Everything about WTO and it's functionality

2. Contents
 Introduction to WTO
 Functions of WTO
 Principles of trading system
 SPS Measure
 TBT Measure
 Difference between SPS and TBT
 WTO Agreement on the application of SPS Measure

3. What is WTO ?
• The World Trade Organization (WTO) is an
intergovernmental organization that regulates and facilitates
international trade. With effective cooperation in the United
Nations System, governments use the organization to
establish, revise, and enforce the rules that govern
international trade.
• It officially commenced operations on 1 January 1995,
pursuant to the 1994 Marrakesh Agreement, thus replacing
the General Agreement on Tariffs and Trade (GATT) that had
been established in 1948.
• The WTO is the world's largest international economic
organization, with 164 member states representing over 98%
of global trade and global GDP.

4. The World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between nations. At its heart are
the WTO agreements, negotiated and signed by the bulk of the world’s
trading nations and ratified in their parliaments. The goal is to ensure that
trade flows as smoothly, predictably, and freely as possible.
What WTO stands for ?
A number of simple, fundamental principles form the foundation of the
multilateral trading system.

5. Functions of WTO
• The WTO shall facilitate and also provide the
framework for the the implementation,
administration, and operation and further the
objectives of this Agreement and the Multilateral
Trade Agreements.
• The WTO shall provide the forum for negotiations
among its members concerning their multilateral
trade relations in matters dealt with under the
Agreement .

6. • The WTO shall administer the Understanding on Rules and Procedures
Governing the Settlement of Disputes.
• The WTO shall administer a Trade Policy Review Mechanism.
• To achieve greater coherence in global economic policy making, the WTO shall
cooperate, as appropriate, with the International Monetary Fund (IMF) and with
the International Bank for Reconstruction and Development (IBRD) and its
affiliated agencies.
• The World Trade Organization serves as the mediator between the nations when
problems arise. WTO could be referred to as the product of globalization and
also as one of the most important organizations in today's globalized society.
• The WTO is also a center of economic research and analysis: regular
assessments of the global trade picture in its annual publications and research
reports on specific topics are produced by the organization

7. Principles of Trading System
• The WTO agreements deal with wide range of activities like
agriculture, textiles clothing, banking, telecommunications,
government purchases, industrial standards and product safety,
food sanitation regulations, intellectual property, and much more.
But a number of simple, fundamental principles run throughout
all of these documents. These principles are the foundation of the
multilateral trading system.
1.Trade without discrimination
• a. Most-favoured-nation (MFN): treating other people equally
Under the WTO agreements, countries cannot normally
discriminate between their trading partners. Grant someone a
special favour (such as a lower customs duty rate for one of their
products) and you have to do the same for all other WTO
members.This principle is known as most-favoured-nation
(MFN) treatment .

8. b. National treatment:
Treating foreigners and locals equally, Imported and
locally-produced goods should be treated equally — at least
after the foreign goods have entered the market. The same
should apply to foreign and domestic services, and to
foreign and local trademarks, copyrights and patents. This
is the principle of “national treatment”
2.Freer trade: Free trade is a trade policy that does not
restrict imports or exports. It can also be understood as the
free market idea applied to international trade. In
government, free trade is predominantly advocated by
political parties that hold economically liberal positions .

9. 3.Promoting fair competition ;
The WTO is sometimes described as a “free trade”
institution, but that is not entirely accurate. The system
does allow tariffs and, in limited circumstances, other
forms of protection. More accurately, it is a system of rules
dedicated to open, fair and undistorted competition. The
rules on non-discrimination — MFN and national treatment
— are designed to secure fair conditions of trade. .Many of
the other WTO agreements aim to support fair competition:
in agriculture, intellectual property, services etc.

10. 4.Encouraging development and economic
reform
 The WTO system contributes to development. On
the other hand, developing countries need flexibility
in the time they take to implement the system’s
agreements. And the agreements themselves inherit
the earlier provisions of GATT that allow for special
assistance and trade concessions for developing
countries. Over three quarters of WTO members are
developing countries and countries in transition to
market economies.

