World Trade Organization WTO


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World Trade Organization WTO

  1. 1. WTO & Its impact on Pakistan economy Name Muhammad Azaz ROLL NO. 1811
  2. 2. WHAT IS ECONOMY??  Economy is basically a social system, which is responsible for production, exchange, distribution, and consumption of goods and services or a nation
  3. 3. IMPORTANCE OF PAKISTAN ECONOMY The 27th largest economy in the world with respect to the purchasing power.  The 48th largest in absolute dollar terms  Pakistan has a semi-industrialized economy 
  4. 4. REASON OF DECLINE Internal political disputes  Fast growing population  Costly, ongoing clash's with neighboring India  War on Terror  Inflation  Results   FDI (Foreign Direct Investment ) decline approximately $8 bn to $3.5bn for the current fiscal year
  5. 5. WTO WORLD TRADE ORGANIZATION The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations to ensure that trade flows as smoothly, predictably and freely as possible  WTO agreements, negotiated and signed by the bulk of the world’s trading nations and approved in their parliaments(148 member countries ). 
  6. 6. ACHIEVEMENT Global trade in 1997 increased 14-fold as compared to 1950  The last half-century has witnessed an exceptional growth in world trade; goods exports grew on average by 6% per annum 
  7. 7. MISSION STATEMENT OF WTO  The World Trade Organization — WTO — is the international organization whose primary purpose is to open trade for the benefit of all. Director General (Mr. Pascal Lamy)
  8. 8. GOAL OF WTO  The ultimate goal is to help producers of goods and services, exporters, and importers conduct their business.
  9. 9. OBJECTIVES Managing trade agreements  Settling trade disputes  Reviewing national trade policies  Support developing countries in trade policy  Solving Issues, through technical assistance  Training programs  Cooperating with other international organizations  Ensuring full employment 
  10. 10. MAJOR ACTIVITIES OF WTO Negotiating the reduction or elimination of obstacles to trade (import tariffs, Subsidies etc)  Monitoring and reviewing the trade policies of the members.  Assisting the process of accession of some 30 countries who are not yet members of the organization()  Explaining to and educating the public about the WTO 
  11. 11. IMPACT OF WTO ON DEVELOPING AND DEVELOPED COUNTRIES WTO is dominated by the world’s most powerful countries and trading blocs: the United States, the European Union, Japan, Canada and Australia are key rich countries  In actual The problem is that the WTO does not hold votes (if it did the rich countries would always lose!). Instead it works by ‘passive consensus’  Like threating developing countries i-e we till cut off your aids or stop support .
  12. 12. CRITICIZERS The US to promote free trade only in sectors, which benefit it.  Free trade will give the developed countries more access to the resources of the developing countries 
  13. 13. IMPACT OF EXPORT  single country limited consumption capacity  limited installed production   Results  Limiting the national income
  14. 14. PAKISTAN ECONOMY Pakistan's economy is very dependent on agriculture.  Agriculture sector contributes 25% to GNP  Industry contributes approximately 18% to GNP  Retail trade account for 15%,  and transport and communication for 10%
  15. 15. IMPACT OF WTO POLICES ON PAKISTAN  As a member it has to abide by the WTO's objective of putting an end to the import duties which have been reduced from maximum over 80 per cent nine years ago to 30 per cent at present.
  16. 16. THREATS Under AoA, (Agreement on agriculture) ,tariff on agriculture products should be same in all member countries.  Tariff reduction can only benefit if both the countries either exporting or importing are providing the same amount of subsidies.  However, if one country provides heavy subsidy and the other country is not able to do so either due to financial constraints. The result of this is very devasting i-e cheap imports.  On the other hand, tariffs are also a source of revenue for the government, and reduction in tariffs means economic deficit. 
  17. 17. Interestingly, developed countries like the U.S, the EU, and Japan are providing domestic support to their agriculture sector, while asking developing countries to demolish the subsidies.  The USA, infect has recently increased its agricultural subsidies.  European countries, on the other hand, give a subsidy of $2.5/day/cow; as compared to per capita income of 75 % Africans is $2/day. More over, subsidy on cotton provided to an American farmer decreases the world cotton price by 4.5 %. 
  18. 18. CONCLUSION At present Pakistan maintains a fairly liberal trade regime.  where all quantitative restrictions on imports have either been removed  Requirements  Proper support and careful policies for the industry  intelligent balancing of imports and exports is vital for the sustainability and growth of Pakistan's economy   This will leads towards a bright future and trade enhancement under the WTO regime
  19. 19. ANY QUESTION???