Module-13 International Institution

| GS Pre Cum Main Foundation Course for CSE-2022 by Vibhas Jha Sir
GS PRE CUM MAIN

FOUNDATION COURSE
for CSE – 2022
INDIAN ECONOMY
Module-13: International Institutions
by
Vibhas Jha Sir
International Institutions 2|Page

BRETTON WOODS AGREEMENT

The Bretton Woods Agreement was negotiated in July 1944 by delegates from 44 countries at the United
Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire. Thus, the name
“Bretton Woods Agreement. Under the Bretton Woods System, gold was the basis for the U.S. dollar and
other currencies were pegged to the U.S. dollar’s value.
Members of the Bretton Woods system agreed to avoid trade wars. For example, they wouldn't lower their
currencies strictly to increase trade. But they could regulate their currencies under certain conditions. For
example, they could take action if foreign direct investment began to destabilize their economies. They
could also adjust their currency values to rebuild after a war.
Benefits of Bretton Woods Currency Pegging
S
The Bretton Woods System included 44 countries. These countries were brought together to help regulate
and promote international trade across borders. As with the benefits of all currency pegging regimes,
currency pegs are expected to provide currency stabilization for trade of goods and services as well as
financing.
IA
All of the countries in the Bretton Woods System agreed to a fixed peg against the U.S. dollar with
diversions of only 1% allowed. Countries were required to monitor and maintain their currency pegs which
they achieved primarily by using their currency to buy or sell U.S. dollars as needed. The Bretton Woods
System, therefore, minimized international currency exchange rate volatility which helped international
trade relations. More stability in foreign currency exchange was also a factor for the successful support of
loans and grants internationally from the World Bank.
The Bretton Woods Agreement created two Bretton Woods Institutions, the IMF and the World Bank.
End of Bretton Woods system
T
The system dissolved between 1968 and 1973. In August 1971, U.S. President Richard Nixon announced the
"temporary" suspension of the dollar's convertibility into gold. While the dollar had struggled throughout
most of the 1960s within the parity established at Bretton Woods, this crisis marked the breakdown of the
system. An attempt to revive the fixed exchange rates failed, and by March 1973 the major currencies began
EX
to float against each other.

Since the collapse of the Bretton Woods system, IMF members have been free to choose any form of
exchange arrangement they wish (except pegging their currency to gold): allowing the currency to float
freely, pegging it to another currency or a basket of currencies, adopting the currency of another country,
participating in a currency bloc, or forming part of a monetary union.
IMF (INTERNATIONAL MONETARY FUND)

 IMF constitutes of total 190 Member Countries
 Andorra - a microstate situated between France and Spain joined the IMF on 16th October 2020
N
The International Monetary Fund (IMF) is an international organization that promotes global economic
growth and financial stability, encourages international trade, and reduces poverty. Quotas of member
countries are a key determinant of the voting power in IMF decisions. Votes comprise one vote per 100,000
Special Drawing Rights (SDR) of quota plus basic votes. SDRs are an international type of monetary reserve
currency created by the IMF as a supplement to the existing money reserves of member countries.
History of the IMF
The IMF was originally created in 1945 as part of the Bretton Woods Agreement, which attempted to
encourage international financial cooperation by introducing a system of convertible currencies at fixed
exchange rates. The dollar was redeemable for gold at $35 per ounce at the time. The IMF oversaw the

system: for example, a country was free to readjust its exchange rate by up to 10% in either direction, but
larger changes required the IMF's permission.
The IMF also acted as a gatekeeper: Countries were not eligible for membership in the International Bank
for Reconstruction and Development (IBRD)—a World Bank forerunner that the Bretton Woods agreement
created in order to fund the reconstruction of Europe after World War II—unless they were members of the
IMF.
Since the Bretton Woods system collapsed in the 1970s, the IMF has promoted the system of floating
exchange rates, meaning that market forces determine the value of currencies relative to one another. This
system continues to be in place today.
IMF Activities:
S
The IMF's primary methods for achieving these goals are monitoring capacity building and lending.
 Surveillance: The IMF collects massive amounts of data on national economies, international trade,
and the global economy in aggregate. The organization also provides regularly updated economic
forecasts at the national and international levels. These forecasts, published in the World Economic
IA
Outlook, are accompanied by lengthy discussions on the effect of fiscal, monetary, and trade policies
on growth prospects and financial stability.
 Capacity Building: The IMF provides technical assistance, training, and policy advice to member
countries through its capacity building programs. These programs include training in data collection
and analysis, which feed into the IMF's project of monitoring national and global economies.
 Lending: The IMF makes loans to countries that are experiencing economic distress to prevent or
mitigate financial crises. Members contribute the funds for this lending to a pool based on a quota
system.
T
Special Drawing Rights (SDR)
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’
official reserves. So far SDR 204.2 billion (equivalent to about US$293 billion) have been allocated to
members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis. The value
EX
of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the
Japanese yen, and the British pound sterling.
The role of the SDR

 The SDR was created as a supplementary international reserve asset in the context of the Bretton
Woods fixed exchange rate system. The collapse of the Bretton Woods system in 1973 and the shift of
major currencies to floating exchange rate regimes lessened the reliance on the SDR as a global
reserve asset. Nonetheless, SDR allocations can play a role in providing liquidity and supplementing
member countries’ official reserves, as was the case amid the global financial crisis.
N
 The SDR serves as the unit of account of the IMF and some other international organizations.The SDR
is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable
currencies of IMF members. SDRs can be exchanged for these currencies.
SDR Operations
 Participating members and prescribed holders can buy and sell SDRs in the voluntary market. If
required, the IMF can also designate members to buy SDRs from other participants.
 SDRs may be used by IMF members and the IMF itself in accordance with the Articles of Agreement
and decisions adopted by the Executive Board and Board of Governors. The IMF has the authority to
prescribe other holders of SDRs, nonmembers, member countries that are not SDR Department

Participants, institutions that perform the functions of a central bank for more than one member, and
other official entities. As of end-January 2021, there were 15 organizations approved as prescribed
holders. Prescribed holders may not receive allocations of SDRs. SDRs cannot be held by private
entities or individuals.
Reserve Tranche
 A reserve tranche is a portion of the required quota of currency each member country must provide
to the International Monetary Fund (IMF) that can be utilized for its own purposes—without a service
fee or economic reform conditions.
 The IMF is funded through its members and their quota contributions. The reserve tranche is
S
basically an emergency account that IMF members can access at any time without agreeing to
conditions or paying a service fee. In other words, a portion of a member country’s quota can be
withdrawn free of charge at its own discretion.
 The IMF's Board of Governors conducts general reviews of quotas at regular intervals (no more than
five years apart). Any changes in quotas must be approved by an 85 percent majority of the total
IA
voting power, and a member’s own quota cannot be changed without its consent. the two main issues
addressed in a general review of quotas are
 the size of an overall quota increase and
 the distribution of the increase among the members.
On February 7, 2020, the Board of Governors (BoG) adopted a Resolution concluding the 15th General
Review of Quotas, with no increase in quotas and providing guidance for the 16th Review. As part of the
16th Review, the BoG requested the Executive Board revisit the adequacy of quotas, and continue the
process of IMF governance reform—including a new formula as a guide—and ensure the primary role of
T
quotas in IMF resources. Any adjustment in quota shares would be expected to result in increases in the
quota shares of dynamic economies in line with their relative positions in the world economy.
Objective of IMF:
EX
The IMF's primary purpose is to ensure the stability of the international monetary system—the system of
exchange rates and international payments that enables countries (and their citizens) to transact with each
other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues
that bear on global stability.
WORLD BANK
The World Bank is an international organization dedicated to providing financing, advice, and research to
developing nations to aid their economic advancement. The bank predominantly acts as an organization
that attempts to fight poverty by offering developmental assistance to middle- and low-income countries.
N
The World Bank is a provider of financial and technical assistance to individual countries around the globe.
The bank considers itself a unique financial institution that sets up partnerships to reduce poverty and
support economic development.
The World Bank supplies qualifying governments with low-interest loans, zero-interest credits, and grants,
all for the purpose of supporting the development of individual economies. Debt borrowings and cash
infusions help with global education, healthcare, public administration, infrastructure, and private-sector
development. The World Bank also shares information with various entities through policy advice,
research and analysis, and technical assistance. It offers advice and training for both the public and private
sectors.

History:
Founded in 1944, the International Bank for Reconstruction and Development—soon called the World
Bank—has expanded to a closely associated group of five development institutions. Originally, its loans
helped rebuild countries devastated by World War II. In time, the focus shifted from reconstruction to
development, with a heavy emphasis on infrastructure such as dams, electrical grids, irrigation systems,
and roads. With the founding of the International Finance Corporation in 1956, the institution became able
to lend to private companies and financial institutions in developing countries. And the founding of the
International Development Association in 1960 put greater emphasis on the poorest countries, part of a
steady shift toward the eradication of poverty becoming the Bank Group’s primary goal. The subsequent
launch of the International Centre for Settlement of Investment Disputes and the Multilateral Investment
S
Guarantee Agency further rounded out the Bank Group’s ability to connect global financial resources to the
needs of developing countries.
The World Bank Group consists of five organizations:

The International Bank for Reconstruction and Development:
IA
 The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-
income and creditworthy low-income countries.
 No of Members: 189 countries
The International Development Association

 The International Development Association (IDA) provides interest-free loans — called credits — and
grants to governments of the poorest countries.
T
 Together, IBRD and IDA make up the World Bank.
The International Finance Corporation
 The International Finance Corporation (IFC) is the largest global development institution focused
exclusively on the private sector. We help developing countries achieve sustainable growth by
EX
financing investment, mobilizing capital in international financial markets, and providing advisory
services to businesses and governments.
No of Members: 185 countries
The Multilateral Investment Guarantee Agency

 The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 to promote foreign direct
investment into developing countries to support economic growth, reduce poverty, and improve
people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors
and lenders.
N
The International Centre for Settlement of Investment Disputes

 The International Centre for Settlement of Investment Disputes (ICSID) provides international
facilities for conciliation and arbitration of investment disputes.
Today the Bank Group’s work touches nearly every sector that is important to fighting poverty, supporting
economic growth, and ensuring sustainable gains in the quality of people’s lives in developing countries.
While sound project selection and design remain paramount, the Bank Group recognizes a wide range of

factors that are critical to success—effective institutions, sound policies, continuous learning through
evaluation and knowledge-sharing, and partnership, including with the private sector. The Bank Group
has long-standing relationships with more than 180 member countries, and it taps these to address
development challenges that are increasingly global. On critical issues like climate change, pandemics, and
forced migration, the Bank Group plays a leading role because it is able to convene discussion among its
country members and a wide array of partners. It can help address crises while building the foundations
for longer-term, sustainable development.
ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB)

The Asian Infrastructure Investment Bank (AIIB) is a new international development bank that provides
financing for infrastructure projects in Asia. It began operations in January 2016. The Asian Infrastructure
S
Investment Bank (AIIB) is a multilateral development bank headquartered in Beijing. Like other
development banks, its mission is to improve social and economic outcomes in its region, Asia, and
beyond.
Key Observation:
IA
● Rapid Growth in Worldwide Membership: AIIB began operations in 2016 with 57 founding
Members (37 regional and 20 non regional). By the end of 2020, we had 103 approved Members
representing approximately 79 percent of the global population and 65 percent of global GDP.
● Highest Credit Rating Assigned by Three Major Rating Institutions: Since 2017, AIIB has received
AAA ratings with a stable outlook from the top credit rating agencies— Standard & Poor’s, Moody’s
and Fitch. Industry recognition of our sound financial standing has enabled us to expand our
presence in international capital markets by successfully issuing global bonds and has allowed us to
broaden funding sources through local currency-denominated bond issuances and private
placements.
T
● Permanent Observer Status in the United Nation: In 2018, AIIB was granted Permanent Observer
status in the deliberations of both the United Nations General Assembly and the Economic and Social
Council, the two development-focused principal organs of the global body.
● Governance Model Enhancing Efficiency and Accountability: AIIB has created an effective
EX
environment for its Board of Directors to take a strategic approach to direct and oversee the work of
an accountable management. The Bank’s Accountability Framework is an innovative governance
model that positions AIIB to embed a culture of accountability throughout the organization. This
framework strengthens (i) the Board’s role in holding the President accountable and establishing
AIIB’s policies and strategies and (ii) the President’s role in conducting AIIB’s business, including the
delegation of projects under set conditions.
This governance model includes an Oversight Mechanism in line with principles of transparency,
openness, independence and accountability. This innovative and flexible structure allowed us to act
swiftly on the immediate social and economic needs of our Members during the pandemic, including
N
more frequent and virtual meetings to facilitate the review and approval of projects and policies.
● Policies and Strategies Developed or Finalized: Strategies for all major infrastructure sectors and for
investing in equity, mobilizing private capital and financing operations in non regional members
have all been approved and being implemented.
AIIB Maps Out Financing Infrastructure for Tomorrow in Corporate Strategy:
The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved the Bank’s first
Corporate Strategy for 2021-2030. AIIB’s Corporate Strategy defines its Mission as “Financing Infrastructure
for Tomorrow” which combines the Bank’s firm commitment to sustainability with a clear operational
focus on

 Green Infrastructure,
 Connectivity and Regional Cooperation,
 Technology-enabled Infrastructure and
 Private Capital Mobilization.
It sets targets on climate financing for 2025 and cross-border connectivity and private sector financing for
2030.
The strategy builds on and reaffirms AIIB’s strong foundations, including the Bank’s core values of Lean,
Clean and Green and is built upon key pillars of establishing AIIB’s market position, achieving impact at
scale, adding value along the project cycle, serving a broad range of members and building the bank’s
corporate culture.
S
Goals of AIIB:
 To foster sustainable economic development, create wealth and improve infrastructure connectivity
in Asia by investing in infrastructure and other productive sectors.
 To promote regional cooperation and partnership in addressing development challenges by working
IA
in close collaboration with other multilateral and bilateral development institutions.
 To promote investment in the public and private capital for development purposes, in particular for
development of infrastructure and other productive sectors.
 To utilize the resources at its disposal for financing such development in the region, including those
projects and programs which will contribute most effectively to the harmonious economic growth of
the region;
 To encourage private investment in projects, enterprises and activities contributing to economic
development in the region when private capital is not available on reasonable terms and conditions.
AIIB’s primary focus is on financing projects that benefit the economic and social development of Asia.
T
Projects should support sustainable infrastructure, cross-border connectivity and private capital
mobilization.
ASIAN DEVELOPMENT BANK (ADB)

EX
The Asian Development Bank (ADB) envisions a prosperous, inclusive, resilient, and sustainable Asia and
the Pacific, while sustaining its efforts to eradicate extreme poverty in the region. Despite the region's many
successes, it remains home to a large share of the world's poor: 263 million living on less than $1.90 a day
and 1.1 billion on less than $3.20 a day.
ADB assists its members, and partners, by providing loans, technical assistance, grants, and equity
investments to promote social and economic development.
ADB maximizes the development impact of its assistance by facilitating policy dialogues, providing
advisory services, and mobilizing financial resources through cofinancing operations that tap official,
commercial, and export credit sources.
N
From 31 members at its establishment in 1966, ADB has grown to encompass 68 members—of which 49 are
from within Asia and the Pacific and 19 outside.
History:
ADB was conceived in the early 1960s as a financial institution that would be Asian in character and foster
economic growth and cooperation in one of the poorest regions in the world.
A resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United
Nations Economic Commission for Asia and the Far East in 1963 set that vision on the way to becoming
reality.

