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WTO intends to supervise and liberalize international trade

The organization officially commenced on January 1, 1995 replacing the GATT (General Agreement on Tariffs and Trade)

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between the nations

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It tries to provide market access to countries for their products and services and promotes friendly investment policies by eliminating:trade distortions between countriestrimming down tariff and non-tariff barriersremoving quotasabolishing subsidies in a phased manner

WTO has rules to address quality issues, labor standards, environmental aspects, government regulation, and legal frameworks

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The need for an institution to promote rule based trade was felt when in 1930s world suffered through the Great Depression and World War II

This economic issue started with the 1929 Stock Market Crash wiping out savings of people and creating unemployment of the highest level in Western World

That great Depression further resulted into WWII and destroyed many European countries

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In January 1948, 23 nations organized the GATT in Geneva providing opportunity to start the tariff negotiations

This first round resulted in 45,000 tariff concessions affecting $10 billion (about 1/5th of the world trade)

The WTO replaced GATT as the world's global trading body in 1995

GATT trading regulations established between 1947 and 1994 remain the primary rule book for multilateral trade in goods

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Raising standards of living Ensuring full employment Expanding production of goods and services Sustainable development Securing share in trade of developing and

least developed countries Designing reciprocal and mutually

advantageous arrangement directed to substantial reduction of discriminatory treatment in international trade relation

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Protection to Domestic Industry through TariffsMember countries can protect their domestic

industry/production through tariffs only It prohibits the use of quantitative restrictions, except in

a limited number of situations

Binding of TariffsThe member countries are urged to eliminate protection

to domestic industry/ production by reducing tariffs and removing other barriers to trade in multilateral trade negotiations 7

Most Favored-Nation (MFN) Treatment The rule lays down the principles of non-discrimination

amongst member countries Tariff and other regulations should be applied to imported or

exported goods without discrimination among countries Exceptions to the rules are to regional arrangements

subjected to preferential or duty free trade agreements, Generalized System of Preferences (GSP) where developed countries apply preferential or duty free rates to imports from developing countries

4. National Treatment Rule The rule prohibits member countries from

discriminating between imported products and domestically produced goods in the matter of internal taxes and in the application of internal regulations.8

National Treatment RuleThe rule prohibits member countries from

discriminating between imported products and domestically produced goods in the matter of internal taxes and in the application of internal regulations

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At the heart of WTO are WTO agreements, negotiated and signed by a large number of the world’s trading nations and ratified by their parliaments

Agreement on trade related aspect of intellectual property rights (TRIPS)

Agreement on agriculture (AOA)Agreement on Sanitary and phytosanitary measures

(SPS)Technical barriers to trade (TBT) agreement

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WTO AgreementsWTO Agreements

Intellectual property rights

Copyrights

Patent trade marks

Geographical names

Industrial designs

Trade secrets

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Agreement on TRIPSAgreement on TRIPS

Food safety through CAC Plant health standards Animal health standards specific towards;

Additives, contaminants and toxic substances in food

Pesticides & drug residues and MRL compliance

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Agreement on Application of Sanitary and Agreement on Application of Sanitary and Phytosanitary Measures (SPS)Phytosanitary Measures (SPS)

Food Certification (HACCP and GMP)

Labeling requirements

Plant and animal quarantine requirements

Disease and Pest control

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Inspection, testing and certification

Custom procedures

High custom duties

Violation of intellectual property rights

Investment restrictions14

Technical Barriers to Trade (TBT)Technical Barriers to Trade (TBT)

Indiscriminate use of pesticides and chemicals results residues in food

Food additives are creating toxicity

Chemicals generated during food processing- prolonged heating of fats generates carcinogens

Repeatedly deep fried foods are injurious to health

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Toxicity from packaging material

Sewage, sludge, untreated industrial waste water polluting ground water and used for vegetable growing

Poultry, beef and mutton- feed additives, hormones and antibiotics

Clean water is unavailable to the masses

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1947-1960’s

1960’s-70’s

1970’s-80’s

1980’s-90’s

1990’s-2000

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Craftsmanship, where quality was built into products

Quality control took the shape of Inspection activity

Introduction of Statistical Quality/ Process control in a few key industries

Introduction of Quality circles

Introduction of TQM, ISO-9000, Structuring of PNAC and PSQCA

Quality Era’s in PakistanQuality Era’s in Pakistan

Good Manufacturing Practices (GMP)

Hazard Analysis Critical Control Points (HACCP)

Quality Assurance Standards (ISO-22000 And ES-29000)

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Present RequirementsPresent Requirements

More stringent Food Safety Standards imposed in countries like Pakistan

Food Laws, standards, procedures, testing infrastructure, nutrition and labeling methods are dreadfully primitive and ineffective

Pakistan's food is merely exported as a commodity rather than as value added foods

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Limited export-due to non compliance of WTO regulations

Increased imports

Reduced Industrialization

Less Employment – 10% unemployment

Loss in economic sovereignty

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