GATT• The General Agreement on Trade and Tariff (GATT) came into existence in 1947.• It sought substantial reduction in tariff and other barriers to trade and to eliminate discriminatory treatment in international commerce.• Original intention behind the GATT was to create a third institution to supervise international trade, other two being the World Bank and IMF.• India signatory to GATT 1947 along with twenty two other countries• Eight rounds of negotiations had taken place during five decades of its existence
GATTGATT is the predecessor of WTOBorn in 1948 as a result of the international desire to liberalize tradeLasted until 1994, when it was replaced by the World Trade Organization.
BENEFITS FROM GATT• 1.The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government
URUGUAY ROUNDHeld in September 1986 in Pantadel Este in Uruguay. The major highlights were:a) Expansion in the sphere of activities from international trade to services, investment and information.b) Liberalization of trade in Agriculture and Textile goods.c) Patents & Subsidiesd) Tariff cut- Developing countries have to cut tariffs by 24% over next 10 years while developed countries by 36% for 6 years.e) Establishment of WTO
GATT/WTO• The World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-global level.• It’s an organization for liberalizing trade. It’s a forum for governments to negotiate trade agreements.
What Is the WTO? The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. WTO agreements are negotiated and signed by the trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct and grow their business.
WTO• World Trade Organization The organization officially commenced on January 1, 1995 deals with regulation of trade between participating countries The WTO has 153 members headquarters is at the Centre William Rappard, Geneva, Switzerland.
The Role of WTO1.The important role of WTO include administration and operation of the Plurality Trade Agreements, It also facilitates the implementation, administration and operation, furthering the objectives of the agreement and establishing it and other Multilateral Trade Agreements and providing the framework for the implementation2.It also provides the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to the Agreement setting it up and for the results of such negotiations as may be decided by the Ministerial Conference3. administering the Understanding on Rules and Procedures Governing the Settlement of Disputes or the Dispute Settlement Understanding which is Annex 2 to the agreement setting it up4. administering the Trade Policy Review Mechanism in Annex 3 of the agreement setting it up5. it also helps in coordinating ,cooperating as appropriate with the International Monetary Fund and the International Bank for Reconstruction and Development with a view to achieving greater coherence in global economic policy making.As in brief we can say that WTO plays a vital role in developing and increasing the world trade.The WTO functions as the principal international body concerned with multilateral negotiations on the reduction of trade barriers and other measures that distort competition. The WTO also serves as a platform for countries to raise their concerns regarding the trade policies of their trading partners. The basic aim of the WTO is to liberalize world trade and place it on a secure basis, thereby contributing to economic growth and development.
WTO• Only mechanism to tackle the systemic issues • Three pillars of agriculture (access, export subsidies, domestic support) • Antidumping and other disciplines • Special and differential treatment (SDT) • Capacity Building• Multilateral rules favor small economies• Multilateral agreements favor trade creation and reduce costs in administrating agreements• Only multilateral forum that has been successful in challenging or even modifying trade policies of the major trading economies• Greater recognition of its dispute settlement mechanism
The GoalTo improve the welfare of the peoples of the member countries.
Past, Present, FutureThe WTO came into being in 1995.The WTO is the successor to the General Agreementon Tariffs and Trade (GATT), established in the wakeof the Second World War.
The Past 50 Years: Exceptional Growth in World TradeMerchandise exports grew on average 6% annuallyTotal trade in 1997 was 14 times the level of 1950In 1997, 40 governments concluded negotiations for tariff free trade.
The WTO benefits of tradeWe have seen what Ricardo had to say aboutcomparative advantage, and the strong consensusamong those who seriously consider trade issues.Trade provides nearly 100% of an economy’s jobs.Global trade provides a large and growing share ofthese jobs..
Major WTO FunctionsAdministering WTO trade agreementsForum for trade negotiationsHandling trade disputesMonitoring national trade policiesTechnical assistance and training for developing countriesCooperation with other international organizations
The Quad Some of the most difficult negotiations have needed an initial breakthrough in talks among the four largest membersCanadaEuropean unionJapanUnited States
How to Join the WTO: the Accession ProcessFirst, “tell WTO about yourself”.Second, “work out with WTO individually what you have to offer.” (Country to country negotiations bilaterally.)Third, “let’s draft membership terms.”Finally, “the decision.”
Criticisms of the WTO The WTO undermines state sovereignty It undermines representative democracy Member nations are prevented from protecting the environment Members are unable to uphold laws guaranteeing workers’ rights The WTO is controlled by the larger nations The WTO represents the interests of large corporations and wealthy citizenshttp://www.wto.org/english/thewto_e/whatis_e/10mis_e/10m00_e.htm
Some protesters have arguments fully worthy of consideration.They deserve a better venue for hearing than the streets.Nihilistic anarchists usually capture the legal protest, along withlugubrious labor Ludditestrade terrorists, andthe clueless
The Doha, Qatar InitiativesA new trade round was launched November, 2001For the first time, developing countries demandedcapacity-building and technical assistance to takepart meaningfully.
