INTERNATIONAL INSTITUTIONS & TRADE IMPLICATIONS

ASSIGNMENT- NO 1

Submitted By:

Richa Gupta (F-54)

Richa Khanna (F-55)
Richa Modi (F-56)
Ruchi Rachna (F-57)
Sachin Verma (F-58)
Saher Riyaz (F-59)
Sakar Singh (F-60)
 WORLD TRADE ORGANISATION

The WORLD TRADE ORGANISATION (WTO) is an international organization

to supervise and liberalize international trade. The WTO came into being on 1 January
1995, and is the successor to General Agreement on Tariffs and Trade (GATT), which
was created in1947,and continued to operate for almost five decades as a defacto
international organization.

The World Trade Organization (WTO) is the only global international

organization dealing with the rules of trade between nations. At its heart are the WTO
agreements, negotiated and signed by the bulk of the 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

The World Trade Organization deals with the rules of trade between nations at a near-
global level; it is responsible for negotiating and implementing new trade agreements,
and is in charge of policing member countries’ adherence to all the WTO agreements
signed by the majority of the world’s trading nations and ratified in there parliaments.
The organization is currently working on a new trade negotiation called the Doha
Development Agenda launched in 2001.

Where countries have faced trade barriers and wanted them lowered, the negotiations
have helped to liberalize trade. But the WTO is not just about liberalizing trade, and in
some circumstances its rules support maintaining trade barriers — for example to protect
consumers or prevent the spread of disease.
The WTO's main activities are:

— Negotiating the reduction or elimination of obstacles to trade (import tariffs, other

barriers to trade) and agreeing on rules governing the conduct of international trade
(e.g. antidumping, subsidies, product standards, etc.)

— Administering and monitoring the application of the WTO's agreed rules for trade
in goods, trade in services, and trade-related intellectual property rights

— Monitoring and reviewing the trade policies of our members, as well as ensuring
transparency of regional and bilateral trade agreements

— Settling disputes among our members regarding the interpretation and application
of the agreements

— Building capacity of developing country government officials in international trade

matters

— Assisting the process of accession of some 30 countries who are not yet members
of the organization

— Conducting economic research and collecting and disseminating trade data in

support of the WTO's other main activities

— Explaining to and educating the public about the WTO, its mission and its
activities.

It’s a set of rules … At its heart are the WTO agreements, negotiated and signed
by the bulk of the world’s 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 WTO has 153 members which represents more than 95% of the total world trade.
The WTO is governed by ministerial conference, which meets every two years; a General
council which implements the conference’s policy decisions and is responsible for day to
day administration and a director general who is appointed by Ministerial Conference.
The WTO headquarters is in Geneva, Switzerland.

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. They prescribe
special treatment for developing countries. They require governments to make their trade
policies transparent by notifying the WTO about laws in force and measures adopted, and
through regular reports by the secretariat on countries’ trade policies.
These agreements are often called the WTO’s trade rules, and the WTO is often
described as “rules-based”, a system based on rules. But it’s important to remember that
the rules are actually agreements that governments negotiated.

The system’s 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.
And it helps to settle disputes … This is a third important side to the WTO’s work.
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.Born in 1995, but not so young
The WTO began life on 1 January 1995, but its trading system is half a century older.
Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the
rules for the system. (The second WTO ministerial meeting, held in Geneva in May
1998, included a celebration of the 50th anniversary of the system.)
It did not take long for the General Agreement to give birth to an unofficial, de facto
international organization, also known informally as GATT. Over the years GATT
evolved through several rounds of negotiations.The last and largest GATT round, was the
Uruguay Round which lasted from 1986 to 1994 and led to the WTO’s creation. Whereas
GATT had mainly dealt with trade in goods, the WTO and its agreements now cover
trade in services, and in traded inventions, creations and designs (intellectual property).

