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Agenda

Origin of GATT ( Before 1947)

Origin of GATT ( Before 1947)

Objectives of WTO

Objectives of WTO

Principles of WTO

Principles of WTO

Functions of WTO

Functions of WTO

History of WTO ( After GATT till 1995)

History of WTO ( After GATT till 1995)

Structure of WTO

Structure of WTO

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Origin of GATT ( 1947)

Before World WarBefore World War--I, European Danube Commission (1857)I, European Danube Commission (1857)

Before World WarBefore World War--I, European Danube Commission (1857)I, European Danube Commission (1857)

Economic Committee of League (1920)Economic Committee of League (1920)

Economic Committee of League (1920)Economic Committee of League (1920)

League of Nations (1920League of Nations (1920--1930)1930)

League of Nations (1920League of Nations (1920--1930)1930)

Emergency tariff Act and FordneyEmergency tariff Act and Fordney--Mc Umber Act (1921Mc Umber Act (1921--1922)1922)

Emergency tariff Act and FordneyEmergency tariff Act and Fordney--Mc Umber Act (1921Mc Umber Act (1921--1922)1922)

Wheat Executive and AMTC (1916Wheat Executive and AMTC (1916--1917)1917)

Wheat Executive and AMTC (1916Wheat Executive and AMTC (1916--1917)1917)

Allied Economic Conference (1916)Allied Economic Conference (1916)

Allied Economic Conference (1916)Allied Economic Conference (1916)

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Contd..

Keynes and Whites Plans (1944)Keynes and Whites Plans (1944)

Keynes and Whites Plans (1944)Keynes and Whites Plans (1944)

Establishment of United Nations Economic and SocialEstablishment of United Nations Economic and Social

Council (1946)Council (1946)

Establishment of United Nations Economic and SocialEstablishment of United Nations Economic and Social

Council (1946)Council (1946)

CordelCordel Hulls Imagination (1934)Hulls Imagination (1934)

CordelCordel Hulls Imagination (1934)Hulls Imagination (1934)

HawlyHawly Smoot Tariff Act (1930)Smoot Tariff Act (1930)

HawlyHawly Smoot Tariff Act (1930)Smoot Tariff Act (1930)

GATT (1947)GATT (1947)

GATT (1947)GATT (1947)

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History of WTO:-

Period Major Events

1947 GATT is drawn up to record the results of tariff

negotiations among 23 countries.

1948 GATT provisionally enters into force. Delegations from

56 countries meet in Havana, Cuba to consider final draft

of International Trade Organization (ITO).

1950 China withdraws from GATT. The U.S administration

abandons efforts to seek ratification of the ITO.

1955 The U.S is granted a waiver from GATT disciplines for

certain agriculture policies.

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Contd..

1965 Trade and Development was added to the GATT,establishing new guidelines for trade policies towards

developing countries.

1974 Multifibre Agreement(Agreement Regarding International Trade in

Textiles) enters into force.

1986 The Uruguay Round was launched in Punta del Este,

Uruguay.

1994 Final act establishing WTO was signed by the ministersin Marrakech embodying the results of the Uruguay

round.

1995 The WTO enters into force on January 1.

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GATT v/s. WTO

GATT

GATT WTOWTO

GATT was a set of rules with

no institutional foundation.

WTO is a permanent

institution with its own

secretariat.

GATT rules applied on

provisional basis.

The WTO commitments are

full and permanent.

GATT applied to trade in

goods.

WTO also considers services

and intellectual property

rights.

GATT is not at all engaged

into dispute settlements.

While WTO dispute settlement

system is faster, automatic and

less likely to blockages.

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Objectives of WTO

To enhance to preserve the environment.To enhance to preserve the environment.

Expand Production of Goods and Trade.Expand Production of Goods and Trade.

Raising standard of living and income.Raising standard of living and income.

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Four basic Principles of WTO

Laws & Regulations must be Trasparent.

Non-Discrimination.

- MFN(most favored nation) treatment- National treatment

Progressive trade liberalization.

Special & Differential treatment.

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Functions of WTO

Acting as a forum for multilateral trade negotiations .Acting as a forum for multilateral trade negotiations .

Seeking to resolve trade disputes.Seeking to resolve trade disputes.

Overseeing national trade policies.Overseeing national trade policies.

Cooperating with other international institutions.Cooperating with other international institutions.

Maintaining trade related database.Maintaining trade related database.

Acting as a watchdog of international trade .Acting as a watchdog of international trade .

Technical assistance and training for developing countries.Technical assistance and training for developing countries.

