Introduction of WTO WTO was formed 1st Jan 1995 It took over GATT ( General Agreement on Trade and Tariff). In 8th round of GATT popularly known as Uruguay Round, member nations of GATT decided to set up a new organization known as World Trade Organization in place of GATT
Functions of WTO Facilitate the implementation, administration and operation and further the objectives of MTAs Provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. Administer the Understanding on Rules and Procedures Governing the settlement of Disputes and trade Policy Review Mechanism. shall cooperate, as appropriate, with the IMF and IBRD and its affiliated agencies.
Objectives of WTO to implement the new world trade system as to enhance competitiveness among all visualised in the Agreement; trading partners so as to benefit consumers to promote World Trade in a manner that and help in global integration; benefits every country; to increase the level of production and to ensure that developing countries secure a productivity with a view to ensuring level of better balance in the sharing of the employment in the world; advantages resulting from the expansion of to expand and utilize world resources to the international trade corresponding to their best; developmental needs; to improve the level of living for the global to demolish all hurdles to an open world population and speed up economic trading system and usher in international development of the member nations economic renaissance because the world trade is an effective instrument to foster economic growth;
India and WTO India one of members of General Agreement on Tariffs and Trade (GATT) since 1948. After Marrakesh Agreement, India joined WTO since inception in 1995. Aim to participate in WTO rule based system with greater stability, transparency and predictability in governance of international trade. Developing countries like India availed of greater trade opportunities and also challenged certain policies of developed countries (DCs) Developmental issues increasingly focused along with trade issues S&D treatment for developing and LDCs incorporated
Areas of concern In spite of special provisions for developing countries, certain imbalances and inequities experienced. A number of DCs not fulfilled some obligations for trade liberalization while developing countries asked to reduce import duties and provide greater market access. India has reduced tariffs to bring them to bound levels. Even lower for a large number of commodities as part of the reforms process. Now, India committed to reduce tariffs to bring in line with South East Asian countries by 2007. We are not in a position to reduce tariffs substantially to the extent suggested by developed countries since Customs duties important source of revenue for developing countries like India. The industrial sector faces several constraints-some protection warranted for specific industries Non-agricultural tariffs gradually reduced but agricultural tariffs require greater caution due to following reasons.
India and other developing countries have argued that agriculture is way of lifeand employs large proportion of workforce while contributing significantly to GDP.Exposure to volatile international market would affect not only domestic pricesbut also incomes of poor.Technical barriers to trade and stringent restrictions on grounds of SPSregulations to be relaxed to prevent protectionist measures by DCs on this plea.Grant of patents on non-original innovations, particularly linked to traditionalmedicines issue of concern.Mechanism proposed for disclosure of source of origin of biological material usedalong with consent of country of origin. Dissemination of knowledge and alsopatent rights for seed diversity important for developing countries.Under agreement on Trade in Services, developing countries have asked forrelaxing restrictions on movement of natural persons.
Some DCs not fully implemented the required reduction of domestic support to farmers, export subsidies and tariffs. WTO permits non- distortionary subsidies. Experience shows these can be trade distorting and DCs have steadily increased such subsidies leading to excessive global production. Disadvantage to developing countries since such subsidies unaffordable. Get less competitive in world market. Technical barriers to trade and stringent restrictions on grounds of SPS regulations to be relaxed to prevent protectionist measures by DCs on this plea. Grant of patents on non-original innovations, particularly linked to traditional medicines issue of concern. Mechanism proposed for disclosure of source of origin of biological material used along with consent of country of origin. Dissemination of knowledge and also patent rights for seed diversity important for developing countries.
Under agreement on Trade in Services, developing countries have asked forrelaxing restrictions on movement of natural persons.India has advantage in movement of highly skilled and experiencedprofessionals.Developing countries had wanted unbundling of Singapore issues comprisingMAI, competition policy, trade facilitation and transparency in Governmentprocurement.
Argument in favor of WTO Increase in Foreign trade Increase in Agricultural trade Increase in inflow of foreign investment Improvement in services Benefits for clothing and textile industries Inflow of better technology and better quality products
Progress in fulfillment of India’scommitment to WTO Reduction in tariff and non tariff barriers Amendment in patent act Sui-generis system Copyright, trademark and industrial designs Geographic indication Trade Related Investment Measures (TRIM) General Agreement on Trade in Services (GATS)