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Introduction of WTO :

The World Trade Organization (WTO) is an organization that intends to supervise

and liberalize international trade. The organization officially commenced on
January 1, 1995 under the Marrakech Agreement, replacing the General Agreement
on Tariffs and Trade (GATT), which commenced in 1948. The organization deals
with regulation of trade between participating countries; it provides a framework
for negotiating and formalizing trade agreements, and a dispute resolution process
aimed at enforcing participants' adherence to WTO agreements which are signed
by representatives of member governments and ratified by their parliaments. Most
of the issues that the WTO focuses on derive from previous trade negotiations,
especially from the Uruguay Round (19861994).

Def of WTO :
An international agency which encourages trade between member nations,
administers global trade agreements and resolves disputes when they arise.

Pascal Lamy is the fifth Director-General of the WTO. His appointment took
effect on 1 September 2005 for a four-year term. In April 2009 WTO members
reappointed Mr Lamy for a second four-year term, starting on 1 September 2009

Functions of WTO

The WTO is a new international organisation set up as a permanent body. It is

designed to play the role of a watchdog in the spheres of trade in goods, trade in
services, foreign investment, intellectual property rights, etc. Article III has set out
the following five functions of WTO;
(i) Administering and Implementing the multilateral and
plurilateral trade agreements. :
The WTO shall facilitate the implementation, administration and operation and
further the objectives of this Agreement and of the Multilateral Trade
Agreements, and shall also provide the frame work for the implementation,
administration and operation of the plurilateral Trade Agreements.
(ii) Acting as a forum for multilateral trade negotiations :
The WTO shall provide the forum for negotiations among its members
concerning their multilateral trade relations in matters dealt with under the
Agreement in the Annexes to this Agreement.
(iii) Seeking to resolve trade disputes.:
The WTO shall administer the Understanding on Rules and Procedures
Governing the Settlement of Disputes. The WTO shall administer Trade Policy
Review Mechanism.WTOs Trade-related technical assistance (TRTA) activities
and programmes are geared towards sustainable trade capacity-building in
beneficiary countries.
(iv) Overseeing national trade policies.:
With a view to achieving greater coherence in global economic policy making,
the WTO shall cooperate, as appropriate, with the international Monetary Fund
(IMF) and with the International Bank for Reconstruction and Development
(IBRD) and its affiliated agencies.

Objectives of WTO

1.Introduce sustainable development.:

Trade is a powerful ally of sustainable development. The WTOs founding
agreement recognizes sustainable development as a central principle, and it is an
objective running through all subjects in current Doha negotiations.
2.The WTO reiterates the objectives of GATT :
GATT was converted from a provisional agreement into a formal international
organisation called World Trade Organization (WTO) with effect from January 1,
1995. WTO will serve as a single institutional framework encompassing GATT and
all the result of the Uruguay Round. It will be directed by a Ministerial Conference
that will meet at least once every two years and its regular business will be
overseen by a General Council. The WTO is a more powerful body with enlarged
functions than the GATT and is envisaged to play a major role in the world
economic affairs.
3.Taking positive steps to ensure that developing countries:
To ensure that developing countries secure a better balance in the sharing of the
advantages resulting from the expansion of international trade corresponding to
their developmental needs
4.Raising standard of living and income:
To increase the level of production and productivity with a view to ensuring level
of employment in the world And To improve the level of living for the global
population and speed up economic development of the member nations.


The WTO Structure

The structure of the WTO is dominated by its highest authority, the Ministerial
Conference, composed of representatives of all WTO members, which is required
to meet at least every two years and which can take decisions on all matters under
any of the multilateral trade agreements.
The day-to-day work of the WTO, however, falls to a number of subsidiary bodies;
principally the General Council, also composed of all WTO members, which is
required to report to the Ministerial Conference. As well as conducting its regular
work on behalf of the Ministerial Conference, the General Council convenes in two
particular forms - as the Dispute Settlement Body, to oversee the dispute settlement
procedures and as the Trade Policy Review Body to conduct regular reviews of the
trade policies of individual WTO members.
The General Council delegates responsibility to three other major bodies - namely
the Councils for Trade in Goods, Trade in Services and Trade-Related Aspects of
Intellectual Property. The Council for Goods oversees the implementation and
functioning of all the agreements (Annex 1A of the WTO Agreement) covering
trade in goods, though many such agreements have their own specific overseeing
bodies. The latter two Councils have responsibility for their respective WTO
agreements and may establish their own subsidiary bodies as necessary.
Three other bodies are established by the Ministerial Conference and report to the
General Council. The Committee on Trade and Development is concerned with
issues relating to the developing countries and, especially, to the "least-developed"
among them. The Committee on Balance of Payments is responsible for
consultations between WTO members and countries which take trade-restrictive
measures, under Articles XII and XVIII of GATT, in order to cope with balance-ofpayments difficulties. Finally, issues relating to WTO's financing and budget are
dealt with by a Committee on Budget.
Each of the four plurilateral agreements of the WTO - those on civil aircraft,
government procurement, dairy products and bovine meat - establish their own
management bodies which are required to report to the General Council.

