GATT & WTO

Presented by-

Suditi BhagatArpit MittalNaman Jain

GATT

Set of multilateral trade agreements

To provide an international forum - expansion of world trade

That encouraged free trade between member states

By regulating and reducing tariffs on traded goods

Providing a common mechanism for resolving trade disputes eliminating discrimination

Introduction Of GATT(1948 - 1994)

1930 Depression in international trade. Restrictions- safe guard their interest Oct 30 1947,23 countries at Geneva signed an

agreement-GATT Post World War II, the victory nations sought to

create institutions - eliminate the causes of war.

To resolve/prevent war through the United Nations

To eliminate the economic causes of war by establishing three international economic

institutions.

Back ground

To provide equal opportunities to all countries

in terms of trade in international market Increase effective demand for real income

growth goods Minimize tariffs and other restrictions on trade Provide amicable solutions to dispute related to

international trade Ensure better living standard To strengthen and clarify rules for agricultural

trade

Objectives of GATT

Non Discrimination

Prohibition of Quantitative Restrictions

Concept of consultation aims to avoid damage to trading interests of contracting parties.

GATT provides frame work within which the negotiations can be held for reduction of tariff another barrier to trade and structure for embodying results of such negotiations.

Fundamental Principles of GATT

Matters related to the tariff and related matters granted to any of

the trading partner. Ensures that any tariff reduction or any other trade concession is

extended to all GATT parties. National treatment: GATT members must give imported goods treatment equal to that

of domestic goods. No restrictions on charges like rates may be applied to imported

goods unless equally treated. Protection through tariff: Prohibits quantitative restrictions / Quotas. Contracting parties are expected to provide protection by means of

tariffs which are transparent and subject to negotiations in the GATT.

Dispute Settlement: Procedures from Uruguay round negotiations provides more

automatic and effective resolution of disputes between member nations.

FUNCTIONS OF GATT  

Established: 1st January 1995 with its origin in Bretton Woods Conference post World War II .

Motive:- Formed for economic stability, peace and for reconstruction

Created By: Uruguay Round negotiations (1986-1994)

Headquarter: Geneva, Switzerland

Membership: 160 member states (26th June 2014)

Secretariat Staff: 640

INTRODUCTION OF WTO

Organization that intends to supervise and liberalize international trade

Only global international organization dealing with the rules of trade between nations

WTO deals with agreements, negotiated and signed by the bulk of world’s trading nations and ratified in their parliaments.

The goal is to help producers of goods and services, exporters and importers conduct their business.

WORLD TRADE ORGANIZATION

The WTO is composed of 160 countries which represents

95% of world trade. Of these, 123 were signed during the Uruguay round WTO members do not have to be full-sovereign nation

members. Instead, they must be a custom territory with full autonomy in their external relations.

Over 3/4th of WTO members are developing or least developed countries.

There are 24 countries that are not members known as Observers. These countries are currently negotiating membership.

The biggest of these non-members is Russia, however they are in the process of accession.

YEMEN became the newest member on 26 June, 2014

WTO MEMBERS

The GATT (1948) multilateral instrument governing international trade managed to operate for almost half a century as a semi institutionalized multilateral treaty regime on a provisional basis.

Seven rounds of negotiations occurred under the GATT The Tokyo round during the 70’s - tackle trade barriers

that do not take the form of tariffs and to improve the system but the agreements were not accepted by all the member nations of GATT.

These agreements and policies were amended in URUGUAY ROUND leading to acceptance by the member nations and formation of WTO.

This final act concluding the Uruguay round and officially establishing the WTO regime was signed in 1994 at Marrakesh, Morroco and hence known as Marrakesh Agreement.

FORMATION OF WTO

Tariffs and Non-tariff measures Tropical product Textile product National resource based products Textile & clothing Agriculture GATT –articles Safeguards Multilateral trade agreements & arrangement Subsidies Dispute settlement Trade related aspects of intellectual property rights

(TRIPs)

Areas of Uruguay Round

Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring National Trade policies Technical assistance and training for developing

countries Cooperation with other international

organizations.

 Functions of WTO

1. Non-Discrimination. 2. Reciprocity.3. Binding and enforceable commitments. The tariff commitments 4. Transparency. 5. Safety valves.

Principles of WTO

WTO has 160 members, around 24 other countries are negotiating members.

WTO’S top level decision making body is the “Ministerial Conference”.

The second level is the “General Council’( normally head by the ambassadors & delegations ).

The General Council also meets the Trade policy Review Body and the ‘Dispute settlement body’

The third level is “The goods council”, “Services Council” & “Intellectual Property Council” , which reports to the General Council.

STRUCTURE OF WTO

http://en.wikipedia.org/wiki/File:Wto_logo.png

The agreements are the outcome of negotiations between the members.

The current set of agreements are the result of 1986-1994 Uruguay round of negotiations, which is a revision of GATT.

A non-discriminatory trading system is operated through these agreements, which enlist the rights & obligations of the members.

The various WTO agreements in different sectors are:a. In case of Goodsb. In case of Servicesc. In case of Intellectual property

WTO AGREEMENTS

After Marrakesh Agreement, India joined WTO since inception in 1995.

Developing countries like India availed greater trade opportunities and also challenged a certain policies of developed countries.

For India, exposure to volatile international market would affect not only domestic prices but also incomes of poor.

Aim to participate in WTO rule based system with greater stability, transparency and predictability in governance of international trade.

THE WTO AND INDIA

Increase in Export Earnings Agricultural Exports Export of textile and clothing Multilateral rules and disciplines Growth to service exports Foreign investment

IMPACT ON INDIAN ECONOMY

The World Trade Organization (WTO)

deals with the global rules of trade between nations.

Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.