The document discusses the structure and outcomes of the Uruguay Round of trade negotiations between WTO member countries. It provides details on: 1) The structure of the WTO is dominated by the Ministerial Conference composed of all members. Day-to-day work falls to subsidiary bodies like the General Council. 2) The 8th GATT round, known as the Uruguay Round, was launched in 1986 to extend the trading system into new areas like services and intellectual property, and reform trade in agriculture and textiles. 3) The Uruguay Round concluded in 1994 with the Marrakesh Agreement, establishing the WTO and increasing binding commitments on tariffs for both developed and developing countries.

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Economics Assignment
 What is World Trade Organization(WTO)? Elaborate the current structure
and explain the outcomes of Uruguay round. (8th
round).
1. The World Trade Organization (WTO) is an intergovernmental
organization that regulates international trade. The WTO deals with
regulation of trade in goods, services and intellectual property between
participating countries by providing a framework for negotiating trade
agreements and a dispute resolution process aimed at enforcing participants'
adherence to WTO agreements, which are signed by representatives of
member governments and ratified by their parliaments. The WTO prohibits
discrimination between trading partners, but provides exceptions for
environmental protection, national security, and other important
goals. Trade-related disputes are resolved by independent judges at the
WTO through a dispute resolution process.
 The structure of the WTO
The structure of the WTO is dominated by its highest authority, the Ministerial
Conference, composed of representatives of all WTO members, which is required
to meet at least every two years and which can take decisions on all matters under
any of the multilateral trade agreements.
The day-to-day work of the WTO, however, falls to a number of subsidiary bodies;
principally the General Council, also composed of all WTO members, which is
required to report to the Ministerial Conference. As well as conducting its regular
work on behalf of the Ministerial Conference, the General Council convenes in two
particular forms - as the Dispute Settlement Body, to oversee the dispute
settlement procedures and as the Trade Policy Review Body to conduct regular
reviews of the trade policies of individual WTO members.
The General Council delegates responsibility to three other major bodies - namely
the Councils for Trade in Goods, Trade in Services and Trade-Related Aspects of
Intellectual Property. The Council for Goods oversees the implementation and
functioning of allthe agreements (Annex1Aof the WTOAgreement) coveringtrade

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in goods,thoughmany suchagreements havetheir own specific overseeingbodies.
The latter two Councils have responsibility for their respective WTO agreements
(Annexes 1B and 1C) and may establish their own subsidiary bodies as necessary.
Three other bodies areestablished by the Ministerial Conferenceand reportto the
General Council. The Committee on Trade and Development is concerned with
issuesrelating to the developing countries and,especially, to the "least-developed"
among them. The Committee on Balance of Payments is responsible for
consultations between WTO members and countries which take trade-restrictive
measures, under Articles XII and XVIII of GATT, in order to cope with balance-of-
payments difficulties. Finally, issues relating to WTO's financing and budget are
dealt with by a Committee on Budget.
Each of the four plurilateral agreements of the WTO - those on civil aircraft,
government procurement, dairy products and bovine meat - establish their own
management bodies which are required to report to the General Council.
Uruguay Round: 1986-1994
Well beforeGATT's 40th anniversary,itsmembers concluded thatthe GATT system
was straining to adapt to a new globalizing world economy. In response to the
problems identified in the 1982 Ministerial Declaration (structural deficiencies,
spill-over impacts of certain countries' policies on world trade GATT could not
manage etc.), the eighth GATT round – known as the Uruguay Round – was
launched in September 1986, in Punta del Este, Uruguay.
It was the biggest negotiating mandate on trade ever agreed: the talks aimed to
extend the trading system into several new areas, notably trade in services and
intellectual property,and to reformtrade in the sensitivesectors of agricultureand
textiles; all the original GATT articles were up for review. The Final Act concluding
the Uruguay Round and officially establishing the WTO regime was signed 15 April
1994, during the ministerial meeting at Marrakesh, Morocco, and hence is known
as the Marrakesh Agreement.