The Philippines capital of Manila was chosen to host the new institution, which opened on 19 December
1966, with 31 members that came together to serve a predominantly agricultural region. Takeshi Watanabe
was ADB's first President.
During the 1960s, ADB focused much of its assistance on food production and rural development.
A major landmark was the establishment in 1974 of the Asian Development Fund to provide low-interest
loans to ADB's poorest members.
In 1982, ADB opened its first field office—in Bangladesh—to bring operations closer to the people in need.
Later in the decade, ADB began working with nongovernment organizations to help disadvantaged
groups. In mid-1997, a severe financial crisis hit the region, setting back Asia's economic gains. ADB
responded with projects and programs to strengthen financial sectors and create social safety nets for the
S
poor. ADB approved its largest single loan—a $4 billion emergency loan to the Republic of Korea—and
established the Asian Currency Crisis Support Facility to accelerate assistance
In 1999—recognizing that economic development was bypassing many people in the region—ADB adopted
poverty reduction as its overarching goal.
IA
In 2003, the severe acute respiratory syndrome (SARS) epidemic hit the region, making it clear that fighting
infectious diseases requires regional cooperation. ADB began providing support at national and regional
levels to help countries more effectively respond to avian influenza and the growing threat of HIV/AIDS.
ADB also had to respond to unprecedented natural disasters, committing more than $850 million for
recovery in areas of India, Indonesia, Maldives, and Sri Lanka hit by the December 2004 Asian tsunami. In
addition, a $1 billion line of assistance to help victims of the October 2005 earthquake in Pakistan was set
up.
In May 2014, plans were announced to combine the lending operations of ADB’s two main funds, the Asian
Development Fund and its ordinary capital resources. The merger will boost ADB’s total annual lending
T
and grant approvals to as high as $20 billion—50% more than the current level when it takes effect in
January 2017.
Roles and functions:

EX
● Economic and Social Advancement: This bank has a membership program under which there are
various benefits available for the members’ countries.
These benefits include providing loan and investment at a concessional rate. One of the functions of
the ADB is to provide loans and equity investments for the economic and social upgrade of
developing member countries.
● Technical Assistance:
Most of the countries require a lot of services like advisory services. Moreover, while operating at the
international level, most of the countries require technical support too.
N
One of the functions of the Asian Development Bank is to provide technical assistance for the
preparation and implementation of development projects and advisory services.
● Investment Promotion
Firstly, the Asian Development Bank provides a lot of services to the member countries in the form of
investments. At the same time, they also provide some specific sort of investment facilities for
development purposes.
● Support in Policies and Plans
Plans and policies play an important role in any country. There are various domestic agencies
providing help to the authorities while framing various policies.

But there is a need for some international agencies at the same time for the same function. One of the
main functions of the ADB is to provide help to the member countries in framing policies and plans at
the international level.
NEW DEVELOPMENT BANK: NDB

“The Bank shall have an initial authorized capital of US$ 100 billion. The initial subscribed capital shall be
US$ 50 billion, equally shared among founding members. The first chair of the Board of Governors shall be
from Russia. The first chair of the Board of Directors shall be from Brazil. The first President of the Bank
shall be from India. The headquarters of the Bank shall be located in Shanghai. The New Development
Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters.”
(Fortaleza Declaration)
S
History:
At the fourth BRICS Summit in New Delhi (2012), the leaders of Brazil, Russia, India, China and South
Africa considered the possibility of setting up a new Development Bank to mobilize resources for
IA
infrastructure and sustainable development projects in BRICS and other emerging economies, as well as in
developing countries. They directed Finance Ministers to examine the feasibility and viability of this
initiative, to set up a joint working group for further study, and to report back by the next Summit in 2013.
Following the report from the Finance Ministers at the fifth BRICS summit in Durban (2013), the leaders
agreed on the feasibility of establishing the New Development Bank and made the decision to do so. It was
also agreed that the initial contribution to the Bank should be substantial and sufficient for it to be effective
in financing infrastructure.
During the sixth BRICS Summit in Fortaleza (2014), the leaders signed the Agreement establishing the New
Development Bank (NDB).
T
In the Fortaleza Declaration, the leaders stressed that the NDB will strengthen cooperation among BRICS
and will supplement the efforts of multilateral and regional financial institutions for global development,
thus contributing to collective commitments for achieving the goal of strong, sustainable and balanced
growth
EX
At the signing of the Headquarters Agreement with the government of the People’s Republic of China and
the Memorandum of Understanding with the Shanghai Municipal People’s Government on 27 February
2016, the NDB became fully operational.
The NDB is building a robust and diversified portfolio of sustainable infrastructure projects, in order to
fulfill its mandate and achieve strategic objectives.
Working of NDB:
The New Development Bank (NDB) is a multilateral development bank (MDB) established by Brazil,
Russia, India, China and South Africa (BRICS) with the objective of financing infrastructure and sustainable
N
development projects in BRICS and other emerging economies and developing countries. NDB’s work
complements the efforts of multilateral and regional financial institutions, toward global growth and
development.
NDB’s work is centered around maximizing the impact of development in a fast, flexible and efficient
manner. To catalyze the kind of development we envisage, we are always keen to listen, learn and
collaborate with other MDBs, governments, financial institutions and social organizations.
To fulfill its purpose, the Bank supports public or private projects through loans, guarantees, equity
participation and other financial instruments. NDB funded projects are located within the following Key
Areas of Operation:
International Institutions 10 | P a g e
S
The Bank provides technical assistance for projects and engages in information, cultural and personnel
exchanges with the purpose of contributing to the achievement of environmental and social sustainability.
IA
As a young and dynamic MDB, the NDB is well-placed to trigger a new kind of development – one that is
based on holistic and sustainable growth for our planet.
The activities of the New Development Bank as an international institution for promoting sustainable
development are consistent with the purposes and principles of the United Nations in the socio-economic
field. In 2018, the New Development Bank received observer status in the UN General Assembly,
establishing a firm basis for active and fruitful cooperation with the United Nations.
Mission:
T
The New Development Bank was formed to support infrastructure and sustainable development efforts in
BRICS and other underserved, emerging economies for faster development through innovation and
cutting-edge technology. The bank partners with nations through capital and knowledge, achieving
development goals with transparency and empathy and creating an equal opportunity for the development
of all countries.
EX
VALUES:
The New Development Bank is a partner in development that goes beyond the conventional codes of
multilateral banks. It represents, operates and is recognized for its values that fulfill the founding vision.
● Open & Approachable: We believe that mutual respect and a spirit of collaboration drive effective
results. At the New Development Bank, we are committed to having an open mind regarding the
needs of developing countries today and establishing meaningful partnerships.
● Transformative: Our mission is to bridge the gaps between need and funding and to be a partner in
bringing about truly holistic development. We take pride in partnering with developing countries to
N
drive structural transformation by providing financial assistance for infrastructure and sustainability-
driven projects.
● Sustainable: The 21st century has brought with it tremendous development. However, this progress
has been skewed, insufficient and often harmful to our environment. We collaborate with Initiatives
that drive growth and employment while ensuring environmental protection.
● Bold & Path-breaking: Innovative initiatives are required to change the face of development finance
and make the value chain efficient and fast. This requires bold decisions and groundbreaking process
innovation. At the New Development Bank we use technology for the larger goal of global
development.
● Flexible & Adaptive: By virtue of our roots in developing economies, we possess a keen
understanding of their financing needs. We come with a commitment to be flexible in our processes
and approach in order to accommodate interests of our public and private partners. NDB has
quickened the pace of loan disbursements by adapting our systems.
● Egalitarian: The New Development Bank is founded on the principles of equality and democracy. We
believe in democratic decision-making and inclusivity of all stakeholders. We understand that the
true meaning of development is, at the core, the vision of a great leveler – a vision that is inclusive,
not selective.
● Transparent: The New Development Bank believes in transparency and complete disclosure. We are
committed to ensure that our proceedings are transparent and all our policies, procedures and
S
documents are publicly accessible.
UNCTAD - UNITED NATIONS CONFERENCE ON TRADE AND

DEVELOPMENT
IA
UNCTAD, which is governed by its 195 member States, is the United Nations body responsible for dealing
with economic and sustainable development issues with a focus on trade, finance, investment and
technology. It helps developing countries to participate equitably in the global economy. Its work can be
summed up in three words: think, debate, deliver. UNCTAD carries out economic research, produces
innovative analyses and makes policy recommendations to support government decision-making.
UNCTAD is a forum where representatives of all countries can freely engage in dialogue, share experiences
and tackle critical issues affecting the global economy. It promotes consensus at the multilateral level.
UNCTAD turns research findings into practical applications and offers direct technical assistance to help
countries build the capacities they need for equitable integration into the global economy and improve the
T
well-being of their populations.
History:
In the early 1960s, growing concerns about the place of developing countries in international trade led
EX
many of these countries to call for the convening of a full-fledged conference specifically devoted to
tackling these problems and identifying appropriate international actions.
The first United Nations Conference on Trade and Development (UNCTAD) was held in Geneva in 1964.
Given the magnitude of the problems at stake and the need to address them, the conference was
institutionalized to meet every four years, with intergovernmental bodies meeting between sessions and a
permanent secretariat providing the necessary substantive and logistical support.
Simultaneously, the developing countries established the Group of 77 to voice their concerns. (Today, the
G77 has 131 members.)
The prominent Argentinian economist Raúl Prebisch, who had headed the United Nations Economic
N
Commission for Latin America and the Caribbean, became the organization's first Secretary-General.
Areas of work:
 Comprehend options to address macro-level development challenges
 Achieve beneficial integration into the international trading system
 Diversify economies to make them less dependent on commodities
 Limit their exposure to financial volatility and debt
 Attract investment and make it more development friendly
 Increase access to digital technologies
 Promote entrepreneurship and innovation

 Help local firms move up value chains
 Speed up the flow of goods across borders
 Protect consumers from abuse
 Curb regulations that stifle competition
 Adapt to climate change and use natural resources more effectively
UNCTAD in the UN system
UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in
1964. Our headquarters are located in Geneva, Switzerland, and we have offices in New York and Addis
Ababa.
S
UNCTAD is part of the UN Secretariat. It reports to the UN General Assembly and the Economic and Social
Council but has our own membership, leadership, and budget. We are also part of the United Nations
Development Group.
G-20
IA
The Group of Twenty (G20) is the premier forum for its members’ international economic cooperation and
decision-making. Its membership comprises 19 countries plus the European Union. Each G20 president
invites several guest countries each year.
T
EX
G20 leaders meet annually. In addition, Finance Ministers and Central Bank Governors meet regularly
during the year to discuss ways to strengthen the global economy, reform international financial
institutions, improve financial regulation and implement the key economic reforms that are needed in each
member economy. Underpinning these meetings is a year-long program of meetings among senior officials
and of working groups coordinating policy on specific issues.
The G20 started in 1999 as a meeting of Finance Ministers and Central Bank Governors in the aftermath of
N
the Asian financial crisis. In 2008, the first G20 Leaders’ Summit was held, and the group played a key role
in responding to the global financial crisis. Its decisive and coordinated actions boosted consumer and
business confidence and supported the first stages of economic recovery. G20 leaders have met 15th times
since 2020.
The 2020 G20 Riyadh summit was the fifteenth meeting of Group of Twenty (G20). It was scheduled to take
place in Riyadh, the capital city of Saudi Arabia, on 21–22 November 2020.However, due to the COVID-19
pandemic, it was held virtually.
The G20 is an apt model for global cooperation in today’s world. Its response to the global financial crisis is
a testament to the impact G20 members can make when working together. The G20 introduced trillions of
dollars in fiscal stimulus packages worldwide, which saved or created millions of jobs that would
otherwise have been destroyed. It also put in place measures to limit the collapse of financial markets and
helped maintain consumer and business confidence.
The G20 is supported by international organisations, including the Financial Stability Board, the
International Labour Organisation, the International Monetary Fund, the Organisation for Economic Co-
operation and Development, the United Nations, the World Bank and the World Trade Organization. These
and several other organisations are invited to attend key G20 meetings.
The G20 is the international forum that brings together the world’s major economies. Its members account
for more than 80% of world GDP, 75% of global trade and 60% of the population of the planet.
The forum has met every year since 1999 and includes, since 2008, a yearly Summit, with the participation
S
of the respective Heads of State and Government.
In addition to the Summit, ministerial meetings, Sherpa meetings (in charge of carrying out negotiations
and building consensus among Leaders), working groups and special events are organized throughout the
year.
IA
The G20 also regularly engages with non-government sectors. Engagement groups from business (B20),
civil society (C20), labour (L20), think tanks (T20) and youth (Y20) are holding major events during the
year, the outcomes of which will contribute to the deliberations of G20 leaders.
The work of G20 is divided into two tracks:

 The finance track comprises all meetings with G20 finance ministers and central bank governors and
their deputies. Meeting several times throughout the year they focus on monetary and fiscal issues,
financial regulations, etc.
 The Sherpa track focuses on broader issues such as political engagement, anti-corruption,
T
development, energy, etc. Each G20 country is represented by its Sherpa; who plans, guides,
implements, etc. on behalf of the leader of their respective country.
Structure and Functioning of G20

EX
 The G20 Presidency rotates annually according to a system that ensures a regional balance over time.
 For the selection of presidency, the 19 countries are divided into 5 groups, each having no more than
4 countries. The presidency rotates between each group. Every year the G20 selects a country from
another group to be president.
 India is in Group 2 which also has Russia, South Africa, and Turkey.
 The G20 does not have a permanent secretariat or Headquarters. Instead, the G20 president is
responsible for bringing together the G20 agenda in consultation with other members and in response
to developments in the global economy.
 TROIKA: Every year when a new country takes on the presidency, it works hand in hand with the
previous presidency and the next presidency and this is collectively known as TROIKA. This ensures
N
continuity and consistency of the group’s agenda
Issues Addressed by G20:

