World War I (1914-1918) took life of

55 million people.

The prolonged recession before the world war 2nd

World war II(1939-1945) took life of Over 60 - 70 million people. Money spent has been estimated at more than $1.075 trillion.

Till the world war 2nd , the west had adopted decades of

protectionism.

Protectionism had led to decrease of international trade between the countries and decline in their economies.
The countries felt a need to prevent the protectionist policies & to revive the economic policies.
2

The prolonged recession before the world war 2nd & the devastation caused by the world war 2nd led to the BRETTON WOODS conference resulting in the formation IMF , IBRD & ITO.
The IMF, IBRD and ITO, were formed in 1945 but USA didnt ratify ITO. 23 countries met in Geneva in 1947 & signed a agreement on tariff & international trade.(GATT)

Set of multilateral trade agreements aimed at the abolition of quotas and the reduction of tariffs among member countries. Signed on October 30, 1947, by 23 countries in Geneva (to take effect on January 1, 1948)

Consists of 8 Rounds rounds of trade negotiations

1. 2. 3.

Non discrimination Prohibition of quantitative restrictions Consultations.

OBJECTIVES OF GATT
1. 2.

3. 4.

To raise the standard of living. To ensure full employment and a large and steadily growing volume of real income and effective demand. To develop the full use of the resource of the world To expand production and international trade.

tariffs Geneva(Swiss) 1947 23 45000

$10 billion of trade which w 20% of globa trade -----

Annecy France

1949

13

5000 tariff

Torquay UK

1950

38

8700 tariff concession

Cutting the tariffs levels 25 % of 1945 level

Geneva II Swiss Geneva Swiss Geneva Swiss

1955-56 1960-61

26 26

Tariff reductions Tariff reductions Concessions were made $40 billion worth $300 billion reduction

2.5 billion dollars worth

Worth 4.9 billion dollar ---

1964

62

Tokyo Uruguay

1973-79 1986-94

102 125

Non tariff reductions

1.

2.
3. 4. 5. 6. 7. 8.

GATS TRIPS TRIMS DISPUTE SETTELMENT MECHANISM ANTI DUMPING MEASURES AOA SPS WTO

It is a general agreement on trade in services. It covers 4 modes of international delivery of services:Cross border flow (Trans border data flows, transportation services) Commercial presence (Provision of services abroad thru FDI , etc..) Consumption abroad Movement of personnel (Entry & temporary stay of foreign consultants)

1.

2.

3. 4.

IPR are the rights given to persons over the creation of their minds. These exclusive rights are given for usage for certain time period.
To encourage & reward creative work . Technological innovations . Fair competition. Consumer protection. Transfer of technology.

OBJECTIVES
1. 2. 3. 4. 5.


1.
2. 3. 4. 5. 6. 7.

It covers rights for :

Copy rights & related rights Trademarks Geographical indications Industrial design Layout design Patents Undisclosed information (trade secrets etc..)

1. 2.

3.
4.

It is trade related investment measures No country shall apply TRIMS which is inconsistent with WTO articles . The following are inconsistent :Local content requirement Trade balancing requirement Trade & foreign exchange Domestic sales requirement.

It has a fixed dead line in settlement of disputes . The first ruling does not extend beyond 1 year. The appeal is generally disposed off before 60 days.

Anti-Dumping laws is applicable if the margin of dumping is more than 2% of the export price or the volume of dumped products is more than 3% of the product. Anti-Dumping duty shall not exceed the margin of dumping . Anti-Dumping action may be suspended or terminated if the exporter agrees to remove the dumping or the injurious effect of it.

There are 3 principal commitments.. 1. Market Access :- no import restrictions & limitations 2. Domestic support :- Elimination of govt support to domestic companys. 3. Export subsidies :- phase out support given to exporters .. Other important aspects are:a) Tariffication :- means removal of tariff quotas. b) Tariff binding :- means fixing the max rate of import duty, above which a country does not raise the duty unilaterally.

1.

2.

It an agreement for food safety , animal & plant health regulations. it consists of 14 articles & are applied to Protect plant life or health due to risk from entry , establishment or spread of pests, disease , disease carrying organisms or disease causing organisms. Protect human or animal life or health within the territory of the member from risks arising from additives , toxins , contaminants or disease causing organisms in foods beverages or feed stuff. prevent or limit other damages from entry , establishment or spread of pests

3.

In Uruguay round of talks India committed that it would be bound by 40 % tariff on industrial raw material, manufacturing components capital goods & 25 % in other cases. Reduction in agricultural subsidies Full access for textiles & clothing from developing countries . Extension of Intellectual Property Rights. On agricultural tariffs, India has indicated ceiling bindings 100 % on primary products & 300 % on edible oils. In the area of non tariff barriers the agreement to abolish VER & to phase out MFA by the end of 2004 are land mark achievements for developing countries.