WTO AGREEMENTS
The Marrakesh Agreement Establishing the World Trade Organization

Annex 1A: Multilateral Agreement on Trade in Goods

General Agreement on Tariffs and Trade 1994(GATT 1994)

Agreement on Agriculture

On Application of Sanitary and Phytosanitary (SPS) Measures

On Textiles and Clothing

Agreement on Technical Barriers to Trade (TBT)

Agreement on Trade- Related Investment Measures (TRIMs)

Article VI of the GATT 1994: Anti- Dumping Agreement

Article VII of the GATT 1994: Customs Valuation Agreement

Agreement on Pre-shipment Inspection (PSI)

Agreement on Rules of Origin

Agreement on Import Licensing Procedures

Agreement on Subsidies and Countervailing Measures

Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services (GATS)

Annex 1C: Agreement on Trade –Related Aspects of Intellectual Property Rights

Annex 2: Understanding on Rules and Procedures Governing the Settlement of Disputes

Annex 3: Trade Policy Review Mechanism (TPRM)

Annex 4: Plurilateral Trade Agreements

Agreement on Trade in Civil Aircraft

Agreement on Government Procurement

IS WTO A GROWTH ENGINE FOR DEVELOPED NATIONS

Lack of flexibility by developed nations is holding back the progress on agreements that
would help developing countries benefit from a liberal, multilateral trade regime. The
reality is that the European Union offer on agriculture in the WTO negotiations goes a
very long way to meet the interests of the developing countries. The alternative to
European Union strategy was the globalization strategy of the Cairns Group of countries
and the U.S. to some extent, which would be extremely negative for both the developing
countries and the European union.

The stated aim of WTO is to promote free trade and stimulate economic growth. People
argued that free trade leads to a divergence instead of convergence of income levels
within rich and poor countries. The WTO does not manage the global economy
impartially , but, in its operations, has a systematic bias toward rich countries, and
multinational co-operations harming smaller countries which have less negotiation
power. The reasons are – market access in the industry has not improved. Developed
countries have had no gains yet from the phasing out of textiles quotas, non-tariff barriers
such as anti-dumping measures have increased, and domestic support and export
subsidies for agricultural products in the rich countries remain high. It may be argued
also, that the African countries are being marginalized in this vein , and are less
integrated financially and technologically.
Though critics argue that many developing countries have not benefitted from the
Uruguay Round , which may be understandable for African countries , to some extent,
however , we must also understand that inspite of WTO being a growth engine for
developed countries, it has brought in its vein, boons for the less developed, too.

In the last few years WTO members have concentrated a lot of efforts into improving the
condition of least-developed countries (LDCs) inside the multilateral trading system, both
in terms of market access and technical assistance. Measures taken in the framework of
the WTO can help LDCs increase their exports to other WTO members and attract
investment.
In many developing countries, pro-market reforms have encouraged faster growth,
diversification of exports, and more effective participation in the multilateral trading
system. Excluding countries at war or in transition, export growth in developing countries
has risen from 4.3% a year in the 1980s to 6.4% in the 1990s. Growth in GDP per person
has risen from 0.4% year to 1.5% per year.
Even the least-developed countries are doing slightly better, though not as well as other
developing countries. Again, excluding countries at war or in transition, export growth in
LDCs has risen from 2.9% a year in the 1980s to 3.2% in the 1990s. And whereas GDP
per person fell by 0.6% a year in the 1980s, it rose by 0.8% a year in the 1990s.
Specifically, the WTO has “delivered” for LDCs in the following areas:
First, there have been significant improvements in market access opportunities for LDCs.
Twenty eight WTO members have pledged market access improvements. Many of them
have actually agreed to drop all barriers and provide “duty-free and quota-free” treatment
to all LDC exports. They join a number of other countries who already provide open
markets. The average non-weighted tariff applied by major trading partners to LDCs
exports has fallen from 10.6% in 1997 to 6.9% in the first quarter of 2001.
For example:
Canada, effective 1 September 2000, added a further 570 tariff lines to the list of goods
from LDCs eligible for duty-free treatment. About 90% of all LDC imports will now
receive duty-free treatment;
New Zealand, since 1 July 2001, offers duty-free and quota-free access to all imports
from LDCs
The European Union, Norway and Switzerland provide duty-free, quota-free market
access for all LDC exports (except arms). A transition period is in place for a few specific
products.
Egypt notified tariff reductions ranging from 10% to 20% of existing applied duties for
77 products of export interest to LDCs, and provides duty free access for about 50
products. In addition, Egypt bound customs duties, with a 10% reduction for industrial
products imported from LDCs.