The G20 focuses on a broad agenda of issues of global importance, although, issues pertaining to the global
economy dominate the agenda, additional items have become more important in recent years, like:
 Financial markets
 Tax and fiscal policy
 Trade
 Agriculture
 Employment
 Energy
 Fight against corruption
 Advancement of women in job market
 2030 agenda for Sustainable development
 Climate Change
 Global Health
 Anti-terrorism
 Inclusive entrepreneurship
The objectives of the G20 are:
S
 Policy coordination between its members in order to achieve global economic
 stability, sustainable growth;
 To promote financial regulations that reduce risks and prevent future financial crises;
 To create a new international financial architecture.
IA
WORLD TRADE ORGANISATION
Headquarters: Geneva, Switzerland
Founded: 1 January 1995
Membership: 164 member states
Formation: 1 January 1995; 26 years ago
Director-General: Ngozi Okonjo-Iweala (from 1 March 2021)
T
Official languages: English, French, Spanish
The World Trade Organization (WTO) is the only global international organization dealing with the rules
of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the
EX
world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly,
predictably and freely as possible.
From the early days of the Silk Road to the creation of the General Agreement on Tariffs and Trade (GATT)
and the birth of the WTO, trade has played an important role in supporting economic development and
promoting peaceful relations among nations. This page traces the history of trade, from its earliest roots to
the present day.
General Agreement on Tariffs and Trade (GATT)

The General Agreement on Tariffs and Trade (GATT), signed on October 30, 1947, by 23 countries, was a
legal agreement minimizing barriers to international trade by eliminating or reducing quotas, tariffs, and
N
subsidies while preserving significant regulations. The GATT was intended to boost economic recovery
after World War II through reconstructing and liberalizing global trade. The member nations had to
remove all the trade discriminations. The 8 rounds of negotiations from 1947 to 1993 reduced average tariffs
on industrial goods from 40% to 5%. The steps taken at GATT led to economic globalization
The original 23 GATT members were Australia, Belgium, Brazil, Burma (now Myanmar), Canada, Ceylon
(now Sri Lanka), Chile, China, Cuba, Czechoslovakia (now the Czech Republic and Slovakia), France, India,
Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia (now
Zimbabwe), Syria, South Africa, the United Kingdom, and the United States. The membership increased to
128 countries by 1994.
The GATT went into effect on January 1, 1948. Since that beginning it has been refined, eventually leading
to the creation of the World Trade Organization (WTO) on January 1, 1995, which absorbed and extended
it.
GATT’s most important principle was that of trade without discrimination, in which each member nation
opened its markets equally to every other. As embodied in unconditional most-favoured nation clauses,
this meant that once a country and its largest trading partners had agreed to reduce a tariff, that tariff cut
was automatically extended to every other GATT member.
GATT included a long schedule of specific tariff concessions for each contracting nation, representing tariff
rates that each country had agreed to extend to others. Another fundamental principle was that of
protection through tariffs rather than through import quotas or other quantitative trade restrictions; GATT
S
systematically sought to eliminate the latter.
Other general rules included uniform customs regulations and the obligation of each contracting nation to
negotiate for tariff cuts upon the request of another. An escape clause allowed contracting countries to alter
agreements if their domestic producers suffered excessive losses as a result of trade concessions.
IA
The GATT managed to function as a de facto international organization, sponsoring eight rounds (A round
is a series of multilateral negotiations) of multilateral trade negotiations.
During the GATT (General Agreement on Tariffs and Trade) years, eight rounds of tariff negotiations were
held between 1947 and 1994:
1. Geneva (1947),
2. Annecy (1949),
3. Torquay (1950-51),
T
4. Geneva (1956),
5. Geneva (1960-61) - also known as the Dillon Round,
6. The Kennedy Round (1964-67),
EX
7. The Tokyo Round (1973-79) and

8. The Uruguay Round (1986-94).
GATT - Chronology of Achievements

1947 - The birth of GATT. On 30 October 1947, the General Agreement on Tariffs and Trade (GATT) was
signed by 23 nations at the Palais des Nations in Geneva. The Agreement contained tariff concessions
agreed to during the first multilateral trade negotiations and a set of rules designed to prevent these
concessions from being frustrated by restrictive trade measures.
N
The 23 founding contracting parties were members of the Preparatory Committee established by the United
Nations Economic and Social Council in 1946 to draft the charter of the International Trade Organization
(ITO). The ITO was envisaged as the final leg of a triad of post-War economic agencies (the other two were
the International Monetary Fund and the International Bank for Reconstruction - later the World Bank).
In parallel with this task, the Committee members decided to negotiate tariff concessions among
themselves. From April to October 1947, the participants completed some 123 negotiations and established
20 schedules containing the tariff reductions and bindings which became an integral part of GATT. These
schedules resulting from the first Round covered some 45,000 tariff concessions and about $10 billion in
trade.
GATT was conceived as an interim measure that put into effect the commercial-policy provisions of the
ITO. In November, delegations from 56 countries met in Havana, Cuba, to consider the ITO draft as a
whole. After long and difficult negotiations, some 53 countries signed the Final Act authenticating the text
of the Havana Charter in March 1948. There was no commitment, however, from governments to
ratification and, in the end, the ITO was stillborn, leaving GATT as the only international instrument
governing the conduct of world trade.
1948 - Entry into force. On 1 January 1948, GATT entered into force. The 23 founding members were:
Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India,
Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South
Africa, United Kingdom and the United States. The first Session of the Contracting Parties was held from
S
February to March in Havana, Cuba. The secretariat of the Interim Commission for the ITO, which served
as the ad hoc secretariat of GATT, moved from Lake Placid, New York, to Geneva. The Contracting Parties
held their second session in Geneva from August to September.
1949 - Second Round at Annecy. During the second Round of trade negotiations, held from April to
August at Annecy, France, the contracting parties exchanged some 5,000 tariff concessions. At their third
IA
Session, they also dealt with the accession of ten more countries.
1950 - Third Round at Torquay. From September 1950 to April 1951, the contracting parties exchanged
some 8,700 tariff concessions in the English town, yielding tariff reductions of about 25 per cent in relation
to the 1948 level. Four more countries acceded to GATT. During the fifth Session of the Contracting Parties,
the United States indicated that the ITO Charter would not be re-submitted to the US Congress; this, in
effect, meant that ITO would not come into operation.
1956 -Fourth Round at Geneva. The fourth Round was completed in May and produced some $2.5 billion
worth of tariff reductions. At the beginning of the year, the GATT commercial policy course for officials of
T
developing countries was inaugurated.
1958 - The Haberler Report. GATT published Trends in International Trade in October. Known as the
"Haberler Report" in honour of Professor Gottfried Haberler, the chairman of the panel of eminent
economists, it provided initial guidelines for the work of GATT. The Contracting Parties at their 13th
EX
Sessions, attended by Ministers, subsequently established three committees in GATT: Committee I to

convene a further tariff negotiating conference; Committee II to review the agricultural policies of member
governments and Committee III to tackle the problems facing developing countries in their trade. The
establishment of the European Economic Community during the previous year also demanded large-scale
tariff negotiations under Article XXIV:6 of the General Agreement.
1960 - The Dillon Round. The fifth Round opened in September and was divided into two phases: the first
was concerned with negotiations with EEC member states for the creation of a single schedule of
concessions for the Community based on its Common External Tariff; and the second was a further general
round of tariff negotiations. Named in honour of US Under- Secretary of State Douglas Dillon who
N
proposed the negotiations, the Round was concluded in July 1962 and resulted in about 4,400 tariff
concessions covering $4.9 billion of trade.
1961 - The Short-Term Arrangement covering cotton textiles was agreed as an exception to the GATT rules.
The arrangement permitted the negotiation of quota restrictions affecting the exports of cotton-producing
countries. In 1962 the "Short-term" Arrangement became the "Long-term" Arrangement, lasting until 1974
when the Multifibre Arrangement entered into force.
1964 - The Kennedy Round. Meeting at Ministerial level, a Trade Negotiations Committee formally opened
the Kennedy Round in May. In June 1967, the Round's Final Act was signed by some 50 participating
countries which together accounted for 75 per cent of world trade. For the first time, negotiations departed
from the product-by-product approach used in the previous Rounds to an across-the-board or linear
method of cutting tariffs for industrial goods. The working hypothesis of a 50 per cent target cut in tariff
levels was achieved in many areas. Concessions covered an estimated total value of trade of about $40
billion. Separate agreements were reached on grains, chemical products and a Code on Anti-Dumping.
1965 - A New Chapter. The early 1960s marked the accession to the General Agreement of many newly-
independent developing countries. In February, the Contracting Parties, meeting in a special session,
adopted the text of Part IV on Trade and Development. The additional chapter to the GATT required
developed countries to accord high priority to the reduction of trade barriers to products of developing
countries. A Committee on Trade and Development was established to oversee the functioning of the new
GATT provisions. In the preceding year, GATT had established the International Trade Centre (ITC) to
S
help developing countries in trade promotion and identification of potential markets. Since 1968, the ITC
has been jointly operated by GATT and the UN Conference on Trade and Development (UNCTAD).
1973 - The Tokyo Round. The seventh Round was launched by Ministers in September at the Japanese
capital. Some 99 countries participated in negotiating a comprehensive body of agreements covering both
IA
tariff and non-tariff matters. At the end of the Round in November 1979, participants exchanged tariff
reductions and bindings which covered more than $300 billion of trade. As a result of these cuts, the
weighted average tariff on manufactured goods in the world's nine major industrial markets declined from
7.0 to 4.7 per cent. Agreements were reached in the following areas: subsidies and countervailing measures,
technical barriers to trade, import licensing procedures, government procurement, customs valuation, a
revised anti-dumping code, trade in bovine meat, trade in dairy products and trade in civil aircraft. The
first concrete result of the Round was the reduction of import duties and other trade barriers by industrial
countries on tropical products exported by developing countries.
T
1974 - On 1 January 1974, the Arrangement Regarding International Trade in Textiles, otherwise known as
the Multifibre Arrangement (MFA), entered into force. It superseded the arrangements that had been
governing trade in cotton textiles since 1961. The MFA seeks to promote the expansion and progressive
liberalization of trade in textile products while at the same time avoiding disruptive effects in individual
EX
markets and lines of production. The MFA was extended in 1978, 1982, 1986, 1991 and 1992. MFA members
account for most of the world exports of textiles and clothing which in 1986 amounted to US$128 billion.
1982 - Ministerial Meeting. Meeting for the first time in nearly ten years, the GATT Ministers in November
at Geneva reaffirmed the validity of GATT rules for the conduct of international trade and committed
themselves to combating protectionist pressures. They also established a wide-ranging work programme
for the GATT which was to lay down the groundwork for a new Round.
1986 - The Uruguay Round. GATT Trade Ministers meeting at Punta del Este, Uruguay, launched the
eighth Round of trade negotiations on 20 September. The Punta del Este Declaration, while representing a
single political undertaking, was divided into two sections. The first covered negotiations on trade in goods
N
and the second initiated negotiations on trade in services. In the area of trade in goods, the Ministers
committed themselves to a "standstill" on new trade measures inconsistent with their GATT obligations
and to a "rollback" programme aimed at phasing out existing inconsistent measures. Envisaged to last four
years, negotiations started in early February 1987 in the following areas: tariffs, non-tariff measures,
tropical products, natural resource-based products, textiles and clothing, agriculture, subsidies, safeguards,
trade-related aspects of intellectual property rights including trade in counterfeit goods, and trade-related
investment measures. The work of other groups included a review of GATT articles, the GATT dispute-
settlement procedure, the Tokyo Round agreements, as well as the functioning of the GATT system as a
whole.
1993- 15 December, Successful Conclusion of the Uruguay Round.

1994 - 15 April, Signing of the Uruguay Round Agreements in Marrakesh.
"GATT 1994" is the updated version of GATT 1947 and takes into account the substantive changes
negotiated in the Uruguay Round. GATT 1994 is an integral part of the World Trade Organization
established on 1 January 1995. It was agreed that there be a one-year transition period during which certain
GATT 1947 bodies and commitments would co-exist with those of the World Trade Organization.
Establishment of a Preparatory Committee for the WTO, under the Chairmanship of Mr. Peter Sutherland,
with the overall responsibility for preparing the groundwork for a smooth transition from GATT to the
WTO.
S
In the "Headquarters Agreement", Members decide to locate the WTO in Geneva.
1995 - 1st January, establishment of the World Trade Organization. Mr. Renato Ruggiero was appointed
Director-General of the World Trade Organization. November, establishment of the Appellate Body which
hears appeals and reviews decisions of WTO dispute panel cases.
IA
Rationale of GATT:
Looking at the whole period between 1820 and 1992 we find that world population grew five-fold, world
GDP forty-fold and world trade no less than 540-fold. Those who think trade and the global
interdependence it brings do not matter should consider those figures very carefully indeed. All the more
so in respect of the periods when growth of trade was most marked. Two periods stand out. The first, was
the years between 1820 and 1870 - an especially liberal period for commercial policies throughout the world
- when the annual average growth of the volume of world exports was 4.2 per cent. The second, which
many observers call the "Golden Age'' was precisely the period 1950 to 1970 when successive rounds of
T
GATT trade negotiations progressively knocked down the high tariffs and the quota restrictions of the
inter-War years. During those years world merchandise exports grew by 7.0 per cent a year on average.
Only in the last few years of the 1990s, as the Uruguay Round was concluded and commitments to further
opening of markets and new rules and disciplines have been secured, has there been some signs of a return
to trade growth near that of the "Golden Age''.
EX
Increasing globalization of the world economy through trade growth is here to stay. But to enjoy the
benefits that substantial trade growth brings then that process of globalization and enhanced
interdependence of nations must be stimulated through new initiatives in trade and economic
liberalization. Future jobs, development, improvements in social welfare, education, health and
environmental protection depend on it. There is no real alternative.
The role of GATT in integrating developing countries into an open multilateral trading system is also of
major consequence. The increasing participation of developing countries in the GATT trading system and
the pragmatic support provided to them through the flexible application of certain rules helped developing
N
countries to both expand and diversify their trade. It could now be said that a great number of these
countries have already become full partners in the system as can be witnessed by their active participation
in the Uruguay Round. The task of helping to integrate further the least-developed countries is one of the
challenges that lies ahead in the WTO. Similarly, the full integration of countries with economies in
transition into the trading system must be achieved in order to strengthen economic interdependence as a
basis for greater prosperity and world peace.
In looking back over the achievements of GATT during the past fifty years, one must not forget the critical
role played in the management of the system by the four Directors-General who preceded me in this seat.
Their unswerving dedication together with that of the Secretariat itself were crucial to the historical
achievements of GATT during its lifetime.
These negotiations were critical to ensure the future health of the world economy and the trading system.
The globalization of the world economy over the past decade has created a greater reliance than ever on an
open multilateral trading system. Free trade has become the backbone of economic prosperity and
development throughout the world. Partly as a result of this, there has been a shift in trade policy
mechanisms from border measures to internal policy measures, substantially affecting the management of
trade relations. The Uruguay Round sought to establish a new balance in rights and obligations among
trading nations as a result of this phenomenon.
Reasons for replacing GATT by WTO:

