The prolonged recession before the world war 2nd
& the devastation caused by the world war 2nd led
to the BRETTON WOODS conference resulting in the
formation IMF , IBRD & ITO.
The IMF, IBRD and ITO, were formed in 1945 but
USA didn’t ratify ITO.
23 countries met in Geneva in 1947 & signed a
agreement on tariff & international trade.(GATT)
Set of multilateral trade agreements aimed
at the abolition of quotas and the reduction
of tariffs among member countries.
Signed on October 30, 1947, by 23 countries
in Geneva (to take effect on January 1, 1948)
It Consists of 8 Rounds – Rounds of trade
Prohibition of quantitative restrictions
To raise the standard of living.
2. To ensure full employment and a large and
steadily growing volume of real income and
3. To develop the full use of the resource of the
4. To expand production and international trade.
$10 billion of
trade which was
20% of global
Cutting the tariffs
levels by 25 % of
2.5 billion dollars
Worth 4.9 billion
made $40 billion
WTO was formed…
Strength increased from 23 to 125 countries.
50 years has witnessed an exception growth in world trade.
Merchandise export grew on an average of 6% annually.
Total trade in 2002 was 22 times than that of 1950.
Principal achievements of GATT were the establishment of a forum for
continuing consultation . Disputes that could have resulted in hard feeling
Developing countries with balance of payment problems were generally
exempted from liberalization.
The average level of tariff on manufactured products in industrial countries
was brought down from about 40% in 1947 to nearly 3% after Uruguay
The first 6 rounds concentrated on reducing tariffs while the 7th round of
Tokyo moved on to tackle non tariff barriers.
The 8th round helped in establishing the WTO a global organization to
regulate trade between nations.
Today 97 % of the world trade is routed through GATT & WTO
The world trade organization was established on 1st
It is the embodiment of the Uruguay round results &
the successor to GATT.
WTO has 153 members, India being one of the
The head of WTO is located in Geneva of
“Child becomes a Parent & Parent a child”
As per 2nd March 2013, there are 159 Members of
“WTO is an International body designed to play the
role of a watchdog in spheres of trade in Goods,
services foreign investments, IPR etc.”
WTO is the only international organization dealing
with the global rules of trade between nations. Its
main function is to ensure that trade flows as
smoothly, predictably and freely as possible.
Administering WTO trade agreements
Forum for trade negotiations
Handling trade disputes
It acts as a watch dog of international trade
Monitoring national trade policies
Technical assistance and training for developing
Cooperation with other international organizations
Providing technical assistance and training for
It is a General Agreement on Trade in
It covers 4 modes of international delivery
Cross border flow (Trans border data flows,
Commercial presence (Provision of services
abroad thru FDI , etc..)
Movement of personnel (Entry & temporary
stay of foreign consultants)
Trade Related Aspects of Intellectual Property
IPR are the rights given to persons over the
creation of their minds.
These exclusive rights are given for usage for
certain time period.
To encourage & reward creative work .
Technological innovations .
Transfer of technology.
It covers rights for :
Copy rights & related rights
Undisclosed information (trade secrets etc..)
It is Trade Related Investment Measures
No country shall apply TRIMS which is
inconsistent with WTO articles . the
following are inconsistent :Local content requirement
Trade balancing requirement
Trade & foreign exchange
Domestic sales requirement.
It has a fixed dead line in settlement of
The first ruling does not extend beyond 1
The appeal is generally disposed off before
Meaning- It means selling the product at below the
on going market price or at the price below the cost
Anti-Dumping laws is applicable if the margin of
dumping is more than 2% of the export price or the
volume of dumped products is more than 3% of the
Anti-Dumping duty shall not exceed the margin of
Anti-Dumping action may be suspended or
terminated if the exporter agrees to remove the
dumping or the injurious effect of it.
Agreement on Agriculture
There are 3 principal commitments..
Market Access :- no import restrictions & limitations
Domestic support :- Elimination of govt support to
Export subsidies :- phase out support given to exporters ..
Other important aspects are:a)
Tariffication :- means removal of tariff quotas.
Tariff binding :- means fixing the max rate of import
duty, above which a country does not raise the duty
GATT is an agreement.
It was designed with an
attempt to establish
It was applied on a
GATT covered only
mechanism slow & at
times in conclusive.
WTO is an organization.
It is establishes to serve
its own purpose.
Its activity are full and
It covers goods, services,
system is fast
IMF – International Monetary Fund
IBRD – International Bank of
Reconstruction and Development
ITO – International Trade Organization
IPR – Intellectual Property Rights
International Business- 2e- P Subba Rao.