EVALUATION OF GATT

Strength increased from 23 to 125 countries. 50 years has witnessed an exception growth in world trade. Merchandise export grew on an average of 6% annually. Total trade in 2002 was 22 times than that of 1950. Principal achievements of GATT were the establishment of a forum for continuing consultation . Disputes that could have resulted in hard feeling are compromised. Developing countries with balance of payment problems were generally exempted from liberalization. The average level of tariff on manufactured products in industrial countries was brought down from about 40% in 1947 to nearly 3% after Uruguay round. The first 6 rounds concentrated on reducing tariffs while the 7th round of Tokyo moved on to tackle non tariff barriers. The 8th round helped in establishing the WTO a global organization to regulate trade between nations. Today 97 % of the world trade is routed through GATT & WTO

The world trade organization was established on JAN 1 1995. It is the embodiment of the Uruguay round results & the successor to GATT. WTO has 153 members, India being one of the founder members. The head of GATT is located in Geneva of Switzerland.
Child becomes a Parent & Parent a child

WTO is an International body designed to play the role of a watchdog in spheres of trade in Goods, services foreign investments, IPR etc.

The world trade organization is an international organization designed to supervise and liberalize international trade. It deals with rules of trade between nations at a near-global level.

1. Without Discrimination: A country should not discriminate between its trading partners

Most-Favoured-Nation/MFN Status: The contracting nations binds itself to grant to the other in certain stipulated matters the same terms as are then, or may be thereafter, granted to the nation which receives from it the most favorable terms in respect of those matters National Treatment: Treating foreigners and locals equally.

2. Freer: Barriers coming down through negotiation

Progressive Liberalization

3. Predictable: Foreign companies, investors, and governments should be confident that trade barriers (including tariffs and non-tariff barriers) should not be raised arbitrarily; tariff rates and market-opening commitments are bound in the WTO

4. More Competitive: Discouraging unfair practices such as export subsidies and dumping products at below cost to gain market share 5. More Beneficial for Less Developed Countries: Giving them more time to adjust, greater flexibility, and special privileges. Ex: Uruguay Round

1. 2.

3.

4.

5.

6.

It administers the WTO agreements. It provides the forum for negotiations among member countries concerning the multilateral trade relations in matters dealt with, under the agreements. WTO oversees and monitors national trade policies of member. countries. It acts as a watch dog of international trade It administrates the mechanism for setting trade disputes between the member countries. Providing technical assistance and training for developing countries. It co-operates with other international organizations like the IMF and IBRD (world bank) involved in global economic policy making.

GATT GATS TRIPS TRIMS Disputes settlement mechanism Antidumping measures Agreement on agriculture SPS

Cover goods, services, and intellectual property Set procedures for settling disputes Several trade agreements are currently being negotiated under the Daha Development Agenda

Require governments to make their trade policies transparent by notifying the WTO WTO councils and committees ensure policies are being followed WTO members are periodically scrutinized on their trade policies and practices

Resolves trade quarrels under the Dispute Settlement Understanding to ensure trading runs smoothly Countries petition the WTO if they believe they believe their rights are being infringed

WTO specifically tries to aid developing countries to build their trading capacity and try to help establish trading standards Organizes technical cooperation missions, numerous courses for government officials, and the Aid for Trade tries to help develop a countrys skills and infrastructure to expand their trade capacity

WTO maintains dialogue with various organizations non-government related to enhance cooperation and increase awareness of WTO activities around the world

MINISTERIAL COUNCIL

Dispute Settlement Body

GENERAL COUNCIL

Trade Policy Review Body

GOODS COUNCIL

SERVICES COUNCIL

TRIPS COUNCIL

One Country One Vote Decision making is generally by consensus

WTO Agreement Four Specific Situations

An interpretation of any of the multilateral trade agreements can be adopted by a majority of three quarters of WTO members.
The Ministerial Conference can waive an obligation imposed on a particular member by a multilateral agreement, also through a three-quarters majority. Decisions to amend provisions of the multilateral agreements can be adopted through approval either by all members or by a two-thirds majority depending on the nature of the provision concerned. But the amendments only take effect for those WTO members which accept them. A decision to admit a new member is taken by a two-thirds majority in the Ministerial Conference, or the General Council in between conferences.

Pascal Lamy French political advisor, a businessman, and a former European Commissioner for Trade.

Lamy is Honorary President of Paris-based think tank Notre Europe

GATT is an agreement. GATT was adhoc & provisional. GATT covered only goods. Disputes settlement mechanism slow & at times in conclusive. It contained grand father clause i.e existing domestic legislation to continue even if it violated a GATT agreement.

It is an organization. WTO is permanent. It covers goods, services, intellectual property rights. It is speedy.

WTO rules it out.

1.

2.
3. 4.

5. 6. 7. 8.

It is undemocratic. It is unsafe. It tampers labor & human rights. It encourages privatization of essential services . It is killing people. It is increasing inequality. It is pro developed countries. It undermines national sovereignty.

Globalization!! The alternative would be chaos For the most part the WTO is unbiased The power of Sanctions