A PROJECT ON EMERGENCE OF WORLD TRADE ORGANISATION IN THE SUBJECT ECONOMICS OF GLOBAL TRADE AND FINANCESUBMITTED BY NAME: HARSH MANDAVIA ROLL NO: 29 M.COM. PART - I in BUSINESS MANAGEMENTUNDER THE GUIDANCE OF PROF. JOSE AUGUSTINETO UNIVERSITY OF MUMBAI FOR MASTER OF COMMERCE PROGRAMME (SEMESTER - I) YEAR: 2015-16

SVKMS NARSEE MONJEE COLLEGE OF COMMERCE &ECONOMICS VILE PARLE (W), MUMBAI 400056.

EVALUATION CERTIFICATE

This is to certify that the undersigned have assessed and evaluated the project on EMERGENCE OF WORLD TRADE ORGANISATION submitted by student of M.Com. Part - I (Semester I) for the academic year 2015-16. This project is original to the best of our knowledge and has been accepted for Internal Assessment.

Name & Signature of Internal Examiner ________________________________ _________________________________

Name & Signature of External Examiner _________________________________

_________________________________

Shri. Sunil B. Mantri DECLARATION BY THE STUDENT

I, Harsh Mandavia student of M.Com. (Part I) Roll No.29 hereby declare that the projectTitle- OBJECTIVES OF WORLD TRADE ORGNISATION for the subject ECONOMICS OF GLOBAL TRADE AND FINANCEsubmitted by me for Semester I of the academic year 2015-16, is based on actual work carried out by me under the guidance and supervision of PROF. . I further state that this work is original and not submitted anywhere else for any examination.

Place: MUMBAI.Date: (Harsh Mandavia) Name & Signature of Student

ACKNOWLEDGEMENT

It is indeed a great pleasure and proud privilege to present this project work. I thank my project guide and M-COM coordinator of SVKMS NARSEE MONJEE COLLEGE OF COMMERCE AND ECONOMICS, VILE PARLE (WEST). Their co-operation and guidance have helped me to complete this project. I would sincerely like to thank the principal of our college Shri. Sunil B. Mantri for his support and guidance. I would also like to thank the college library and its staff for patiently listening and guiding me and finally. I would like to thank my family and friends who supported me in this project. THANK YOU.

CONTENTSr. No.PARTICULARSPage No.

CHAPTER I INTRODUCTION

1.1

1.2

1.3

CHAPTER II XXXXXXXXX

2.1

2.2

CHAPTER III XXXXXXXXXX

3.1

3.2

CHAPTER IV CONCLUSION

4.1

4.2

APPENDIX

5.1

5.2

5.3Bibliography

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services.The word Economics originates from the Greek work Oikonomikos which can be divided into two parts:(a) Oikos, which means Home, and(b) Nomos, which means Management.Thus, Economics means Home Management. The head of a family faces the problem of managing the unlimited wants of the family members within the limited income of the family. In fact, the same is true for a society also. If we consider the whole society as a family, then the society also faces the problem of tackling unlimited wants of the members of the society with the limited resources available in that society. Thus, Economics means the study of the way in which mankind organizes itself to tackle the basic problems of scarcity. All societies have more wants than resources. Hence, a system must be devised to allocate these resources between competing ends.

INTRODUCTION:-

The World Trade Organization was founded on 1stJanuary 1995 to replace the General Agreement on Tariffs and Trade (GATT). This multilateral organization aims to lower tariffs and non-tariff barriers so as to increase international trade. The 161 member states meet in ministerial sessions at least once every two years. The World Trade Organization (WTO) is an international, multilateral organization, which sets the rules for the global trading system and resolves disputes between its member states, all of whom are signatories to its about 60 agreements. WTO headquarters are located in Geneva, Switzerland. Roberto Azevdo is the current Director-General. As of now, there are 161 members in the organization, with. All WTO members are required to grant one another most favored nation status, such that ( with some exceptions ) trade concessions granted by a WTO member to another country must be granted to all WTO members. Since its inception in 1995, the WTO has been a major target for protests by the anti-globalization movement. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations. The bulk of the WTOs current work comes from the 198694 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to new negotiations, under the Doha Development Agenda launched in 2001. Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers - for example, to protect consumers or prevent the spread of disease. At its heart are the WTO agreements, negotiated and signed by the bulk of the worlds trading nations. These documents provide the legal ground rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives. The systems overriding purpose is to help trade flow as freely as possible - so long as there are no undesirable side effects - because this is important for economic development and well-being. That partly means removing obstacles. It also means ensuring that individuals, companies and governments know what the trade rules are around the world, and giving them the confidence that there will be no sudden changes of policy. In other words, the rules have to be transparent and predictable. Trade relations often involve conflicting interests. Agreements, including those painstakingly negotiated in the WTO system, often need interpreting. The most harmonious way to settle these differences is through some neutral procedure based on an agreed legal foundation. That is the purpose behind the dispute settlement process written into the WTO agreements.

MEMBERSMEMBERS, dually present with EUOBSERVERSNON-MEMBERS

Formation1January 1995; 20 years ago

TypeInternational trade organization

PurposeRegulateinternational trade

HeadquartersCentre William Rappard,Geneva, Switzerland

Coordinates46.12N 6.09ECoordinates:46.12N 6.09E

Region servedWorldwide

Membership161 member states

Official languageEnglish,French,Spanish

Director-GeneralRoberto Azevdo

Budget196 millionSwiss francs(approx. 209 million US$) in 2011.[3]

Staff640[4]

Websitewww.wto.org

STRUCTURE OF WORLD TRADE ORGANISATION

The Ministerial Conference (MC) is at the top of the structural organization of the WTO. It is the supreme governing body which takes ultimate decisions on all matters. It is constituted by representatives of (usually, Ministers of Trade) all the member countries.The General Council (GC) is composed of the representatives of all the members. It is the real engine of the WTO which acts on behalf of the MC. It also acts as the Dispute Settlement Body as well as the Trade Policy Review Body.There are three councils, viz.: the Council for Trade in Services and the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) operating under the GC. These councils with their subsidiary bodies carry out their specific responsibilitiesFurther, there are three committees, viz., the Committee on Trade and Development (CTD), the Committee on Balance of Payments Restrictions (CBOPR), and the Committee on Budget, Finance and Administration (CF A) which execute the functions assigned to them by e WTO Agreement and the GC.