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The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a
result of the Uruguay Round negotiations (a distinction is made between GATT
1994, the updated parts of GATT, and GATT 1947, the original agreement which is
still the heart of GATT 1994). GATT 1994 is not however the only legally binding
agreement included via the Final Act at Marrakesh; a long list of about 60
agreements, annexes, decisionsand understandingswasadopted. The agreements
fall into six main parts:
1. the Agreement Establishing the WTO
2. the Multilateral Agreements on Trade in Goods
3. the General Agreement on Trade in Services
4. the Agreement on Trade-Related Aspects of Intellectual Property Rights
5. dispute settlement
6. reviews of governments' trade policies
In terms of the WTO's principle relating to tariff "ceiling-binding”, the Uruguay
Round has been successfulin increasing binding commitments by both developed
and developing countries, as may be seen in the percentages of tariffs bound
before and after the 1986–1994 talks.
 Discuss the causes of adverse Balance of Payment (BoP). Also write the
remedial measures can be taken to improve Bop.
Causes of Disequilibrium various causes of disequilibrium in the balance of
payments or adverse balance of payments are as follows:
1. Development Schemes:
The main reason for adverse balance of payments in the developing countries is
the huge investment in development schemes in these countries. The propensity
to import of the developing countries increases for want of capital for
industrialization. The exports, on the other hand, may not increase because these
countries are traditionally primary producing countries. Moreover the volume of
exports may fall because newly created domestic industries may need them. All

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this leads to structural changes in the balance of payment resulting in structural
disequilibrium.
2. Price-Cost Structure:
Changes in price-cost structure of export industries affect the volume of exports
and create disequilibrium in the balance of payments. Increase in prices due to
higher wages, higher cost of raw materials, etc. reduces exports and makes the
balance of payments unfavorable.
3. Changes in Foreign Exchange Rates:
Changes in the rate of exchange is another cause of disequilibrium in the balance
of payments. An increase in the external value of money makes imports cheaper
and exports dearer; thus, imports increase and exports fall and balance of
payments become unfavorable. Similarly, a reduction in the external value of
money leads to a reduction in imports and an increase in exports.
4. Fall in Export Demand:
There has been a considerabledecline in (his exportdemand for the primary goods
of the underdeveloped countries as a result of the large increase in the domestic
production of foodstuffs raw materials and substitutes in the rich countries.
Similarly, the advanced countries also find a fall in their export demand because of
loss of colonial markets. However, thedeficit in the balance of payment due to the
fall in export demand is more persistent in the underdeveloped countries than in
the advanced countries.
5. Demonstration Effect:
According to Nurkse, the people in the less developed countries tend to follow the
consumptionpatterns of thedeveloped countries.Asa resultof this demonstration
effect, the imports of the less developed countries will increase and create
disequilibrium in the balance of payments.
6. International Borrowing and Lending:

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Internationalborrowing and lending is another reason for the disequilibriumin the
balance of payments. The borrowing country tends to have unfavorablebalance of
payments, whilethe lending country tends to have favorablebalanceof payments.
7. Cyclical Fluctuations:
Cyclical fluctuations cause cyclical disequilibrium in the balance of payments.
During depression, the incomes of the people in foreign countries fall. As a result,
the exports of these countries tend to decline which, in turn, produces
disequilibrium in the home country's balance of payment.
8. Newly Independent Countries:
The newly independent countries,in order to develop international relations, incur
huge amounts of expenditure on the establishment of embassies, missions, etc. in
other countries. This adversely affects the balance of payments position.
9. Population Explosion:
Another important reason for adverse balance of payments in the poor countries
is population explosion. Rapid growthof population in countrieslike Indiaincreases
imports and decreases the capacity to export.
10. Natural factors:
Natural calamities, such as droughts, floods, etc., adversely affect the production
in the country. As a result, the exports fall, the imports increase and the country
experiences deficit in its balance of payments.
Following are the main methods of CorrectDisequilibriumin Balance of Payments:
1. Monetary Policy (deflection)
Monetary policy may be devised to correct a deficit in the balance of payments
of a country. The deficit occurs because of high import and exports. This is to be
reversed. In this regard, the country may adopt deflationary or dear money policy

