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W.T.O.
THE ONE WORLD MARKET
HISTORY OF W.T.O.
n Great depression of 1930
n 1947 , Geneva : GATT
n Equal opportunity in trade for all
n Push real effective demand
n Tariff reduction for mutual benefit
n Re-Solving trade related disputes
n Better living standards and prosperity
HISTORY OF WTO.. contd..
n First six rounds 1947- 1979
n Tokyo round 1973-1979
n Uruguay round 1986- 1993
n Dunckel proposals
n Market access
n Agriculture
n Textiles
n TRIPS
n TRIMS
n Trade in services
n Institutional matters
GATT Vs. W.T.O.
n 1ST Jan 1948
n Informal
n No permanent secretariat
n Treaty not binding
n Ratification by parliaments not required
n Limited to trade and tariff
n 1st Jan 1995
n Formal
n Secretariat and general council
n Treaty binding on govts
n Ratification by p’ments required
n Includes services, IPR, investments also
SO.. WHAT IS IT NOW?
n Essentially a multi trade agreement
n A corporate body under international law
n The only international organization dealing with global rules of trade b/w nations
n 148+2 nations
n 90% of global trade
n A body of agreements – GATT, GATS, TRIPS, TRIMS

OBJECTIVES OF W.T.O.
n To enlarge production and trade of goods,
n To ensure increase in effective demand
n To ensure full employment and enhancement in standard of living in member countries
n To enlarge trade of services
n To ensure optimum utilization of world resources
n Sustainable development and protection of ecology and environment
MODUS OPERANDI
n Ministerial council, the top policy body
n General council
n Director general
n Councils : DSB, TRPB, CTG, CTS
n Decision by consensus
n MFN : the cornerstone
WHAT DOES IT DO?
n Administration of the trade agreements
n Forum for trade negotiations
n Handles trade disputes: DSB
n Monitors national trade policies: TPRB
n Technical assistance & training for LDCs
n Cooperation with international oganizations. e.g. IMF, IBRD

BENEFITS OF W.T.O.
n Agreements GUARANTEE trade rights to member countries
n ASSURANCE for all concerned
n Greater access to global market for everyone
n Greater choice of suppliers, raw material, components and finished goods
n Perennial buoyancy
n Weeding out cyclical depressions and recessions
n Level playing field for every one
THE AGREEMENTS
GATT
n Relates to trade in goods
n C.T.G. to review
n 11 committees : textile, IT, agriculture, subsidies, anti dumping , market access
n Aims to secure reduction in protection
n Reduction in subsidies, tariff ,QRs
n Increased market access


THE AGREEMENTS.. Contd..
GATS
n Provides guidelines for trade in service

n Aims at trade growth by seeking stable , predictable, fair , non-discriminatory policy environment

n C.T.S. to review




THE AGREEMENTS.. Contd..
TRIPs
n Lays down MINIMUM norms and standards to be adopted for protection of following IPRs—
n Copyrights
n Trademarks
n Industrial designs
n Patents
n Geographical indicators
n Layout designs of ICs

THE AGREEMENTS.. Contd..
TRIMs
n Trade related investments measures
n Advocates free and national level treatment to all investments by member countries
n All member countries to notify and eliminate TRIMs ,inconsistent with Uruguay round
THE MINISTERIAL CONFERENCES
SINGAPORE CONFERENCE- Dec. 1996
n Focus on implementation of Uruguay round
n ITA proposed
n Developed countries push for labor issue
n Developing countries lobby strongly
n Labor standards declared subject of ILO
n Investment & Competition subject of WTO
n Win some- loose some game for both
THE MINISTERIAL CONFERENCES
GENEVA CONFERENCE- May 1998
n Concentrated at implementation issues

n Not much progress made

n R.K. Hegde put forth concerns of developing countries
THE MINISTERIAL CONFERENCES
SEATTLE CONFERENCE– Nov. 1999
n Divergence of opinion over labor issues and market access

n Marked by heavy protests by environmentalists and human right activists
n Maran bats for India
THE MINISTERIAL CONFERENCES
DOHA CONFERENCE– November 2001
n China’s accession
n Voiced food and livelihood concerns of developing countries
n Attempts to include contentious singapore issues foiled by India
n Positive outcomes– tariff reduction, opening of agriculture and services ,farm subsidy reduction
n Amendment in TRIPs to allow access to cheap patented drugs for the developing countries

THE MINISTERIAL CONFERENCES
CANCUN CONFERENCE– Sep. 2003
n Cambodia and Nepal join
n Focus on implementation of DOHA work program
n North- south divide over agriculture subsidy, NAMA
n Consequently… Talks largely failure
n Positive outcome- G 20