Second, the Integrated Framework (IF) — the joint IMF, ITC, UNCTAD, UNDP, World
Bank and WTO technical assistance program for LDCs — has been redesigned and is in
operation on a Pilot Basis in Cambodia, Madagascar and Mauritania. It will help LDCs
mainstream trade into their national development plans and strategies for poverty
reduction. It will help ensure trade, as an engine for growth, is central to development
plans. It will also ensure that trade-related technical assistance and capacity building is
delivered within a coherent policy framework rather than on a stand-alone basis. The
possibility of the extension of the IF Pilot Scheme is being examined, based on progress
reported at the Fourth WTO Ministerial Conference..

Third, WTO members are currently looking at means to assist as much as possible those
LDCs in the process of joining the WTO. LDCs acceding to the WTO have to learn and
to understand how the WTO works. They need to draft domestic laws that comply with
WTO rules. They need to establish mechanisms for enforcing those rules. And they need
to negotiate with existing members suitable conditions of entry to the WTO. LDCs
currently in the process of accession to the WTO are: Bhutan, Cambodia, Cape Verde,
Lao People’s Democratic Republic, Nepal, Samoa, Sudan, Vanuatu and Yemen. In
addition, Ethiopia and Sao Tome & Principe are WTO observers.

Fourth, WTO members have taken a host of initiatives to help LDCs participate more
fully at the WTO. These include:
activities for non-resident members and observers to ensure that those countries not
represented in Geneva can still follow the daily business of the WTO and still be an
integral part of the WTO process;
the “Geneva Week”: an annual event bringing together senior officials from capitals and
European-based missions — not only of LDCs but also of other small economies — to
learn and exchange views concerning critical areas of the WTO work;
improvement of the WTO’s Trade Policy Review Mechanism: as well as shedding light
on a country’s trade rules, it now helps trade policy capacity building and the
mainstreaming of trade priorities into national development plans and poverty reduction
strategies; expansion of the WTO training and policy courses; establishment of WTO
reference centres connecting LDCs’ capitals to WTO sources of information through the
Internet; establishment of a new programme to fund interns within country missions in
Geneva; facilitating the participation of LDCs at WTO Ministerials — for example,
financing LDC trade ministers’ travel and hotel expenses.

Fifth, and finally, the WTO provides a forum where LDCs can and do raise particular
problems relating to food safety and quality standards. Indeed, LDCs can find it difficult
to comply in their exports with developed countries’ sanitary standards. WTO agreements
limit importing countries’ scope to impose arbitrary requirements on LDCs’ exports, and
encourage the use of internationally developed standards. The Director-General himself
has initiated high-level discussions with the secretariats of international standard-setting
bodies to improve LDCs’ participation and capacity to make full use of international
standards.

The WTO recognizes as least-developed countries (LDCs) those countries which have
been designated as such by the United Nations. There are currently 49 least-developed
countries on the UN list, 30 of which to date have become WTO members.
These are: Angola; Bangladesh; Benin; Burkina Faso; Burundi; Central African
Republic; Chad; Congo, Democratic Republic of the; Djibouti; Gambia; Guinea; Guinea
Bissau; Haiti; Lesotho; Madagascar; Malawi; Maldives; Mali; Mauritania; Mozambique;
Myanmar; Niger; Rwanda; Senegal; Sierra Leone; Solomon Islands; Tanzania; Togo;
Uganda; Zambia.
Nine additional least-developed countries are in the process of accession to the WTO.
They are: Bhutan; Cambodia; Cape Verde; Laos; Nepal; Samoa; Sudan; Vanuatu and
Yemen. Furthermore, Ethiopia and Sao Tome & Principe are WTO Observers.

ISSUES RELATED TO INDIA AND OTHER DEVELOPING NATIONS

AND WTO

The first issue is the nature of the subject; are we talking about the comparative
advantage of developing countries which comes from lower wage levels - as the issue is
sometimes presented - or are we talking about human rights or labour standards? It is
fundamentally important to clarify the terms of the debate as it relates to trade.
The second point is to identify what are the key issues related to trade; for example, are
we talking about child labour or trade union rights in terms of labour standards or in
terms of human rights.

