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Unit - IV World Trade Organisation (1) Ito, Gatt and Wto
Unit - IV World Trade Organisation (1) Ito, Gatt and Wto
Unit - IV World Trade Organisation (1) Ito, Gatt and Wto
1
GATT – Original 23 signatories. Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba,
Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern
Rhodesia, Syria, South Africa, the United Kingdom and the United States.
The World Trade Organisation (WTO) oversees a multilateral system that deals with
the rules of trade between nations on a global level. The working of the WTO is largely based
on the Uruguay Round of negotiations that took place from 1986 to 1994.
The WTO has its origins in the General Agreement on Tariffs and Trade of 1947 and
subsequent round of negotiations. Trade rounds took place between 1947 and 1994, in which
focus was put on tariffs in the first five rounds. In the later rounds, non-tariff issues, non-
tariff barriers, anti-dumping measures were negotiated. In the final round the following
subjects were covered–
Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles,
agriculture, creation of WTO.
GATT had mainly dealt with trade in goods; the WTO agreements cover trade in
services and in intellectual property besides dispute settlement procedures.
The WTO agreements include agriculture, textiles and clothing, banking,
telecommunications, government purchases, industrial standards and product safety, food
regulations, and more.
Though there have been several Ministerial Conferences after Uruguay Round, the
objectives of a new round of negotiations were formulated only under the “Doha
Development Agenda” launched in 2001 at the fourth Ministerial Conference at Doha, Qatar.
Though the GATT, over a period of 47 years – from 1948 to 1994, provided the rules
for much of world trade, it remained a provisional agreement.
Package approach
The World Trade Organisation is envisaged to build on GATT which had gone
through stresses and strains in the journey for over four decades. The WTO in Article III,
indicates a very important fact. It is that the legal instruments and the agreements are binding
on all the members. Earlier, members of the GATT as they liked, had option, to go out of
certain provisions under the Agreement. For WTO, it is a total package and members have to
either take it as a package or be out of the system. This is expected to lead to strengthening of
the organisation.
WTO IN A NUTSHELL
Agreement Establishing WTO
(At a Glance)
Entering or Withdrawing
Any State or separate customs territory possessing full autonomy in the conduct of its
external commercial relations may accede to the WTO on terms to be agreed between other
members and itself.
Any member can withdraw from the organisation and it comes into effect upon the
expiry of six months from the date of the member’s withdrawal notice given to the Director
General of WTO.
Decision Making
The decision to amend the basic principles such as Most Favoured Nation (MFN) or
National Treatment has to get the unanimous consent of all members.
Interpretation of the provisions of the agreements and waiver of members’ obligation
to follow the provisions is required to get the backing of three-quarters majority of the
members present and voting.
Different Committees
There is a Committee on Budget, Finance and Administration. There is a Committee
on Trade and Development. Finally, there is a Committee on Trade and Environment, which
has become a highly controversial and yet an important issue for re-negotiation given the
conflicting stand of the developed countries and some of the developing countries. All these
committees shall set down their respective rules and procedures subject to the approval of
their respective councils. For all the committees, the membership is open to representatives of
all committees.
The Plurilateral Trade Agreement is not binding on all members.
Article V of the Agreement is indicating the details of relations with other
organisations.
As regards the Secretariat, details of which are given in Article VI, basically it is the
Director General who is responsible to the WTO. Similarly details on Committee on Budget,
Finance, and Administration are given in Article VII and finally as regards the status of the
WTO, it has been made clear in Article VIII.
The Contracting Parties of WTO agreement agreed to accord legal personality and
also to accord such privileges and immunities to the organisation and to its officials as are
necessary for the exercise of certain functions.
More Bindings
Developed countries increased the number of imports whose tariff rates were “bound”
from 78% of product lines to 99%. For developing countries, the increase was considerable;
from 21% to 73%. Countries in transition from centrally planned economies to a free-market
economy increased their bindings from 73% to 98%.