FUNCTIONS OF WTO:-

While the WTO is driven by its member states, it could not function without its Secretariat to coordinate the activities. The Secretariat employs over 600 staff, and its experts - lawyers, economists, statisticians and communications experts - assist WTO members on a daily basis to ensure, among other things, that negotiations progress smoothly, and that the rules of international trade are correctly applied and enforced.The former GATT was not really an organization; it was merely a legal arrangement. On the other hand, the WTO is a new international organization set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. Article III has set out the following functions of WTO:- Trade Negotiations:- The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. These agreements are not static; they are renegotiated from time to time and new agreements can be added to the package. Many are now being negotiated under the Doha Development Agenda, launched by WTO trade ministers in Doha, Qatar, in November 2001. Implementation and Monitoring:- WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented. All WTO members must undergo periodic scrutiny of their trade policies and practices, each review containing reports by the country concerned and the WTO Secretariat. Dispute Settlement:- The WTOs procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgments by specially appointed independent experts are based on interpretations of the agreements and individual countries commitments. Building Trade Capacity:- WTO agreements contain special provision for developing countries, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities, and support to help them build their trade capacity, to handle disputes and to implement technical standards. The WTO organizes hundreds of technical co-operation missions to developing countries annually. It also holds numerous courses each year in Geneva for government officials. Aid for Trade aims to help developing countries develop the skills and infrastructure needed to expand their trade.HISTORY OF WTOThe WTO was officially created in January of 1995 and essentially replaced the General Agreement on Tariffs and Trade (GATT), which had been in force since 1948, a few years after the Second World War. Before the WTO was created, an initiative to start something similar known as the International Trade Organization (ITO) took place. Unfortunately, the ITO treaty was not approved by the U.S. and a few other countries and ultimately never went into effect.In the 1980s, as the world economies became more global in trade and business, it became evident that GATT was not built or structured to address many of the new global trading challenges that were arising. As a result, the biggest trade negotiating event on record began in 1986. It was known as the Uruguay Round, seeing as it took place in Punta del Este, Uruguay. One of the final accomplishments of this round was the creation of the WTO. The WTO is currently working on new negotiations and agreements, known as the Doha Development Agenda, and these started in 2001.The World Trade Organization came into existence in nineteen ninety-five. It operates a system of trade rules. It serves as a place for nations to settle disputes and negotiate agreements to reduce trade barriers. The newest of its one hundred fifty members, Vietnam, joined in January.But the roots of the W.T.O. date back to World War Two and the years that followed.In nineteen forty-four, a meeting took place in Bretton Woods, New Hampshire: the International Monetary Conference. There, negotiators agreed to create the International Monetary Fund and the World Bank. But they could not agree on an organization to deal with international trade.Three years later, in nineteen forty-seven, twenty-three nations approved the General Agreement on Tariffs and Trade, or GATT. It was meant to be temporary. Trade negotiations under GATT were carried out in a series of talks called rounds. The first round lowered import taxes on one-fifth of world trade. Later rounds produced additional cuts, and negotiators added more issues.The sixth round began in nineteen sixty-three. It was called the Kennedy Round after the murder of President John F. Kennedy. The results included an agreement against trade dumping. This is when one country sells a product in another country at an unfairly low price.The eighth round of talks began in Punta del Este, Uruguay, in nineteen eighty-six. The Uruguay Round lasted almost twice as long as planned. In all, one hundred twenty-three nations took part in seven-and-a-half years of work. They set time limits for future negotiations. They also agreed to create a permanent system to settle trade disputes.In April of nineteen ninety-four, most of those one hundred twenty-three nations signed an agreement. It replaced GATT with the World Trade Organization.The W.T.O. launched a new round on development issues in Doha, Qatar, in November of two thousand one. These talks were supposed to end by January of two thousand five. But negotiators could not agree on issues involving agricultural protections. The current round has been suspended since last July.The WTO is a relatively powerful international organisation. Its dispute settlement body can impose sanctions to enforce decisions on member countries disagreements over what WTO rules mean in practice.The WTO was preceded by the General Agreement on Tariffs and Trade (GATT), which was concluded in 1947. Back then, the original idea was to start an International Trade Organisation, but that did not materialise. In the GATT context, there were eight rounds of trade liberalisation talks. Initially, their topics were the reduction of tariffs and the phasing out of quotas, but later other trade barriers were tackled to.The Uruguay Round was the final GATT Round. It was started at a summit in Punta del Este in 1986 and concluded in Marrakesh in 1994. It capped agriculture subsidies and established the WTO. Other important results included the end of textiles quotas at the beginning of 2005, the Agreement on Trade Related Intellectual Property Rights (TRIPS) and the General Agreement on Trades in Services (GATS).The WTO is meant to continue liberalising trade through negotiation rounds. For many years, however, members did not agree on an agenda for a new round. At the Ministerial Conference in Singapore in 1996, the rich nations insisted it should include investors rights, competition/anti-trust policy, trade facilitation and government procurement. Developing countries disagreed, fearing that binding rules on these Singapore issues would restrict their policy space and limit their scope for growth.The next summits in Geneva in 1998 and Seattle in 1999 similarly failed. Protests, which are now considered the beginning of the movement of globalisation sceptics, overshadowed the meeting in Seattle. Civil society organisations argued that the WTO served the interests of rich nations in exploiting the Third World.Such criticism was misleading. The WTO only passes rules when all members agree. Every member has the right of veto. Since many developing countries are WTO members, their bargaining power is stronger in this context than when they negotiate on their own with the great economic powers.Nonetheless, there was reason to protest. Many developing countries felt cheated by the Uruguay Round because it did not allow them to increase their exports as fast as they had been made believe. One reason for such frustration was that trade policy is very complex, and the details may fast overburden countries with weak governmental capacities. The EU and US delegations arrive at Ministerial Conferences with armies of legal advisers, but small and poor countries are typically only represented by a handful of diplomats.At the turn of the Millennium, moreover, a global dispute erupted over pharma patents, which, according to TRIPS, are protected all over the world. Brazil, Thailand, South Africa and other nations, however, urgently needed low cost HIV/AIDS medication. The Ministerial Conference in Doha in 2001 dealt with this matter by allowing members to break patents if doing so is necessary to protect public health because those who own intellectual property rights do not make essential medication available at acceptable prices.The summit in Doha also started a new round of negotiations. Among other things, it is supposed to further reduce agricultural subsidies and phase out export subsidies for agricultural products. These issues matter very much to developing countries that depend on agriculture. Subsidies in richer nations thwart their farmers competitiveness.In Doha, moreover, the rich nations put the Singapore issues on the agenda, even though the developing countries, led by India, made it clear they would not accept rules on these matters. So far, trade facilitation is the only Singapore issue on which talks have made reasonable progress. All in all, however, the Doha Round looks stuck. The USA and the EU are pursuing bilateral strategies and so are emerging giants like China and India.