While no-one should challenge the legitimate right of developing countries to use the
comparative advantage of lower costs, and no-one should use human rights and issues of
social standards as an excuse for disguised protectionism, no country should deliberately
deny workers' rights or attempt to generate artificially-lower costs by forced labour,
discrimination against women, exploitation of children or other such abuses.
The growth of regionalism is a more complex issue. There is no natural contradiction
between regionalism and the multilateral system. This has been the shared assessment of
the great majority of the international trade community. The real contradiction, it must
always be emphasised, is between open trade and protectionism. Regional trade
initiatives can certainly help to lower trade barriers and thus promote economic growth.
But the relationship between regionalism and a multilateral system based on the MFN
principle is nonetheless a complex one. The provisions of the GATT have sought to
ensure compatibility by requiring regional agreements to cover substantially all trade
among the partners and to promote trade policies which do not lead to higher protection
or extra restrictions on the trade of non-members.
Until quite recently, there was only one large regional grouping, and that was limited to a
number of western European countries. The US was historically opposed to regionalism.
But this situation has changed. Since the 1980s, the US has begun to build its own
regional agreements, through free trade with Canada, through NAFTA, and through
APEC, etc. Now, almost all the member countries of the WTO also belong to a regional
trade agreement. The importance of regional agreements as a means of tariff reduction
has declined (this is also thanks to the success of the GATT). Regional agreements are
becoming more and more important in terms of trade rules, and for the political weight
they represent in international negotiations. These are elements which could break up the
parallelism between regional and multilateral progress; there is the risk that antagonism
between regional groups could make progress in the multilateral system more difficult.
Furthermore, regional initiatives such as the suggestions for a trans-Atlantic free trade
area could give the impression of re-erecting a discriminatory divide between the rich
North and the poorer South.
At the core of this relationship, there is the basic question of the kind of international
system we want: a global system based on the principle of non-discrimination embodied
in agreed and enforceable rules, or a world divided into regional blocs with all the
consequences this would imply for political stability and security. If we decrease our
imports from the developing countries, we decrease their growth and our growth alike.
And the growth of many developing countries will be the most powerful engine for
growth in developed countries. At the same time, if we reduce export opportunities for
developing countries we only increase unemployment and poverty in these countries, and
further restrict opportunities for their young people. And if we try to close our borders
both to goods and to people we will just increase instability, violence, war and terrorism.
So the only sustainable policy for us and for the developing countries is to continue a
strong commitment to openness.
That is why we need to keep the multilateral system, with its reliable framework of
principles and rules in good repair; it is a firm foothold in a shifting world. Liberalization
within the multilateral system means that this unstoppable process can be implemented
within internationally agreed rules and disciplines. This is the opposite of a chaotic and
unchecked process - without the security of the multilateral system, change would indeed
be a leap in the dark. At the same time, the multilateral system is becoming more and
more a political issue. This is happening because its evolution increasingly concerns
national regulatory policies more than cross-border obstacles; and it is happening because
the challenges to the system are increasingly political rather than technical. In this
context, it could become very important to consider the possibility of strengthening the
institutional basis of the system - for example by enhancing the political dimension of its
central institution, the WTO.

There is public and political disenchantment with international institutions. This is tied,
in part, to the discomfort and suspicion attached to transfers of national governance in a
globalizing economy and to a lack of coherence in policy-making at the inter-
governmental level. It is tied also to a view that powerful international bodies are less
accountable to the ordinary citizen than should be the case. It is a view we cannot share.
It is governments which negotiate in institutions like the WTO, and governments are
accountable to their citizens.
In the area of trade, there is a view that nothing further should be negotiated at the global
level unless the particular concerns of those developing countries which have yet to
succeed in the international market place are first dealt with. We do not accept that this
failure to achieve co-called "equitable" results demonstrates a shortcoming of the
multilateral trading system. We do, however, believe that much greater effort can and
must be made to ensure that the poorer nations are able to draw maximum benefit both
through the efforts of the private sector and government and through the properly
coordinated delivery of assistance from all the international agencies involved.