● The GATT was only a set of rules and multilateral agreements and lacked institutional structure.
S
● The trade in services and intellectual property rights were not covered by regular GATT rules.
● The GATT provided for consultations and dispute resolution, allowing a GATT Party to invoke
GATT dispute settlement articles if it believes that another Party’s measure caused it trade injury.
● The GATT did not set out a dispute procedure with great specificity resulting in lack of deadlines,
IA
laxity in the establishment of a dispute panel and the adoption of a panel report by the GATT Parties.
● It made the GATT as a weak Dispute Settlement mechanism.
History of WTO:
The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The
bulk of the WTO’s current work comes from the 1986–94 negotiations called the Uruguay Round and
earlier negotiations under the General Agreement on Tariffs and Trade (GATT).
Over the past 60 years, the WTO, which was established in 1995, and its predecessor organization the
T
GATT have helped to create a strong and prosperous international trading system, thereby contributing to
unprecedented global economic growth. The WTO currently has 164 members, of which 117 are developing
countries or separate customs territories. WTO activities are supported by a Secretariat of some 700 staff,
led by the WTO Director-General. The Secretariat is located in Geneva, Switzerland, and has an annual
EX
budget of approximately CHF 200 million ($180 million, €130 million). The three official languages of the
WTO are English, French and Spanish.
Principles of WTO:
1. Non-discrimination: A country should not discriminate between its trading partners and it should
not discriminate between its own and foreign products, services or nationals.
2. More open: Lowering trade barriers is one of the most obvious ways of encouraging trade; these
barriers include customs duties (or tariffs) and measures such as import bans or quotas that restrict
quantities selectively.
N
3. Predictable and transparent: Foreign companies, investors and governments should be confident that
trade barriers should not be raised arbitrarily. With stability and predictability, investment is
encouraged, jobs are created and consumers can fully enjoy the benefits of competition — choice and
lower prices.
4. More competitive: Discouraging ‘unfair’ practices, such as export subsidies and dumping products at
below cost to gain market share; the issues are complex, and the rules try to establish what is fair or
unfair, and how governments can respond, in particular by charging additional import duties
calculated to compensate for damage caused by unfair trade.
5. More beneficial for less developed countries: Giving them more time to adjust, greater flexibility
and special privileges; over three-quarters of WTO members are developing countries and countries
in transition to market economies. The WTO agreements give them transition periods to adjust to the
more unfamiliar and, perhaps, difficult WTO provisions.
6. Protect the environment: The WTO’s agreements permit members to take measures to protect not
only the environment but also public health, animal health and plant health. However, these
measures must be applied in the same way to both national and foreign businesses. In other words,
members must not use environmental protection measures as a means of disguising protectionist
policies.
WTO's main activities are:
S
1. negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade)
and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies,
product standards, etc.)
2. administering and monitoring the application of the WTO's agreed rules for trade in goods, trade in
IA
services, and trade-related intellectual property rights
3. monitoring and reviewing the trade policies of our members, as well as ensuring transparency of
regional and bilateral trade agreements
4. settling disputes among our members regarding the interpretation and application of the agreements
5. building capacity of developing country government officials in international trade matters
6. assisting the process of accession of some 30 countries who are not yet members of the organization
7. conducting economic research and collecting and disseminating trade data in support of the WTO's
T
other main activities
8. explaining to and educating the public about the WTO, its mission and its activities.
The WTO's founding and guiding principles remain the pursuit of open borders, the guarantee of most-
EX
favoured-nation principle and non-discriminatory treatment by and among members, and a commitment
to transparency in the conduct of its activities. The opening of national markets to international trade, with
justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable
development, raise people's welfare, reduce poverty, and foster peace and stability. At the same time, such
market opening must be accompanied by sound domestic and international policies that contribute to
economic growth and development according to each member's needs and aspirations.
Working of WTO
The WTO is run by its member governments. All major decisions are made by the membership as a whole,
either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who
N
meet regularly in Geneva). Decisions are normally taken by consensus.

In this respect, the WTO is different from some other international organizations such as the World Bank
and International Monetary Fund. In the WTO, power is not delegated to a board of directors or the
organization’s head
Day-to-day work in between the ministerial conferences is handled by three bodies:
 The General Council
 The Dispute Settlement Body
 The Trade Policy Review Body
All three are in fact the same — the Agreement Establishing the WTO states they are all the General
Council, although they meet under different terms of reference. Again, all three consist of all WTO
members. They report to the Ministerial Conference.
Three more councils, each handling a different broad area of trade, report to the General Council:
 The Council for Trade in Goods (Goods Council)
 The Council for Trade in Services (Services Council)
 The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)
As their names indicate, the three are responsible for the workings of the WTO agreements dealing with
their respective areas of trade. Again they consist of all WTO members. The three also have subsidiary
S
bodies
WTO’s - Ministerial Conference,

Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional
IA
body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the
organization's business in the intervals between Ministerial Conferences. Both of these bodies comprise all
members. Specialised subsidiary bodies (Councils, Committees, Sub-committees), also comprising all
members, administer and monitor the implementation by members of the various WTO agreements. List of
ministerial conference are as follow:
Singapore, 9-13 December 1996

The Ministers, had met in Singapore from 9 to 13 December 1996 for the first regular biennial meeting of
the WTO at Ministerial level, as called for in Article IV of the Agreement Establishing the World Trade
T
Organization, to further strengthen the WTO as a forum for negotiation, the continuing liberalization of
trade within a rule-based system, and the multilateral review and assessment of trade policies, and in
particular to:
 assess the implementation of our commitments under the WTO Agreements and decisions;
EX
 review the ongoing negotiations and Work Programme;

 examine developments in world trade; and
 address the challenges of an evolving world economy.
Geneva, 18-20 May 1998

The General Council's work programme encompassed the following:
(a) recommendations concerning:
N
 the issues, including those brought forward by Members, relating to implementation of existing
agreements and decisions;
 the negotiations already mandated at Marrakesh, to ensure that such negotiations begin on
schedule;
 future work already provided for under other existing agreements and decisions taken at
Marrakesh;
(b) recommendations concerning other possible future work on the basis of the work programme
initiated at Singapore;
(c) recommendations on the follow-up to the High-Level Meeting on Least-Developed Countries;

(d) recommendations arising from consideration of other matters proposed and agreed to by Members
concerning their multilateral trade relations.
Seattle, November 30 – December 3, 1999

Officially, it’s the Third WTO Ministerial Conference. The ministerial conference is the organization’s
highest-level decision-making body. It meets "at least once every two years", as required by the Marrakesh
Agreement Establishing the World Trade Organization — the WTO’s founding charter.
This ministerial will launch major new negotiations to further liberalize international trade and to review
some current trade rules. It will also set in motion a work programme to look at other important issues.
S
The WTO’s current agreements were the result of the 1986-94 Uruguay Round of negotiations. Although
the outcome meant a major reform of world trade rules and a substantial reduction in trade barriers, many
participants wanted to see further improvements in the trading system.
In particular, the agreements on services (the General Agreement on Trade in Services, GATS) and on
IA
agriculture state that new negotiations will resume by the beginning of 2000. These two subjects are
definitely going to be in the new negotiations.
It’s important to be clear that the Seattle Ministerial Conference will only be the beginning of the
negotiations, just as the seven-year Uruguay Round was launched at a ministerial meeting in Punta del Este
in 1986 and the six-year Tokyo Round was launched in Tokyo in 1973.
After the launch in Seattle, the actual negotiations and work programmes will take place in Geneva, where
the WTO is located. Many countries have suggested a deadline of three years for these new talks. The
decision will be made by ministers in Seattle. Ministers will be aware that past experience has shown it is
T
not always easy to complete large, complicated negotiations within the specified time.
Doha, 9-13 November 2001

Preparation for the Doha Ministerial Conference began in January 2000, shortly after the unsuccessful 3rd
EX
Ministerial Conference held in Seattle in December 1999.

Director-General Mike Moore and 1999 General Council Chairman Ali Mchumo unveiled for member
governments a four point plan of confidence building measures designed to get the organization back on its
feet and functioning again. The measures included:
 Specific initiatives to assist least-developed countries (LDCs), including a call for greater market
access.
 A special mechanism for discussing and negotiating implementation issues
 A comprehensive examination of technical cooperation and capacity building activities
N
 Procedures for ensuring more active and effective participation of all member governments in the
WTO
Each of these four measures has proven successful. On the question of the LDCs, 29 countries have
committed themselves to further opening their markets to exports from LDCs. The General Council also
agreed to establish an Implementation Review Mechanism, through special sessions of the Council, which
has met regularly in formal and informal mode to discuss and negotiate implementation issues.
The Director-General has led a comprehensive review of technical cooperation and capacity building
which, though still in progress, has already resulted in greater efficiency. Moreover, Mr. Moore has worked
with heads of other organizations to strengthen the Integrated Framework of technical assistance for Least
Developed Countries. The six organizations involved in the Integrated Framework are the World Trade
Organization, UNCTAD, the World Bank, the International Monetary Fund, the United Nations
Development Programme and the International Trade Centre.
Around 100 implementation issues were raised in the lead-up to the Doha Ministerial Conference. The
implementation decision, combined with paragraph 12 of the main Doha Declaration, provides a two-track
solution. More than 40 items under 12 headings were settled at or before the Doha conference, for
immediate delivery; and the vast majority of the remaining items are immediately the subject of
negotiations
Cancún, 10-14 September 2003
S
Officially, this meeting is the Fifth WTO Ministerial Conference. The ministerial conference is the
organization’s highest-level decision-making body. It meets “at least once every two years”, as required by
the Marrakesh Agreement Establishing the World Trade Organization — the WTO’s founding charter.
Ministers agreed that this Fifth Ministerial Conference would “take stock of progress in the negotiations,
IA
provide any necessary political guidance and take decisions as necessary.” To oversee the conduct of the
negotiations themselves, the Doha Declaration established the Trade Negotiations Committee, under the
authority of the General Council, which was charged with monitoring the negotiations and devising the
procedures and guidelines for these talks.
Hong Kong, 13-18 December 2005
The Sixth WTO Ministerial Conference was held in Hong Kong, China, 13–18 December 2005. In general,
ministerial conferences are the WTO’s highest decision-making body, meeting at least once every two years
and providing political direction for the organization.
T
The main task before members in Hong Kong is to settle a range of questions that will shape the final
agreement of the Doha Development Agenda, which members hope to complete, at the end of 2006.
Launched at the Fourth Ministerial Conference in November 2001, the Doha Development Agenda includes
negotiations on a range of subjects, and work on issues related to the implementation of agreements arising
EX
from previous negotiations (the 1986–94 Uruguay Round, which created the WTO).
For the negotiations on agriculture and non-agricultural market access, the next aim is to agree on formulas
and other details that will determine the scale of reductions in tariffs on thousands of products and on farm
subsidies. Also on the agenda are preparation for the final stages of negotiations in services, various WTO
rules and a number of development issues. Originally intended for Hong Kong, some of the objectives are
being delayed to early 2006 with Hong Kong as an important staging post.
Previous ministerial conferences have also been occasions when governments approved new members to
the WTO.
N
Geneva, 30 November - 2 December 2009

The Seventh Session of the WTO Ministerial Conference in Geneva, Switzerland, took place from 30
November to 2 December 2009. The general theme for discussion was “The WTO, the Multilateral Trading
System and the Current Global Economic Environment”.
In parallel to the Plenary Session, there were two Working Sessions on 1 December and 2 December,
respectively. The Working Sessions were aimed at providing an interactive forum for Ministers for
discussion under two broad sub-themes: “Review of WTO activities, including the Doha Work
Programme” for the first day; and “The WTO's contribution to recovery, growth and development” for the
second day.
The General Council on 17 November 2009, Pascal Lamy said that while the upcoming WTO Ministerial
Conference would not be a negotiating session, it would be “a platform for ministers to review the
functioning of this house”, including the Doha Round, and an occasion “to send a number of strong signals
to the world with respect to the entire WTO waterfront of issues — from monitoring and surveillance to
disputes, accessions, Aid for Trade, technical assistance and international governance”.
Geneva, 15-17 December 2011
The Eighth Ministerial Conference was held in Geneva, Switzerland, from 15 to 17 December 2011. In
parallel to the Plenary Session, where Ministers made prepared statements, three Working Sessions took
place with the following themes: “Importance of the Multilateral Trading System and the WTO”, “Trade
and Development” and “Doha Development Agenda”. The Conference approved the accessions of Russia,
S
Samoa and Montenegro. In the final session, Ministers adopted a number of decisions and the Chair made a
concluding statement.
In parallel to the Plenary Session, Working Sessions took place on 16 and 17 December. The Working
Sessions aimed at providing an interactive forum for Ministers, giving them a platform for discussion
IA
under three broad themes: “Importance of the Multilateral Trading System and the WTO”, “Trade and
Development” and “Doha Development Agenda”.
In the final session on 17 December, Ministers adopted a number of decisions on intellectual property,
electronic commerce, small economies, least developed countries’ accession, a services waiver for least
developed countries, and trade policy reviews (explained in the briefing notes). The Chair concluded with a
statement in two parts: a consensus statement on “elements for political guidance” and a factual summary
of points that Ministers made in the meeting.
Bali, 3-6 December 2013
T
At the Ninth Ministerial Conference, held in Bali, Indonesia, from 3 to 7 December 2013, ministers adopted
the “Bali Package”, a series of decisions aimed at streamlining trade, allowing developing countries more
options for providing food security, boosting least-developed countries’ trade and helping development
more generally. They also adopted a number of more routine decisions and accepted Yemen as a new
EX
member of the WTO.
The decisions and declarations from Bali include: the Bali Ministerial Declaration (including post-Bali
work), decisions and a declaration on the Doha Round, and decisions on regular WTO work.
Nairobi, 15-19 December 2015
The WTO's 10th Ministerial Conference was held in Nairobi, Kenya, from 15 to 19 December 2015. It
culminated in the adoption of the "Nairobi Package", a series of six Ministerial Decisions on agriculture,
cotton and issues related to least-developed countries (LDCs). The Conference was chaired by Kenya's
Cabinet Secretary for Foreign Affairs and International Trade, Amina Mohamed.
N
The “Nairobi Package” was adopted at the WTO's Tenth Ministerial Conference, held in Nairobi, Kenya,
from 15 to 19 December 2015. It contains a series of six Ministerial Decisions on agriculture, cotton and
issues related to least-developed countries (LDCs). A Ministerial Declaration outlining the Package and the
future work of the WTO was adopted at the end of the five-day Conference.
Buenos Aires, 10-13 December 2017
The Eleventh Ministerial Conference (MC11) took place from 10 to 13 December 2017 in Buenos Aires,
Argentina. It was chaired by Minister Susana Malcorra of Argentina. The Conference ended with a number
of ministerial decisions, including on fisheries subsidies and e-commerce duties, and a commitment to
continue negotiations in all areas.
The Conference opened with the signing of a presidential declaration in support of the WTO. This was
signed by President Macri of Argentina, President Temer of Brazil, President Cartes of Paraguay and
President Vázquez of Uruguay as well as by representatives of Colombia, Guyana, Mexico, Peru and
Suriname.
On the final day of the conference, three proponent groups announced new initiatives to advance talks at
the WTO on the issues of electronic commerce, investment facilitation and micro, small and medium sized
enterprises (MSMEs).
Other notable events at the Conference included the publication of the Buenos Aires Declaration on Women
and Trade, the launch of the "Enabling E-commerce" initiative and the announcement of Google as the
WTO/ICC's first Small Business Champion following the culmination of the small business video
S
competition.
Geneva, week of 29 November 2021

