Globalization and

World Trade
Organization
and exchange rate:

Subject: Economy of Pakistan.

Role of WTO in globalization
WTO stands for World Trade Organizations:

=> It is an intergovernmental organization which is concerned with the regulation of international

trade.

* HEADQUATER: Geneva. Switzerland

* FOUNDED: 1st January, 1995

* MEMBERS: 165 member states

* LEADER: Roberto Azevedo

* PURPOSE: Reduction of tariffs and other barriers to trade. * STAFF: 640.

Globalization
Globalization means interdependence.

It is also the free movement of goods, services, people, technology and information around the globe.

It is a process which leads to the integration of various local and national markets in the world
economy.

Globalization describes the interconnectedness and interdependent of different countries around the
world.

Pakistan becomes the member of WTO in 1948 to be the part of globalization.

Managerial structure of WTO:
1) Minstrel level Council: held conference once in two years where various issue are discussed.

2) General council: held one to three sessions in a year where TRADE POLICY and ECONOMIC
DISPUTE SETTLEMENT are discussed.

Types of general council:

1) Goods council

2) service council

3) Trade related intellectual property rights.

Objectives of WTO:
1) The purpose of WHTO is to liberalize the world trade.

2) systematically remove social, political, legal, linguistics, cultural and socio economic barriers.

3) Better allocate of resources.

Main area of working:
1) Parliament approved agreement

2) 15 to 20 agreement is done so far by WTO.

3) GATT (General agreements on tariff and trade) which only promoted and neutralized trades of
goods but WTO made agreements on goods, agricultural goods and intellectual property right to make
trade more comprehensive.
Types of agreements:
1) Agreement of agriculture:

This is the first agreement of WTO which stress upon the removal/ bring down of subsidies on
agricultural products. A/c to this agreement,

No member country should give subsidy to its farmers,

All member country will not refuse to give market access to other member country,

No member country will give subsidy on agriculture exports.

Pakistan is allowed to give only 10 % subsidy on agriculture.

Trade Related intellectual
property rights:
 (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets
down minimum standards for many forms of intellectual property (IP) regulation as applied to
nationals of other WTO Members.

It contains requirements that nations' laws must meet for copyright rights, including the rights of
performers, producers of sound recordings and broadcasting organizations; geographical indications,
including appellations of origin; industrial designs; integrated circuit layout-designs; patents;
monopolies for the developers of new plant varieties; trademarks; trade dress; and undisclosed or
confidential information.

It specifies enforcement procedures, remedies, and dispute resolution procedures.

Trade-Related Investment
Measures (TRIMs)
TRIMs refers to certain conditions or restrictions imposed by a governments in respect of foreign
investment in the country.

It provides that no contracting party shall apply any TRIM which is inconsistent with the WTO
Articles.
FUNCTIONS OF WTO
=> Administering WTO trade agreements.

=> Forum for trade negotiations.

=> Handling trade disputes .

=> Monitoring national trade policies.

=> Technical assistance and training for developing countries.

=>  Cooperation with other international organizations.

PRINCIPLES OF WTO:
The basic principles of the WTO (according to the WTO): Trade Without Discrimination.

1. Most Favoured Nation (MFN): treating other people equally.

2. National treatment: Treating foreigners and locals equally.

 Freer trade: gradually, through negotiation.

 Predictability: through binding and transparency.

 Promoting fair competition.

 Encouraging development and economic reform.

CONCLUSION:
 It is the place where the member country comes and talks together and shares their grievance in order
to resolve their problem related to International trade.

 The countries make their decisions through various councils and committees, whose membership
consists of all WTO members.

 The system helps promote peace, by handling Dispute of member countries. It provides free trade
which cuts the costs of living and provides more choice of products and qualities and stimulates
economic growth.
The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and
the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers,
and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for
developing countries. They require governments to make their trade policies transparent

WTO deals with the special needs of developing countries as two thirds of the WTO members are developing countries
and they play an increasingly important and active role in the WTO because of their numbers, because they are becoming
more important in the global economy, and because they increasingly look to trade as a vital tool in their development
efforts.
Exchange Rate:
 The rate at which one currency will be exchanged for another. Or An exchange rate is the value of
one currency converted into another.

 The value of one country’s currency in terms of another currency.

  An exchange rate thus has two components,

◦ the domestic currency and a foreign currency.

 For example our domestic currency is Pakistani Rupees and the Foreign Currency can be United
States Dollars (USD)
Types of Exchange Rates
which are:

1. Fixed Exchange Rate:

It is type of exchange rate system which remains fixed and does not change and is decided/determined
by the govt and central bank.

2. Floating/Flexible Exchange Rate:

It is type of exchange rate which fluctuate and is determined by the market forces of demand and supply.

(More demand > more value and more supply > less value)

3. Managed Floating Exchange Rate: Where there is a mixture of fixed and floating exchange rate.
Thank you
SO MUCH