At present, there is a clear drift by governments from reliance on securing objectives

through the multilateral framework to initiatives at the bilateral and regional level.
Individually, many of these initiatives make sense. In the absence of significant
movement in the WTO, they are understandable. If they are consistent with WTO rules
we would not condemn them. Nevertheless, we are concerned by their collective effect.
In particular, closed, discriminatory trade agreements fragment the trading system and
close down options for those outside. While poor developing countries can pursue their
own regional integration initiatives, these can never be a substitute for their global
economic integration.

We are struck by the very high level of trade dispute settlement cases being handled in
the WTO. In one sense, this is a sign of the success and effectiveness of the new system
which emerged from the Uruguay Round. It is notable that developing countries are
making increased use of the system as complainants. Our concern is that the dispute
settlement system is being used as a means of filling out gaps in the WTO system; first,
where rules and disciplines have not been put in place by its member governments or,
second, are the subject of differences of interpretation. In other words, there is an
excessive resort to litigation as a substitute for negotiation. This trend is dangerous in
itself. The obligations which WTO members assume are properly for the member
governments themselves to negotiate. The issue is still more concerning given certain
public perceptions that the process of dispute settlement in the WTO is over-secret and
over-powerful.

Generally, there is widespread misunderstanding of the multilateral trading system. This

has led to public and political distrust in some, largely industrial, countries. In part,
misunderstanding is the result of deliberate misrepresentation. In part it reflects the
limited attention by the WTO's member governments to explaining and making available
tools for adequate public information. There is a pressing need to demonstrate the
system's role and importance in the process of globalization as well as to emphasize its
limitations in achieving progress in fields which are not tied closely to trade. All of us
need to keep in mind that there is no other rules-based system available to pursue the
goals of economic development: the only other systems are power-based.

WTO & INDIA

India does not stand to gain much by shouting for agriculture reforms in developed
countries because the overall tariff is lower in those countries. India will have to tart
major reforms in agriculture sector in India to make Agriculture globally competitive.
Same way it is questionable if India will be major beneficiary in dismantling of quotas,
which were available under MFA for market access in US and some EU countries. It is
likely that China, Germany, North African countries, Mexico and such others may reap
benefit in textiles and Clothing areas unless India embarks upon major reforms in
modernization and up gradation of textile sector including apparels.
Some of Singapore issues are also important like Government procure, Trade and
Investment, Trade facilitation and market access mechanism.

TEXTILES AND CLOTHING:

There was a reduction in tariff on textiles and clothing which was done in the following
phases:
a. 16% of imports have been made tariff free on 1st jan,1995
b. Further 17% of imports have been made tariff free on 1st jan,1998.
c. Further 18% of imports have been made tariff free on 1st jan,2002
d .Remaining 49% of imports have been made tariff free on 1st jan,2005

PHARMA SECTOR:

In Pharma-sector there is a need for major investments in R &D and mergers and
restructuring of companies to make them world class to take advantage. India has already
amended patent Act and both product and Process are now patented in India. However,
the large number of patents going off in USA recently, gives the Indian Drug companies
windfall opportunities, if tapped intelligently. Some companies in India have organized
themselves for this.
Excerpts from Speech of Ramkrishna Hegde, the then Minister, at Geneva in 1998-
"In order to make WTO an effective multilateral body, which serves the objectives for
which it was set up, it is necessary to go back to the basic principles. The Uruguay Round
negotiators had stated their intentions quite clearly in the Preamble to the Marrakesh
Agreement establishing the WTO. They recognised "that their relations in the field of
trade and economic endeavour should be conducted with a view to raising standards of
living, ensuring full employment and a large and steadily growing volume of real income
and effective demand, and expanding the production of and trade in goods and services,
while allowing for the optimal use of the world's resources in accordance with the
objective of sustainable development, seeking both to protect and preserve the
environment and to enhance the means for doing so in a manner consistent with their
respective needs and concerns at different levels of economic development. They
recognized also "that there is need for positive efforts designed to ensure that developing
countries, and especially the least developed among them, secure a share in the growth in
international trade commensurate with the needs of their economic development".