HISTORY OF GATT General Agreement on Tariffs and Trade(GATT), former specialized agency of the United Nations. It was established in 1948 as an interim measure pending the creation of the International Trade Organization. However, plans for the latter were abandoned and GATT continued to exist until the end of 1995. Members of GATT were pledged to work together to reduce tariffs and other barriers to international trade and to eliminate discriminatory treatment in international commerce. The most important service of GATT was to negotiate multilateral extensions of tariff reductions through the application of themost-favored-nation clause. GATT also provided for regular meetings to consider other problems of international trade. An important GATT principle was that protection of domestic industries was to be done strictly through tariffs and not measures such as import quotas. The only exceptions permitted to GATT rules were those dealing withbalance of paymentsdifficulties, and these exceptions are carefully supervised. GATT provided the framework for most important international tariff negotiations from 1947 until 1994. The eighth, or Uruguay round, of GATT negotiations, which began in 1986 with 15 negotiating groups, was long stalemated by the issue of agricultural subsidies maintained by the European Community. The agreement that resulted (1994) from the Uruguay round led to the creation (1995) of the more powerfulWorld Trade Organization(WTO) as a replacement for GATT. However, the GATT framework remained in place for a 12-month transition period. General Agreement on Tariffs and Trade(GATT),set of multilateral trade agreements aimed at the abolition of quotas and the reduction oftariffduties among the contracting nations. When GATT was concluded by 23 countries atGeneva, in 1947 (to take effect on Jan. 1, 1948), it was considered an interim arrangement pending the formation of a United Nations agency to supersede it. When such an agency failed to emerge, GATT was amplified and further enlarged at several succeeding negotiations. It subsequently proved to be the most effective instrument of world trade liberalization, playing a major role in the massive expansion of world trade in the second half of the 20th century. By the time GATT was replaced by theWorld Trade Organization(WTO) in 1995, 125 nations were signatories to its agreements, which had become a code of conduct governing 90 percent of world trade.GATTs most important principle was that of trade without discrimination, in which each member nation opened its markets equally to every other. As embodied in unconditional most-favoured nation clauses, this meant that once a country and its largest trading partners had agreed to reduce a tariff, that tariff cut was automatically extended to every other GATT member. GATT included a long schedule of specific tariff concessions for each contracting nation, representing tariff rates that each country had agreed to extend to others. Another fundamental principle was that of protection through tariffs rather than through import quotas or other quantitative trade restrictions; GATT systematically sought to eliminate the latter. Other general rules included uniform customs regulations and the obligation of each contracting nation to negotiate for tariff cuts upon the request of another. An escape clause allowed contracting countries to alter agreements if their domestic producers suffered excessive losses as a result of trade concessions.GATTs normal business involved negotiations on specific trade problems affecting particular commodities or trading nations, but major multilateral trade conferences were held periodically to work out tariff reductions and other issues. Seven such rounds were held from 1947 to 1993, starting with those held at Geneva in 1947 (concurrent with the signing of the general agreement); atAnnecy,France, in 1949; at Torquay, Eng., in 1951; and at Geneva in 1956 and again in 196062. The most important rounds were the so-called Kennedy Round (196467), theTokyoRound (197379), and the Uruguay Round (198694), all held at Geneva. These agreements succeeded in reducing average tariffs on the worlds industrial goods from 40 percent of their market value in 1947 to less than 5 percent in 1993.TheUruguay Roundnegotiated the most ambitious set of trade-liberalization agreements in GATTs history. The worldwide trade treaty adopted at the rounds end slashed tariffs on industrial goods by an average of 40 percent, reduced agricultural subsidies, and included groundbreaking new agreements on trade in services. The treaty also created a new and stronger global organization, the WTO, to monitor and regulateinternational trade. GATT went out of existence with the formal conclusion of the Uruguay Round on April 15, 1994. Its principles and the many trade agreements reached under its auspices were adopted by the WTO.

Transformation Of GATT Into The WTOThe main questioning on the reasons that led to the replacement of the GATT to WTO of is considered as one most important questions on this topic? Is the change of the GATT simply a change of names and thus replace the GATT of 1947 with the GATT of 1994? Or Is there any substantial ground for this change relating to the failure of the GATT in achieving its main objectives? And if there are reasons behind this change is faded with the birth of the World Trade Organization ?In fact, the birth of the World Trade Organization by replacing the old organization of the GATT was not merely a new game, but it was a necessity that was required by the stage of the nineties of the last century, especially since the GATT failed to achieve its goals. The weaknesses of the GATT was behind its failure, including the existence of legal problems, particularly in the areas of agriculture and textiles. For example, it can be noted that the United States was not able to convince Japan and China within the framework of the GATT to open its markets to U.S. goods. In addition, the GATT failed to cover trade in services and intellectual property rights, and the absence of an international mechanism to resolve disputes in international trade Notwithstanding the above, the GATT has made over 47 years a great success in promoting and ensuring a large part of the liberalization of world trade, and helped reductions in customs duties and ensured the growth of trade and production, it has made a lot of achievements and contributions in the field of liberation of some sectors of the international trade and growth, but it has suffered limited influence on some key aspects. There are many reasons through which the failure of the GATT agreement can be justified, such as the GATT by itself was only the set of rules and multilateral agreements and has no constituent bases, it was only interested in trade in goods without paying attention to services and intellectual property rights, the role of the commission of disputes of the GATT was slow in resolving disputes and it was being subjected to a degree of disruption. One of the main reasons behind the collapse of the GATT was that the organization was in favor of the industrial countries, and lost confidence among the developing countries.Since the beginning the GATT has suffered from serious problems, for this it has been for many times close to failure, and at the end eventually converted to the WTO. Therefore, it can be said that the organization of trade organization is a new version of the GATT, which has exhausted its purposes and was no longer capable intermediate of consequences on global economic conditions or to achieve the interests of industrial countries. The establishment of the WTO was so important as there was a real necessity for the emergence of a new mechanism to accommodate changes in the international arena, this organization was an old idea that came to light in order to announce the start of a new phase of financial globalization