11. 5.Predictability: through binding and
transparency
Sometimes, promising not to raise a trade barrier can
be as important as lowering one, because the promise
gives businesses a clearer view of their future
opportunities. With stability and predictability,
investment is encouraged, jobs are created and
consumers can fully enjoy the benefits of
competition — choice and lower prices. The
multilateral trading system is an attempt by
governments to make the business environment
stable and predictable.

12. The Sanitary and phytosanitary{SPS}
Measures agreement
 How do you ensure that your country’s consumers are being supplied with food
that is safe to eat — "safe" by the standards you consider appropriate? And at
the same time, how can you ensure that strict health and safety regulations are
not being used as an excuse for protecting domestic producers?

13. SPS
 The Agreement on the Application of Sanitary and Phytosanitary Measures sets
out the basic rules for food safety and animal and plant health standards.
 It allows countries to set their own standards. But it also says regulations must be
based on science. They should be applied only to the extent necessary to protect
human, animal or plant life or health. And they should not arbitrarily or
unjustifiably discriminate between countries where identical or similar conditions
prevail.
 Member countries are encouraged to use international standards, guidelines and
recommendations where they exist. However, members may use measures which
result in higher standards if there is scientific justification. They can also set
higher standards based on appropriate assessment of risks so long as the approach
is consistent, not arbitrary.
 The agreement still allows countries to use different standards and different
methods of inspecting products.

14. Key features
 All countries maintain measures to ensure that food is safe for consumers, and to
prevent the spread of pests or diseases among animals and plants.
 These sanitary and phytosanitary measures can take many forms, such as requiring
products to come from a disease-free area, inspection of products, specific
treatment or processing of products, setting of allowable maximum levels of
pesticide residues or permitted use of only certain additives in food.
 Sanitary (human and animal health) and phytosanitary (plant health) measures
apply to domestically produced food or local animal and plant diseases, as well as
to products coming from other countries.

15. Justification of measures
 The SPS Agreement, while permitting governments to maintain appropriate
sanitary and phytosanitary protection, reduces possible arbitrariness of decisions
and encourages consistent decision-making.
 It requires that sanitary and phytosanitary measures be applied for no other
purpose than that of ensuring food safety and animal and plant health. In
particular, the agreement clarifies which factors should be taken into account in
the assessment of the risk involved.
 Measures to ensure food safety and to protect the health of animals and plants
should be based as far as possible on the analysis and assessment of objective and
accurate scientific data.

17. What are sanitary and phytosanitary
measures ?
 For the purposes of the SPS Agreement, sanitary and phytosanitary measures are
defined as any measures applied:
 To protect human or animal life from risks arising from additives, contaminants,
toxins or disease-causing organisms in their food;
 To protect human life from plant- or animal-carried diseases;to protect animal or
plant life from pests, diseases, or disease-causing organisms;
 To prevent or limit other damage to a country from the entry, establishment or
spread of pests.
 These include sanitary and phytosanitary measures taken to protect the health of
fish and wild fauna, as well as of forests and wild flora

18. Technical barriers to trade
 The Technical Barriers to Trade (TBT) Agreement aims to ensure that technical
regulations, standards, and conformity assessment procedures are non-
discriminatory and do not create unnecessary obstacles to trade. At the same time,
it recognises WTO members' right to implement measures to achieve legitimate
policy objectives, such as the protection of human health and safety, or protection
of the environment. The TBT Agreement strongly encourages members to base
their measures on international standards as a means to facilitate trade. Through its
transparency provisions, it also aims to create a predictable trading environment.