THE OBJECTIVE OF WTO REITRATED:

It is very clear that the intention of the negotiators was to use trade as an instrument for
development, to raise standards of living, expand production, keeping in view,
particularly, the needs of developing countries and least-developed countries. The WTO
must never lose sight of this basic principle. Every act of implementation and of
negotiation, every legal decision, has to be viewed in this context. Trade, as an instrument
for development, should be the cornerstone of all our deliberations, decisions and actions.
Besides, the system should be seen to be equitable and fair. It must be used in such a
manner that the letter and spirit of the Agreements is fully observed. The WTO Members
must mutually support and encourage each other to achieve the final goal. It must be
recognized that all Members should assume a negotiating rather than an adversarial
posture. It should also be recognized that different economies have different features and
structures, different problems, different cultures. The pace of change must be carefully
calibrated to take into account such differences. All Members should guard against
unilateral action that cuts at the root of multilateral agreement and consensus.
Developing countries have generally been apprehensive in particular about the
implementation of special and differential treatment provisions (S&D) in various
Uruguay Round Agreements. Full benefits of these provisions have not accrued to the
developing countries, as clear guidelines have not been laid down on how these are to be
implemented. "
The first Ministerial Conference held in 1996 in Singapore saw the commencement of
pressures to enlarge the agenda of WTO. Pressures were generated to introduce new
Agreements on Investment, Competition Policy, Transparency in Government
Procurement and Trade Facilitation. The concept of Core Labor Standards was also taken
up for introduction.
India and the developing countries, which were already under the burden of fulfilling the
commitments undertaken through the Uruguay Round Agreements, and who also
perceived many of the new issues to be non-trade issues, resisted the introduction of these
new subjects into WTO. They were partly successful. The Singapore Ministerial
Conference (SMC) set up open-ended Work Program to study the relationship between
Trade and Investment; Trade and Competition Policy; to conduct a study on
Transparency in Government Procurement practices; and do analytical work on
simplification of trade procedures (Trade Facilitation).

Participation in the system: opportunities and concerns :

The WTO agreements, which were the outcome of the 1986-94 Uruguay Round of trade
negotiations, provide numerous opportunities for developing countries to make gains.
Further liberalization through the Doha Agenda negotiations aims to improve the
opportunities.
Among the gains are export opportunities. They include:
 Fundamental reforms in agricultural trade
Phasing out quotas on developing countries’ exports of textiles and clothing
Reductions in customs duties on industrial products
Expanding the number of products whose customs duty rates are “bound” under the
WTO, making the rates difficult to raise
Phasing out bilateral agreements to restrict traded quantities of certain goods — these
“grey area” measures (the so-called voluntary export restraints) are not really recognized
under GATT-WTO.
In addition, liberalization under the WTO boosts global GDP and stimulates world
demand for developing countries’ exports.
But a number of problems remain. Developing countries have placed on the Doha
Agenda a number of problems they face in implementing the present agreements.
And they complain that they still face exceptionally high tariffs on selected products
(“tariff peaks”) in important markets that continue to obstruct their important exports.
Examples include tariff peaks on textiles, clothing, and fish and fish products. In the
Uruguay Round, on average, industrial countries made slightly smaller reductions in their
tariffs on products which are mainly exported by developing countries (37%), than on
imports from all countries (40%). At the same time, the potential for developing countries
to trade with each other is also hampered by the fact that the highest tariffs are sometimes
in developing countries themselves. But the increased proportion of trade covered by
“bindings” (committed ceilings that are difficult to remove) has added security to
developing country exports.
A related issue is “tariff escalation”, where an importing country protects its processing
or manufacturing industry by setting lower duties on imports of raw materials and
components, and higher duties on finished products. The situation is improving. Tariff
escalation remains after the Uruguay Round, but it is less severe, with a number of
developed countries eliminating escalation on selected products. Now, the Doha agenda
includes special attention to be paid to tariff peaks and escalation so that they can be
substantially reduced.