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by raising the bank rate and restricting credit. Under deflation, prices fall which
makes exports attractive and imports relatively costlier. This eventually leads to a
rise in exports and a fall in imports. The policy of money contraction or deflection
keeps exchange rates unaffected and tries to correct the payments through
domestic changes. However, deflation being in inexpedient, its Side Effects are
dangerous to a poor Nation. It creates more unemployment and poverty.
Again a developing economy has to adopt an expansionary rather than a
contraceptive monetary policy to cater to developmental needs.
2. Exchange Depreciation
Exchange depreciation means the decline in the rate of exchange of one country in
terms of another. For example – Assume- the Indian rupee exchanges for 65
Roubles of Russian currency. If India experiences an adverseBalance of payments
with regard to Russia, the Indian demand for Rouble will be rise.
Consequently, the price of Rouble in terms of Rupee will be appreciated in its
external value. Thus, the rate of exchange of Indian rupee in terms of rouble may
change to 1 Rupee = 45 Roubles from 1 equal 45 balls this is known as 1 Rupee =
64 Roubles. This is known as Exchange Depreciation.
It is automatic and it helps in correcting a mild adverseBalance of payments. This
stimulates exports by making the domestic goods cheaper to the foreigners and
thereby leading to favorable balance.
3. Devaluation
Devaluation of currency is another way which makes exports attractive. The term
Devaluation means a reduction in the official rate at which one currency is
exchanged for another. It is an alternative to exchange depreciation.
Devaluation is undertaken when the currency is found to be unduly overvalued.
Devaluation makes the Goods cheaper for foreigners. Exports will rise and imports
decline.
The Success of Devaluation, however, depends on certain following factors:

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Demand elasticity for the exports must be greater than Unity.
The elasticity of supply for the imports should be greater than Unity.
Devaluation should not be exceedingly adverse because it will not do anything.
There should not be retaliative action from other Nations, that is, other nations
should not have the corresponding Devaluation that nullifies each other’s gain.
Devaluation of the country’s “terms of trade” should not be exceedingly adverse
otherwise it will not gain anything from trade.
Moreover, these are the following ‘Drawbacks of Devaluation’:
It may lead to ‘Inflationary’ tendencies in the internal economy.
It is nothing but the acknowledgment of a country’s economic weakness.
It puffs up the burden of Debt servicing.
It takes considerable time to yield expected results.
Its effect is strongly purgative I.e. violent.
4. Exchange Control
Restriction on the use of foreign exchange by the central banks called Exchange
Control.
When exchangecontrolisadopted, all theexporters haveto surrendertheirforeign
exchange earnings to Central Bank. Under exchange control, the central bank
releases foreign exchanges only for essential imports and conserves therestof the
balance. This is the most direct method of curbing imports.
Exchangecontrol, in General, deals with the balance of paymentsdisequilibrium by
suppressing thedeficit that it only a symptomand not the Basic Trouble. Exchange
control deals with only the deficit, not its causes, and it may irritate those causes
tending to create a morebasic disequilibrium. Methodsto CorrectDisequilibriumin
Balance of Payments

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Inother words,exchangecontrolcan preventa complete breakdown,butit cannot
eliminate a condition of disequilibrium.
Thus, exchange control offers no permanent solution to the problem of persistent
disequilibrium. Itcan, at bestbejustified only as a temporarymeasure, to gain time
while other more fundamental adjustments made to restore equilibrium in the
Balance of payments.
5. Fiscal Policy- Import Duties
Under this policy, import traffic tariff duties are imposed so as to make the import
dearer with an overall aim of checking imports. Imports get reduced and Balance
of payments become favorable.
6. Import Policy (import quotes)
Under this mechanism, the government fixes a maximum quantity or value of a
commodity to be imported. This in turn reduces and the deficit is reduced and
thereby the Balance of payments, the position is improved.
This measurehas the immediate effect of checking imports as marginal propensity
to import becomes zero once the quota limit is reached.
To correctdisequilibrium in Balance of payments import quotes are assumed to be
better than import duties. The quota has the immediate effect of restricting
imports as the marginal prosperity to import become zero, once the quota-limited
is reached.
Thus, the effect of quotas on quantitative restriction (QR) of imports is explicit. But
the Balance of payments effects of import duties and not to certain.
7. Stimulating/Improving Export
To correct disequilibrium in the Balance of payments, it is necessary that exports
should be increased, the government may adopt export programmes for this
purpose.