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WTO STRUCTURE

MINISTERIAL CONFERENCE

General council for

Dispute Settlement

Understanding`

General council for

Trade Policy Review

Body

General Council to

carry out certain

functions

Council for Trade in

Goods

Council for Trade-Related

Aspects of Intellectual Property

RightsCouncil for Trade in

Services

Committee Committee

Working Parties

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GATT Rounds

Periodic multinational negotiations

A package approach to negotiations*

Agreements are multilateral-- rather than

bilateral

12

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13

The GATT/WTO Rounds

Geneva 1947

Annecy 1949

Torquay 1950 Geneva 1956

Dillon Round 1960-61

Kennedy Round 1964-67

Tokyo Round 1973-79

Uruguay Round 1986-93

Doha Round 2001

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14

Name and Date Participants Focus Area Accomplishments

Geneva 1947 23 Tariffs Signing ofGATT, 45,000tariff concessions

affecting $10 billion of

trade

Annecy 1949 33 Tariffs Countries exchangedsome 13,000 tariff

concession

Torquay1950-51

38 Tariffs Countries exchangedsome 8,700 tariff

concessions, cutting the

1948 tariff levels by

25%

The GATT/WTO Rounds

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15

Name and Date Participants Focus Area Accomplishments

Geneva II

1955-56

26 Tariffs,

admission ofJapan

Bilateral negotiations

based on request and offerLists. $2.5 billion worth of

tariff reductions

Dillon Round

1960-62

26 Tariffs Request & offer lists. 4,400

tariff concessions covering

$4.9 billion of trade.Tariffs

on manufactured

items reduced 8-10%

Kennedy Round

1964-67

62 Tariffs, Anti-

dumping

First across the board tariff

reductions. Industrialcountries reduced

manufactured item tariffs

35%

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16

Rounds Participants FocusArea Accomplishments

Tokyo Round 1973-

79

102 Tariffs, non-tariff

measures,

"framework"

agreements

Cut industrial global

tariffs

30-35%

Uruguay

1986-94

123 Tariffs, non-tariff

measures, rules,

services, intellectualproperty, dispute

settlement, textiles,

agriculture, creation

of WTO, etc

Creation of WTO, &

extended the range of

trade negotiations,leading to major

reductions in tariffs

(about 40%) and

agricultural subsidies,

and an extension of

intellectual property

rights.

Doha 2001 141 *Labor standards,environment,

competition,

investment,

transparency, patentsetc

Yet to conclude

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Doha round

Number of meetings:

Began with ministerial-level meeting in Doha, Qatar in

2001.

Subsequent meetings in Cancn, Mexico (2003).

Hong Kong (2005)

Related negotiations in Geneva, Switzerland, Paris &France (2004, 2006, 2008)

17

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Doha round (Contd)

What if Doha round fails in future?

Immediate consequence on International

trade*.

Less exports.

Other International negotiations will be

affected.

*18

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19

Agricultural effects of the rounds

Rounds Agricultural Effects

Geneva (1955-56) Allowed export subsidies

Dillon Round (1960-62) EC agreed to duty free

imports on soybeans & cotton.

Kennedy Round (1963-67) Centered on EC policy- No agreements

Tokyo Round (1973-79) Small tariff & quota

reductions- Agriculture

identified as separate

Agenda

19

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ISSUES & DISPUTES

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Issues path

Regional trading agreements The environment: A specific concern Investment, competition, procurement & simpler

procedures Electronic commerce Labour standards: consensus, coherence &

controversy Financing issues

Issues concerning India Dispute settlement

21

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Regional trading arrangements

They seem to be contradictory, but often regionaltrade agreements can actually support the WTOsmultilateral trading system.

The groupings that are important for the WTO arethose that abolish or reduce barriers on tradewithin the group.

22

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The Environment: A specificconcern

The WTO has no specific agreement dealing withthe environment.

Trade and Environment Committee

The shrimp-turtle case

23

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Investment, competition,procurement, simpler procedures

Ministers from WTO member-countries decided at the1996 Singapore Ministerial Conference to set up three

new working groups

They also instructed the WTO Goods Council to look atpossible ways of simplifying trade procedures, an issue

sometimes known as trade facilitation

1 August 2004 to proceed with negotiations in only onesubject, trade facilitation. The other three were dropped

from the Doha agenda. 24

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Electronic commerce

A new area of trade involves goods crossing borders

electronically.

WTO General Council to establish a comprehensivework programme.

WTO members also agreed to continue their currentpractice of not imposing customs duties on electronictransmissions.