19. TBT Policy objectives

31. WTO Agreement
on The
Application of SPS
measure
Ageement Article
General Provisions 1
Basic Rights and Obligations 2
Harmonization 3
Equivalence 4
Assessment of risk and determination of the
appropriate level of SPS protection 5
Adaptation to regional conditions, including pest- or
disease-free areas and areas of low pest or
disease prevalence
6
Transparency 7
Control, inspection and approval procedures 8
Technical assistance 9
Speacial and differential treatement 10
Consultations and disputes settlement 11
Administration 12
Implementation 13
Final Provisions 14

32. General Provisions
• This Agreement applies to all sanitary and phytosanitary measures
which may, directly or indirectly, affect international trade. Such
measures shall be developed and applied in accordance with the
provisions of this Agreement.
• Nothing in this Agreement shall affect the rights of Members under
the Agreement on Technical Barriers to Trade with respect to measures
not within the scope of this Agreement.
Basic Rights and Obligations
Members have the right to take sanitary and phytosanitary measures
necessary for the protection of human, animal or plant life or health,
provided that such measures are not inconsistent with the provisions of
this Agreement.

33. Harmonization
To harmonize sanitary and phytosanitary measures on a wide basis as possible,
Members shall base their sanitary or phytosanitary measures on international
standards, guidelines or recommendations, where they exist, except as otherwise
provided for in this Agreement
Equivalence
Members shall accept the sanitary or phytosanitary measures of other
Members as equivalent, even if these measures differ from their own or
from those used by other Members trading in the same product, if the
exporting Member objectively demonstrates to the importing Member
that its measures achieve the importing Member’s appropriate level of
sanitary or phytosanitary protection. For this purpose, reasonable access
shall be given, upon request, to the importing Member for inspection,
testing and other relevant procedures.

34. Assessment of risk and determination of the
appropriate level of SPS protection
In the assessment of risks, Members shall take into account available scientific
evidence; relevant processes and production methods; relevant inspection, sampling
and testing methods; prevalence of specific diseases or pests; existence of pest- or
disease-free areas; relevant ecological and environmental conditions; and quarantine
or other treatment.
Adaptation to regional conditions, including pest- or disease-
free areas and areas of low pest or disease prevalence
Members shall ensure that their sanitary or phytosanitary measures are
adapted to the sanitary or phytosanitary characteristics of the area —
whether all of a country, part of a country, or all or parts of several
countries — from which the product originated
and to which the product is destined.

35. Transparency
Members shall notify changes in their sanitary or phytosanitary measures
and shall provide information on their sanitary or phytosanitary measures .
Control, inspection and approval procedures
Members shall conduct the operation of control, inspection
and approval procedures, including national systems for
approving the use of additives or for establishing tolerances for
contaminants in foods, beverages or feedstuffs, and otherwise
ensure that their procedures are not inconsistent with the
provisions of this Agreement.

36. Technical assistance
Members agree to facilitate the provision of technical assistance to other
Members, especially developing country Members, either bilaterally or
through the appropriate international organizations. Such assistance may be,
inter alia, in the areas of processing technologies, research and infrastructure,
including in the establishment of national regulatory bodies, and may take the
form of advice, credits, donations and grants, including for the purpose of
seeking technical expertise, training and equipment to allow such countries to
adjust to, and comply with, sanitary or phytosanitary measures necessary to
achieve the appropriate level of sanitary or phytosanitary protection in their
export markets.
Speacial and differential treatement
In the preparation and application of sanitary or phytosanitary measures,
Members shall take account of the special needs of developing country
Members, and in particular of the least-developed country Members.

37. Consultations and disputes settlement
The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and
applied by the Dispute Settlement Understanding shall apply to consultations and
the settlement of disputes under this Agreement, except as otherwise specifically
provided herein.
Administration
A Committee on Sanitary and Phytosanitary Measures is hereby established to
provide a regular forum for consultations. It shall carry out the functions necessary
to implement the provisions of this Agreement and the furtherance of its
objectives, in particular with respect to harmonization. The Committee shall reach
its decisions by consensus.
Implementation
Members are fully responsible under this Agreement for the observance of all
obligations set forth herein. Members shall formulate and implement positive
measures and mechanisms in support of the observance of the provisions of this
Agreement by other than central government bodies

38. Final Provisions
The least-developed country Members may delay
application of the provisions of this Agreement for a
period of five years following the date of entry into force
of the WTO Agreement with respect to their sanitary or
phytosanitary measures affecting importation or
imported products.

39. References
 https://www.wto.org/
 https://en.m.wikipedia.org/wiki/World_Trade_Organization