2. 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
3. GATT
GATT is the predecessor of WTO
Born in 1948 as a result of the international
desire to liberalize trade
Lasted until 1994, when it was replaced by
the World Trade Organization.
4. 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
5. URUGUAY ROUND
Held 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 & Subsidies
d) 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
6. 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.
7. 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.
8. 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.
9. The Role of WTO
1.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 implementation
2.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 Conference
3. 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 up
4. administering the Trade Policy Review Mechanism in Annex 3 of the agreement setting it up
5. 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.
10. 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
12. Past, Present, Future
The WTO came into being in 1995.
The WTO is the successor to the General Agreement
on Tariffs and Trade (GATT), established in the wake
of the Second World War.
13. The Past 50 Years: Exceptional Growth in
World Trade
Merchandise exports grew on average 6% annually
Total trade in 1997 was 14 times the level of 1950
In 1997, 40 governments concluded negotiations for tariff
free trade.
14. The WTO benefits of trade
We have seen what Ricardo had to say about
comparative advantage, and the strong consensus
among those who seriously consider trade issues.
Trade provides nearly 100% of an economy’s jobs.
Global trade provides a large and growing share of
these jobs.
.
15. Major WTO Functions
Administering WTO trade agreements
Forum for trade negotiations
Handling trade disputes
Monitoring national trade policies
Technical assistance and training for developing countries
Cooperation with other international organizations
16. The Quad
Some of the most difficult negotiations have
needed an initial breakthrough in talks among
the four largest members
Canada
European union
Japan
United States
17. How to Join the WTO: the Accession
Process
First, “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.”
18. 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 citizens
http://www.wto.org/english/thewto_e/whatis_e/10mis_e/10m00_e.htm
19. 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 with
lugubrious labor Luddites
trade terrorists, and
the clueless
20. The Doha, Qatar Initiatives
A new trade round was launched November, 2001
For the first time, developing countries demanded
capacity-building and technical assistance to take
part meaningfully.
21. The Doha, Qatar Initiatives
The Pledging Conference was convened in
accordance with the December 2001
decision of the WTO General Council.
In that decision, the General Council set a
target for core funding of CHF 15 million plus
support in kind, including training courses for
trade officials.
22. Structure of the WTO Agreement
WTO Agreement
GATT
Dispute Trade
GATS Settlement Policy
Review
TRIPS
A A A A
A A A A
22
23. 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
24. Dispute Settlement in the WTO:
Aim
Dispute 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
26. Dispute Settlement in the WTO:
Consultations
Who?
One or more Members (complainants) against another Member (respondent)
Possibility for third party Members to join
Confidential process
Minimum time limits for complainant
26
27. RTA (Regional Trade Agreements)
• RTA's 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.
• RTA's 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 that's what RTAs help in its members.
28. 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)
29. 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.
30. 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.
31. 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.
32. 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
33. 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)