25

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Labour standards: consensus,coherence and controversy

There is a clear consensus: All WTO member

governments are committed to a narrower set ofinternationally recognized core standards

On the other hand, many developing countries

believe the issue has no place in the WTOframework

This issue was also indirectly mentioned inthe Appellate Body Report

26

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Financing issues

Relationship banking or branch banking versus acentralized portfolio approach.

Risk analysis

Credit scoring or rating

Ability of SMEs to bare the risk

27

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Issues Concerning India

In spite of special provisions for developing countries, certainimbalances & inequities experienced.

A number of DCs not fulfilled some obligations for tradeliberalization while developing countries asked to reduceimport duties & provide greater market access.

The industrial sector faces several constraints- some

protection warranted for specific industries.

Non-agricultural tariffs gradually reduced but agriculturaltariffs require greater caution.

28

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Dispute Settlement

Dispute settlement is the central pillar of themultilateral trading system, and the WTOs unique

contribution to the stability of the global economy

The WTOs procedure underscores the rule of law,and it makes the trading system more secure &

predictable.

By July 2005, only about 130 of the nearly 332 caseshad reached the full panel process.

29

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Principles: equitable, fast,effective, mutually acceptable

A dispute arises when one country adopts a trade policy measureor takes some action that one or more fellow-WTO membersconsiders to be breaking the WTO agreements.

The Uruguay Round agreement introduced a more structuredprocess with more clearly defined stages in the procedure.

The round also made it impossible for the country losing a case toblock the adoption of the ruling.

The preferred solution is for the countries concerned to discusstheir problems and settle the dispute by themselves.

30

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60 days Consultations, mediation, etc

45 days Panel set up and panellists appointed

6 months Final panel report to parties

3 weeks Final panel report to WTO members

60 daysDispute Settlement Body adopts report

(if no appeal)

Total = 1 year (without appeal)

60-90 days Appeals report

30 daysDispute Settlement Body adopts

appeals report

Total = 1y 3m (with appeal)

How long to settle a dispute?

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How are disputes settled?

First stage: Consultation (up to 60 days)

Second stage: The panel (up to 45 days for a panel tobe appointed, plus 6 months for the panel toconclude)

Before the first hearing

First hearing: the case for the complaining country &defense.

32

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Contd..

Rebuttals

Experts First draft

Interim report

Review Final report

The report becomes a ruling

33

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The case has been decided: What next?

If a country has done something wrong, it should swiftly

correct its fault

Even once the case has been decided, there is more to dobefore trade sanctions are imposed

If after 20 days, no satisfactory compensation is agreed, thecomplaining side may ask the Dispute Settlement Body forpermission to impose limited trade sanctions

34

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India Certain Taxes and Other Measureson Imported Wines & Spirits

22 September 2008

Complaint by the European Communities.

35

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Argentina Measures Affecting the Importof Pharmaceutical Products

25 May 2001

Consultations requested No panelestablished nor settlement notified

36

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INTRODUCTIONINTRODUCTION

India is a key part of the talks in every meeting of

WTO rounds.

At Doha, the then Indian Commerce Minister put up a

strong fight and succeeded in extracting better returnsin comparison to the Uruguay Round and previous

Ministerial conferences, held since the inception of the

WTO in 1995.

India is a member of two developing country

coalitions, the G-20 and the G-33.

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Problems Faced by INDIA in WTO

Predominance of developed nations in negotiations .

Resource & Skill limitations of smaller countries to

understand and negotiate. Non-tariff barriers being created by developed

nations.

Poor implementation of Doha Development Agenda.

Dismantling of MFA and its likely impact oncountries like India.

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AGRICULTUREAGRICULTURE

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WTO & INDIAN AGRICULTURE

The WTO Agreement on Agriculture was one of themain agreements which were negotiated during the

Uruguay round.

After seven years of negotiations the Uruguay round

multilateral trade negotiations were conclude on

December 1993 and were formally ratified in April

1994 at Marrakesh, Morocco.

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The WTO Agreement on Agriculture contains

provisions in 3 broad areas of agriculture.

1. Market Access

2. Domestic Support

3.Export Subsidies

WTO & INDIAN AGRICULTURE

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MARKET ACCESS

This includes tariffication, tariff reduction and access

opportunities.

Tariffication means that all non-tariff barriers such

as1. Quotas

2. Min. Import. Prices

3. Discretionary licensing

4. State trading measures.

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DOMESTIC SUPPORT

For domestic support policies, subject to reductioncommitments, the total support given in 1986-88,

measured by the Total Aggregate Measure of Support.