WTO members have agreed that the organization’s Twelfth Ministerial Conference (MC12) will take place
in the week of 29 November 2021 in Geneva, Switzerland. The timing and venue were endorsed at a
IA
meeting of the WTO’s General Council on 1 March 2021. MC12 was originally scheduled to take place from
8 to 11 June 2020 in Kazakhstan's capital, Nur-Sultan, but was postponed due to the COVID-19 pandemic.
The Conference will be chaired by Kazakhstan's Minister of Trade and Integration, Bakhyt Sultanov, as
approved by WTO members in December 2019.
MC12 was originally scheduled to take place in June 2020 in Nur-Sultan, Kazakhstan, but was postponed
due to the COVID-19 pandemic.
In May 2020, WTO members discussed Kazakhstan's offer to reschedule the conference to June 2021.
Reporting on his consultations with members in December 2021, the chair of the General Council,
T
Ambassador David Walker of New Zealand, said on 1 March 2021 that it was no longer realistic to envisage
holding MC12 in June 2021 in light of the current situation. Kazakhstan told members that it shared this
assessment.
The Ministerial Conference, which is attended by trade ministers and other senior officials from the
EX
organization’s 164 members, is the highest decision-making body of the WTO. Under the Marrakesh
Agreement Establishing the WTO, the Ministerial Conference is to meet at least once every two years.
Goals of WTO
1. The WTO’s global system lowers trade barriers through negotiation and operates under the principle
of non-discrimination. The result is reduced costs of production (because imports used in production
are cheaper), reduced prices of finished goods and services, more choice and ultimately a lower cost
of living.
2. The WTO’s system deals with these in two ways.
N
a. One is by talking: countries negotiate rules that are acceptable to all.

b. The other is by settling disputes about whether countries are playing by those agreed rules.
3. The WTO can stimulate economic growth and employment.
4. The WTO can cut the cost of doing business internationally.
5. The WTO can encourage good governance. Transparency — shared information and knowledge —
levels the playing field. Rules reduce arbitrariness and opportunities for corruption.
6. The WTO can help countries develop: Underlying the WTO’s trading system is the fact that more
open trade can boost economic growth and help countries develop. In that sense, commerce and
development are good for each other. In addition, the WTO agreements are full of provisions that
take into account the interests of developing countries.
7. The WTO can give the weak a stronger voice: Small countries would be weaker without the WTO.
Differences in bargaining power are narrowed by agreed rules, consensus decision-making and
coalition building.
a. Coalitions give developing countries a stronger voice in negotiations.
b. The resulting agreements mean that all countries, including the most powerful, have to play by
the rules. The rule of law replaces might-makes-right.
S
8. The WTO can support the environment and health: The trade is nothing more than a means to an
end. The WTO agreements try to make trade support the things we really want, including a clean and
safe environment, and to prevent governments using these objectives as an excuse for introducing
protectionist measures.
IA
9. The WTO can contribute to peace and stability: When the world economy is in turmoil, the
multilateral trading system can contribute to stability.
10. Trade rules stabilize the world economy by discouraging sharp backward steps in policy and by
making policy more predictable. They deter protectionism and increase certainty. They are
confidence-builders.
TRIPS (TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY

RIGHTS)
T
Intellectual Property Rights are the rights given to persons/agencies for their creativity/innovations. These
rights usually give the creator an exclusive right over the use of his/her creation for a certain period of
time. The importance of intellectual property in India is well established at all levels- statutory,
administrative and judicial.
EX
This Agreement, inter-alia, contains an Agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPS) which came into force from 1st January 1995. It lays down minimum standards for protection and
enforcement of intellectual property rights in member countries which are required to promote effective
and adequate protection of intellectual property rights with a view to reducing distortions and
impediments to international trade.
The obligations under the TRIPS Agreement relate to provision of minimum standard of protection within
the member countries legal systems and practices.
The Agreement provides for norms and standards in respect of following areas of intellectual property:
N
 Patents
 Trade Marks
 Copyrights
 Geographical Indications
 Industrial Designs
The basic obligation in the area of patents is that the invention in all branches of technology whether
products or processes shall be patentable if they meet the three tests of being new involving an inventive
step and being capable of industrial application.
In addition to the general security exemption which applied to the entire TRIPS Agreement, specific
exclusions are permissible from the scope of patentability of inventions, the prevention of whose
commercial exploitation is necessary to protect public order or morality, human, animal, plant life or health
or to avoid serious prejudice to the environment.
Needs of TRIPS
The progress and well-being of humanity rest on its capacity to create and invent new works in the areas of
technology and culture.
1. Encourages innovation: The legal protection of new creations encourages the commitment of
additional resources for further innovation.
S
2. Economic growth: The promotion and protection of intellectual property spurs economic growth,
creates new jobs and industries, and enhances the quality and enjoyment of life.
3. Safeguard the rights of creators: IPR is required to safeguard creators and other producers of their
intellectual commodity, goods and services by granting them certain time-limited rights to control the
use made of the manufactured goods.
IA
4. It promotes innovation and creativity and ensures ease of doing business.
5. It facilitates the transfer of technology in the form of foreign direct investment, joint ventures and
licensing.
TRADE RELATED INVESTMENT MEASURES (TRIMS)

Under the Agreement on Trade-Related Investment Measures of the World Trade Organization (WTO),
commonly known as the TRIMs Agreement, WTO members have agreed not to apply certain investment
measures related to trade in goods that restrict or distort trade. The TRIMs Agreement prohibits certain
T
measures that violate the national treatment and quantitative restrictions requirements of the General
Agreement on Tariffs and Trade (GATT).
The agreement on the Trade Related Investment measures (TRIMS) calls for introducing national treatment
of foreign investment and removal of quantities restrictions. It identifies five investment measures which
EX
are inconsistent with the General Agreement on Trade and Tariff (GATT) on national treatment and on
general elimination of quantitative restrictions. These are measures which are imposed on the foreign
investors the obligation to use local inputs, to produce for export as a condition to obtain imported goods
as inputs, to balance foreign exchange outgo on importing inputs with foreign exchange earnings through
export and not to export more than a specified proportion of the local production.
Trade-Related Investment Measures is the name of one of the four principal legal agreements of the World
Trade Organization (WTO), trade treaty. TRIMs are rules that restrict preference of domestic firms and
thereby enable international firms to operate more easily within foreign markets. The TRIMs Agreement
prohibits certain measures that violate the national treatment and quantitative restrictions requirements of
N
the General Agreement on Tariffs and Trade (GATT).

TRIMs may include requirements to:
 Achieve a certain level of local content;
 Produce locally;
 Export a given level/percentage of goods;
 Balance the amount/percentage of imports with the amount/percentage of exports;
 Transfer of technology or proprietary business information to local persons;
Objectives
The objectives of the Agreement include “the expansion and progressive liberalization of world trade and
to facilitate investment across international frontiers so as to increase the economic growth of all trading
partners, particularly developing country members, while ensuring free competition”.
The TRIMs Agreement has been found by the developing countries to be standing in the way of sustained
industrialization of developing countries, without exposing them to balance of payment shocks, by
reducing substantially the policy space available to these countries. Developed countries, on the other
hand, have been arguing for a further expansion in the list of prohibited TRIM. But India should be careful
while giving its node to the expansion of TRIMS because it may make Indian manufacturing more
vulnerable against the cheap products of developed countries
S
Customs Valuation
For importers, the process of estimating the value of a product at customs presents problems that can be
just as serious as the actual duty rate charged. The WTO agreement on customs valuation aims for a fair,
uniform and neutral system for the valuation of goods for customs purposes — a system that conforms to
IA
commercial realities, and which outlaws the use of arbitrary or fictitious customs values. The Committee on
Customs Valuation of the Council for Trade in Goods (CGT) carries out work in the WTO on customs
valuation. The agreement provides a set of valuation rules, expanding and giving greater precision to the
provisions on customs valuation in the original GATT.
A related Uruguay Round ministerial decision gives customs administrations the right to request further
information in cases where they have reason to doubt the accuracy of the declared value of imported
goods. If the administration maintains a reasonable doubt, despite any additional information, it may be
deemed that the customs value of the imported goods cannot be determined on the basis of the declared
T
value.
WTO Negotiations Doha Round Controversy
Doha Round negotiations have been stalled as the participating countries could not reach a consensus over
trade negotiations with major differences between developed and developing countries. As a matter of
EX
debate, the following points can be taken as the reason of the failure of Doha Round:
1. The developed countries especially EU, the USA, Canada and Japan had differences with developing
countries (India, Brazil, China, South Africa) arguments over Special Safeguard Mechanism (SSM).
2. The negotiations considered in the Doha Round were taken up in Geneva in 2008 but were again
stalled due to the lack of consensus on SSM.
India in Doha Round
India puts forth the following stance:
N
1. It supports Special Safeguard Mechanism (SSM) to protect its farmers from the import surge.
2. It supports the development agenda of the Doha round for the developing nations and wants each
country to support the same.
3. The government focussed on the need for the successful completion of Doha Round and wanting
developed nations to undertake greater market-opening commitments.
4. India also wants rich countries to drastically reduce its ‘trade-distorting’ farm subsidies.
5. India wants a permanent solution to the issue of public food stockholding in developing countries for
the purpose of food security.
6. It supports duty-free and quota-free market access for developing nations.

7. India has consistently opposed an expansion of the multilateral trading system in the direction of
negotiating and implementing multilateral agreements on investment, competition policy, and
government procurement – a possibility created by the Singapore Ministerial Declaration of 1996.
8. In the Doha Round, India’s then Commerce and Industry Minister emphasised on the need to
recognize the existing development deficit in the WTO agreements; and also drew attention to the
asymmetries in the agreements of the Uruguay Rounds and the TRIPS agreement.
9. It argued that IPR protection under geographical indication should not be limited only to wine and
spirits but should be extended to include other products (such as Basmati rice)
S
10. It pushed for restrictions on the use/misuse of biological and genetic resources and traditional
knowledge.
At the Cancun ministerial conference, Arun Jaitely (The then Minister of Commerce and Industry) argued
over agricultural negotiations stating that the developed countries have high levels of agricultural subsidies
and these are far greater than what these countries spent on official development assistance.
IA
India demands elimination of trade-distorting domestic support from other WTO members and has
insisted on the system of proportionality (Which needs developed nations to make greater concessions than
the developed countries.)
India - Patent Protection for Pharmaceutical Protection and Agricultural Chemical

Products
India appeals from certain issues of law and legal interpretations in the Panel Report, India - Patent
Protection for Pharmaceutical and Agricultural Chemical Products (the "Panel Report"). The Panel was
T
established to consider a complaint by the United States against India concerning the absence in India of
either patent protection for pharmaceutical and agricultural chemical products under Article 27 of the
Agreement on Trade-Related Aspects of Intellectual Property (the "TRIPS Agreement"), or of a means for
the filing of patent applications for pharmaceutical and agricultural chemical products pursuant to Article
EX
70.8 of the TRIPS Agreement and of legal authority for the granting of exclusive marketing rights for such
products pursuant to Article 70.9 of the TRIPS Agreement. The relevant factual aspects of India's "legal
regime" for patent protection for pharmaceutical and agricultural chemical products are described at the
Panel Report.
The Panel Report was circulated to the Members of the World Trade Organization (the "WTO") on 5
September 1997. The Panel reached the following conclusions:
On the basis of the findings set out above, the Panel concludes that India has not complied with its
obligations under Article 70.8(a) and, in the alternative, of Article 63 of the TRIPS Agreement, because it has
failed to establish a mechanism that adequately preserves novelty and priority in respect of applications for
N
product patents in respect of pharmaceutical and agricultural chemical inventions during the transitional
period to which it is entitled under Article 65 of the Agreement, and to publish and notify adequately
information about such a mechanism; and that India has not complied with its obligations under Article
70.9 of the TRIPS Agreement, because it has failed to establish a system for the grant of exclusive marketing
rights.
The Panel made the following recommendation:
The Panel recommends that the Dispute Settlement Body request India to bring its transitional regime for
patent protection of pharmaceutical and agricultural chemical products into conformity with its obligations
under the TRIPS Agreement
On 15 October 1997, India notified the Dispute Settlement Body (the "DSB") of its intention to appeal
certain issues of law covered in the Panel Report and legal interpretations developed by the Panel,
pursuant to Article 16 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
(the "DSU"), and filed a Notice of Appeal with the Appellate Body, for Appellate Review (the "Working
Procedures"). On 27 October 1997, India filed an appellant's submission. On 10 November 1997, the United
States filed an appellee's submission pursuant to Rule 22 of the Working Procedures. That same day, the
European Communities filed a third participant's submission pursuant to Rule 24 of the Working
Procedures. The oral hearing provided for in Rule 27 of the Working Procedures was held on 14 November
1997.
India - E-commerce Related Discourse at The WTO
S
On the occasion of the World Economic Forum in Davos in January, 2019, 76 Member countries of the
World Trade Organisation (WTO), decided to formally initiate negotiations towards a plurilateral legal
framework regulating electronic commerce (e-commerce). This decision was taken after more than two
decades of oscillation between dialogue and deadlock is the e-commerce discourse at the WTO.
IA
The e-commerce policy of India which was made public in 2019 has its focus on data localization. It
emphasizes that the country and the citizens have a sovereign right to their data.
Even though the policy is yet to be made public, the Indian government in a revised draft has proposed
that all the companies that mirror or store Indian users' data overseas will be subjected to periodic audits.
They will also have to make any data available that the government seeks within 72 hours or pay the
penalty.
India along with South Africa has raised concerns over a proposal at the WTO seeking to expand the scope
of global moratorium to include digitized and digitizable goods such as books, video games, software and
music. New Delhi has maintained that the globally agreed ecommerce moratorium has led to loss of
T
revenue besides restricting use of tariffs as a trade policy and hence, should be done away with.
TRADE FACILITATION AGREEMENT (TFA)

