WTO

MITALI PURWAR

 Indias Economy has grown by more than 9% for three years running, and has seen a decade of 7%+ growth.

The growth rate of the manufacturing sector rose steadily from 8.98% in 2005, to 12% in 2006.
The storage and communication sector also registered a significant growth rate of 16.64% in the same year.

 The growth rate of the service sector was 11.18% in 2007 and now contributes 53% of GDP.
The industrial sector grew 10.63% in the same period and is now 29% of GDP. Agriculture is 17% of the Indian economy.

 GATT was formed in 1947 and lasted until 1994, when it was replaced by the world trade organisation. The GATT's main objective was the reduction of barriers to international trade. This was achieved through the reduction of tariff barriers, quantitative restriction and subsidies on trade through a series of agreements. The GATT was a treaty, not an organization.

Raising standard of living.

Ensuring full employment and a large and steadily growing value of real income and effective demand. Developing full use of the resources of the world. Expansion of production and international trade.

 Firstly, the dispute resolution mechanism of GATT was not functioning as effectively as had been hoped. Countries with longstanding disagreements were unable to reach any sort of resolution on a number of issues, ranging from government subsidies for exports to regulations regarding foreign direct investment.

Secondly, a number of commodities, most importantly, agricultural products and textiles, were widely exempt from GATT disciplines.

Thirdly, it was widely believed that certain forms of administered trade protectionantidumping duties, voluntary export restraints, and countervailing dutieswere restricting trade and distorting trade patterns in many important sectors.
Fourthly, trade in services was expanding rapidly and GATT had no rules regarding trade in services. Fifthly, countries that produced intellectual property movies, computer programs, patented pharmaceuticalswere becoming increasingly frustrated by the lack of intellectual property protection in many developing nations.

 Lastly, the rules regarding trade-related investment measures for example, domestic purchase requirements for plants built from foreign direct investmentwere hotly disputed.

Formation Headquarters Membership Official languages Director General Budget Staff Website -

1 January 1995 Geneva, Switzerland 153 member states English, French, Spanish Pascal Lamy 180 million Swiss france 625 www.wto.int

 The World Trade Organization (WTO) is an international organisation designed to supervise and liberalize international trade.
The WTO came into being on 1 January 1995, and is the successor to the General agreement on tariffs and trade (GATT), which was created in 1947, and continued to operate for almost five decades as a international organization

 The WTO has 153 members, which represents more than 95% of total world trade.
The WTO is governed by a Ministerial Conference, which meets every two years; a General Council, which implements the conference's policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the Ministerial Conference.

 Administering W.T.O Trade Agreements. Acting as a Forum for trade negotiations. Settling and Handling Trade disputes Monitoring and reviewing national trade policies Assisting the member in trade policies through technical assistance and training programmes Technical assistance and training for developing countries. Co-operation with other International Organization

 The agreements of WTO cover everything from trade in goods, services and agricultural products, these agreements are quite complex to understand, however all these agreements are based on some simple principles;

Non-Discrimination Reciprocity Transparency

 The system helps promote peace. Rules make life easier for all. Disputes are handled constructively. Free trade cuts the cost of living. It provides more choice of product and quality Trade raises income. Trade stimulate economic growth. The basic principle make life more efficient.

 Decisions are made by all the members together. After the decision by individual countries, the WTO's agreements have been ratified in all members' parliaments.
The WTO's top level decision-making body is the Ministerial Conference which meets at least once every two year. Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members' capitals) which meets several times a year in the Geneva headquarters.

 At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council. Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements.

GATT WTO GATT was ad hoc and provisional WTO and its agreements are permanent. GATT has contracting parties WTO has members GATT system allowed existing WTO does not permit us domestic legislation to continue even if it violated a GATT agreement GATT was less powerful, disputes WTO is more powerful, disputes settlement system was slow and settlement mechanism is faster less efficient, its ruling can be and more efficient,very difficult to easily blocked block the rulings

 India is a founder member of World Trade Organization, and also treated as the part of developing countries group for accessing the concessions granted by the organization. As a result, there are several implications for India for the various agreements that are signed under WTO.

 India had to change several laws and policies; the major changes that were incorporated were as a follows1) Reduction of peak and average tariffs on manufactured products.

Commitments to phase out the quantitative restrictions over a period as these were considered non-transparent measure in any countries policy structure.

2. Trade Related Investment Measure (TRIMS).

The agreement relates to investments originating from one country to another. The agreement prohibits the host country to discriminate the investment from abroad with domestic investment, which implies that it favors national treatment of foreign investment.

3. Trade Related Intellectual Property Rights (TRIPS) An intellectual property right refers to any creation of human mind which gets legal recognition and protection such that the creator of the intangible is protected from illegal use of his creation. This agreement includes several categories of property such as Patents, Copyrights, Trademarks, Geographical indications,

 4. Agreement on Agriculture (AOA): The Agriculture happens to be one of the most protected sectors in all the countries without any exceptions, and therefore an agreement on the agricultural issues have always been evading and debated strongly by all the countries involved in trade in agriculture. 5. Agreement on Sanitary and psyto-sanitary measures (SPM): this agreement refers to restricting exports of a country if they do not comply with the international standards of germs/bacteria etc if the country suspects that allowing of such products inside the country would result in spread of disease and pest, then there is every right given to the authorities to block the imports.

 6. Multi-Fiber Agreement (MFA): This agreement is dismantled with effect from 1 January 2005. The result was removal of QR on the textile imports in several European countries. As a consequence a huge textile market is opened up for developing countries textile industry as well as for other countries that have competitive advantage in this area.

P = Price Q = Quantity S = Supply D = Demand Pt = Price with tariff Pw = World price MT = Imports under tariff MFT = Imports under free trade A = Tariff revenue B = Consumption distortion

P = Price

Q = Quantity

S = Supply

D = Demand

XS = Export supply MT = Imports under tariff

MD = Import demand

Pt = Price with tariff

Pw = World price

MFT = Imports under free trade

QT = Imports under tariff

QFT = Imports under free trade

 Major reform under WTO in 2005 resulted : A gain to world of around $23 billion, including $12.3 billion for the US, $0.8 billion for Canada, $2.2 billion for Europe and around $8 billion for developing countries.

Farmers Subjected To WTO Protectism WTO Uniform Rules Liberalization Of World Trade High Tariff Rate Developing Country Effect Developing Country Biotechnological Advancement

 India a part of Multi-Fibre Agreement (MFA). Contributes to 4% of national GDP and 20% of manufacturing value added. Provides employment to 6.5 million persons directly or indirectly. Quota phase out Opportunity as well as threat.

Contributes to almost 35% of foreign exchange

 Trade and Environment Labour Standards

Trade and Investment

Trade and Competition Transparency in Procurements made by the Government