WTO
Location:Geneva,Switzerland
Established:1January 1995
Created by:Uruguay Round negotiations(1986-1994)
Membership:153 countries(on 23 July 2008)
Budget:189 million Swiss francs for 2009
2007 Secretariat staff:625
Head:Director-General,Pascal Lamy
HISTORY OF WTO
The international trading system since 1948 was
guided by the rules & procedures in GATT.
The WTO's predecessor, the General Agreement
on Tariffs and Trade (GATT), was established in
1948 after World War II as result of the
international desire to liberlise trade .
The Bretton Woods Conference-1944:IMF,World
Bank,ITO
HISTORY OF WTO
The ITO was to be a United Nations specialized
agency and would address not only trade barriers
but other issues indirectly related to trade,
including employment, investment, restrictive
business practices, and commodity agreements.
But the ITO treaty was not approved by the United
States and a few other signatories and never went
into effect.
In the absence of an international organization for
trade, the GATT would over the years "transform
itself" into an international organization.
PRINCIPLES OF GATT
1)Non-discrimination-MFN
2)Prohibition of quantitative restrictions
3)Consultation
OBJECTIVES:
Raising standard of living
Ensuring full employment
Full utilization of resources of the world
Expansion of production & international trade
FEATURES OF WTO
It is an international organisation to promote multilateral trade
It has replaced GATT
It promotes free-trade by removing tariff & non-tariff barriers
in international trade
Has a fixed set of rules & regulations
Agreement agreed by member-countries are binding on all
members of WTO & if any member does not follow such
agreement,then its complaint can be lodged with the Dispute
Settlement Body of WTO
It includes trade in goods,trade in services,protection of IPR
etc
WTO is not an agent of UN
WTO members have equal voting rights
OBJECTIVES OF WTO
Implement new world trade agreements
Promote multilateral trade
Promote free trade by abolishing tariff & non-tariff barriers
Promote world trade in a manner that benefits every
member country
Take special steps for the development of poorest nations
Expand & utilize world resources in the most optimum
manner
Enhance competitiveness among all trading partners
Remove all hurdles to an open system & use world trade as
an effective instrument to boost economic growth.
WTO & GATT
GATT WTO
GATT was ad hoc & provisional WTO & its agreements are
permanent
GATT has contracting parties WTO has members
GATT system allowed existing WTO does not permit this
legislation to continue even if it
violated a GATT agreement
GATT was less powerful, dispute WTO is more powerful than
settlement system was slow & less GATT,dispute settlement system
efficient,its ruling was easily is faster & more efficient,very
blocked difficult to block the ruling
COMMON MISUNDERSTANDINGS
ABOUT WTO
The WTO dictates policies
The WTO is for free trade at any cost
Commercial interests precede focus on environment
Commercial interests precede focus on development needs
Interests of health & safety are compromised in favour of
commercial interest.
Jobs are destroyed & poverty worsened
Small countries are becoming helpless
WTO is the tool of power centres
Weaker countries are forced to join
The WTO is undemocratic
URUGUAY ROUND(1986-1994)
It is the name given to eighth round of
MTN(multilateral trade negotiations)
Discussion on:
Reducing specific trade barriers
Strengthening the GATT disciplines
Problems of trade related aspects of intellectual
property rights(TRIPS) & trade related investment
measures(TRIMS)
SCOPE OF WTO
Trade in goods
Trade Related Intellectual Property Rights(TRIPs)
Trade Related Investment Measures(TRIMs)
General agreement on Trade in Services(GATS)
WTO-SOME AGREEMENTS
1)Trade in Agriculture
a)Reduction in domestic subsidies:
• Agricultural subsidies are of 2 types:
Agricultural inputs:seeds,fertilizers,pesticides,etc
Agricultural outputs:support price(min. guaranteed price for crops
fixed by govt.)-max.10% of market price of crop
b)Reduction in export subsidies:In Doha Agreement,in the year
2001,WTO urged members to abolish all forms of export subsidies
on agricultural products.
c)Improvement in Market Access
• WTO has put tariff limit for different products.Member countries
cannot impose tariff on imports beyond that limit,although they can
fix tariff beyond this limit.
• Non-tariff barriers will be abolished
Trade in Agriculture
d) Public Distribution System:Distributing
foodgrains by government at concessional rates to
the people living below the poverty line.
2) Trade in Textile & Clothing
a) Elimination of MFA:In Multi-Fibre Arrangement,quantitative
restrictions were imposed by developed countries on import of
textiles.It prevented under-developed countries to export textiles
in these developed nations.
b) Reduction in Tariff on Textiles & Clothing:it has been done in
following phases:
16% of imports have been made tariff free on 1st January,1995
Further 17 % of imports have been made tariff free on 1st
January,1998
Further 18 % of imports have been made tariff free on 1st
January,2002
Remaining 49% on imports have been made tariff free on 1st
January,2005
It benefits textile exporting countries like India,China,Korea etc.
