World

Trade
Organization

History of WTO

Constituted on 1
st
January, 1995.
WTO took over the GATT.
Membership was 124 nations.
India was one of the founder member.
In the year 2004, the no. increased to 148.
Objective was to remove the tariffs and non
tariff barriers.


Present Position of WTO
Present Membership is 159 Nations.
Headquarter Center William Rappard,
Geneva, Switzerland
Official Language English, French, Spanish
Objective To encourage free trade of goods
and services.

Features of WTO

An international organization to promote
multilateral trade.
Replaced the GATT.
Promote free trade
Fixed rules and regulations and has a legal
status.
Binding on all members of WTO.
It includes trade in goods, trade in services,
protection of intellectual property rights, etc.
One country, one vote.


Objectives of WTO
To improve the standard of living of people in
the member countries.
To ensure full employment and broad increase
in effective demand.
To enlarge production and trade of goods.
To enlarge production and trade in services.
To ensure optimum utilization of world
resources.
To accept the concept of sustainable
development.
To protect environment.

Structure of WTO
1. Ministerial conference
2. General council
3. Functional councils under the general council
Council for trade in goods
Council for trade in services
Council for trade related aspects of intellectual
property
4. Committee and management bodies
Committee on trade & development
Committee on BOP
Committee on budget, finance and administration
Framework of WTO
Multilateral
Agreements
on Trade in
Goods
GATS
TRIPs DSB
TPRM
Agriculture
Textile & Clothing
TRIMs
Anti Dumping


Copyright
Trademarks
Patents

Agreement on Agriculture
The WTO Agreement on Agriculture contains
provisions in 3 broad areas of agriculture : reduction
in domestic subsidies, reduction in export subsidies,
improvement in market access, public distribution
system.

Trade in Textile and Clothing
WTO agreement with regard to trade in textile and
clothing provides the following provisions:
Elimination of MFA
Reduction in tariff on textile and clothing

Trade Related Intellectual Property Right
(TRIPs)

Intellectual property right can be with regards to copy
right, patents and trademark.
Under TRIPs life of patents has been fixed as follows:
General patents 20 years
Copy right 50 years
Trade mark 10 years
Industrial design 10 years
Medicines 10 years



Trade Related Investment Measures (TRIMs)

Main features of TRIMs are as:
To offer fair treatment and all facilities to all foreign
investors which are available to domestic investors.
To remove restrictions on repatriation of dividend,
interest and royalty of MNCs.
To allow 100% foreign equity participation in certain
cases.
No restriction on any area of foreign investment.


General Agreement on Trade in Services (GATS)

The GATS defines services as the supply of a service from the
territory of one member country into the territory of another
member country ; in the territory of one member to the service
consumer of any other member ; by a service supply of one
member ; through commercial presence in the territory of any
other member ; or by a service supplier of one member, through
presence of natural persons of a member in the territory of any
other member.


Disputes Settlement Agreement

In 1
st
stage, DSB consult parties under disputes.
Director general of WTO act as mediator for settlement
of bodies.
DSB takes the final decision on the basis of report
submitted by panel with in 30 days.


Agreement on Export Subsidies

WTO agreement prohibit export subsidy to promote free
and fair global competition in the world trade.
Developing countries are exempted from giving export
subsidy.


Anti Dumping Agreement

Dumping :Practice of selling a product in one national market at a
lower price than it is sold in another national market. Thus
Dumping is the price discrimination b/w national markets.

Tariff duty: The importing country imposes high rate of import
tariffs on dumping so that the price of the dumping goods would
be either equal to or more than that of the dumped goods.

No restriction on 1% import of total market sale of that product.



Trade Policy Review Mechanism

Aims to carry out reviews of the trade policies & practices under
the MTAs & PTAs for the smooth functioning of Multilateral
Trading System.

Trade Policy review body was established for this purpose.

Each member has to report to the TPRB regularly about the trade
policies & practices pursued by it.


WTO and India
Advantages
Increase in foreign trade
Increase in inflow of foreign investment
Benefits for clothing and textile industry
Inflow of better technology
Restrict dumping
Disadvantages
Loss to agriculture sector
Loss to domestic industry
Patents of Indian herb by foreign companies
Loss to service sector
Increase unemployment