The WTO came into existence on 1st January 1995. But there is a long history attached to the establishment of this organisation dating back to 1945. The original intention was to create a third institution to handle the trade side of the international economic cooperation, joining the two Bretton woods institutions, the International Monetary Fund and the World Bank. Over 50 countries participated in the negotiations to create an International Trade Organisation (ITO) as a specialised agency of the UN. The aim was to create the ITO at a UN Conference on Trade and Employment in Havana, Cuba in 1947. Meanwhile 15 countries had begun talks in December 1945 to reduce and bind custom tariffs. With the Second World War just recently ended, the main aim was to give a boost to international trade and rectify the harm caused by the protectionist measures. The first round of negotiation was a success and by the time the General Agreement on Trade and Tariff or GATT 1947 came into effect on 30th October 1947 through a protocol of provisional application, the group had expanded to 23(contracting parties). The 23 were also a part of the larger group negotiating the ITO Charter. The Havana conference began on 21 November 1947, less than a month after GATT was signed. The ITO Charter was finally agreed in Havana in March 1948, but it never came into existence as it was never passed by the US Congress even though the US was one of its major driving forces. Not looking into the various political and other reasons behind such a decisi ion of the United States, the conclusion was that GATT was the only international instrument governing international trade until 1995 when WTO was established.The main purpose of GATT 1947 was to reduce tariffs internationally in order to facilitate free trade, the outcome of which is the various tariff concessions schedules created under GATT. GATT evolved as a result of a series of multilateral trade negotiations known as trade rounds. 8 trade rounds took place under GATTs auspices. The earlier trade rounds concentrated on further reducing tariffs. Later on the Kennedy round brought about an agreement on anti-dumping. The Tokyo rounds concentrated on reducing non-tariff trade barriers. This was the first ever attempt made to look into trade barriers other than tariffs. In the Tokyo round various issues were brought to the forefront, some successful, some not so successful. In most cases, a relatively small number of GATT members subscribed to such arrangements. Since they were not accepted by all members, they were informally called codes. These agreements and arrangement were not multilateral, but a good start. Later in the Uruguay round, many of these agreements became multilateral, accepted by all members. Only four remained plurilateral, later in 1997, the number reducing to two which included Government procurements and civil aircrafts. These plurilateral agreements became a part of WTO as we will see when we proceed further on the discussion of coming into force of the agreement that finally established the WTO.The final chapter of the trade negotiations under GATT was the Uruguay round. All was not going well under the GATT and with the world trade becoming more and more complex, GATT was not able to deal with it. For instance, in agriculture, loopholes in the multilateral system were heavily exploited, and efforts at liberalizing agricultural trade met with little success. In the textiles and clothing sector, an exception to GATTs normal disciplines was negotiated in the 1960s and early 1970s, leading to the Multifibre Arrangement. Even GATTs dispute settlement systems were causing concern as will be discussed later. The Uruguay round negotiations lasted for about seven and a half years, twice the time originally planned for. But it was worth the trouble, basically all issues related to trade were discussed in these negotiations, previous GATT articles were reviewed and most importantly the Final Act concluding the Uruguay Round and officially establishing the WTO regime was signed during the April 1994 ministerial meeting at Marrakesh, Morocco, and hence is known as the Marrakesh Agreement.The Marrakesh agreement was the document that gave the legal sanction to the establishment of the World Trade Organisation on January 1, 2005. This agreement consisted of a preamble which laid down the basic objectives of this organisation, 16 articles which basically put forward the structure, functions, decision making process, accession and various other key aspects of the World trade organisation. Now the main function of the WTO as mentioned in Article 3:1 of the agreement is to administer the implementation of the multilateral trade agreements which are a part of the Marrakesh agreement in the form of annexes. Annex 1 consists of agreements on trade in goods, agreements on trade in services and agreements on trade related aspects of intellectual property rights. There are other annexes relating to dispute settlement undertaking, Trade policy review mechanism and plurilateral agreements. Now an important question that arises is what happened to GATT after the establishment of the WTO. Well the answer to that is that GATT 1947 is a part of the Marrakesh agreement as Annex 1A in the form of GATT 1994 which is mainly GATT 1947 plus the various developments decided on during the various trade negotiations. The contracting parties of GATT 1947 automatically became the members of WTO (Article IX: Original membership) and then the agreement was opened to be accession by other countries (Article X: Accession). The WTO framework ensures a single undertaking approach to the results of the Uruguay Round thus, membership in the WTO entails accepting all the results of the Round without exception. The WTO Agreement and the annexed agreements, including GATT 1994, were to come into force on a date determined by the Ministers of the WTO, which was to be as early as possible as and not later than July 1, 1995;Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, para. 3. The date, ultimately, was January 1, 1995. No minimum membership requirements were set, because the WTO Agreement adopted the pre-existing GATT 1947 membership as its own. WTO Agreement, Article XI: 1. Adherence to the WTO Agreement includes adherence to each of the annexed agreements, including GATT 1994, except for the plurilateral agreements in Annex 4 (re: civil aircraft, government procurement, dairy products, and bovine meat), which are optional agreements.The Scope and Function of the GATT: The function of GATT is to constrain member States from imposing measures that restrain international trade, according to the theory that liberalized trade promotes efficient allocation of production and consumption among States. The scope of GATT is quite wide reaching. Not only does it cover tariffs, quotas, custom procedures, and state trading, it also extends to domestic activities, such as internal taxes, subsidies, and domestic regulation which tends to discriminate against imported products. The WTO agreement annexed in itself GATT 1994 which also includes GATT 1947 as well as GATS, intellectual property rights, trade review mechanism and plurilateral trade agreements.Environmental Scope of GATT:does not address environmental issues per se. but it severely limits the ability of members to address environmental problems through trade barriers. In so far as a member State's activities concerning the environment have discriminatory impacts upon international trade, either by favouring domestic products or by favouring products from one nation over those of a GATT member State, GATT disallows them. Exceptions: Art. XX(b) and (g). Only in cases where the State has been or will be damaged within its territory would discriminatory trade action be appropriate under GATT. If enough scientific evidence of domestic damage existed, a member State could invoke the Article XX exceptions to justify trade barriers addressing a global environmental problem, as well. In the Tuna/Dolphin dispute, the GATT panel found the extraterritorial extension of the Article XX justifications wrongful when the United States attempted to justify trade restrictions upon the life and conservation of dolphins in the Pacific Ocean. Unilateral action has been disallowed but multilateral action hasnt been. Eg. CITES, Montreal Protocol. The optional structure of the Annex 4 agreements may provide the flexibility needed for the WTO to be able to support environmental-trade action within the GATT structure.Decision making under WTO:The WTO makes decisions by consensus. But where a decision cannot be reached by consensus, the matter is decided a majority of votes cast, in an election in which each member of the WTO has one vote. WTO Agreement, Article IX: 1. Under the previous GATT consensus system, decisions were made rarely and one country could hold up the entire system. Article IX:2 of the WTO Agreement, the WTO Ministerial Conference and General Council exclusively interpret the WTO Agreement and the GATT 1994. Interpretations are based on the recommendation of the Council overseeing the functioning of the Agreement in question. The decision to adopt an interpretation is subject to a 3/4s vote by the members. Upon request by a member, the WTO's Ministerial Conference has the authority to make decisions on all matters under any of the Multilateral Trade Agreements, including GATT 1994. WTO Agreement, Article IV: 1. Decisions of the WTO are backed by sanctions: if a member does not follow the WTO's recommendation to cease a wrongful trade practice within a reasonable time, compensation and the suspension of concessions or other obligations may be imposed. However, compensation is voluntary. Understanding on Rules and Procedures Governing the Settlement of Disputes.

