The document provides a history and overview of the General Agreement on Tariffs and Trade (GATT) and its evolution into the World Trade Organization (WTO). It discusses that GATT was established in 1947 to promote international trade and reduce trade barriers. Key aspects of GATT included non-discrimination principles and prohibiting quantitative trade restrictions. GATT was then transformed into the WTO in 1995 which established a stronger institutional framework with agreements covering trade in goods, services, and intellectual property. The WTO operates through a hierarchical structure with ministerial conferences and councils overseeing areas like trade in goods, services, and dispute settlement. Decision-making aims to be consensus-based.

1. A Brief History of GATT
and WTO

2. A Brief History of GATT
• United Nations conference of 1944 recommended
the establishment of
▫ IMF (International Monetary Fund)
▫ World Bank
▫ ITO (International Trade Organization)
• GATT (General Agreement on Tariffs and Trade)
came into existence in 1947.
▫ It was first discussed in United Nations conference
on the topic of Trade and Employment in 1947, in
Geneva.

3. • To boost the economic activity across the nations,
which was affected after World War II.
• Great depression period took over the world’s economy
1913.
• Reduced employment rate
• Inflation, etc .
• It was a treaty not an organization.
• Later it was transformed into WTO (World Trade
Organization ) in 1995.

4. General Agreement on Tariffs and
Trade
• It is a legal agreement between countries to
promote international trade by reducing or
eliminating trade barriers.

5. Objectives of GATT
• Raising living standards
• Ensuring full employment
• Developing full use of resources of the world
• Expansion of production and international
trade.
• Reducing trade barriers.
▫ Tariffs
▫ Non-Tariffs
▫ Quotas

6. Principles of GATT
• Non-Discrimination Principle
• Prohibition of Quantitative Restrictions
• Consultation

7. Non-Discrimination Principle
• This principle states that no member/ country
should discriminate between countries for
conducting international trade.

8. Prohibition of Quantitative
Restrictions
• GATT seeks to prohibit quantitative restrictions
as far as possible and limit restrictions on trade
to the less rigid tariffs.
• GATT also restricts the members to adopt
dumping and export subsidies.

9. Consultations
• By providing a forum to the countries involved
in international trade to resolve disagreement
through consultation.

10. Exceptions in GATT
• Certain exceptions are granted to countries,
confronted with balance of payment difficulties
and to the developing countries.
• Giving subsidies to farmers and promoting
agricultural trade and sector.
• Restriction on textile trade for developed
countries.

11. World Trade Organization (WTO)
• In 1986, United nations held a meeting Uruguay in
the context of international trade and discussed
scope of international trade including new areas.
▫ GATS (General Agreement on Trade in Services)
▫ TRIPS (Trade Related Aspects of Intellectual
Property Rights)
• GATT was then transformed into proper
organization WTO, in 1995.
▫ Under WTO, GATT still exists as an agreement.

12. Basic Structure and
Functions of WTO

13. The Basic Structure of WTO
• WTO is basically an intergovernmental
organization (IGO)
▫ that is concerned with the regulation of
international trade between countries.
▫ IGO is an organization which involves governments
of more than one countries
• Broadly WTO has two largest parts of trade
▫ Products
▫ Services

14. • The structure of WTO has 3 part:
1. Basic principles
2. Additional details
3. Market access commitments
• There are five basic principles:
1. GATT (General Agreement on Tariffs and Trade)
2. GATS (General Agreement on Trade in Services)
3. TRIPS (Trade-Related Aspects of Intellectual
Property Rights)
4. Dispute settlement
5. TPRM (Trade Policy Review Mechanism)

15. General agreement on Trade in
Services (GATS)
• A legal agreement between different countries
whose overall purpose is to promote services
across nations, by reducing trade barriers.
▫ Cross border movement of people
▫ Tourism
▫ Baking services
▫ Telecommunication

16. Trade- Related Aspects of Intellectual
Property Rights (TRIPS)
• Intellectual property is any information with
commercial value.
• TRIPS is an international legal agreement
between the nations of WTO, whose purpose is
to protect intellectual property of the nations.
▫ Patents
▫ Copyrights
▫ trademarks

17. • Trademark
▫ Logo, symbol, brand name, colors, etc.
• Copyright
▫ A legal right of any business to create anything
that expresses an idea.
• Patents
▫ A patent right protects the business for their
products/ services being sold, created or used by
another party without permission.

18. Dispute Settlement
• A system of WTO to tackle broken promises
between countries, businesses and government.
• WTO members have agreed that if they believe that
one nation of WTO has violated trade rules, they
will use multi-lateral system instead of taking
unilateral action.

19. Trade Policy Review Mechanism
(TPRM)
• An instrument for surveillance of members’
trade policy.
• Its purpose is to make the trade policies between
countries, transparent and smoother.
▫ Ensuring that all the rules and regulations of WTO
are accepted by all the members.

20. Additional Details
• It deals with the special requirements for
specific sectors and issues.
Market Access Commitments
• Lengthy and detailed commitments made by
individual member for giving access to the
foreign supplier to their domestic market.