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Export promotion programs include subsidies, tax concession to exporters,
marketing facilities, incentives for exporters, reducing export duties etc.
Further, to encourage exports the level of costs in the country may have to be
brought down. Thus, may involve cutting down on wages and interest rates and
other incomes and also a contraction of currency to bring the prices down.
8. Foreign Loans
The governmentcan also secure loans from foreign banks or foreign governments
to reduce the deficit in the balance of payments. Since the repayment of these
loans is spread over a long period, This helps the governmentto remove the deficit
in the Balance of payments.
Duringthe currencyof the loans,the governmenttakes stepsto improveits foreign
exchange position. Methods to Correct Disequilibrium in Balance of Payments
9. Encouragement to Foreign Investment
The government induces the foreigners to make an investment in the country
offering them all sorts of investor’s incentives and concessions. This provides the
government with extra foreign exchanges which are utilized to reduce the deficit
in the Balance of payments.
But while inviting the foreign capitalist to invest their capital within the country,
the governmentsees to it that this does not produceany adverserepercussions on
the economy.
10. Incentives to Foreign Tourist
The government may also encourage foreign tourists to visit the country in
increasing numbers of offering them various facilities and constitutional travel.
This increases the foreign exchange earnings of the country with the help of which
the deficit in the Balance of payments can be reduced.

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11. Automatic Measures
The disequilibrium in the Balance of payments may automatically disappear after
sometime when certain forces came into operation in the country. For example-
The disequilibriumin theBalance of payments of a countryunderthe gold standard
was automatically corrected through the inflow and outflow of gold. If the balance
of payments was unfavorable there was an outflow of gold from the country
causing a contraction in the volume of currency and credit, and ultimately a fall in
the domestic price level. This encouraged exports, while it discouraged imports.
The equilibrium in the BOP was automatically restored after some time. Similarly,
the equilibriumin the Balance of payments of a country on thepaper standard was
automatically corrected through fluctuations in its rate of exchange.
For example- If the country’s BOP was unfavorable, the demand for foreign
exchangeexceeded its supply,andconsequently,theexchangevalueof its currency
went down. The fall in its exchange value encouraged exports while it discouraged
imports. The Equilibrium in the BOP was automatically restored after the lapse of
some time. The opposite process worked when the Balance of payments of the
nation turned favorable.The automatic measuresdiscussedabovedid notproduce
the desired results in a short period. Nor were they effective in dealing with a
serious and fundamental disequilibrium in the BOP. Measures of correcting
disequilibrium in the balance of payments
12. Miscellaneous Measures
These include- developing import substituting Industries, postponing debt
payments, check on inflation, check on smuggling etc. All these may help
in correcting disequilibrium in Balance of payments. To Sumup, some the deficit in
the balance of payments is not a desirablephenomenon for a nation. The methods
mentioned above aim at reducing imports and stimulating exports. Of these, the
trade measures are better and effective. It produces immediate results. The
Government of a nation may use this method in combination with other methods
to eliminate or reduce a chronic deficit in the Balance of payments.

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 Write a short note on any 4 of the following:
IBRD
The International Bank for Reconstruction and Development (IBRD) is an
international financial institution that offers loans to middle-income
developing countries. The IBRD is the first of five member institutions that
compose the World Bank Group, and is headquartered in Washington, D.C.,
United States.
IBRD finances investments across allsectors and provides technicalsupport
and expertise at each stage of a project. IBRD’s resources not only supply
borrowing countries with needed financing, but also serve as a vehicle for
global knowledge transfer and technical assistance.
ADB
The Asian Development Bank (ADB) is a regional development
bank established on 19 December 1966, which is headquartered in
the Ortigas Center located in the city of Mandaluyong, Metro
Manila, Philippines. The company also maintains 31 field offices around the
world[4]
to promote social and economic development in Asia. The bank
admits the members of the United Nations Economic and Social
Commission for Asia and the Pacific (UNESCAP, formerly the Economic
Commission for Asia and the Far East or ECAFE) and non-
regional developed countries. From 31 members at its establishment, ADB
now has 67 members, of which 48 are from within Asia and the Pacific and
19 from outside.The ADB was modeledcloselyon the World Bank, and has
a similar weighted voting system where votes are distributed in proportion
with members' capital subscriptions. ADB releases an annual report that
summarizes its operations, budget and other materials for review by the
public. The ADB-Japan Scholarship Program (ADB-JSP) enrolls about 300
students annually in academic institutions located in 10 countries within the