The Difference Between The GATT And The WTO:The GATT the General Agreement on Tariffs and Trade has been established after the Second World War in 1947 and entered into force in 1948, it has come as a result of the decision of great states to set up the foundations for a new world order. In fact, the idea of new world order required the establishment of two main axes, the first has a political nature known as the united nations and the second has an economic nature that was the GATT.The GATT has held many successful rounds on different areas of economic interests, the Kennedy round, which resulted in an agreement to combat dumping, but failed to agree on agricultural issues at the first attempt to negotiate non-tariff measures. The other agreements of non-tariff also were rejected in the United States, this round also failed to reach an agreement on anti-dumping and estimate Customs, because the 1962 law of Special trade expansion has no provisions as regard to non-tariff measures and the rejection of the U.S. Congress to pass the legislation for the agreements. The Tokyo round has been considered as a serious attempt to expand the system of GATT, it has drafted the first set of non-tariff for the management of support and countervailing duties, government procurement, customs valuation, import licensing and levels of anti-dumping duties, civil aviation and the products of dairy and meat.Finally, the most important round was the Uruguay Round, which led to the establishment of the WTO. This round is considered significant because it has reached a positive outcome on the abolition of quantitative restrictions on imports, not only to regulate trade in goods, but also included trade in services and intellectual property rights, and produced new mechanisms related to settling commercial disputes, and has lasted for more than seven years.

In spite of the successes achieved by the GATT in terms of liberalization of international trade, enhancement of the world productivity and reduce tariffs, it was unable to achieve the interests of developing countries and to cope with international changes. In these circumstances the birth of the World Trade Organization came to complete the process of GATT and perform what the latter failed to achieveKey Difference:The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. It was created in 1948 and lasted until 1993. World Trade Organization (WTO) was formed as a replacement for GATT in 1995 with the purpose of supervising and liberalizing international trade. WTO has a more permanent structure compared to GATT. WTO also monitors trade in services and trade-related aspects of intellectual property rights, in addition to trade in goods. There are various bodies or agreements that have been made around the world in order to maintain peace and justice among the different countries. The main purpose of such bodies is to regulate talks, trade and other rules and regulations among the different countries of the World. The most popular bodies are the United Nations and the World Trade Organization. Though there are a few similarities between the GATT and the WTO, they are distinctly different from each other The General Agreement on Tariffs and Trade (GATT) was a multilateral agreement regulating international trade. It was created in 1948 with a purpose of substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. It was originally placed under the ITO (International Trade Organization), which was supported by the United Nations (UN). When the ITO failed to ratify, GATT evolved into the World Trade Organization (WTO). There a few major flaws in the GATT structure such as not enough enforcing power, which led to many disputes among the members. Also, the rules and regulations that were created under GATT were temporary in nature.

World Trade Organization (WTO) was formed as a replacement for GATT in 1995 with the purpose of supervising and liberalizing international trade. The organization deals with regulation of trade between participating countries, it also provides a framework for negotiations and formalizations of trade agreements. It is also responsible for enforcing trade laws, agreements and resolving disputes. The WTO was created with the purpose of being a stronger and having a more permanent framework compared to the previous GATT. It also monitors trade in services and trade-related aspects of intellectual property rights, in addition to trade in goods. The WTO has a total of 157 member countries.GATTWTO

Full formGeneral Agreement on Tariffs and TradeWorld Trade Organization

Year of creation19481995

PurposeTo strengthen international trade.To govern GATT and international trade practices.

FrameworkNo permanent structure or framework.Has a permanent structure with a permanent framework.

ScopeTrade in goods.Trade in goods; trade in services and trade-related aspects of intellectual property rights.

Dispute resolutionHas a permanent appellate body to review findings and settle disputes.Disputes are resolved faster as settlement system has a select time frame.