AMS to Indian Agri is still below 10% in terms of

WTO stipulations.

It is the annual level of support in monetary terms

extended to agriculture sector.

Green Box Support Blue Box Support

Special and Differential Treatment Box Support.

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EXPORT COMPETITION

The Agreement contains provisions regardingmembers commitment to reduce Export Subsidies.

Developed countries are required to reduce theirexport subsidy expenditure by 36%.

For developing countries the percentage cuts are

24%.

Developed countries has to reduce the export subsidyin 6 yrs and Developing countries in 10 yrs.

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INDIAN AGRICULTURE & AoA

Negotiated

Reduction

Developed

Countries (1995-

2000)in percent

Developing

countries (1995-

2004) in percent

Avg. Tariff cut for all

agri products

-36 -24

Min. Tariff

cut/product

-15 -10

Total cut in AMS -20 -13

Value cut -36 -24

Volume cut -21 -14

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EXPORT COMPETITION

No Rolling Over of unused export subsidies should

be allowed.

India is making use of these subsidies in certainschemes of Agricultural Processed Food Products

Export Development Authority (APEDA), especially

for facilitating export of horticulture products.

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INDIAs COMMITMENT

As India was maintaining QR (QuantitativeRestrictions) due to BOP reasons, it did not have toundertake any commitments in regard to marketaccess.

India does not provide any product specific supportother than market price support.

In India, exporters of Agri commodities do not getany direct subsidy.

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WTO BOUND RATES

Commodities WTO bound rate,Jan 2001

Actual Rate,2001-02

WHEAT 80-100 50

PULSES 100 5

COFFEE 150 70

TEA 100 70

CRUDE/PALMOIL

300 75

SUGAR 150 60

RAW COTTON 100 10

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SPECIAL & DIFFERENTIAL TREATMENT

These include purchases for and sales from food

security stocks at administered prices provided that

the subsidy to producers is included in calculation of

AMS.

Developing countries are permitted untargeted

subsidised food distribution to meet requirements of

the urban and rural poor.

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INDIAs BASIC OBJECTIVE

a. To protect its food and livelihood security concerns

and to protect all domestic policy measures taken for

poverty alleviation, rural development and ruralemployment.

b. To create opportunities for expansion of agri exports

by securing meaningful market access in developed

countries.

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TEXTILE , SERVICETEXTILE , SERVICE

&&TRIPSTRIPS

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TEXTILE INDUSTRY & WTO

Hardest fought issues in the W.T.O.

From 1974 until the end of uruguay round, the trade

was governed by the multi fiber agreement.

But however at the GATT 1994, it was decided to

bring the textile trade under the jurisdiction of theWorld Trade Organization (WTO)

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IMPACT OF TERMINATION OF ATC The Agreement on Textiles and clothing was

terminated (Dec2004).

Quantitative restriction comes to an end .

Changes to existing WTO rules or new WTOdisciplines which might be agreed may also have animpact on international trade in this sector.

WTO rules on anti-dumping and security have thefollowing impact:

- prevent unfair trading practices

- prevent injurious trade flows

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TEXTILE INDUSTRY IN INDIA

India becoming a textile exports hub.

Textile Exports from India are to set to double from

$12.5bn currently to $25bn by 2010.

Indian exporter in this sector have also been facing

stiff competition .

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SERVICE SECTOR & WTO

India share in service in WTO is higher than its sharein WTO in goods.

From US $6.8 billion exports in1995, Indias serviceexports have increased to US $30 billion in 2008 afterthe conclusion of uruguay round.

India has submitted requests in a number of servicessectors to a large number of member countries.

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MarketAccess National Treatment

Sector

No of

countries

Cross Border Supply

(%)

Cross Border Supply

(%)

Full Part No Full Part No

Professional Services 74 19 17 64 14 10 76

Consultancy(Installation of

hardware) 51 57 20 24 51 22 27

Software Implementation 56 54 27 20 48 29 23

Data Processing 54 54 26 20 46 31 22

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SMALL ENTERPRISE & WTO

SME will have to face tougher competition in

domestic and foreign market, due to following

reasons.

lowering of tariffs

removal of quantitative restrictions

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Continue

Small enterprises sector should not view WTO as

challenge but an opportunity in following ways.

Lower overhead and higher flexibilities in SMEs

Increasing use of outsourcing, job work, ancillary

development by large industries.

Diversification of SSI export items

Preparing inventory of technical standards.

to use more information technology.