THE MINISTERIAL CONFERENCES
HONG KONG CONFERENCE– Dec 2005
n Focused at DOHA work program
n Main thrust areas– agriculture subsidy & NAMA
n Export subsidy in developed countries to go by 2013
n Developing countries to cut import duty as per swiss formula for enhanced NAMA
THE MINISTERIAL CONFERENCES
HONG KONG CONFERENCE.. Contd..
n G-20 expands to G-110
n Special product clause pushed through for protecting livelihood and rural dvlpmt
n Special safeguard measure approved for developing countries
n LDCs to have duty free, quota free access to all countries
n Peak duty and duty escalations to reduce substantially
INDIA’S CONCERNS AT W.T.O.
n Elimination of trade distorting farm subsidies by developed countries

n Minimizing tariff reduction

n Bargaining appropriate policy space for food security, livelihood security and rural development
WHAT NEEDS TO BE DONE?
n Greater mobility for temporary workers from developing workers
n Policy space to be given to the LDCs
n Rich countries to move beyond
‘ MERCANTILIST MINDSET’
n SPIRIT and not just the letter of WTO to be followed
KEY TERMS…
n Market Access—
The extent to which an imported good or service can compete with the locally produced ones…. Measured by tariff and non tariff measures in supply of cross border goods and services..
KEY TERMS…
n NAMA---
Market access negotiations, in which, participating countries promise an assured degree of access to their market to non agriculture products; e.g. industrial products, fish, rubber, jute, mineral ore etc… e.g. supposedly 3% in case of industrial goods market in India
KEY TERMS…
n Swiss Formula—higher reduction for higher tariffs.. all tariffs to be reduced by a coefficient which would be same for all the countries.. thus it fails to take into account the differing requirements of different countries.. India had rejected this formula earlier on but in Hong Kong round developing countries have had to accede to it on industrial goods , in a quid-pro-quo with the US- EU- Japan axis..
KEY TERMS…
n Special product provisions ( SPP )
A member country can select an appropriate number of products which would not be covered under tariff reduction commitment… these products to be kept in sensitive list.. for India it’s basically dairy products and edible oils..

KEY TERMS…
n Special Safeguard Measures ( SSM )
Any member country can restrict the import of any particular product, temporarily… to protect a specific domestic industry from a potential threat or damage..
KEY TERMS…
n Countervailing duties
Imposed by importing country on the goods that it believes, have been subsidized in the exporting country and thereby, are hurting the domestic industry.
KEY TERMS…
n Dumping
The event in which a particular exporting company/ country, sells its goods below their actual cost of production to the importing country, to unfairly beat the domestic competition and cause injury..
The importing country can impose ANTI- DUMPING DUTY to protect its industry.
KEY TERMS…
n A.T.B.—
AGREEMENT ON TECHNICAL BARRIERS.
In order to ensure a reliable, commonly adopted and agreed set of norms for technical regulations and product standards( so that these are not used as excuses to further protectionism), an agreement has been developed… part of GATT
KEY TERMS…
n Singapore issues—
1. Investments
2. Competition policy
3. Govt. procurements
4. Trade facilitation.

Barring the last one, no progress has ,
so far , been made in either of them.. Due to stiff resistance from developing countries.
KEY TERMS…
n MFN

1.Countries can’t discriminate b/w their trading partners.

2. No country would discriminate between domestic and foreigner produce

3.Some exceptions are allowed to MFN , e.g. RTAs or FTAs.

4.Also, can a country raise barriers against products traded by any specific country which are being traded unfairly
KEY TERMS…
n TARIFF PEAKS

Relatively high tariff on sensitive products in developed countries.. e. g. peak duty of 30% on Indian RMG exports as against avg. 3% duty in US.

KEY TERMS…
n TARIFF ESCALATION
Duty structure that imposes higher duty on semi finished products exports than on raw material.. and even higher duty on finished product exports.. As much as 20% in some cases..
KEY TERMS…
n BIO PIRACY
1. Commercial use of biological resources and related traditional knowledge without consent of their customary holders or originators,
e.g., Patent issues of Neem and Turmeric in U.S.
2. Covered under U.N.C.B.D.
3. To be incorporated in TRIPs
THORNY ISSUES AHEAD..
n Final form of the Swiss Formula
n Progress of reduction in farm subsidies
n Reduction in Non-tariff Barriers in developed countries
n Negotiations on prevention of misuse of anti- dumping duty
n Negotiations on patents in ‘traditional’ knowledge like Yoga .. And Geographical indicators
n Singapore issues, environmental and health concerns..
GOD BLESS YOU!