The Impact Of WTO On The Global Economy:The establishment of the World Trade Organization has changed the features of the global economy by linking the international and commercial relations and the interests of the countries. With the birth of this organization, it can be said that the set up of the modern global economic system has been completed, which is characterized by the dominance of the principles and mechanisms of the capitalist system.The States belonging to this organization seek to benefit from trade liberalization and the movement of international capital. The birth of this organization has been preceded by difficult negotiations which proved the contradictions that exist among the major industrialized countries, which search for new markets of goods and services, especially those produced by developing countries. The developing countries also seek to protect their economies from the fierce competition and feed its treasury with the proceeds of taxes and customs duties on the imported goods. Such countries considered the organization as a new device to pass the policies of the dominant superpower states.The Organization has devoted an asymmetric relationship between the industrialized North, where the parties of Trinity , which are the pillars of the global economy (North America, Europe, Japan) produce about 87% of global imports and more than 94% of global exports of materials and manufactured goods, while the south, which still most of its countries suffer from chronic problems such as poverty, unemployment, suffocating foreign debt, and political instability. However, the aggravation of the situation is dire, especially after it seemed clear that the growth and stability of developing countries is a prerequisite for the stability of the global economy.The organization aims to strengthen the global economy through liberalization of trade from all restrictions, and raising the level of real national income of the member states, and increasing the demand on the economic resources and its optimal exploitation, expanding and facilitating access to international markets, assistance in resolving disputes between states and automation of trade policies and cooperation with other international institutions to achieve harmony between trade and financial policies and cash. The international community has witnessed a growing interest shifts the main characterized of the global economy, having accelerated the pace in an unprecedented manner during the nineties of the twentieth century. The World Trade Organization is considered as a tool and means which has its importance in organizing and promoting the international trade and thus contributes to the globalization of the economy.Resolution Of Commercial Disputes And Appeals And Implementation:The office of the resolution disputes may adopt the report of the Appellate Body after thirty days of its issuance, and accept the parties to the conflict without condition, with only a consensus against it. The party must show its determination on the implementation of the recommendations reached a settlement of disputes, and it can be given a reasonable period of time determined from a dispute resolution to do so.In case of failure of a member to implement the decision, the plaintiff can be involved with the negotiated solution to compensatory with other party and it can demand to the withdraw the privileges and obligations of the other party, but that was impractical or ineffective, it could revoke the privileges of other sectors. In any event, the dispute settlement system will continue to implement the recommendations and the adopted resolutions, and will remain no outstanding cases on its agenda until the problem is solved. There is no doubt that the mechanisms for dispute resolution have been expanded in comparison with the special mechanisms (GATT 1947).The case of Japan Alcoholic Beverages, (Canada, European Communities v. Japan)United States), in this case, the main issue was that the Japanese liquor tax law imposed taxes at different rates on alcohol products, where this law imposed low taxes for the products of shochu less than other products. In this case, the Appellate Body upheld that the imposition of higher taxes on vodka products compared with the taxes imposed on shochu drinks is considered a violation of article 3 (2) of the GATT.The Evolution Of The World Trade Organization: An Evaluative Prospective:The financial openness associated with the application of policies of the world trade organization helps the developing countries to access international financial markets and it makes it easy for these countries to acquire its demands and funds to fill the gap in local resources. Any failure of savings for financing domestic investment may lead to increase the domestic investment, the rate of economic growth and update banking and financial system always helps in creating an environment conducive to the activity of the private sector, which may lead to reduce the phenomenon of capital transferring abroad. The international investments help for foreign technology transfer, activating the movement of world trade through the exchange commodity and service.The disadvantages of the WTO can be summarized as it exposures the local industries to collapse as a result of the inability to compete, shifting of the underdeveloped and the developing nations to lasting products markets of the advanced countries, losing the quit capacity for future competition, keeping the situation as it is for the level of development and progress in developing countries, weakening the national sovereignty in the area of fiscal policy and economy and entry of dirty money into the country.The share of the third world of the total GDP is declining in a regular basis, this does not contradict with the reality of economic growth experienced by several developing countries (Asian Tigers), which is humble in all other developing countries, it has deepened the gap between North and South. In spite of the role played by the World Trade Organization in the output of the global economy from recession - through the liberalization and increase the volume of foreign trade - it remains for the benefit of the active economic states in the global economy (the United States, Europe and Japan). The continued escalation of the differences between rich and poor is obsessed with putting question marks in front of many: Who benefits from the liberalization of foreign trade? Is a system of partnership and integration between the North and the South justified?The question here Is there a real need for the WTO? Despite the claim that this organization contributes to the flow of foreign investment to the member states of the Organization, as one of the key benefits of economic globalization, these investments come to serve foreign trade and make a profit out of abundant and rapid, it is therefore working to strengthen the international division and not change it for the benefit of developing countries. As the opinion of supporters of the World Trade Organization and other international institutions, say that the trade liberalization and foreign investments contribute effectively to the economic growth of countries, is subjected to reservations, because the only growth and performance of the economy that brings foreign private investment. Since these investments like foreign loans granted by international financial institutions go to the States that have already succeeded in raising the rates of growth than to go to countries that need the money to raise the growth rate, as evidenced by the distribution of this investment between the regions of the world.It can be concluded that addressing the globalization of the economy - after the World Trade Organization - may be possible for the industrialized countries that deal with the global economy from a strong and influential position, but it is difficult for developing countries because of its vulnerability in the global economy and a bug deep in the international economic balancesWhat caused the emergence the WTO?(1) To create binding rules relating to trade - including on employment, commodity agreements, restrictive business practices, international investment and services - which nation states had to follow.

(2) To establish a binding dispute settlement mechanism so that trade disputes could be conclusively resolved.

(3) To include things which traditionally had not been considered in trade discussions - notably intellectual property rights - so that they would be linked with trade.

(4) To progressively reduce tariffs.

(5) To generally promote trade liberalisation around the world.

(6) To rectify some of the the failings of the GATT.

(7) To establish formal institutions (which the GATT did not have) to deal with trade policy.