The Trade Facilitation Agreement came into force in 2017, when the number of member countries which
EX
ratified the agreement reached a count of 112. The main aim of the agreement was to boost global growth
by reducing the cost of the transaction in terms of export and import.
The Trade Facilitation Agreement was introduced to simplify customs procedures by reducing costs and to
improve the efficiency and speed of trade being done. The agreement basically seeks to simplify the border
management programs and bring down trade barriers. It is a legally managed agreement and is considered
to be one of the biggest reforms taken up by the World Trade Organisation (WTO) since its establishment.
Another aim of this agreement was to make an easy and transparent movement of goods across national
boundaries. The TFA intends to create a less discriminatory business environment by speeding up
clearance procedures and formalities.
N
Trade Facilitation Agreement Significance

The Trade Facilitation Agreement came into force on 22 February 2017 and it was significant because it was
the first significant agreement signed WTO after its establishment in 1995. There were major reasons why
the Trade Facilitation Agreement was significant for India and the other countries. Given below are a few
points of significance:
1. This agreement had made WTO a significant organisation for liberalisation of trade
2. The agreement also mentions that assistance will be provided to the developing countries for the up-
gradation of their infrastructure
3. The profit in terms of trade of the different countries is expected to soar really high and result in the
economic growth of the member countries.
4. The agreement will help improve transparency in the trade
5. Reduce possibilities of corruption
Another important factor is the reduction in cargo release time. The target set by WTO states that the
products need to be imported within 3 days in case of sea cargo and within 2 days for air cargo. For export,
the target has been set as 2 days for sea cargo and the same day for air cargo.
India and Trade Facilitation Agreement
S
India, in terms of economic growth, is at a very crucial junction right now. The Trade Facilitation
Agreement has helped India attain a position in the world in terms of export and import of products. India
has managed to redefine itself as a nation indulged in legitimate trade. The agreement has proved to be
extremely beneficial for India.
The fact that the Government has accepted the trade facilitation action plan as suggested by the National
IA
Committee on Trade Facilitation (NCTF), which is to be implemented at the highest level proves that the
Indian Government aims at enhancing the trade facilitation.
REGIONAL TRADING AGREEMENTS

Regional trading agreements refer to a treaty that is signed by two or more countries to encourage free
movement of goods and services across the borders of its members. The agreement comes with internal
rules that member countries follow among themselves. When dealing with non-member countries, there
are external rules in place that the members adhere to.
T
Quotas, tariffs, and other forms of trade barriers restrict the transport of manufactured goods and services.
Regional trading agreements help reduce or remove the barriers to trade.
Types of Regional Trading Agreements
EX
Regional trading agreements vary depending on the level of commitment and the arrangement among the
member countries.
 Preferential Trade Areas: The preferential trading agreement requires the lowest level of
commitment to reducing trade barriers, though member countries do not eliminate the barriers
among themselves. Also, preferential trade areas do not share common external trade barriers.
 Free Trade Area: In a free trade agreement, all trade barriers among members are eliminated, which
means that they can freely move goods and services among themselves. When it comes to dealing
with non-members, the trade policies of each member still take effect.
 Customs Union: Member countries of a customs union remove trade barriers among themselves and
N
adopt common external trade barriers.

 Common Market: A common market is a type of trading agreement wherein members remove
internal trade barriers, adopt common policies when it comes to dealing with non-members, and
allow members to move resources among themselves freely.
 Economic Union: An economic union is a trading agreement wherein members eliminate trade
barriers among themselves, adopt common external barriers, allow free import and export of
resources, adopt a set of economic policies, and use one currency.
 Full Integration: The full integration of member countries is the final level of trading agreements.
INTERNATIONAL TRADE ORGANISATION

US-M-C-A (United States-Mexico-Canada Agreement)
The United States-Mexico-Canada Agreement, also known as the USMCA, is a trade deal between the three
nations which was signed on November 30, 2018. The USMCA replaced the North American Free Trade
Agreement (NAFTA), which had been in effect since January of 1994. Under the terms of NAFTA, tariffs on
many goods passing between North America's three major economic powers were gradually phased out.
By 2008, tariffs on various agricultural and textiles products, automobiles, and other goods were reduced or
eliminated.
The USMCA was negotiated under the Trump Administration, but the idea of a replacement for NAFTA
S
dates back before President Trump's presidential term. Over the years, NAFTA had frequently been
blamed for the export of U.S. manufacturing to Mexico and the accompanying loss of jobs and suppression
of wages among U.S. workers. In 2008, then-presidential candidate Obama had pledged to renegotiate
NAFTA in the interests of American workers but later declined to do so during his administration.
IA
First, the Mexican Senate ratified the deal on June 19, 2019, and approved amendments to it on December
12, 2019. Then, on December 19, 2019, the U.S. House of Representatives passed legislation to approve the
USMCA. The legislation passed the Senate in January 16, 2020, and on January 29, President Trump signed
it into law. Finally, the Canadian Parliament ratified the treaty on March 13, 2020
Key Provisions:
Per the Office of the United States Trade Representative, the USMCA is a "mutually beneficial win for
North American workers, farmers, ranchers, and businesses." NAFTA aimed to create a free trade zone
T
between the U.S., Canada, and Mexico, and the USMCA utilizes NAFTA as a basis for a new agreement.
While the USMCA has a broad impact on trade of all kinds between the three named nations, some of the
agreement's most important provisions include the following:
 Dairy and Agriculture: The USMCA will increase U.S. farmers' access to the Canadian dairy market
EX
by raising the amount of U.S. goods that can be exported to Canada tariff-free. This will allow the
U.S. tariff-free access to up to 3.6% of the Canadian dairy market. The amount of tariff-free exports
allowed for some poultry products will also be expanded.
 Automobiles: One of the most significant portions of the USMCA stipulates new trade regulations for
automobiles and automotive parts. Under NAFTA, cars and trucks with at least 62.5% of their
components manufactured in one of the three participating countries could be sold free of tariffs. The
USMCA increases that minimum requirement to 75%. At the same time, the USMCA stipulates
minimum wages for workers in the automotive manufacturing process: 40-45% of the work done on
eligible vehicles must be accomplished by workers earning at least $16 (USD) per hour.
N
 Intellectual Property: The USMCA increases intellectual property protections. Among other changes
to trade policy, the new agreement extends the copyright period to 70 years beyond the life of the
creator, an increase of 20 years in some cases. The USMCA also addresses new products that weren't
around when NAFTA was written in the early 1990s. The USMCA prohibits tariffs on digital music,
e-books, and other similar digital products. The agreement also establishes copyright safe harbor for
internet companies, meaning they can't be held liable for copyright infringements of their users if
they make good faith efforts to stop infringement.
 Sunset Provision: Unlike NAFTA, the USMCA will expire after 16 years unless it is renewed, and all
three nations are required to come together for a joint review after 6 years.
 Labor: The USMCA sets up an independent investigatory panel that can investigate factories accused
of violating workers' rights, and stop shipments from factories found to be in violation of labor laws.
In addition, Mexico says it will enact a wide array of labor reforms to make it easier for workers to
unionize, and stop violence and other abuses of workers. These provisions are meant to achieve two
goals: to improve working conditions for Mexico's workers and create a more even playing field
between U.S. and Mexican factories because Mexican wages are likely to rise.
Agreement highlights include:

 Creating a more level playing field for American workers, including improved rules of origin for
automobiles, trucks, other products, and disciplines on currency manipulation.
S
 Benefiting American farmers, ranchers, and agribusinesses by modernizing and strengthening food
and agriculture trade in North America.
 Supporting a 21st Century economy through new protections for U.S. intellectual property, and
ensuring opportunities for trade in U.S. services.
IA
 New chapters covering Digital Trade, Anti-Corruption, and Good Regulatory Practices, as well as a
chapter devoted to ensuring that Small and Medium Sized Enterprises benefit from the Agreement.
MERCOSUR
The Southern Common Market (MERCOSUR for its Spanish initials) is a regional integration process,
initially established by Argentina, Brazil, Paraguay and Uruguay, and subsequently joined by Venezuela
and Bolivia-the latter still complying with the accession procedure. Its official working languages are
Spanish and Portuguese. The working documents’ official version will be that of the host country language
of each meeting.
T
MERCOSUR is an open and dynamic process. Since its creation, its main objective has been to promote a
common space that generates business and investment opportunities through the competitive integration
of national economies into the international market. As a result, it has established multiple agreements with
countries or groups of countries, granting them, in some cases, the status of Associated States – this being
EX
the situation of the South American countries. These participate in activities and meetings of the Bloc and
have trade preferences with the States Parties. MERCOSUR has also signed commercial, political or
cooperation agreements with a diverse number of nations and organizations on all five continents.
History:
Mercosur was created in 1991 when Argentina, Brazil, Paraguay, and Uruguay signed the Treaty of
Asuncion, an accord calling for the “free movement of goods, services, and factors of production between
countries.” The four countries agreed to eliminate customs duties, implement a common external tariff of
35 percent on certain imports from outside the bloc, and adopt a common trade policy toward outside
N
countries and blocs. The charter members hoped to form a common market similar to that of the European
Union, and even considered introducing a common currency.
The Mercosur stamp is emblazoned on member countries’ passports, and license plates display the
Mercosur symbol. Residents of the bloc are authorized to live and work anywhere within it. In 1994, the
group signed the Protocol of Ouro Preto, formalizing its status as a customs union.
Mercosur’s goals include the harmonization of the economic policies of its members and the promotion of
economic development. The Ouro Prêto Protocol (1994) established Mercosur’s present organizational
structure and gave it a legal personality under international law, allowing it to negotiate agreements with
countries and other international organizations.
On Jan. 1, 1995, following several years of efforts to reduce internal tariffs (tariffs imposed by members on
other members), a free-trade zone and a customs union were formally established. Nevertheless, full
harmonization eluded Mercosur: some internal goods were still subject to customs duties, and, though
members agreed to apply a common tariff on imports from nonmembers, disparities on such duties
continued to exist.
In 1996 the Joint Parliamentary Commission, which consists of parliamentarians from member countries,
declared that all participating members must have functioning democratic institutions. In 2003 Mercosur
signed a free-trade agreement with the Andean Community, which went into effect on July 1, 2004.
In 2007 a new parliament of the member states was inaugurated in Montevideo. In 2012, following the
controversial impeachment of Paraguayan Pres. Fernando Lugo, Brazil, Argentina, and Uruguay voted to
S
suspend Paraguay’s membership until 2013. Later at the same summit where that action was taken, leaders
from the three active member countries announced the ascent of Venezuela to full membership, effective
July 31, 2012.
Objectives:
IA
Mercosur’s main objective is to increase the efficiency and competitiveness of all member economies by
opening markets, promoting economic development in the framework of a globalized world, improving
infrastructure and communications, making better use of available resources, preserving the environment,
generating industrial complementation and coordinating macroeconomic policies. Achieving a common
external tariff is one of the main goals of the bloc.
Since its origins, MERCOSUR has been based on the principles of Democracy and Economic Development,
which underpins the core values of a human-faced integration. Aligned with these, different agreements
have been added in terms of migratory, labour, cultural, and social matters -just to mention a few, which
are of utmost importance for its inhabitants.
T
These agreements meant the incorporation of the Citizen, Social and Productive Integration dimensions.
For this to be achieved, it was necessary to adapt and expand the institution’s structure throughout the
region by meeting new demands and deepening the effective participation of the citizens. Moreover, it had
to equip itself with its own financing mechanisms, such as the MERCOSUR Fund for the Structural
EX
Convergence (FOCEM), amongst other funds.
ASEAN (ASSOCIATION OF SOUTHEAST ASIAN NATIONS)

The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok,
Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of
ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.
Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23
July 1997, and Cambodia on 30 April 1999, making up what is today the ten Member States of ASEAN.
N
History
On 8 August 1967, five leaders – the Foreign Ministers of Indonesia, Malaysia, the Philippines, Singapore
and Thailand – sat down together in the main hall of the Department of Foreign Affairs building in
Bangkok, Thailand and signed a document. By virtue of that document, the Association of Southeast Asian
Nations (ASEAN) was born. The five Foreign Ministers who signed it – Adam Malik of Indonesia, Narciso
R. Ramos of the Philippines, Tun Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and Thanat
Khoman of Thailand – would subsequently be hailed as the Founding Fathers of probably the most
successful inter-governmental organization in the developing world today. And the document that they
signed would be known as the ASEAN Declaration.
It was a short, simply-worded document containing just five articles. It declared the establishment of an
Association for Regional Cooperation among the Countries of Southeast Asia to be known as the
Association of Southeast Asian Nations (ASEAN) and spelled out the aims and purposes of that
Association. These aims and purposes were about cooperation in the economic, social, cultural, technical,
educational and other fields, and in the promotion of regional peace and stability through abiding respect
for justice and the rule of law and adherence to the principles of the United Nations Charter. It stipulated
that the Association would be open for participation by all States in the Southeast Asian region subscribing
to its aims, principles and purposes. It proclaimed ASEAN as representing “the collective will of the
nations of Southeast Asia to bind themselves together in friendship and cooperation and, through joint
efforts and sacrifices, secure for their peoples and for posterity the blessings of peace, freedom and
prosperity.”
S
AIMS AND PURPOSES
As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:
 To accelerate the economic growth, social progress and cultural development in the region through
IA
joint endeavours in the spirit of equality and partnership in order to strengthen the foundation for a
prosperous and peaceful community of Southeast Asian Nations;
 To promote regional peace and stability through abiding respect for justice and the rule of law in the
relationship among countries of the region and adherence to the principles of the United Nations
Charter;
 To promote active collaboration and mutual assistance on matters of common interest in the
economic, social, cultural, technical, scientific and administrative fields;
 To provide assistance to each other in the form of training and research facilities in the educational,
T
professional, technical and administrative spheres;
 To collaborate more effectively for the greater utilisation of their agriculture and industries, the
expansion of their trade, including the study of the problems of international commodity trade, the
improvement of their transportation and communications facilities and the raising of the living
EX
standards of their peoples;