Trade in Textile & Clothing
c) Safeguard Mechanism:Developing nations
can impose import restrictions to protect
their domestic industries
3) TRIPS- Trade related aspects of
intellectual property rights
Intellectual property right refers to the right over creations
of mind.
The UR Agreement on TRIPS covers 7 intellectual
properties:
Copyright & related rights
Trademarks
Geographical indications
Industrial designs
Patents
Layout designs of integrated circuits
Undisclosed information including trade secrets
PATENTS
A patent is a legal protection granted for an invention that
is new,non-obvious & useful. The patent grants the patent
holder the exclusive right to make use or sell the patented
products.
Life of Patents:
General patents:2o yrs
Copyrights: 50yrs
Trade marks:7yrs
Industrial designs: 10yrs
Medicines:10yrs
PATENTS
The Indian Patents Act,1970, as amended & effective from
January 1,2005,lays down:
Grants for Revocation of Patents:Acc. To Act
Items not Patentable:Against public interest,mathematical,
agriculture,medicine,etc
Product patents::Earlier process patent(diff. Process).Now
product patent
Patent period:max.14yrs to 20 yrs
Rights & obligations of patentee:use,make,sell
Working of the Patent:patent product is produced in India,made
available sufficiently,at reasonable prices & within reasonable
time.serve interest of society
Exceptions:govt. can acquire patent product
TRADEMARKS
Trademark is an exclusive mark intended to distinguish
the products of one seller from those of others.
The Indian law related to trade marks has been
amended & consolidated & Trade & Merchandise
Marks Act,1958 has been replaced by The Trade
Marks Act,1999. Objectives of The Trade Marks
Act,1999 :
The registration & better protection of trade marks for
goods & services
Prevention of the use of fraudulent marks
TRADEMARKS
The Registrar of Trade Marks for the purposes of this Act is
known as the Controller-General of Patents,Designs & Trade
Marks.
There is a Trade Marks Registry with its head office at such
place as the Central Government may specify. For the purpose of
facilitating the registration of trade marks, branches have been
established.
Under the Trade Marks Act,an Appellate Board to be known as
the Intellectual Appellate Board is established by the Central
Government to exercise the jurisdiction , powers & authority
conferred on it or under this Act.
Any person aggrieved by an order or decision of the Registrar
under this Act, or the rules made thereunder may prefer an
appeal to the Appellate Board.
4) TRIMS-TRADE RELATED
INVESTMENT MEASURES
TRIMS refers to certain conditions or restrictions
imposed by a government in respect of foreign
investment in the country.
The agreement on TRIMS provides that no
contracting party shall apply any TRIM which is
inconsistent with the WTO Articles,such as:
Local content requirement
Trade balancing requirement
Domestic sales requirements
5) GATS:General Agreement on
Trade in Services
Itprovides for free flow of services among
member nations
Insurance, travel, tourism, hotel, banking,
shipping,telecommunication,business
outsourcing,etc.
6) DISPUTE SETTLEMENT
Stages:
DSB consults parties under dispute
Then Director General of WTO will act mediator or
the settlement of dispute
The panel will be constituted by DBS whose
decision will be unconditionally acceptable to both
parties.
Panel will give its report within 60-90 bays
The DSB will take the final decision on the basis of
this report within 30 days.
7) ANTI-DUMPING AGREEMENTS
Practice of selling a product abroad at an unreasonably
lower price.
Objective:to sell surplus production in the foreign market
initially at lower price with a view to damage the domestic
industry & later charge higher prices.
WTO Agreements: dumping measures will be curbed & no
country will be allowed to dump its products in another
country,but if volume dumped imports from a particular
country is less than 1 % of domestic market sale of that
product,then the dumping will be treated as insignificant &
WTO will not entertain such complaint of dumping.
8)REVIEWING TRADE POLICIES
OF MEMBER COUNTRIES
The Trade Policy Review Mechanism (TPRM)
provides for a Trade Policies Review Body(TPRB) to
regularly examine the economic & trade policies of
member-nations.It examines economic & trade
policies :
every two years for the four major
traders(EC,US,Japan,Canada)
Every 4 years for the next 16 leading traders
Every 6 years for remaining tarders
THE COMPETITION ACT,2002
This is an Act designed to promote & sustain
competition & thereby protect the interests of
consumers.
The act runs into 66 sections,divided into 9 chapters.It
extends to the whole of India except J&K
Objectives:
Economic development of the country
For establishment of a commission to prevent practices
having adverse impact on competition
To promote & sustain competition in markets
Protect interests of consumers & to ensure freedom of
trade
SEBI-SECURITIES & EXCHANGE
BOARD OF INDIA
OBJECTIVES:
To protect the interests of investors in
securities & to promote the development
of,& to regulate, the securities market for
matters connected therewith or incidental
therewith.
SEBI-SECURITIES & EXCHANGE
BOARD OF INDIA
Management:
Members=Chairman+2 members amongst officials
of Ministries of Central Govt. dealing with
Finance & Law+1 member from RBI+2 members
appointed by Central Govt. who will be
professionals with experience or special
knowledge relating to securities market.