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Region. Upon completionof their study programs,scholars are expected to
contribute to the economic and social development of their home
countries. ADB is an official United Nations Observer
IDA
The International DevelopmentAssociation (IDA) is an international financial
institution which offers concessional loans and grants to the world's
poorest developing countries. The IDA is a member of the World Bank
Group and is headquartered in Washington, D.C., United States. It was
established in 1960 to complement the existing International Bank for
Reconstruction and Development by lending to developing countries which
sufferfrom the lowest gross national income,from troubled creditworthiness,
or from the lowest per capita income. Together, the International
Development Association and International Bank for Reconstruction and
Development are collectively generally known as the World Bank, as they
follow the same executive leadership and operate with the same staff.
The association shares the World Bank's mission of reducing poverty and
aims to provide affordable development financing to countries whose credit
risk is so prohibitive that they cannot afford to borrow commercially or from
the Bank's other programs. The IDA's stated aim is to assist the poorest
nations in growing more quickly, equitably, and sustainably to reduce
poverty. The IDA is the single largest provider of funds to economic
and developmentprojects inthe world's poorestnations. From 2000 to 2010,
it financed projects whichrecruited and trained 3 million teachers,immunized
310 million children, funded $792 million in loans to 120,000 small and
medium enterprises, built or restored 118,000 kilometers of paved roads,
built or restored 1,600 bridges, and expanded access to improved water to
113 million people and improved sanitation facilities to 5.8 million people.
The IDA has issued a total $238 billion USD in loans and grants since its
launch in 1960. Thirty-six of the association's borrowing countries have
graduated from their eligibility for its concessionallending. However, eight of
these countries have relapsed and have not re-graduated.

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World Bank
The World Bank (French: Banque mondiale)[3]
is an international financial
institution that provides loans to countries of the world for capital projects.It
comprises two institutions: the International Bank for Reconstruction and
Development (IBRD), and the International DevelopmentAssociation (IDA).
The World Bank is a component of the World Bank Group.
The World Bank's most recent stated goal is the reduction of poverty. As of
November2018,the largest recipients of World Bank loans were India ($859
million in 2018) and China ($370 million in 2018), through loans from IBRD
 Elaborate the objectives & functions of World Bank.
Objectives:
The following objectives are assigned by the World Bank:
1. To provide long-run capital to member countries for economic
reconstruction and development.
2. To induce long-run capital investment for assuring Balance of Payments
(BoP) equilibrium and balanced development of international trade.
3. To provide guaranteefor loans granted tosmall and large unitsand other
projects of member countries.
4. To ensure the implementation of development projects so as to bring
about a smooth transference from a war-time to peace economy.
5.Topromotecapitalinvestmentinmember countriesbythefollowing ways;
(a) To provide guarantee on private loans or capital investment.
(b) If private capital is not available even after providing guarantee, then
IBRD provides loans for productive activities on considerate conditions.

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Functions:
World Bank is playing main role of providing loans for development works
to member countries, especially to underdeveloped countries. The World
Bank provides long-term loans for various development projects of 5 to 20
years duration.
The main functions can be explained with the helpofthe following
points:
1. World Bank provides various technical services to the member countries.
For this purpose, the Bank has established “The Economic Development
Institute” and a Staff College in Washington.
2. Bank can grant loans to a member country up to 20% of its share in the
paid-up capital.
3. The quantities of loans, interest rate and terms and conditions are
determined by the Bank itself.
4. Generally, Bankgrantsloans for a particular project dulysubmitted tothe
Bank by the member country.
5. The debtor nation has to repay either in reserve currencies or in the
currency in which the loan was sanctioned.
6. Bank also provides loan to private investors belonging to member
countries on its own guarantee, but for this loan private investors have to
seek prior permission from those counties where this amount will be
collected.
 Discuss Industrial policy of 1991
The New Industrial Policy of 1991 comes at the center of economic
reforms that launched during the early 1990s. All the later reform
measures were derived out of the new industrial policy. The Policy has
brought comprehensive changes in economic regulation in the
country. As the name suggests, these reform measures were made in
different areas related to the industrial sector.