(8) To establish a system which is less susceptible to blockages - the solution was to automatically implement findings rather than to wait for a consensPurposes Of The World Trade OrganisationOne Of The Main Purposes Of The World Trade Organisation (WTO) Rules Is To Promote Trade Liberalisation, That Is, The Elimination Or Reduction Of Barriers To Trade'. Identify And Critically Analyse The Arguments Relating To Whether Trade Liberalisation Is An Appropriate Policy For Developing CountriesThe world trade organisation is established to promote trade liberalisation, the purpose of this assignment is to evaluate whether this principle is appropriate for developing countries. International organization based in Geneva that supervises world trade. It was created in 1995 to replace the General Agreement on Tariffs and Trade (GATT).Developing country makes up about three quarters of the total WTO partisanship. Together with countries at in attendance in the process of change to market-based economies, they engage in recreation an more and more important position in the WTO. Consequently, much notice is paid to the special needs and problems of developing and transition economies. The WTO Secretariat's tuition and technological collaboration organization organize a figure of programme to give details how the organization mechanism and to help train administration officials and negotiators. Some of the events are in Geneva, others are held in the countries concerned. A number of the programme is prearranged together with other global organization. Some take the form of training course. In other cases individual help might be offered. The subject can be no matter which from help in dealing with discussions to join theWTO and implement WTO commitment to guidance in participate successfully in many-sided negotiations. Just beginning country, particularly the least-developed among them, are helped with trade and tariff data telling to their own sell abroad comfort and to their contribution in WTO bodies.Like its predecessor, it aims to inferior trade barrier and give confidence many-sided trade. It monitors member devotion to GATT agreement and negotiates and implements new agreement. Critics of the WTO, counting many opponent of economic globalization, have charged that it undermines national sovereignty by promote the security of large multinational corporations and that the trade liberalization it encourages leads to ecological damage and deteriorating living standards for low-skilled workers in developing countries. By the early 21st century, the WTO had more than 145 members.Trying to carry order to an incompetent world, the World Trade Organization (WTO) works to make easy worldwide trade. It provides a discussion anywhere its more than 150 member nations discuss sign deal agreements. The WTO administer the agreement, handle trade dispute, monitors national trade policies, provides technical assistance and training for developing countries, and cooperates with other worldwide organization. The association derive most of its functioning income from associate charity. Each member's donation is designed with a method that takes into account that member's share of global trade. The WTO replaced the General Agreement on Tariffs and Trade (GATT) in 1995.The many-sided trade conference beneath the sponsorship of GATT (General Agreement on Tariffs and Trade, based on a 1947 agreement) recognized the World Trade Organization. Upon approval of the round Final Act by member, the WTO replace GATT as the worldwide polygonal trade association, and a sequence of agreement linked with but lawfully different from GATT were also located under the WTO sunshade.The 1947 wide-ranging concord on Tariffs and Trade (GATT) emerge from time of war and post-war discussions to institute a steady, polygonal financial command. The long negotiate procedure (1944-7) reflect the contentious natural world of the political affairs of worldwide operate at domestic and worldwide level of bargain: changing pattern of worldwide trade could have theatrical and fairly instant effects on family service and takings levels within and in the middle of nationwide economies. While it has never proved possible to gain broad agreement on the extent of liberalization in most domains of worldwide trade, it was conventional that the unilateralist and biased practice of the inter-war period had had chiefly unenthusiastic consequences for all worried.GATT itself was a temporary agreement which required to codify the rules of the emerging trade government and to continue with significant reduction in nationwide barrier to trade. The US allocation was strong-minded to press other country to diminish their biased trade practice (particularly the British Imperial Preference') and in swap the United States was enthusiastic to decrease its conventionally high tariff. The USSR and its ally remain exterior GATT, only bearing in mind partisanship at the finish of the Cold War in 1989. Subsequent the name of the Havana Charter in 1948, the GATT was hypothetical to form the rule book' of the newly recognized global Trade association (ITO). The ITO contract agreed a far additional determined polygonal organization than the ultimate WTO, but this is in part its ultimate collapse. When the US unsuccessful to approve the ITO charter, the establishment was departed and only the interim' GATT survive.The GATT conformity enunciates the main beliefs of reciprocity and non-discrimination, encapsulate in the Most Favoured Nation (MFN) and nationwide action concept. Nationwide conducts imply so as to government cannot extravagance overseas export firm any less constructively than conjugal producer. Reciprocity intended that any discussions in the middle of trade partner be to yield more or less give-and-take concession and/or reimbursement in the eyes of the party. Non-discrimination supposed that any operate compromise sophisticated by a country to one GATT trading partner had to be extensive to all others at the same time. In this way, two-pronged consultation surrounded by trading parties would be multilateral zed', leading to the organization of a moderate trading order.GATT negotiate Rounds' be tricky due to the feeble condition of most post-war economy, and the strange spirited border of American manufacturing at the occasion. Most economy would contain knowledgeable rigorous balance-of-payments problems had they separate barrier to import, and domestic service would have be unfavourably pretentious as well. As post-war revival rendered more open-minded trade policy satisfactory, the American administration required to put back the gradually move towards with mutual comprehensive tax cut by all participate party on a broad range of traded merchandise. This suggestion urbanized into the Kennedy Round' agreement of June 1967 which stands as a watershed in post-war trade liberalization. Tariffs on artificial goods were abridged by 36 per cent on average, and this development was sustained in the later Tokyo Round (1974-9). The amalgamated States had at first taken one-sided method to keep undeveloped trade out of the GATT process in 1955, but had upturned this location in the Kennedy Round. This led to a long-running conflict with the EU (with its ordinary Agricultural Policy, which represents a delicate internal compromise difficult to disturb) and Japan, both with protected agricultural markets. Agriculture is still central to conflict over the trade regime, and held up the Uruguay Round of negotiations (completed in December 1993).As tariff were lower, so-called non-tariff barrier (NTBs) become the residual instrument of trade policy. Examples were voluntary export restraint agreement and arranged advertising actions, organization next to the strength of GATT non-discrimination. As these were voluntary', GATT rules hypothetically did not apply. In addition, the main beliefs of liberalization call into enquiry many financial policy methods connected with winning national financial expansion strategy in the post-war period, mainly in Japan, Europe, and the just beginning world. Finally, the Less Developed country required exception from a lot of of GATT's policy, pointing out that their weak economy benefit little from free buy and sell arrangements. All government ill-treated the flee clause in GATT (e.g. from side to side anti-dumping method) and attempt have been made to make tighter up the rules in excess of time. None of this dispute is probable to be determined in any enduring style; it is the nature of the eventual cooperation which will be critical to the sustained success of