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TRIPs( Trade Related Intellectual Property

Rights)

It is essential that fruit of R&D are adequately

protected through out the world under harmonised

protection system.

GATS was the starting point of the intellectual

property agreement, and its basic principal is

National treatment

Most Favoured nation treatment

Intellectual Property Protection

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How to protect intellectual property?

Copyrights under TRIPS

Trademarks under TRIPS

Geographical indications under TRIPS

Patents under TRIPS

Industrial Design under TRIPS

Curbing Anti-competitive licensing contracts

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FOREIGN TRADEFOREIGN TRADE

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WTOs TREATMENT TO DEVELOPING

COUNTRIES

WTO deals with the needs of developing countries

in 3 ways.

1. WTO Agreement contains special provisions on

developing countries.2. Committee on Trade & Development is the main

body focusing on work in this are in WTO on topics

such as Debt, Tech transfer etc.

3. WTO secretariat provides tech. assistance for

developing countries (mainly training of various

kinds).

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WTOs TREATMENT TO LEAST

DEVELOPED COUNTRIES

In 2002, WTO adopted a work programme for

LDC, containing

1. Improve Market Access

2. More technical assistance

3. Support for agencies working on the diversification

of LDCs economies.

4. Help in following the work of the WTO5. A speedier membership process for least-developed

countries negotiating to join the WTO.

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Average Unweighted Tariff (%)

Bound Rate of

Tariff Duty,

2005

Applied

Rate of duty,

1997/98

SECTORS

Agriculture 94 26

Mining 36 25

Manufacturing 52 36

Whole Economy 54 35

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Year Exports (mill $) Imports (mill $)

1987-88 2696 144

1988-89 2689 186

1989-90 3373 203

1990-91 3969 247

1991-92 4192 137

1992-93 4448 149

1993-94 4891 229

1994-95 6533 330

1995-96 7448 359

1996-97 8026 359

1997-98 8487 409

1998-99 8303 457

1999-00 9126 538

2000-01 10657 597

2001-02 9665 748

2002-03 11036 970

2003-04 11909 1250

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TRADE &TRADE &ENVIRONMENTALENVIRONMENTAL

CONCERNSCONCERNS

UNDER WTOUNDER WTO

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TRADE & ENVIRONMENT CONCERNS

Sustainable Development.

The Doha mandate placed trade & environment

work at the WTO on two tracks:

1. The CTE (Committee for Trade & Environment)special session has been established to deal with

negotiations.

2. The CTE regular deals with non-negotiating issues

of the Doha ministerial Declaration together with

original agenda contained in 1994 Marakkesh

Decision on Trade and Environment.

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TRADE & ENVIRONMENT CONCERNS

Contd

The Doha Ministerial Declaration provided the CTE

with a special mandate to give attention to three

items.

1. The effect of environmental measures on marketaccess and the win-win situation.

2. The relevant provisions of the TRIPS agreement.

3. Labelling requirements for environmental purposes.

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INDIAs STAND AT VARIOUS MEETINGS

June 2007, Standoff between INDIA, BRAZIL, US &

EU on disagreement of opening up of the agriculture

and industrial markets in various countries.

Geneva 2008, Disagreement over issues of protectionof Indian farmers and African banana imports to the

EU.

India had a hard stand against tariffs and subsidies,

critisized by US. Commerce Minister Kamal Nathsaid Im not risking the livelihood of millions of

farmers

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INDIAs STAND AT VARIOUS MEETINGS

India's Commerce Minister, Kamal Nath, said "I

would only urge the director-general to treat this

[failure of talks] as a pause, not a breakdown, to keep

on the table what is there.

The declaration at the end of the G20 summit of

world leaders in London in 2009 included a pledge to

complete the Doha round

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CONCLUSION

Trade accustomed to both in the international and

domestic market is going to reflect different hues and

shades for India.

As a member of WTO, India has bound about 67% ofits tariff line whereas before Uruguay, it was only 6%.

Indias engagement in the Doha Development Agenda

negotiations and the associated changes in domestic

and external policies needed to achieve itsobjectives,require strong & consistent backing of

government.

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REFERENCEs

WTO & INDIA Vibha Mathur

INDIA & WTO Aaditya Mattoo & Robert Stern

India in the Doha Round T. N. Srinivasan

Doha Round of Trade Negotiations- Draft NAAS policy paper 38

www.wikipedia.com

www.wto.org

Working paper by Rajesh Chadha, Drusilla K. Brown,Alan V. Deardorff and Robert M. Stern