WTO

(WORLD TRADE ORGANIZATION)

INTRODUCTION:
 The World Trade Organization(WTO) is an international
organization dealing with the rules of trade between nations on
global level.
 It came into being on January 1st, 1995.

 Signed by 123 nations in 1994.

 WTO had replaced GATT( General Agreements on Tariffs and

Trade).
 They deal with: agriculture, textile and clothing, banking,
telecommunications, industrial standards and product safety, food
sanitations regulations, intellectual property and much more.
FACT FILE OF WTO:
 Location: Geneva,
Switzerland
 Established: 1 January, 1995
 Created by: Uruguay round negotiations
(1986-1994)
 Head: Pascal Lamy ( Director-General)
 Membership: 163 countries since November
2016
 Secretariat staff: 625
 Budget: 197 million Swiss francs (approx)

WTO headquarters,
Switzerland
FORMATION OF WTO:

 WTO was formed as a result of continuous

negotiations among the members of
GATT (General Agreement for Tariff and
Trade).
 GATT had less authority and dealt at
provisional level.
 Seven rounds of negotiations occurred under the
GATT focusing on issues of dumping, duties,
tariff reduction, etc.
 WTO was framed in the last round of these
negotiations that took place during 1986-1994
and was accepted by all the member nations.
OBJECTIVES:
 Basic objective: promote international trade and implement the
new trade agreements.
 Settlement of trade disputes among member countries.

 Providing technical assistance to underdeveloped countries.

 To enhance competitiveness among trading partners so as to

benefit the customers.
 Chalking out effective trade policies.

 Conducting training programs in member countries etc.

STRUCTURE OF WTO

 Structure of WTO is dominated by its highest

authority, the Ministerial Conference, composed
of representatives of all WTO members.
 The day-to-day work of the WTO, however, falls
to a number of subsidiary bodies; principally the
General Council, also composed of all WTO
members, which is required to report to the
Ministerial Conference.
 The General Council delegates responsibility to
four other major bodies - namely the Councils
for Trade in Goods, Trade in Services,
Committee on T&D and T&E, and Trade-
Related Aspects of Intellectual Property.
 The WTO is composed of 163 countries which
represents 95% of total world trade.
ROLE OF WTO
 Main goal of WTO is to help the trading industry to become
smooth, fair , free and predictable.
 Implementing WTO agreements and administering the
international trade.
 Provides technical assistance and guidance related to management
of foreign trade.
 Steps to increase opportunities for such countries which do not
enjoy good share in global economy.
 Settling trade disputes among member nations with the help of its
Dispute Settlement.
 Arranging numerous technical corporations, seminars, meetings,
reference centers, etc throughout the world.
PRINCIPLES OF WTO
 S&P

NT Fairness

Principle
of WTO

TL MFN
MOST-FAVOURED-NATION (MFN)

In WTO MFN mean no discrimination.

Abolish unequal treatment among members.

Each member treats all the other members equally as “Most-favored” trading
partners.
NATIONAL TREATMENT

 Have three ingredients:

 Should not impose tax more on imported than domestic goods.

 No country can impose any specific quantity on local resource for

product usage.
 Prohibit discrimination b/w domestic & imported goods.
STABILITY & PREDICTABILITY
 Should be stability in govt. and political policies.
 Tariffs should be bound.

TRANSPARENCY

 Promote fair competition.

 Deals about laws, regulation and decision affecting trade.
TRADE LIBERALIZATION

 Progressive trade liberalization in products should be beneficial to

all countries.
 Trade should be free from all kind of barriers.
AGREEMENTS OF WTO
AGREEMENT ON AGRICULTURE

To improve market access and reduce trade-distorting subsidies.

AGREEMENT ON TEXTILE & CLOTTING

Under ATC that there should be no quotas on textile and clothing product trade.
AGREEMENT ON SUBSIDES & COUNTERVAILING
MEASURES

This agreement prohibit the export subsidies. It provide disciplines

for the use of subsidies and regulate the action which the countries
can take to counter the effect of subsidies.
AGREEMENT ON ANTI-DUMPING
No company could export a product at a price lower than the price
it normally charge on its own home market.

AGREEMENT ON SAFEGUARD

Under the agreement on safeguard, the member countries may

restrict imports of that product temporarily to protect its specific
domestic industry.
AGREEMENT ON CUSTOMS VALUATION

The purpose of this agreement is the prevention of fictitious

customs valuation and aims for a fair, uniform and neutral system
for the valuation of goods for customs purpose.

AGREEMENT ON IMPORT LICENSING

The purpose of this agreement is that licensing should not be used

to restrict imports by any mean
AGREEMENTS ON TRIPS

 Copy Right
 Trade Mark

 Geographical Indication

 Industrial Design

 Patents

 Secret Information

 Layout of Integrated Circuits

THREATS OF WTO FOR PAKISTAN
THREATS OF WTO FOR PAKISTAN

 Pakistan signed the Uruguay Treaty and so is the member of

WTO. USA has imposed many restrictions on the purchase of
cotton and textile items from Pakistan. After becoming the
member of WTO Pakistan had to reduce its tariff from 80% to 30%.
In this way, Pakistan get Export Opportunities but because of lack
of skills , expensive products Pakistan can not compete at
international trade with competitors. This has produced adverse
effects on our economy.
THREATS OF WTO IN PAKISTAN

 Elimination of Quota
 China’s Expected Competition

 Preparation

 Unemployment

 Value Added Products

 Domestic Industries

 Undermines Local Development

ELIMINATION OF QUOTA

 Here the word “Quota” is used in the sense of limitations on

imports.
 The reason behind “Quota” is to promote our local trading and local
products and manufacturing.
 Prices and Production have fallen down by 12 and 25% respectively
after removal of GSP.
 Elimination of Quota means “no restrictions on imports” which can
reduce local production and can damage the economy.
CHINA’S EXPECTED COMPETITION

 China is making progress in field of Textile day by day.

 The Chinese Government retains ownership of 52% of its textile
sectors and it runs its sector at a loss, subsidizing its output up to
10% to gain market share in allover the world.
 China introducing products and services in Pakistan at low prices
than local products of Pakistan which can damage our local
economy.
PREPARATION

 Overall it seems that both Government of Pakistan and business

community are not worried about WTO’s results.
 No efforts are made by Government of Pakistan to face the
challenges .
UNEMPLOYMENT

 Modernization in Agriculture definitely increase the production in

less time but also reduce the labor participation rate.
 The reduction in labor participation rate increases the
unemployment rate in Pakistan which can damage the economy of
Pakistan. It is a serious threat.
VALUE ADDED PRODUCTS
 The share of value added products is very low in Pakistan which
requires to be increased in order to survive in modern scenario.

DOMESTIC INDUSTRIES

 Absence of export or import subsidies would make a tough

situation for local manufacturers.
 Without subsidies exporters can not compete with foreign
producers .
 Free trade also affected by absence of subsidies.
UNDERMINES LOCAL DEVELOPMENT

 The prevalent cost of doing business in Pakistan is very high due to

taxation, high electricity cost and other factors.
 This would be the major threat to the existence of industry in free
trade environment.
 CONCLUSION

REQUIREMENTS:
I. Proper support and careful policies for the industry, intelligent
balancing of imports and exports is essential and necessary for
the sustainability and growth of Pakistan’s economy.
II. This will lead towards a bright future and trade enhancement
under WTO regime.