 To promote Southeast Asian studies; and
 To maintain close and beneficial cooperation with existing international and regional organisations
with similar aims and purposes, and explore all avenues for even closer cooperation among
themselves.
European Union
European Union is an international organisation consisting of European Countries, which was formed in
1993. It came into force after the signing of the Maastricht Treaty by 27 countries. The Maastricht Treaty is
N
also known as the Treaty of the European Union (TEU). Maastricht is a city located in the Netherlands. The
Maastricht Treaty was amended thrice. The amendments are listed below.
 Treaty of Amsterdam (1997)
 Treaty of Nice (2001)
 Treaty of Lisbon (2007)
History:
 After World War II, European integration was seen as a cure to the excessive nationalism which had
devastated the continent.
 In 1946 at the University of Zurich, Switzerland, Winston Churchill went further and advocated the
emergence of a United States of Europe.
 In 1952, European Coal and Steel Community (ECSC) was founded under the Treaty of Paris (1951)
by 6 countries called Six (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) to
renounce part of their sovereignty by placing their coal and steel production in a common market,
under it.
 European Court of Justice (called "Court of Justice of the European Communities" until 2009) was
also established in 1952 under the Paris Treaty.
 European Atomic Energy Community (EAEC or Euratom) is an international organisation
established by the Euratom Treaty (1957) with the original purpose of creating a specialist market for
S
nuclear power in Europe, by developing nuclear energy and distributing it to its member states while
selling the surplus to non-member states.
 European Economic Community (EEC) was created by the Treaty of Rome (1957). The Community's
initial aim was to bring about economic integration, including a common market and customs union,
among its founding members (Six).
IA
 It ceased to exist by Lisbon Treaty-2007 and its activities were incorporated in the EU.
 Merger Treaty (1965, Brussels) in which an agreement was reached to merge the three communities
(ECSC, EAEC, and EEC) under a single set of institutions, creating the European Communities (ECs).
 The Commission and Council of the EEC were to take over the responsibilities of its counterparts
(ECSC, EAEC) in other organisations.
 The ECs initially expanded in 1973 when Denmark, Ireland, the United Kingdom became members.
Greece joined in 1981, Portugal and Spain following in 1986.
T
 Schengen Agreement (1985) paved the way for the creation of open borders without passport
controls between most member states. It was effective in 1995.
 Single European Act (1986): enacted by the European Community that committed its member
countries to a timetable for their economic merger and the establishment of a single European
EX
currency and common foreign and domestic policies.
 The Maastricht Treaty-1992 (also called the Treaty on European Union) was signed on 7 February
1992 by the members of the European Community in Maastricht, Netherlands to further European
integration. It received a great push with the end of the Cold War.
 In 2002, Treaty of Paris (1951) expired & ECSC ceased to exist and its activities fully absorbed by the
European Community (EEC).
 The Treaty of Lisbon 2007:
 European Community (now composed only of EEC, EAEC, as ECSC already ceased in 2002)
was ceased and its activities incorporated in the EU.
N
 EAEC is the only remaining community organization legally distinct from the European Union
(EU), but has the same membership, and is governed by many of the EU's institutions.
 Euro Crisis: The EU and the European Central Bank (ECB) have struggled with high sovereign debt
and collapsing growth in Portugal, Ireland, Greece and Spain since the global financial market
collapse of 2008. Greece and Ireland received financial bailouts from the community in 2009, which
were accompanied by fiscal austerity. Portugal followed in 2011, along with a second Greek bailout.
 Multiple rounds of interest rate cuts and economic stimulus failed to resolve the problem.
 Northern countries such as Germany, the United Kingdom and the Netherlands increasingly
resent the financial drain from the south.
The goals of the European Union are:

 promote peace, its values and the well-being of its citizens
 offer freedom, security and justice without internal borders
 sustainable development based on balanced economic growth and price stability, a highly
competitive market economy with full employment and social progress, and environmental
protection
 combat social exclusion and discrimination
 promote scientific and technological progress
 enhance economic, social and territorial cohesion and solidarity among EU countries
S
 respect its rich cultural and linguistic diversity
 establish an economic and monetary union whose currency is the euro
Values: The EU values are common to the EU countries in a society in which inclusion, tolerance, justice,
solidarity and non-discrimination prevail. These values are an integral part of our European way of life:
IA
 Human dignity: Human dignity is inviolable. It must be respected, protected and constitutes the real
basis of fundamental rights.
 Freedom: Freedom of movement gives citizens the right to move and reside freely within the Union.
Individual freedoms such as respect for private life, freedom of thought, religion, assembly,
expression and information are protected by the EU Charter of Fundamental Rights.
 Democracy: The functioning of the EU is founded on representative democracy. Being a European
citizen also means enjoying political rights. Every adult EU citizen has the right to stand as a
candidate and to vote in elections to the European Parliament. EU citizens have the right to stand as a
T
candidate and to vote in their country of residence, or in their country of origin.
 Equality: Equality is about equal rights for all citizens before the law. The principle of equality
between women and men underpins all European policies and is the basis for European integration.
It applies in all areas. The principle of equal pay for equal work became part of the Treaty of Rome in
1957. Although inequalities still exist, the EU has made significant progress.
EX
 Rule of law: The EU is based on the rule of law. Everything the EU does is founded on treaties,
voluntarily and democratically agreed by its EU countries. Law and justice are upheld by an
independent judiciary. The EU countries gave final jurisdiction to the European Court of Justice
which judgements have to be respected by all.
 Human rights: Human rights are protected by the EU Charter of Fundamental Rights. These cover
the right to be free from discrimination on the basis of sex, racial or ethnic origin, religion or belief,
disability, age or sexual orientation, the right to the protection of your personal data, and the right to
get access to justice.
From economic to political union: The European Union is a unique economic and political union between
N
27 EU countries that together cover much of the continent.

The predecessor of the EU was created in the aftermath of the Second World War. The first steps were to
foster economic cooperation: the idea being that countries that trade with one another become economically
interdependent and so more likely to avoid conflict.
The result was the European Economic Community (EEC), created in 1958, and initially increasing
economic cooperation between six countries: Belgium, Germany, France, Italy, Luxembourg and the
Netherlands.
Since then, 22 other members joined and a huge single market (also known as the 'internal' market) has
been created and continues to develop towards its full potential.
On 31 January 2020 the United Kingdom left the European Union.

What began as a purely economic union has evolved into an organization spanning policy areas, from
climate, environment and health to external relations and security, justice and migration. A name change
from the European Economic Community (EEC) to the European Union (EU) in 1993 reflected this.
The EU in the world
 Trade: The European Union is the largest trade block in the world. It is the world's biggest exporter of
manufactured goods and services, and the biggest import market for over 100 countries.
 Free trade among its members was one of the EU's founding principles. This is possible thanks to the
single market. Beyond its borders, the EU is also committed to liberalising world trade.
S
 Humanitarian aid: The EU is committed to helping victims of man-made and natural disasters
worldwide and supports over 120 million people each year. Collectively, the EU and its constituent
countries are the world's leading donor of humanitarian aid.
 Diplomacy and security: The EU plays an important role in diplomacy and works to foster stability,
security and prosperity, democracy, fundamental freedoms and the rule of law at international level.
IA
BREXIT
BREXIT in simple terms refers to Britain holding a referendum to decide whether it wants to continue
membership under the EU or not. The referendum was held on 23rd June 2016 and 52% voted for BREXIT
whereas 48% voted for remaining within the EU. Although the referendum is not binding on Britain’s
parliament, the PM has announced that he has to respect the will of the people.
The UK voted to leave the EU in 2016 and officially left the trading bloc - it's nearest and biggest trading
partner - on 31 January 2020.
T
However, both sides agreed to keep many things the same until 31 December 2020, to allow enough time to
agree to the terms of a new trade deal.
Some of the reasons for Britain to seek BREXIT are:
 Sovereignty- Although the British Government influences some form in selecting the members to the
EX
European Commission, the members are neither under the influence nor accountable to the British
Parliament and some of the policy decisions such as competition policy, agriculture, copyright, and
patent law go against the interests of Britain (these laws override the domestic laws)
 Regulations are becoming a Burden- Some of the regulations such as –limits on the power of
vacuum cleaners, non-recycling of tea bags, etc have often been seen as a burden on some of the
conservatives in Britain. As per Michel Gove, these regulations have cost Britain to the tune of £3
billion per year.
 Euro the Disaster – although the Euro is the common currency for the EU, Britain still uses the pound
as its currency. Now if the euro had to be successful then it would have required greater fiscal and
N
monetary integration and this cannot be achieved unless all the member states have the same
currency. The problem with the euro as a common currency has also been exposed wherein on one
side countries such as Greece and Spain are suffering from high debt, high unemployment, whereas
other countries such as Germany are enjoying higher growth. Now in this situation, the ECB
(European Central Bank) is in a dilemma whether to go for fiscal stimulus or prudence.
 Immigration- Britain is not a signatory of the Schengen Border free zone (allows easy travel across
Europe), over the last ten years there has been a quite an opposition towards migration into the
country from within the EU and its effects on wages and public services especially post 2008 recession
wherein the workers from Lithuania, Poland, Italy, Romania, etc. have moved to Britain
BREXIT Impact on EU and the UK:

 Both the UK and the EU will have tariff-free and quota-free access to each other’s market, however,
the UK nationals will no longer have unrestricted freedom to work, study, start a business or live in
the EU and vice versa.
 The European Unions seeks to link goods trade to maintaining the status quo on access to British
waters which is considered to be a matter of concern for the U.K., so it might give rise to clashes.
 The U.K. on leaving the EU, automatically, mechanically, legally, leaves hundreds of international
agreements concluded by or on behalf of the EU. This is advantageous for its Member States, on
topics as different as trade, aviation, fisheries or civil nuclear cooperation.
S
 Even the non-trade subjects will be full of political troubles because the EU Member States will have
to change their policies according to the new deals and the regulations.
 The European Union’s refusal to bring services into the trade deal might instigate clashes
INDIA & IT’S REGIONAL TRADE AGREEMENTS
IA
ASEAN-India Free Trade Area (AIFTA)
The Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India was
signed in October 2003 and served as a legal basis to conclude further agreements, including Trade in
Goods Agreement, Trade in Services Agreement, and Investment Agreement that form the ASEAN-Indian
Free Trade Area (AIFTA).
The ASEAN-India Trade in Goods Agreement was signed and entered into force on 1 January 2010. Under
the Agreement, ASEAN Member States and India have agreed to open their respective markets by
T
progressively reducing and eliminating duties on 76.4% coverage of goods.
The ASEAN-India Trade in Services Agreement was signed in November 2014. It contains provisions on
transparency, domestic regulations, recognition, market access, national treatment and dispute settlement.
The ASEAN-India Investment Agreement was also signed in November 2014. The Investment
EX
Agreement stipulates protection of investment to ensure fair and equitable treatment for investors, non-
discriminatory treatment in expropriation or nationalisation as well as fair compensation.
Economic co-operation activities under the AIFTA are now being undertaken on agriculture, fisheries and
forestry; services; mining and energy; science and technology; transport and infrastructure; manufacturing;
human resource development; and other sectors such as handicrafts, small and medium enterprises
(SMEs), competition policy, Mekong Basin Development, intellectual property rights and government
procurement
Objective
N
To achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership

agreement among the ASEAN Member States and ASEAN's FTA partners.
INDIA - JAPAN Comprehensive Economic Partnership Agreement (CEPA)

The India-Japan Comprehensive Economic Partnership Agreement (CEPA) that came into force in August
2011 covers trade in goods, services, movement of natural persons, investments, Intellectual Property
Rights, custom procedures and other trade related issues. The agreement was arrived at after four years of
extended negotiations and basically consisted of agreed measures on liberalisation of bilateral trade in
goods, trade in services and investment.
Economic relations between India and Japan have vast potential for growth, given the obvious
complementarities that exist between the two Asian economies. Japan's interest in India is increasing due to
a variety of reasons including India's big and growing market and its resources, especially the human
resources. The signing of the historic India-Japan Comprehensive Economic Partnership Agreement
(CEPA) and its implementation from August 2011 has accelerated economic and commercial relations
between the two countries. During the visit of Prime Minister Modi to Japan in September 2014, PM Shinzo
Abe pledged $35 billion in investment in India's public and private sectors over the next five years as well
as to double the number of Japanese companies operating in India.
Japan is regarded as a key partner in India’s economic transformation. Japan's interest in India is increasing
due to a variety of reasons including India's large and growing market and its resources, especially the
S
human resources. Japan’s bilateral trade with India totaled US$ 16.95 billion in FY 2019-20. Exports from
Japan to India during this period were US$ 12.43 billion and imports were US$ 4.52 billion. India’s primary
exports to Japan are petroleum products, chemicals, elements, compounds, non-metallic mineral ware, fish
& fish preparations, metalliferous ores & scrap, clothing & accessories, iron & steel products, textile yarn,
fabrics and machinery etc. India’s primary imports from Japan are machinery, electrical machinery, iron
IA
and steel products, plastic materials, non-ferrous metals, parts of motor vehicles, organic chemicals, etc.
The objectives of this Agreement are to:
(a) liberalise and facilitate trade in goods and services between the Parties;
(b) increase investment opportunities and strengthen protection for investments and investment
activities in the Parties;
(c) ensure protection of intellectual property and promote cooperation in the field thereof;
(d) promote cooperation for the effective enforcement of competition laws in each Party;
T
(e) improve business environment in each Party;
(f) establish a framework to enhance closer cooperation in the fields agreed in this Agreement; and
(g) create effective procedures for the implementation and application of this Agreement and for the
EX
resolution of disputes.
Challenges:
 The other possible areas of cooperation between India and Japan can possibly be:
a. The field of infrastructure, technology and telecommunication.
b. India and Japan need to work together in the Indo-Pacific Region in order to obtain mutual
benefits.
c. With the help of Japan, India can pave its way to the permanent membership of the UN
N
Security Council.
d. In the IT- sector, in order to harness the gains of the fourth industrial revolution, India and
Japan should collaborate.
e. Within the defence platforms, Japan could be approached to provide assistance in building
warships, weapons, submarines etc.
 Apart from taking assistance from Japan, India should also think about how Indian components
could reach Japan, and how they can be rewarded dividends in Japan: the notion of the Atma-
Nirbhar Bharat also needs to be promoted.
 India needs to look into the matter of post covid ties too, ensure good relations with the other parts of
the world so as to emerge from the losses and also in order to restrain Chinese influence in the areas
of maritime.
India-Republic of Korea (ROK) CEPA