21. Non-Discrimination (in detail)
• Two major components
1. Most-Favored Nation (MFN) Rule
2. National Treatment Principle

22. Most Favored Nation (MFN) Rule
• It states that product made in one country be
treated no less favorably than a similar product
originated in an other country.
• This rule also states that if any concessions or
privileges are given to one country
▫ Those privileges will be given to all the members
of WTO.
▫ Giving equal rights

23. • MFN is the pillar of WTO as it does not
discriminate between nations and does not allow
the importers/ exporters to discriminate
between consumers.
• MFN ensures smaller countries that larger
countries will not exploit the market.
• MFN reduces negotiation costs.

24. National Treatment Principle
• It states that if the nation provides special
treatment and privileges to its citizens
▫ Then it should also provide same privileges to foreign
citizens living in that nation.
• Same rule applies to foreign products imported in
that nation.
• It provides a sense of security to the foreign
suppliers.

25. Structural Body of WTO as an Organization
• The WTO is run by the governments of its
members/ countries.
• All major decisions are made by the members as a
whole, either by
▫ ministers
▫ ambassadors
• Decisions are normally taken by consensus.

26. • WTO enforces rules on every countries’ policies,
after negotiations which are the result of agreed
consensus.
• So that bureaucracies do not affect the countries'
policies.
• The main advantage of taking decisions through
consensus is that it is acceptable by all the
members.

27. Levels of Authority
• Highest authority: The Ministerial Conference
• Second level: General Council in Three Guises
• Third level: Councils for Each Broad Area of Trade
and more
• Fourth level: Down to Nitty-Gritty

28. Highest authority: The Ministerial
Conference
• Countries make decision through different councils
and committees.
• Top most committee/ council is the ministerial
conference
▫ Consisting of ministers from each country.
 Trade minister
 Foreign Minister
▫ Which needs to be held at least once every 2 years.

29. Third level: Councils for Each Broad
Area of Trade and more
• Three councils for different broad areas of trade
report to The General Council
1. Goods Council
2. Services Council
3. TRIPS Council

30. Second level: General Council in Three
Guises
• Overlooks and coordinate day-to-day work between
ministerial conference by three bodies.
1. The General Council
2. The Dispute Settlement Body
3. The Trade Policy Review Body

31. Fourth level: Down to Nitty-Gritty
• Each higher level of councils have subsidiary
bodies.
• The goods council have further 11 committees
▫ Agriculture,
▫ Market access
▫ Anti-dumping
▫ Textile monitory policy
▫ Import licensing, etc.
• The services councils’ subsidiary bodies deals with
▫ Financial services
▫ Domestic regulations
▫ Transportation

32. HODs and BODs: the need for
informality
• Formal meetings are conducted by higher
authorities.
• Informality plays an important role.
▫ Before formal meetings, informal meetings are
conducted and important topics are filtered out.
▫ These informal meetings include HODs (Head of
Delegations)

33. • Informal meetings conducted in smaller groups
▫ 20-30 members
• It is necessary to keep the informal meetings held
with sensitivity and transparency.
• Green Room is a phrase used for conducting
meetings by HODs
▫ Proper reports are prepared for follow up.

34. • In order to increase the bargaining power countries
form coalition and alliance.
• To achieve the agreement on decisions through
consensus is an art to strike an appropriate balance.

35. Structural Body of WTO as an Organization
• The WTO is run by the governments of its
members/ countries.
• All major decisions are made by the members as a
whole, either by
▫ ministers
▫ ambassadors
• Decisions are normally taken by consensus.

36. • WTO enforces rules on every countries’ policies,
after negotiations which are the result of agreed
consensus.
▫ So that bureaucracies do not affect the countries'
policies.
• The main advantage of taking decisions through
consensus is that it is acceptable by all the
members.

37. Levels of Authority
• Highest authority: The Ministerial Conference
• Second level: General Council in Three Guises
• Third level: Councils for Each Broad Area of Trade
and more
• Fourth level: Down to Nitty-Gritty

38. Highest authority: The Ministerial
Conference
• Countries make decision through different councils
and committees.
• Top most committee/ council is the ministerial
conference
▫ Consisting of ministers from each country.
 Trade minister
 Foreign Minister
▫ Which needs to be held at least once every 2 years.

39. Second level: General Council in Three
Guises
• Overlooks and coordinate day-to-day work between
ministerial conference by three bodies.
1. The General Council
2. The Dispute Settlement Body
3. The Trade Policy Review Body

40. Third level: Councils for Each Broad
Area of Trade and more
• Three councils for different broad areas of trade
report to The General Council
1. Goods Council
2. Services Council
3. TRIPS Council

41. Fourth level: Down to Nitty-Gritty
• Each higher level of councils have subsidiary
bodies.
• The goods council have further 11 committees
▫ Agriculture,
▫ Market access
▫ Anti-dumping
▫ Textile monitory policy
▫ Import licensing, etc.
• The services councils’ subsidiary bodies deals with
▫ Financial services
▫ Domestic regulations
▫ Transportation

42. HODs and BODs: the need for
informality
• Formal meetings are conducted by higher
authorities.
• Informality plays an important role.
▫ Before formal meetings, informal meetings are
conducted and important topics are filtered out.
▫ These informal meetings include HODs (Head of
Delegations)

43. • Informal meetings conducted in smaller groups
▫ 20-30 members
• It is necessary to keep the informal meetings held
with sensitivity and transparency.
• Green Room is a phrase used for conducting
meetings by HODs
▫ Proper reports are prepared for follow up.

44. • In order to increase the bargaining power countries
form coalition and alliance.
• To achieve the agreement on decisions through
consensus is an art to strike an appropriate balance.