CURRENT ISSUES UNDER DISCUSSION IN WTO FORUM

The environment: a specific concern:

The WTO has no specific agreement dealing with the environment. However, the
WTO agreements confirm governments’ right to protect the environment, provided
certain conditions are met, and a number of them include provisions dealing with
environmental concerns. The objectives of sustainable development and environmental
protection are important enough to be stated in the preamble to the
Agreement Establishing the WTO.
The increased emphasis on environmental policies is relatively recent in the 60-year
history of the multilateral trading system. At the end of the Uruguay Round in 1994,
trade ministers from participating countries decided to begin a comprehensive
work programme on trade and environment in the WTO. They created the Trade
and Environment Committee. This has brought environmental and sustainable
development issues into the mainstream of WTO work. The 2001 Doha Ministerial
Conference kicked off negotiations in some aspects of the subject.

The committee: broad-based responsibility. The committee has a broad-based

responsibility covering all areas of the multilateral trading system — goods, services and
intellectual property. Its duties are to study the relationship between trade and the
environment, and to make recommendations about any changes that might be needed in
the trade agreements. The committee’s work is based on two important principles:
• The WTO is only competent to deal with trade. In other words, in environmental
issues its only task is to study questions that arise when environmental policies
have a significant impact on trade. The WTO is not an environmental agency. Its
members do not want it to intervene in national or international environmental
policies or to set environmental standards. Other agencies that specialize in
environmental issues are better qualified to undertake those tasks.
• If the committee does identify problems, its solutions must continue to uphold
the principles of the WTO trading system.
More generally WTO members are convinced that an open, equitable and
nondiscriminatory multilateral trading system has a key contribution to make to national
and international efforts to better protect and conserve environmental resources
and promote sustainable development. This was recognized in the results of the
1992 UN Conference on Environment and Development in Rio (the “Earth
Summit”) and its 2002 successor, the World Summit on Sustainable Development
in Johannesburg. The committee’s work programme focuses on 10 areas. Its agenda is
driven by proposals from individual WTO members on issues of importance to them. The
following sections outline some of the issues, and what the committee has concluded so
far:

‘Green’ provisions:

Examples of provisions in the WTO agreements dealing with environmental issues

• GATT Article 20: policies affecting trade in goods for protecting human, animal or
plant life or health are exempt from normal GATT disciplines under certain
conditions.
• Technical Barriers to Trade (i.e. product and industrial standards), and Sanitary
and Phytosanitary Measures (animal and plant health and hygiene): explicit
recognition of environmental objectives.
• Agriculture: environmental programmes exempt from cuts in subsidies
• Subsidies and Countervail: allows subsidies, up to 20% of firms’ costs, for
adapting to new environmental laws.
• Intellectual property: governments can refuse to issue patents that threaten
human, animal or plant life or health, or risk serious damage to the environment
(TRIPS Article 27).
• GATS Article 14: policies affecting trade in services for protecting human, animal
or plant life or health are exempt from normal GATS disciplines under certain
conditions.

Member- countries and Observers :

153 members on 23 July 2008 (with dates of membership).

Click any member to see key information on trade statistics, WTO commitments,
disputes, trade policy reviews, and notifications.

