The WTO was established on 1st January
1995. The governments had concluded the
Uruguay round negotiations on 15th
December 1993 and the ministers gave their
final approval in Marrakesh, Morocco in April
The WTO is the embodiment of the Uruguay
round results and the successor to the General
Agreement on Tariffs and Trade . (GATT)
The WTO administers the trade agreements
negotiated by its members , in particular the
GATT , the GATS (General Agreement on Trade in
Services ) and the TRIPS ( Trade Related Aspects
of Intellectual Property Rights).
The WTO builds on the organizational structure
that had developed under GATT auspices of the
The WTO has larger membership than GATT
, the number of members stands at 150.India
is one of the founder members of the WTO.
It is based in Geneva , Switzerland.
An international Organization:
◦ Organization created by the Marrakesh
◦ Sui generis organisation (independent
from the United Nation system)
◦ Replaces the GATT (created in 1947)
◦ Raising standards of living
◦ Ensuring full employment
◦ Ensuring growth of real income and
◦ Expanding production and trade
◦ Sustainable development
◦ Protection of the environment
Set of rules
The negotiated legal rules included in
the various WTO agreements cover the
Trade in Goods
Trade in Services
Trade-related aspects of intellectual
Trade Policy Reviews
The fundamental principles are
1. Non Discrimination
3. Binding Commitments
5. Safety Valves
It is based on the concept of normal trade
relations – previously called the Most Favored
Nation (MFN) rule. This rule requires that the
WTO members extend the same favorable
terms to all members that they extend to any
The normal trade relations principle applies
Although exceptions are made for the
formation of trading blocs and for
preferential treatment of developing
countries, the non discrimination principle is
basic pillar of the WTO. Because of this
principle , importers and consumers will have
the benefit of using low cost goods
, irrespective of whichever country they are
The principle of Non Discrimination has one
more dimension : national treatment .
National treatment enjoins all member
countries to treat imported and locally
produced goods equally .
Transparency is a basic pillar of the WTO .
WTO members are required to publish their
trade regulations , to establish and maintain
institutions allowing for review of
administrative decisions affecting trade to
respond to request for information by other
members and to notify changes in trade
policies to the WTO.
The regular surveillance of national trade
policies through the trade policy review
mechanism provides the means of
encouraging transparency both domestically
and at multilateral level.
In the WTO , when countries agree to open
their markets for goods and services , they
bind their commitments. Often countries
, particularly the developing ones , tax
imports at rates . But in developed , the rates
actually charged and bound rates tend to the
A country can change its bindings , but only
after negotiating with its trading
partners, which can mean compensating
them for loss of trade.
It operates during negotiations among
countries when governments negotiate in
WTO rounds , they do so with the objective of
obtaining mutually beneficial arrangements
through reciprocal reductions in tariff
bindings In particular governments approach
negotiators seeking a “balance of
concessions” whereby the tariff reductions by
one country is balanced against an equivalent
concession from its trading partners.
In certain circumstances government should
be able to restrict trade. Four types of
provisions exist in this connection.
1. Goods and services meant for non economic
objectives such as public health and national
2. Industries likely to be injured by competition
3. Articles aimed at ensuring fair competition.
Measures in this situation include the right to
impose countervailing duties on imports that
have been subsidized and anti dumping
duties on imports that have been dumped.
4. Provisions permitting intervention in trade
for economic reasons . Economic reasons
include measures to correct a serious
unfavorable balance of trade or the desire to
protect an infant industry.
Administering and implementing the
multilateral and plurilateral trade agreements
which together make up the WTO.
Acting as a forum for multilateral trade
Overseeing national trade policies.
Cooperating with other international
institutions involved in global economic
The WTO is a member driven organization, with
decisions being made by consensus among all
member governments. All decisions are made by
the membership as a whole, either by ministers (
who meet once in two years ) or by their
ambassadors or delegates ( who meet regularly
In this respect , the WTO is different from other
international organizations such as the world
Bank and International Monetary Fund . In the
WTO, power is not delegated to a board of
directors or to a chief executive officer
The WTO had its origin in Bretton woods
conference after the end of second world war.
It was founded in 1948 with 23 members by
the name of GATT[General Agreement on
Tariffs and Trade]. But in 1995,GATT was
rechristined as WTO.
1.GATT was a provisional legal agreement
whereas WTO is an organization with
2.WTO has members while GATT had only
3.GATT dealt only with trade in goods while
WTO covers services and intellectual property
rights as well.
4.The real critical distinction between GATT
and WTO is creation of a binding dispute
settlement system . Under GATT contracting
parties could bring cases before international
body but there was no effective enforcement
mechanism. But in WTO an effective
enforcement mechanism exists.
Goods Council Services Council
General CouncilTPRB DSB
◦ About 750 staff
◦ Headed by a Director-General (DG)
◦ Budget 2009: 190 millions Swiss francs +
extra-budgetary funds (about 24 millions
◦ Member-driven organisation
◦ Consensus (GATT practice), even if voting
◦ Consensus when no Member formally
object to a decision
◦ “Negative” consensus
◦ Type of meetings
(formal, informal, special
sessions, consultations, multi- /pluri-
◦ All WTO Bodies open to all Members
(specificities for panels and Appellate
March 2010: “We are not where we wanted to be by
Informal consultations (regional groups, small groups
in variable geometry and with individual Members)
Members committed to the mandate of the Round and
to its successful conclusion.
◦Value of the system (e.g. global economic crisis-
MTS has prevented a descent into full scale
Sense of frustration at the slow pace of the
negotiations, but there is a clear catalogue of gaps
◦Picture is more blurred is regarding the size of some
of these gaps (Blue Box in agriculture or in Trade
Facilitation). Size of gaps much less clear in NAMA or
Next steps: mix of technical and political preparations to
start devising the contours of a package
◦Need to build on what is already on the table (Chairs'
texts), avoid backtracking, and maintaining the
development dimension of the Round.
A "cocktail" approach: Chair-led processes within the
Negotiating Groups, maintaining an overview of the entire
negotiating landscape (transparency and
inclusiveness), and smaller groups in variable geometry
and bilateral contacts remain necessary and essential –
moving towards a more horizontal view of the issues
(negotiating groups and the TNC remaining the anchor of
the negotiating process)
Ministerial involvement: make productive use of up-
coming gatherings (e.g. Cairns Group, APEC and OECD)
, possible Ministerial engagement if needed