
developed and low-income countries in transition to adjust to WTO rules
and disciplines through technical cooperation and training.

• The WTO is also a center of economic research and analysis- regular

assessments of the global trade picture in its annual publications and
research reports on specific topics are produced by the organization.

• Finally, the WTO cooperates closely with the two other components of
the Bretton Woods system, the IMF and the World Bank.
WTO AGREEMENTS
• The agreement establishing the WTO consist of the following which
embody the results of the Uruguay round of the Multilateral Trade
Negotiations:
• Agreement on Agriculture (AOA)
i. Reduction in domestic subsidies
ii. Reduction in Export Subsidies
iii.Improvement in Market Access
• Trade in Textile and Clothing (Multi- Fibre Agreement)
CONT..
• Trade Related Intellectual Property Rights (TRIPSs)

• Trade Related Investment Measures (TRIMs)

• General Agreement on Trade and Services (GATS)

• Dispute Settlement

• Agreement on Anti-dumping
IMPACT OF WTO ON INDIAN ECONOMY

• Import on Chinese Goods

• Impact of WTO on SSI Units

• Subsidies and Agriculture

• Child Labour
CONT..
• WTO has helped India to improve its export competitiveness.
• Lower tariff barriers and market access has helped India to integrate and
participate in the global economy in a more efficient manner.
• Transfer & Exchange of Technology ,ideas etc. has been of tremendous
help for India in pursuit of its growth and development.
• Having market access has helped in reduction of cost and time which
would have otherwise required for bilateral trade negotiations.
• A well defined and structured dispute settlement mechanism also makes
it easier to settle the trade disputes.
THE DISPUTE SETTLEMENT PROCESS
• The Dispute Settlement Mechanism (DSM) is a quasi-judicial system for resolving trade disputes.
EXERCISE
▪ Short Answer Questions
1. What is General Agreement on Tariff and Trade?
2. Explain the objective of World Trade Organisation.
▪ Long Answer Questions
1. What do you mean World Trade Organisation ? Describe
various Agreements World Trade Organisation.
2. Briefly discuss the Dispute Settlement Process in World
Trade Organisation.
REFERENCE
1. Ashwathappa, K., “Business Environment for Strategic Management”, Tata
McGraw Hill.

2. Cherunilam, Francis, “Business Environment”, Himalaya Publishing House.

3. Sinha, V. C., “Business Environment”, Sanjay Sahitya Bhawan

4. Mishra & Puri, “Indian Economy”, Himalaya Publishing House

5. Shukla, M.B., “Business Environment”, Taxmann’s Publication.

6. Gupta, C.B., “Business Environment”, Sultan Chand & Sons.

7. https://en.wikipedia.org/wiki/History_of_the_World_Trade_Organization

8. https://www.quora.com/What-is-the-impact-of-WTO-on-the-Indian-economy
DECLARATION
• The content is exclusively meant for academic
purposes and for enhancing teaching and learning. Any
other use for economic / commercial purpose is
strictly prohibited. The users of the content shall not
distribute, disseminate or share it with anyone else
and its use is restricted to advancement of individual
knowledge. The information provided in this e-
content is authentic and best as per knowledge.

Ayush Kumar