Albania 8 September 2000

Angola 23 November 1996
Antigua and Barbuda 1 January 1995
Argentina 1 January 1995
Armenia 5 February 2003
Australia 1 January 1995
Austria 1 January 1995
Bahrain, Kingdom of 1 January 1995
Bangladesh 1 January 1995
Barbados 1 January 1995
Belgium 1 January 1995
Belize 1 January 1995
Benin 22 February 1996
Bolivia 12 September 1995
Botswana 31 May 1995
Brazil 1 January 1995
Brunei Darussalam 1 January 1995
Bulgaria 1 December 1996
Burkina Faso 3 June 1995
Burundi 23 July 1995
Cambodia 13 October 2004
Cameroon 13 December 1995
Canada 1 January 1995
Cape Verde 23 July 2008
Central African Republic 31 May 1995
Chad 19 October 1996
Chile 1 January 1995
China 11 December 2001
Colombia 30 April 1995
Congo 27 March 1997
Costa Rica 1 January 1995
Côte d'Ivoire 1 January 1995
Croatia 30 November 2000
Cuba 20 April 1995
Cyprus 30 July 1995
Czech Republic 1 January 1995
Democratic Republic of the Congo 1 January 1997
Denmark 1 January 1995
Djibouti 31 May 1995
Dominica 1 January 1995
Dominican Republic 9 March 1995
Ecuador 21 January 1996
Egypt 30 June 1995
El Salvador 7 May 1995
Estonia 13 November 1999
European Communities 1 January 1995
Fiji 14 January 1996
Finland 1 January 1995
Former Yugoslav Republic of Macedonia (FYROM) 4 April 2003
France 1 January 1995
Gabon 1 January 1995
The Gambia 23 October 1996
Georgia 14 June 2000
Germany 1 January 1995
Ghana 1 January 1995
Greece 1 January 1995
Grenada 22 February 1996
Guatemala 21 July 1995
Guinea 25 October 1995
Guinea Bissau 31 May 1995
Guyana 1 January 1995
Haiti 30 January 1996
Honduras 1 January 1995
Hong Kong, China 1 January 1995
Hungary 1 January 1995
Iceland 1 January 1995
India 1 January 1995
Indonesia 1 January 1995
Ireland 1 January 1995
Israel 21 April 1995
Italy 1 January 1995
Jamaica 9 March 1995
Japan 1 January 1995
Jordan 11 April 2000
Kenya 1 January 1995
Korea, Republic of 1 January 1995
Kuwait 1 January 1995
Kyrgyz Republic 20 December 1998
Latvia 10 February 1999
Lesotho 31 May 1995
Liechtenstein 1 September 1995
Lithuania 31 May 2001
Luxembourg 1 January 1995
Macao, China 1 January 1995
Madagascar 17 November 1995
Malawi 31 May 1995
Malaysia 1 January 1995
Maldives 31 May 1995
Mali 31 May 1995
Malta 1 January 1995
Mauritania 31 May 1995
Mauritius 1 January 1995
Mexico 1 January 1995
Moldova 26 July 2001
Mongolia 29 January 1997
Morocco 1 January 1995
Mozambique 26 August 1995
Myanmar 1 January 1995
Namibia 1 January 1995
Nepal 23 April 2004

Netherlands — For the Kingdom in Europe and for the Netherlands Antilles
1 January 1995
New Zealand 1 January 1995
Nicaragua 3 September 1995
Niger 13 December 1996
Nigeria 1 January 1995
Norway 1 January 1995
Oman 9 November 2000
Pakistan 1 January 1995
Panama 6 September 1997
Papua New Guinea 9 June 1996
Paraguay 1 January 1995
Peru 1 January 1995
Philippines 1 January 1995
Poland 1 July 1995
Portugal 1 January 1995
Qatar 13 January 1996
Romania 1 January 1995
Rwanda 22 May 1996
Saint Kitts and Nevis 21 February 1996
Saint Lucia 1 January 1995
Saint Vincent & the Grenadines 1 January 1995
Saudi Arabia 11 December 2005
Senegal 1 January 1995
Sierra Leone 23 July 1995
Singapore 1 January 1995
Slovak Republic 1 January 1995
Slovenia 30 July 1995
Solomon Islands 26 July 1996
South Africa 1 January 1995
Spain 1 January 1995
Sri Lanka 1 January 1995
Suriname 1 January 1995
Swaziland 1 January 1995
Sweden 1 January 1995
Switzerland 1 July 1995
Chinese Taipei 1 January 2002
Tanzania 1 January 1995
Thailand 1 January 1995
Togo 31 May 1995
Tonga 27 July 2007
Trinidad and Tobago 1 March 1995
Tunisia 29 March 1995
Turkey 26 March 1995
Uganda 1 January 1995
Ukraine 16 May 2008
United Arab Emirates 10 April 1996
United Kingdom 1 January 1995
United States of America 1 January 1995
Uruguay 1 January 1995
Venezuela (Bolivarian Republic of) 1 January 1995
Viet Nam 11 January 2007
Zambia 1 January 1995
Zimbabwe 5 March 1995
 REFERENCES

Dr. (Prof.) Kshamta Chauhan class notes

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-

acc/wto-omc/list.aspx?lang=eng

http://www.meti.go.jp/english/report/downloadfiles/2006WTO/2-

OverviewWTOagreement.pdf

www.wto.org