the WTO as GATT's successor. There nothing the fewer leftovers broad accord on the need to continue the impetus of the liberalization procedure through further rounds of WTO discussions.The Uruguay about discussions productively long-drawn-out the scope of GATT. It now includes polygonal system practical to the military sector (see GATS), intellectual property, investment method, and a quantity of aspect of undeveloped trade. The Round also broken the temporary status of GATT by establish the World Trade Organization with an improved institutional scaffold and argument resolution modus operandi. The WTO's judgements on trade dispute now attach member countries to modify their trade practice, though the US Congress formally refuses this implication and asserts the superiority of US laws.The innovative WTO is not devoid of tension in the middle of its member and their society, as its history would suggest is likely to be the case. Just beginning country argue powerfully that the WTO as constituted does not adequately take into account the difficulties and asymmetries of economic growth under circumstances of liberalization. Urbanized countries and the international organizations they control such as the IMF have put strong pressure on developing countries to liberalize their trade laws despite uncertain penalty for long-run development prospects. Developed countries are often less than liberal in opening their market to just beginning country exports, in particular in the domain of farming and item of clothing manufacture.Possibly the leading face up to the WTO comes not from component state but from civil society group such as non-governmental organizations. Many social activist in the anti-globalization movement draw attention to the difficulties of liberalization in both urbanized and developing country, particularly for the weaker member of society and less market-competitive forms of economic organization which may none the less be crucial to local identity and cultures. Organized labour maintains an uneasy relationship with the liberalization process, for fear of job losses. Finally, the appearance of the European Union (EU), the NAFTA, and other emerging local activities such as MERCOSUR or the Asia Pacific Economic Co-operation Forum (APEC), are also possible challenge to young WTO. So far these regional arrangements have not emerged as discriminatory trading blocs, and the WTO specifically permit local economic addition if well-matched with its rules. Despite the final achievement of the long Uruguay Round, regional actions and certainly bilateral/unilateral solutions (especially on the part of the United States) may turn out to be the command of the day if incomplete concord cannot be reach on outstanding issues. However, global companies would be likely to put up stiff resistance to any effort to considerably confine the open-minded or global natural history of the trade government. In small, divergence in the WTO continues to reflect socio-political tension across its associate economy and is closely connected to the tensions of global monetary addition largely determined by liberalization policies. Developing countries countenance a numeral number of risks linked with trade. Possibly the most excellent known is deteriorating conditions of trade, as the globe prices of the main goods they export be inclined to fall in excess of occasion family member to the value of the manufacture they bring in. A connected difficulty is the instability of globe prices for the primary (especially agricultural) merchandise they sell abroad. Besides, these prices are strong-minded in market beyond the influence of individual poor countries and typically affected by factor beyond their control. Related to this are deliver side risks, especially the understanding of output to climatic unpredictability. Droughts and excess rain create flooding can source serious spoil to undeveloped output.An example is the refuse in the worth of SSA exports: Of 47 African countries, 39 are dependent on a mere two primary commodities for over 50 percent of export earnings and the substantial drop in commodity prices in 1998 encompassed the entire range of African exports. Food and tropical beverage prices fell by 13.6 percent and prices of agricultural raw material by 10.8 percent in 1998.The terms of buy and sell faced by SSA country deteriorate by 9 percent, a loss of real income corresponding to 2.6 percent of GDP, between 1997 and 1998. The trend is progressing: coffee prices in 2002 fell to fewer than a third of their 1997 level. This is perhaps the most extreme example of a general trend, but highlights how harsh the danger is. Uganda is an opposite instance of a state that implemented the trade and economic reforms requested of it in the 1990s, reaping the benefits of economic augmentation, amplified coffee manufacture and income, and condensed poverty. The country could soon see many of the gains undermined, if not wiped about, by a decline of world price that is clear of it's manage. On a positive note, if this is connected with an amplify in the comparative return to foodstuff crops, farmers will alternative.A novel type of danger is up-and-coming in the countenance of more and more included global markets (one facet of globalization). This can be represent by unique qualified from aggressive advantage. Relative benefit capture the possible provide by a county's resource endowment to derive gains from trade. Competitive advantage considers why certain producer, in meticulous multinational firms, is able to exploit the rent from comparative benefit. Trade in undeveloped commodities is dominated by large, typically multinational, companies that are present in all or critical stages of the product chain. At one extreme is convention farming where corporation control manufacture, at the other is supermarket that manage purchase, and often multinational organize the sharing chain between production and final sale. The risk arises because small producers, and even some large producers in small countries, are the weakest link in the chain.In adding together, most just beginning country are price-takers in the mainstream of international market in which their national trade, but their performance are concerted in a small number of markets. They cannot influence world market prices (mainly because of the small relative size of their market contribution), but at the similar time are severely affected by changes in world market prices, especially when these changes are dramatic or unforeseen. A connected subject here is the increasing tendency for great multi-national companies to capture the benefits of comparative advantage by virtue of their monophony location.While change to worldwide trade rule will have a result on food safety both in a straight line and indirectly, the definite impact on persons will be a great deal influenced by domestic mediation. This is provided by the institutions and structure that stand, metaphorically, flanked by the individual and the outside marketplace and translate edge prices into sell prices, which pressure wages and endowments facing the household, and also decide the individual's relationship to the household.The collision of liberalize a country's global trade policy on foodstuff safety is probable to be dissimilar from (and probably smaller than) that of liberalizing its domestic trade policy. However, the belongings of the previous are hard to unravel from those of the latter. Liberalization usually occurs at the identical time as other changes, which may push in the same or a different direction (for case in point, in the case of Zambia, the collapse of the copper industry which had funded a substantial subsidization of agriculture). The usual results from an international trade policy change may not occur if there are either institutional or physical factors that influence domestic trade. Domestic monopoly or oligopolies (whether or not they are state-owned or private) will mute the transmission of any price signals. If rural infrastructure is degraded the transactions costs of domestic trade may exceed the price.

CONCLUSIONThis report has addressed the emergence of WTO . we have examined how far the absence of trade barriers provides an efficient mechanism for ensuring access to natural resources and their long-run sustainability. Finally, the report has considered how international cooperation affects the management of trade in natural resources, with particular emphasis on the role of the WTO. We got to know how GATT transformed to WTO.

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