WTO

WORLD TRADE ORGANIZATION

 CHANAKYA

ARUN SPOORTHI ANUSHRI DEEPAK

DEEPA PRATIBA MARUTI
WTO

 WTO is the only international organization

dealing with the global rules of trade between
nations.
 One of the youngest of the international
organizations, the WTO is the successor to the
General Agreement on Tariffs and Trade (GATT)
established in the wake of the Second World War.
 Its main function is to ensure that trade flows as
smoothly, predictably and freely as possible.
Why WTO came to existence

 3 MAIN REASONS
 First, the economic success of Japan strained
the world trading system
 Second, the world trading system was
strained by the persistent trade deficit in the
world’s largest economy, the United States.
 Third reason for the trend towards greater
protectionism was that many countries found
ways to get around GATT regulations
 Why WTO came to existence…….
In 1995 WTO came into existence
because of all the factors mentioned
above. WTO is a more prominent
body.
 Fact file
 Established: 1st January 1995
 Created by: Uruguay Round Negotiations
(1986-1994)
 Location: Geneva, Switzerland
Membership: 149 countries (on 11 Dec.
2005)
 Budget: 175 million Swiss francs for 2006
 Head: PASCAL LAMY (Director General)
Fact file……….

 A WTO was to created to implement the

GATT agreement

 GATT………?
GATT: General Agreement on Tariffs and
Trade.
 WTO starts its life on 1st Jan 1995, but its
trading system is started since
1948,GATT
 General Agreement on Tariffs and
Trade was born, with 23 founding
members.
 The WTO is currently the host to new
negotiations, under the “Doha
Development Agenda” launched in 2001.
STRUCTURE

1. Ministerial Conference

2. General Council

3. Goods council, services council,

intellectual property rights councils
 OBJECTIVES

 Help trade flow as freely as possible

 
 Serve as a forum for trade negotiations
 
 Set up an impartial means of settling disputes
 
 To increase the transparency and understanding of
countries’ trade policies
 
 To improve the quality of public and inter governmental
issues
FUNCTIONS

 Acting as a forum for trade negotiations

 Reviewing national trade policies
 Administering trade agreements
 Settling trade disputes
 Assisting developing countries in trade policy
issues, through technical assistance
and training programs
 Cooperating with other international
organizations
Principles

1 Without discrimination
2 Freer
3 Predictable
4 More competitive
5 More beneficial for Less Developed Countries
(LDC)
WTO Agreements

The Agreements of WTO cover :

 Goods
 Services
 Intellectual Property
 Dispute Settlement
 Trade policy review
DEVELOPING COUNTRIES
The special provisions include
:

1. Longer time periods for implementing

agreements and comments,
2. Measures to increase trading opportunities for
these countries,
3. Provisions requiring all WTO members to
safeguard the trade interests of developing
countries
4. Support to help developing countries build
the infrastructure for WTO work, handle disputes,
and implement technical standards
10 Benefits of the WTO

1. The system helps promote peace

2. Disputes are handled constructively
3. Rules make life easier for all
4. Freer trade cuts the costs of living
5. It provides more choices of products and qualities
6. Trade raises incomes
7. Trade stimulates economic growth
8. The basic principles make life more efficient
9. Governments are shielded from lobbying
10. The system encourages good government
 Misunderstandings about WTO
1. WTO dictates policy
2. WTO is for free trade at any cost:
3. Commercial interests take priority over
development
4. Over the environment
5. Over health and safety
6. WTO destroys jobs, worsens poverty
7. Small countries are powerless in WTO
8. WTO is the tool for powerful lobbies
9. Weaker countries are forced to join WTO
Arguments for joining up WTO

 After liberalization it was the best option to join WTO for

India. As post liberalization the international trade was
bound to increase. And WTO ensures free and fair trade.

 Once a country joins WTO, the exports rise certainly.

 There arise ample job opportunities for unemployed
people and better job opportunities for talented and
skilled people.

 With the onset of international trade a country also

observes technological development.
Arguments for joining up WTO…………..

 By joining WTO, the country enjoys all the facilities and

benefits given by International Trade Center. ITC gives
various facilities to become more competitive and helps
in solving procedural issues.

 The benefit of intellectual capital can also be availed.

India already has got comparative advantage in the
sectors that are growing at a fast pace like Software.

 Once a part of WTO, no two nations have to get into

different bilateral agreements among them for trade.
 Arguments against joining WTO

 MNCs take away the major chunk of the profits

earned in the host country to their home country.

 They give lesser salary to the employees of the host

countries.

 Though tariff concessions are given but with some

kind of harassment. It was observed when India
signed the nuclear deal with U.S.
Arguments against joining WTO………..

 Security may also be compromised in the longer

run.

 The impact of product patent is lesser felt now,

but in the longer run it is bound to create
problems. In India the cost of medicines is still
very cheap, the foremost reason being the huge
pharma industry. But in the next 20-30 years,
when newer diseases and health problems will be
on rise then its impact will sure be seen and felt
TRIMS- Trade related investment measures

 TRIMS is a council of WTO that ensures the

member countries do not impose any
restrictions on investment. No country can
have laws with the conditions like- If one
country export ‘X’ quantity then they must
import ‘Y’ quantity from the other country
and vice a versa. No condition on quantity
should be imposed that hampers investment
TRIPS- Trade related Intellectual property rights

 The TRIPS regulations oblige WTO members to grant

and enforce patents lasting at least 20 years and
copyrights lasting at least 50 years. Rich countries
had to comply with the rules within a year.
 Poor countries, in which such protection generally
was much weaker, had 5 years grace and the very
poorest had 10 years. The basis for this agreement
was a strong belief among signatory nations that the
protection of intellectual property through patents,
trademarks, and copyrights must be an essential
element of the international trading system.
TRIPS……………

 Inadequate protections for intellectual property

reduce the incentive for innovation. Because
innovation is a central engine of economic
growth and rising living standards, the argument
has been that a multilateral agreement is
needed to protect intellectual property.
 Without such an agreement, there has been a
fear that producers might market imitate the
patented innovations pioneered in a different
country
DOHA CONFERENCE

The 4th WTO Ministerial Conference was held

in Doha, Qatar from 9 to 14 November 2001.
The agenda included:-

1 Cutting tariffs on industrial goods and

services
2 Phasing out subsidies to agricultural
producers
3 Reducing barriers to FDI
4 Limiting the use of Antidumping laws
Other Implications

Duty-free market access for LDC’s and

measures to improve market access for these
exports.

1. Faster and easier negotiations for WTO

membership
2. Technical assistance for LDCs
THANK YOU