ROK and India signed a Comprehensive Economic Partnership Agreement (CEPA) in Seoul on 7th August,
2009, heralding a new era of greater economic exchanges, between the two countries. Negotiated over
twelve rounds, during more than three years, CEPA came into effect on 1st January 2010.
It commits both countries to lower or eliminate import tariffs on a wide range of goods, over the next 10
years and expand opportunities for investments and exchanging services. ROK is phasing out or reducing
tariffs on 90 percent of Indian goods over the next decade, while India will do so on 85 percent of Korean
S
goods.
The Comprehensive Economic Partnership Agreement (CEPA) is a free trade agreement between India and
South Korea. It is equivalent to a free trade agreement, and will provide better access for the Indian service
industry in South Korea. Services include Information technology, engineering, finance, and the legal field.
IA
The agreement has eased restrictions on foreign direct investments. Companies can own up to 65% of a
company in the other country. Both countries avoided issues over agriculture, fisheries, and mining and
chose not to decrease tariffs in those areas.
Major items of India’s exports to Korea are mineral fuels/oil distillates (mainly naphtha), cereals, iron and
steel. On the other hand, Korea’s main export items are automobile parts, telecommunication equipment,
hot rolled iron products, petroleum refined products, base lubricating oils, mechanical appliances, electrical
machinery & parts and iron and steel products
The objectives of this Agreement, as elaborated more specifically through its principles and rules are to:
T
(a) liberalise and facilitate trade in goods and services and expand investment between the Parties;
(b) establish a cooperative framework for strengthening and enhancing the economic relations between
the Parties;
(c) establish a framework conducive for a more favourable environment for their businesses and
EX
promote conditions of fair competition in the free trade area;

(d) establish a framework of transparent rules to govern trade and investment between the Parties;
(e) create effective procedures for the implementation and application of this Agreement;
(f) explore new areas of economic cooperation and develop appropriate measures for closer economic
partnership between the Parties;
(g) improve the efficiency and competitiveness of their manufacturing and services sectors and expand
trade and investment between the Parties; and
(h) establish a framework for further regional and multilateral cooperation to expand and enhance the
N
benefits of this Agreement throughout Asia, and thereby, to encourage the economic integration of
Asian economies.
Challenges:
a. India’s exports have not outperformed overall export growth or exports to the rest of the world.
b. India’s trade deficit has widened
c. Utilisation rate of comprehensive agreements by exporters in India is very low
d. Trade balance has worsened (deficit increased or surplus reduced) for about 16 out of around 22
sectors.
SOUTH ASIAN FREE TRADE AREA (SAFTA)

The South Asian Free Trade Area (SAFTA) is a free trade agreement reached between the members of the
South Asian Association of Regional Cooperation (SAARC) on January 6, 2004. The Governments of the
SAARC (South Asian Association for Regional Cooperation) Member States comprising the People’s
Republic of Bangladesh, the Kingdom of Bhutan, the Republic of India, the Republic of Maldives, the
Kingdom of Nepal, the Islamic Republic of Pakistan and the Democratic Socialist Republic of Sri Lanka
hereinafter referred to as “Contracting States”
 Motivated by the commitment to strengthen intra-SAARC economic cooperation to maximise the
realization of the region’s potential for trade and development for the benefit of their people, in a
spirit of mutual accommodation, with full respect for the principles of sovereign equality,
S
independence and territorial integrity of all States;
 Noting that the Agreement on SAARC Preferential Trading Arrangement (SAPTA) signed in Dhaka
on the 11th of April 1993 provides for the adoption of various instruments of trade liberalization on a
preferential basis;
IA
 Convinced that preferential trading arrangements among SAARC Member States will act as a
stimulus to the strengthening of national and SAARC economic resilience, and the development of
the national economies of the Contracting States by expanding investment and production
opportunities, trade, and foreign exchange earnings as well as the development of economic and
technological cooperation;
 Aware that a number of regions are entering into such arrangements to enhance trade through the
free movement of goods;
 Recognizing that Least Developed Countries in the region need to be accorded special and
T
differential treatment commensurate with their development needs; and
 Recognizing that it is necessary to progress beyond a Preferential Trading Arrangement to move
towards higher levels of trade and economic cooperation in the region by removing barriers to cross-
border flow of goods;
EX
The Objectives of this Agreement are to promote and enhance mutual trade and economic cooperation
among Contracting States by, inter-alia:
 eliminating barriers to trade in, and facilitating the cross border movement of goods between the
territories of the Contracting States;
 promoting conditions of fair competition in the free trade area, and ensuring equitable benefits to all
Contracting States, taking into account their respective levels and pattern of economic development;
 creating effective mechanism for the implementation and application of this Agreement, for its joint
administration and for the resolution of disputes; and
 establishing a framework for further regional cooperation to expand and enhance the mutual benefits
N
of this Agreement.
SAFTA shall be governed in accordance with the following principles:
 SAFTA will be governed by the provisions of this Agreement and also by the rules, regulations,
decisions, understandings and protocols to be agreed upon within its framework by the Contracting
States;
 The Contracting States affirm their existing rights and obligations with respect to each other under
Marrakesh Agreement Establishing the World Trade Organization and other Treaties/Agreements to
which such Contracting States are signatories;
 SAFTA shall be based and applied on the principles of overall reciprocity and mutuality of
advantages in such a way as to benefit equitably all Contracting States, taking into account their
respective levels of economic and industrial development, the pattern of their external trade and tariff
policies and systems;
 SAFTA shall involve the free movement of goods, between countries through, inter alia, the
elimination of tariffs, para tariffs and non-tariff restrictions on the movement of goods, and any other
equivalent measures;
 SAFTA shall entail adoption of trade facilitation and other measures, and the progressive
harmonization of legislations by the Contracting States in the relevant areas; and
S
 The special needs of the Least Developed Contracting States shall be clearly recognized by adopting
concrete preferential measures in their favour on a non-reciprocal basis.
Instruments:
The SAFTA Agreement will be implemented through the following instruments:
IA
 Trade Liberalisation Programme
 Rules of Origin
 Institutional Arrangements
 Consultations and Dispute Settlement Procedures
 Safeguard Measures
 Any other instrument that may be agreed upon.
INDIA & Regional Comprehensive Economic Partnership – RCEP

T
RCEP is a Free Trade Agreement between the ten member states of the ASEAN – Association of Southeast
Asian Nations namely Cambodia, Indonesia, Brunei, Laos, Malaysia, Vietnam, the Philippines, Myanmar,
Singapore, Thailand and its five partners (China, South Korea, Australia, Japan, and New Zealand).
Recently, the Regional Comprehensive Economic Partnership (RCEP) was signed into existence by 15
EX
countries led by China, Japan, South Korea, Australia, New Zealand and the 10-state ASEAN grouping,
creating one of the world’s largest trading blocs.The Regional Comprehensive Economic Partnership was
introduced during the 19th Asean meet held in November 2011. The RCEP negotiations were kick-started
during the 21st Asean Summit in Cambodia in November 2012.
RCEP importance: The 16 countries negotiating the RCEP together account for a third of the world gross
domestic product (GDP) and almost half the world’s population, with the combined GDPs of China and
India alone making up more than half of that. RCEP's share of the world economy could account for half of
the estimated $0.5 quadrillion global (GDP, PPP) by 2050.
Objective of RCEP: RCEP aims to create an integrated market with 16 countries, making it easier for
N
products and services of each of these countries to be available across this region.
The negotiations are focused on the following: Trade in goods and services, investment, intellectual
property, dispute settlement, e-commerce, small and medium enterprises, and economic cooperation.
China's role in RCEP

RCEP was pushed by Beijing in 2012 in order to counter another FTA that was in the works at the time: The
Trans-Pacific Partnership (TPP). The US-led TPP excludes China. However, in 2016 US President Donald
Trump withdrew his country from the TPP. Since then, the RCEP has become a major tool for China to
counter the US efforts to prevent trade with Beijing.
Importance of RCEP for India

 The RCEP will provide a boost to India’s Act East policy and will also influence the economic stature
of India among the other South Asian countries.
 India’s trade with the RCEP group of countries as a percentage of its total trade has increased over
the past decade.
 The greater economic integration with the countries of Southeast Asia and East Asia achieved
through RCEP, India will have access to vast regional markets of these countries thereby helping its
economy.
 India can leverage advantage in areas such as ICT, IT-enabled services, healthcare, and education
services. RCEP would help in expanding into these markets along attracting greater FDI into these
S
areas.
 It would also facilitate India’s MSMEs to effectively integrate into the regional value and supply
chains
India’s position in RCEP
IA
On November 4, 2019 India decided against joining the 16-nation Regional Comprehensive Economic
Partnership (RCEP) trade deal, saying it was not shying away from opening up to global competition
across sectors, but it had made a strong case for an outcome which would be favourable to all countries and
all sectors.
Prime Minister Narendra Modi, in his speech at the RCEP Summit said "the present form of the RCEP
agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP. It also does not
address satisfactorily India's outstanding issues and concerns in such a situation."
Reasons for India's Withdrawal

T
a. Unfavourable Balance of Trade: Though trade has increased the post-Free Trade Agreement with
South Korea, ASEAN countries and Japan, imports have risen faster than exports from India.
● According to a paper published by NITI Aayog, India has a bilateral trade deficit with most of
EX
the member countries of RCEP.
b. Chinese Angle: India has already signed FTA with all the countries of RCEP except China. Trade
data suggests that India’s deficit with China, with which it does not have a trade pact, is higher than
that of the remaining RCEP constituents put together.
● This trade deficit is the primary concern for India, as after signing RCEP cheaper products from
China would have flooded the Indian market.
● Further, from a geopolitical perspective, RCEP is China-led or is intended to expand China's
influence in Asia.
c. Non-acceptance of Auto-trigger Mechanism: To deal with the imminent rise in imports, India had
N
been seeking an auto-trigger mechanism.

● Auto-trigger Mechanism would have allowed India to raise tariffs on products in instances
where imports cross a certain threshold.
● However, other countries in the RCEP were against this proposal.
d. Protection of Domestic Industry: India had also reportedly expressed apprehensions on lowering
and eliminating tariffs on several products like dairy, steel etc.
● For instance, the dairy industry is expected to face stiff competition from Australia and New
Zealand.
● Currently, India’s average bound tariff for dairy products is on average 35%.
● The RCEP binds countries to reduce that current level of tariffs to zero within the next 15 years.
e. Lack of Consensus on Rules of Origin: India was concerned about a “possible circumvention” of
rules of origin.
● Rules of origin are the criteria used to determine the national source of a product.
● Current provisions in the deal reportedly do not prevent countries from routing, through other
countries, products on which India would maintain higher tariffs.
However, India’s stance on the deal also comes as a result of learnings from unfavourable trade balances
that it has with several RCEP members, with some of which it even has FTAs. An internal assessment by
S
the government has revealed that the growth in trade (CAGR) with partners over the last five financial
years was a modest 7.1%. While “there has been growth rate in both imports from and exports to these FTA
partners”, the “utilisation rate” of FTAs both for India and its partners has been “moderate” across sectors,
according to this study, which covers pacts with Sri Lanka, Afghanistan, Thailand, Singapore, Japan,
Bhutan, Nepal, Republic of Korea and Malaysia.
IA
India has trade deficits with 11 of the 15 RCEP countries, and some experts feel that India has been unable
to leverage its existing bilateral free trade agreements with several RCEP members to increase exports.
Way forward:
India, as an original negotiating participant of RCEP, has the option of joining the agreement without
having to wait 18 months as stipulated for new members in the terms of the pact. RCEP signatory states
said they plan to commence negotiations with India once it submits a request of its intention to join the pact
“in writing”, and it may participate in meetings as an observer prior to its accession.
T
However, the possible alternative that India may be exploring is reviews of its existing bilateral FTAs with
some of these RCEP members as well as newer agreements with other markets with potential for Indian
exports. Over 20 negotiations are underway.
India currently has agreements with members like the ASEAN bloc, South Korea and Japan and is
EX
negotiating agreements with members like Australia and New Zealand. Two reviews of the India-
Singapore CECA have been completed; the India-Bhutan Agreement on Trade Commerce and Transit was
renewed in 2016; and the India-Nepal Treaty of Trade was extended in 2016. Eight rounds of negotiations
have been completed for the review of the India-Korea CEPA, which began in 2016. India has taken up the
review of the India-Japan CEPA and India-ASEAN FTA with its trading partners.



N

Module-13 International Institution

Uploaded by

Copyright:

Available Formats

You might also like

Module-13 International Institution

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Module-13 International Institution

Uploaded by

Copyright:

Available Formats

| GS Pre Cum Main Foundation Course for CSE-2022 by Vibhas Jha Sir

GS PRE CUM MAIN

Vibhas Jha Sir

International Institutions 2|Page

BRETTON WOODS AGREEMENT

to float against each other.

IMF (INTERNATIONAL MONETARY FUND)

International Institutions 3|Page

The role of the SDR

International Institutions 4|Page

International Institutions 5|Page

The World Bank Group consists of five organizations:

The International Development Association

The Multilateral Investment Guarantee Agency

 No of Members: 182 countries

The International Centre for Settlement of Investment Disputes

International Institutions 6|Page

ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB)

International Institutions 7|Page

ASIAN DEVELOPMENT BANK (ADB)

International Institutions 8|Page

Roles and functions:

International Institutions 9|Page

NEW DEVELOPMENT BANK: NDB

UNCTAD - UNITED NATIONS CONFERENCE ON TRADE AND

 Promote entrepreneurship and innovation

The work of G20 is divided into two tracks:

Structure and Functioning of G20

continuity and consistency of the group’s agenda

Issues Addressed by G20:

The objectives of the G20 are:

General Agreement on Tariffs and Trade (GATT)

7. The Tokyo Round (1973-79) and

GATT - Chronology of Achievements

Sessions, attended by Ministers, subsequently established three committees in GATT: Committee I to

1993- 15 December, Successful Conclusion of the Uruguay Round.

Reasons for replacing GATT by WTO:

meet regularly in Geneva). Decisions are normally taken by consensus.

WTO’s - Ministerial Conference,

Singapore, 9-13 December 1996

 review the ongoing negotiations and Work Programme;

Geneva, 18-20 May 1998

(c) recommendations on the follow-up to the High-Level Meeting on Least-Developed Countries;

Seattle, November 30 – December 3, 1999

Doha, 9-13 November 2001

Ministerial Conference held in Seattle in December 1999.

Geneva, 30 November - 2 December 2009

Geneva, week of 29 November 2021

a. One is by talking: countries negotiate rules that are acceptable to all.

TRIPS (TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY

TRADE RELATED INVESTMENT MEASURES (TRIMS)

the General Agreement on Tariffs and Trade (GATT).

6. It supports duty-free and quota-free market access for developing nations.

India - Patent Protection for Pharmaceutical Protection and Agricultural Chemical

TRADE FACILITATION AGREEMENT (TFA)

Trade Facilitation Agreement Significance

India and Trade Facilitation Agreement

REGIONAL TRADING AGREEMENTS

adopt common external trade barriers.