The World Trade Organization (WTO)

The World Trade Organization (WTO)
The World Trade Organization is the only international organisation dealing with global rules of trade between member nations to ensure momentum, free and fair flow in global trade . For this multilateral trading system has been promulgated .It functions via WTO’s agreements, negotiated, signed and ratified by majority of world’s trading nations. It was created in 1995 due to trade negotiations in Uruguay between 1986-94 . Perhaps the youngest of the international organisations WTO succeed the General Agreement on Tariffs and Trade (GATT) . Its objective is to help trade flow smoothly and predictably. To achieve this it a dministers trade agreements, act as a forum for trade negotiations, settles trade disputes, reviews national trade policies, assists developing countries via technical assistance and training programmes and cooperates with other international organizations. India is an original member to WTO as it was one of the founding members of GATT.
Distinguishing features between WTO &GATT.
WTO succeed GATT. GATT 1947 has been updated and exits as GATT 1994.All GATT agreements have been incorporated under WTO and they operate with WTO agreements.
The WTO has “members” while GATT had “contracting parties” underscoring the fact that GATT was officially only a legal text with no binding obligations and institutional set up . WTO Secretariat based at Geneva provides administrative and technical support for the WTO and its members ,this was missing in GATT.
WTO is a multilateral institution providing a platform for many issues, besides trade negotiations, like technical standards, safeguards. WTO allows member countries to go beyond specific obligations and discuss “newer concerns”. GATT was concerned with trade in goods .WTO has extended GATT by covering services and intellectual property.
WTO dispute settlement is faster and automatic being an institutional set up with fixed timetables. GATT had no fixed timetables therefore rulings were easier to block and cases dragged for years.
Principles of WTO
Transparency
WTO aims at transparency in international trade relations and trade policies of member countries. It obligates members to notify changes in trade regulations, technical & phtyo–sanitary standards.
Most Favored Nation (MFN) Treatment
It means that every time a member country lowers a trade barrier or opens up a market, it has to accord same treatment to all fellow member nations of WTO for that good or service. The exceptions to this rule are regional trading bodies.
National Treatment
It means equal treatment and protection should be given to foreign goods trademarks, patents &copyrights as provided by a country to its domestic goods.
Free Trade Principal
Barriers like customs duties/tariffs, quantative restrictions, and import bans or quotas should be lowered.
Dismantling Trade Barriers
WTO advocates use of tariffs to avoid dumping and protect domestic industry from the sudden onslaught of imported goods.
Rule Based Trading System
WTO stand for certainty &predictability in world trade. For this it sets ,enforces rules and settles disputes.
Special and Differential Treatment for developing and least developing countries (LDCs)
Many WTO agreements have stipulated concessions for developing and LDC’S which include waiver or deferral of obligations, transfer of technology, flexibility in application of technical & phtyo-sanitary standards.
Competition Principal
WTO believes that level playing filed between foreign &local goods will encourage competition; increase efficiency in production.
Environment Protection
It was not in agenda of Uruguay round yet environmental concerns were addressed in negotiations esp. in GATS and TRIPS.
Key Subjects of WTO are
Agricultuure, sanitary anddd Phtyo-sanitary measures, technical standards, textiles &clothing, anti-dumping action, countervailing Measures, safeguards, customs valuation, rules of origin, The General Agreement on Trade in Services (GATS), Trade Related Intellectual Property Rights (TRIPS), Trade Related Investment Measures (TRIMS) and dispute Settlement.
Structure
It has 150 countries, accounting for over 97% of world trade. All members make decisions by consensus. The Ministerial Conference is WTO’s top-level decision-making body and has biannual meetings. Below it comes General Council, consisting of ambassadors and heads of delegation in Geneva, which meets many times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. At the next level are the Goods Council, Services Council and Intellectual Property (TRIPS) Council and they report to the General Council. Numerous specialised committees, working groups and working parties deal with agreements and other areas like environment, development etc.
Secretariat
The WTO Secretariat based in Geneva is headed by a director-general. Its annual budget is roughly 155 million Swiss francs. Its main duties are to supply technical support to many types of councils and committees and ministerial conferences, to provide technical assistance for developing countries, to analyse world trade, and to explain WTO affairs to the public and media.
The Secretariat provides legal assistance in the dispute settlement process and advises governments wishing to become members of the WTO.