The document discusses the history and evolution of international trade organizations from GATT to the modern World Trade Organization (WTO). It describes how GATT was established in 1947 to promote global free trade but lacked enforcement capabilities. Key points include: - GATT negotiations led to trade liberalization but favored developed nations. - The WTO was established in 1995 to replace GATT and provide stronger rules and a dispute resolution process. - The WTO aims to facilitate trade through policies like most favored nation status and reducing tariffs and barriers. - Regional trade agreements also proliferated like NAFTA, ASEAN, and the EU to liberalize trade among neighboring states.

1. World Trade Organization

2. GATT
“General Agreement on Tariffs and
Trade (GATT) A World organization
established in 1947 to work for freer
trade on a multilateral basis, the GATT
was more of a negotiating framework
than an administrative institution. It
became WTO in 1995”. (Joshua.p.264)

3. Aim and Objectives
 To follow unconditionally most favoured
nation (MFN) principles
 To carry on trade on the principle on non-
discrimination, reciprocity and transparency
 To grant protection to domestic industry
through tariffs only.
 To liberalize tariffs and non-tariff measures
through multilateral negotiations

4. Activities
There were two activities of GATT
 Conference Diplomacy
 Dispute settlement

5. Conference Diplomacy
 To liberalized international trade
 it favoured the developed countries of the world
 Its trade policies in favour of poor countries were
formulated
 It exploited by the developed countries to restrict
the export of primary from Third World Countries.

6. Dispute Settlement
 The “Dispute Settlement Mechanism” of GATT
proved weak
 To handle complaints about violations of its trade
rules
 developed country followed such agricultural
trade policies which were inconsistent with the
GATT rules.

7. World Trade Organization
The World Trade Organization is a global,
multilateral intergovernmental
organization (IGO) that promotes,
monitors, and adjudicates international
trade.

8. WTO and Third World Countries
 The third world countries being unable to produce
manufactured goods will not be able to compete with the
developed countries which produce finished goods.
 The result of WTO supervision of the agreement of free trade
will increase the market, for the developed countries and in
this process the under-developed countries
 And in this process the imported goods from industrial nations
thereby destroying domestic manufacturers.
 WTO treaty would add more than 200 billion dollars in the
world income, 174 billion dollar out of them would go the
developed countries.

9. Important Rounds of WTO
Kennedy Rounds-1960s
 It is called Kennedy Round because started during the President John Kennedy, it
paid special attention to the growing role of European integration, which the
United States found somewhat threatening.
Tokyo Rounds-1970s
 This round adjusted rules of new conditions of world interdependence when, for
instance, OPEC raised oil prices and Japan began to dominate the automobile
export business.
Uruguay Rounds-1986
 The participant said GATT be renamed the “General Agreement to Talk and Talk”,
a successful conclusion to the round would add more than $100 billion to the world
economy annually. During this round they agreed to set up WTO. Besides US also
forced European state to reduce subsidies US somewhat gained its objective,
France won the right to protect its film industry against US films.

10. Most Favoured Nation
“A Principle by which one state, by
granting another state MFN status,
promises to give it the same treatment
given to the first state’s most-favoured
trading partner”. (Joshua.p.264)

11. Most Favoured Nation Principles
The agreement concluded into below provisions
 Rule to protect intellectual property rights entrepreneurs, entertainment,
industries and software produces
 Lower tariff and non-tariff barriers for manufactured products and other
goods
 Formation of new rules on trade and service
 Fair and more open competition in agriculture
 Full participation by the developing countries in global trading system
 More effective rules on anti-dumping, subsidies and import safeguards
 A more effective dispute settlement process
 Creation of World Trade Organization to implement this agreement

12. Bilateral and Regional
Agreements

13. Bilateral and Regional Agreements
Regional free trade areas also matter in
the structure of world trade. In such
areas, groups of neighboring states agree
to remove most or all trade barriers
within area. The creation of a regional
trade agreement allows a group of states
to cooperate in increasing their wealth
without waiting for the rest of the world.

14. NAFTA
The United State, Canada, and Mexico singed
the North America Free Trade Agreement
(NAFTA) in 1994, following a US Canadian
free trade agreement in 1998. In NAFTA’s first
decade. US imports from both Mexico and
Canada more than doubled, then fell
somewhat.

15. NAFTA
The United State, Canada, and Mexico singed
the North America Free Trade Agreement
(NAFTA) in 1994, following a US Canadian
free trade agreement in 1998. In NAFTA’s first
decade. US imports from both Mexico and
Canada more than doubled, then fell
somewhat.

16. FTAA
Politicians in North and South America have long
spoken of creating a single free trade area in the
Western Hemisphere, from Alaska to Argentina-
the Free Trade Area of the Americas (FTAA). To
empower him to do so, President Clinton asked
congress in 1997 to reinstate fast-track
legislation. But democrats in Congress defeated
the measure, demanding that free trade
agreement include requirements for labour and
environment standards for other countries.

17. ASEAN
In 2007, the ten Association of South East Asia Nations
countries met with China, Japan, India, Australia, and
New Zealand to begin negotiation an East Asian free
trade area. The group, unlike some other Asia Pacific
IGOs, doesn’t include the United Sates, but it does
include half the world’s population and some of its
most dynamic economies. In 2010, a free trade area
went into effect among these countries. The ASEAN-
China FTA is the world’s third largest free trade area,
after the EU and NAFTA.

18. T-TIP
EU and US officials are currently negotiating
the Transatlantic Trade and Investment (T-
TIP), which would lower tariffs and lower
barriers to investment between the US and
the EU.

19. CIS
Commonwealth of Independence States (CIS)
formed by 12 former Soviet republic, remains
economically integrated, although Georgia quit
after its 2008 war with Russia. It was previously
a free trade zone by virtue of being part of
single state with integrated transportation,
communication, and other infrastructure links.

20. MERRCOSUR
The South Cone Common Market (MERRCOSUR),
begun in the early 1990s with Brazil, Argentina,
Uruguay, and Paraguay, which opposed letting
Venezuela in. after Paraguay’s president was
hastily impeached in 2012, Brazil engineered
Paraguay’s suspension from MERCOSUR for ten
months, during which Venezuela was admitted.
Chile, Bolivia, Colombia, Ecuador, and Peru have
joined as associate members.

21. CARICOM
A Caribbean Common Market (CARICOM) was
created in 1973, but the area is neither larger
nor rich enough to make regional free trade a
very important accelerator of economic growth,
in 1969, Colombia, Ecuador, Peru, Bolivia
created a group non known as the Andean
Community of Nations, which had modest
success and counts the MERCOSUR members as
associate members.

22. The End