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As part of the policy, the role of public sector has been redefined. A
dedicated reform policy for the public sector including the
disinvestment programme were launched under the NIP 1991. Private
sector has given welcome in major industries that were previously
reserved for the public sector.
Similarly, foreign investment has given welcome under the policy. But
the most important reform measure of the new industrial policy was
that it ended the practice of industrial licensing in India. Industrial
licensing represented red tapism.
Because of the large scale changes, the Industrial Policy of 1991 or the
new industrial policy represents a major change from the early policy
of 1956.
The new policy contained policy directions for reforms and thus for
LPG (Liberalisation, Privatisation and Globalisation). It enlarged the
scope of private sector participation to almost all industrial sectors
except three (modified). Simultaneously, the policy has givenwelcome
to foreign investment and foreigntechnology. Since 1991, the country’s
policy on foreign investment is gradually evolving through the
introduction of liberalization measures in a phasewise manner.
Perhaps, the most welcomechange under the new industrial policy was
the abolition of the practice of industrial licensing. The1991 policy has
limited industrial licensing to less than fifteen sectors. It means that
to start an industry, one has to go for license and waiting only in the
case of these few selected industries. This has ended the era of license
raj or red tapism in the country. The 1991 industrial policy contained
the root of the liberalization, privatization and globalization drive
made in the country in the later period.
The policy has brought changes in the following aspects of industrial
regulation:
1. Industrial delicensing
2. Deregulation of the industrial sector

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3. Public sector policy (dereservation and reform of PSEs)
4. Abolition of MRTP Act
5. Foreign investment policy and foreign technology policy.
1. Industrial delicensing policy or the end of red tapism:
The most important part of the new industrial policy of 1991 was the
end of the industrial licensing or the license raj or red tapism. Under
the industrial licensing policies, private sector firms have to secure
licenses to start an industry. This hascreated long delays in the startup
of industries. The industrial policy of 1991 has almost abandoned the
industrial licensing system. It has reduced industrial licensing to
fifteen sectors. Now only 13 sector need license for starting an
industrial operation.
2. DE reservation of the industrial sector–
Previously, the public sector has given reservation especially in the
capital goods and key industries. Under industrial deregulation, most
of the industrial sectors was opened to the private sector as well.
Previously, most of the industrial sectors were reserved to the public
sector. Under the new industrial policy, only three sectors- atomic
energy, mining and railways will continue as reserved for public sector.
All other sectors have been opened for private sector participation.
3. Reforms related to the Public sector enterprises:
Reforms in the public sector were aimed at enhancing efficiency and
competitiveness of the sector. The government identified strategic and
priority areas for the public sector to concentrate. Similarly, loss
making PSUs were sold to the private sector. The government has
adopted disinvestment policy for the restructuring of the public sector
in the country. At the same time autonomy has been given to PSU
boards for efficient functioning.
4. Foreign investment policy:

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Another major feature of the economic reform measure was it has
given welcome to foreign investment and foreign technology. This
measure has enhanced the industrial competition and improved
business environment in the country. Foreign investment including
FDI and FPI were allowed. Similarly, loan capital has also introduced
in the country to attract foreign capital.
5. Abolition of MRTP Act:
The New Industrial Policy of 1991 has abolished the Monopoly and
Restricted Trade Practice Act. In 2010, the Competition Commission
has emerged as the watchdog in monitoring competitive practices in
the economy.
The industrial policy of 1991 is the big reform introduced in Indian
economy since independence. The policy caused big chang es including
emergence of a strong and competitive private sector and a sizable
number of foreign companies in India.