The Doha, Qatar InitiativesThe Pledging Conference was convened inaccordance with the December 2001decision of the WTO General Council.In that decision, the General Council set atarget for core funding of CHF 15 million plussupport in kind, including training courses fortrade officials.
Structure of the WTO Agreement WTO Agreement GATT Dispute Trade GATS Settlement Policy Review TRIPSA A A AA A A A 22
Dispute Settlement under the GATT 1947• Articles XXII and XXIII of GATT 1947 – Very limited rules – Central concept was “nullification and impairment” of benefits flowing from the agreement• Diplomatic character of dispute settlement: No judicial arm, rather all matters were within powers of GATT Contracting Parties• “Evolved” practice under GATT 1947 GATT.doc 23
Dispute Settlement in the WTO: AimDispute Settlement Understanding: Mechanism aimed at securing compliance with the Covered Agreements (CA) Preserves the rights and obligations of Members under the CA (Art 3.2 DSU) 24
Dispute Settlement in the WTO: ConsultationsWho? One or more Members (complainants) against another Member (respondent) Possibility for third party Members to joinConfidential processMinimum time limits for complainant 26
RTA (Regional Trade Agreements)• RTAs are regional trade agreements between countries from a certian geographic region having similarity socially economically and culturally.• We can take an example of India and Nepal , both he countries are having almost similar taste similar cultures etc. And thats the reason for easy trade.• RTAs main mission is to increase trade in smaller region, like for example SAARC.• WTO behaves as an observer and see that trade is happening in this region under laws. They monitor the various action, they permit it when trade is done in the right intention.• RTAs are also directed with same intentions as the purpose of WTO but only regionally as they have more rights in their region which they do not have in WTO as developed economies say.• RTAs bring the prices to a competitive and fair level. Since RTAs are made among the countries in same area near, trading is easier because of their similar taste and climate.• Like in this case transportation and taxes are lesser in case of India Nepal than Nepal USA. The import or export from or in the land locked country like BHUTAN and NEPAL would have been hard difficult because of many customs and charges, and thats what RTAs help in its members.
List of Operating Agreements• ASEAN Free Trade Area (AFTA)• Asia-Pacific Trade Agreement (APTA)• Central American Integration System (SICA)• Central European Free Trade Agreement (CEFTA)[• Common Market for Eastern and Southern Africa (COMESA)• G-3 Free Trade Agreement (G-3)• Greater Arab Free Trade Area (GAFTA) - June 1957• Gulf Cooperation Council (GCC)• North American Free Trade Agreement (NAFTA)• Pacific accord• South Asia Free Trade Agreement (SAFTA)• Southern African Development Community (SADC)• Southern Common Market (MERCOSUR)• Trans-Pacific Strategic Economic Partnership (TPP)
G3 Free Trade Agreement• The G-3 is a free trade agreement between Colombia, Mexico, and Venezuela that came into effect on January 1, 1995, which created an extended market of 149 million consumers with a combined GDP (Gross domestic product) of US$486.5 billion.• The agreement states a ten percent tariff reduction over ten years (starting in 1995) for the trade of goods and services among its members.• The agreement is a third generation one, not limited to liberalizing trade, but includes issues such as investment, services, government purchases, regulations to fight unfair competition, and intellectual property rights.
North American Free Trade Agreement• The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.• The agreement came into force on January 1, 1994.• It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada. In terms of combined GDP of its members, as of 2010 the trade bloc is the largest in the world.
European Union• The European Union (EU) is an economic and political union of 27 member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community(ECSC) and the European Economic Community (EEC), formed by six countries in 1958. In the intervening years the EU has grown in size by the accession of new member states, and in power by the addition of policy areas to its remit. The Maastricht Treaty established the European Union under its current name in 1993. The last amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009.• The EU operates through a hybrid system of supranational independent institutions and intergovernmentally made decisions negotiated by the member states. Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. The European Parliament is elected every five years by EU citizens.
World Trade Organization agreements• General Agreement on Tariffs and Trade – Agreement on Agriculture – Agreement on the Application of Sanitary and Phytosanitary Measures – Agreement on Technical Barriers to Trade – Agreement on Trade Related Investment Measures – Agreement on Anti-Dumping – Agreement on Customs Valuation – Agreement on Preshipment Inspection – Agreement on Rules of Origin – Agreement on Import Licensing Procedures – Agreement on Subsidies and Countervailing Measures – Agreement on Safeguards• General Agreement on Trade in Services• Agreement on Trade-Related Aspects of Intellectual Property Rights• Agreement on Government Procurement• Information Technology Agreement• Reference: http://en.wikipedia.org/wiki/List_of_free_trade_agreements
Know The WTO• Multilateral’ trading system is operated by the WTO.• Most nations — including almost all the main trading nations — are members of the system.• But some are not, so “multilateral” is used to describe the system instead of “global” or “world”.• Main Aim is to remove or reduce barriers of international trades.World Trade Organization• Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986-94) Membership: 153 countries on 23 July 2008 Budget: 194 million Swiss francs for 2010 Secretariat staff: 637 Head: Pascal Lamy (Director-General)