1. Most-favoured-nation (MFN):
Treating other people equally . Under the WTO agreements, countries cannot
normally discriminate between their trading partners. Grant someone a special
favour (such as a lower customs duty rate for one of their products) and you have
to do the same for all other WTO members.
This principle is known as most-favoured-nation (MFN) treatment (see box). It is
so important that it is the first article of the General Agreement on Tariffs and
Trade (GATT), which governs trade in goods. MFN is also a priority in the General
Agreement on Trade in Services (GATS) (Article 2) and the Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS) (Article 4), although in
each agreement the principle is handled slightly differently. Together, those three
agreements cover all three main areas of trade handled by the WTO.

2. National treatment:
Treating foreigners and locals equally Imported and locally-produced goods
should be treated equally at least after the foreign goods have entered the
market. The same should apply to foreign and domestic services, and to foreign
and local trademarks, copyrights and patents. This principle of national treatment
(giving others the same treatment as ones own nationals) is also found in all the
three main WTO agreements (Article 3 of GATT, Article 17 of GATS and Article 3
of TRIPS), although once again the principle is handled slightly differently in each
of these.National treatment only applies once a product, service or item of
intellectual property has entered the market. Therefore, charging customs duty on
an import is not a violation of national treatment even if locally-produced products
are not charged an equivalent tax.

3.Freer trade:
A new WTO Secretariat study published today (19 June) finds that trade
liberalization helps poor countries to catch up with rich ones and that this faster
economic growth helps to alleviate poverty. WTO Director-General Mike Moore
said: This report confirms that although trade alone may not be enough to
eradicate poverty, it is essential if poor people are to have any hope of a brighter
future. For example, 30 years ago, South Korea was as poor as Ghana. Today,
thanks to trade led growth, it is as rich as Portugal.
4. Transparency :
The Singapore Ministerial Conference of 1996 set up the multilateral Working
Group on Transparency in Government Procurement to conduct a study on
transparency in government procurement practices, taking into account national
policies and, on that basis, to develop elements suitable for inclusion in an
appropriate agreement.



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.
6. BOP :
Countries facing balance-of-payment difficulty may apply import restrictions under
provisions in the GATT 1994 agreement and under the General Agreement on
Trade in Services (GATS).
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.
8. Dismantling Trade Barrier :
Technical regulations and product standards may vary from country to country.
Having many different regulations and standards makes life difficult for producers
and exporters. If regulations are set arbitrarily, they could be used as an excuse for
protectionism. The Agreement on Technical Barriers to Trade tries to ensure that
regulations, standards, testing and certification procedures do not create
unnecessary obstacles, while also providing members with the right to implement
measures to achieve legitimate policy objectives, such as the protection of human
health and safety, or the environment.

Key Subj In Wto:

1.Agriculture :
The agriculture negotiations are difficult because of the wide range of views and
interests among member governments, the large number of active participants, and
the complexity of many issues. The aim is to contribute to further liberalization of
agricultural trade, allowing countries to compete on quality and price rather than
on the size of their subsidies. That is particularly the case for many developing
countries whose economies depend on an increasingly diverse range of primary
and processed agricultural products, exported to an increasing variety of markets,
including to other developing countries.
At the heart of the talks are the three pillars:
market access: cutting tariffs, expanding tariff-quotas and various
flexibilities for these
exports subsidies (officially export competition): eliminating these and
disciplining export credit, food aid and state trading enterprises to eliminate
hidden export subsidies
domestic support: cutting supports that distort trade (by stimulating overproduction and artificially raising or lowering prices) and disciplining forms
of support that could distort trade.

2.Health & safety measures :

Article 20 of the General Agreement on Tariffs and Trade (GATT) allows
governments to act on trade in order to protect human, animal or plant life or
health, In addition, there are two specific WTO agreements dealing with food
safety and animal and plant health and safety, and with product standards in
general. Both try to identify how to meet the need to apply standards and at the
same time avoid protectionism in disguise.


3.Textiles and Clothing :

After more than forty years of trade with import quotas, the textiles and clothing
sector eventually became subject to the general rules of the WTO from January 1,
2005. Protection of the textile and clothing sector has a long history. In 1962, a
Long-term Agreement regarding International Trade in Cotton Textiles (LTA) was
signed under the auspices of GATT. The LTA was renegotiated several times until
it was replaced by the Multi Fibre Agreement (MFA) which came into force in
1974. The MFA was negotiated four times and it finally expired in 1994. The
expiration of the MFA did not, however, mean the end of the quotas. With the
establishment of the WTO in 1995, the Agreement on Textiles and Clothing (ATC)
was negotiated as a transitory regime to the full integration of textiles and clothing
into the multi-lateral trading system. Four countries had been restricting their
imports of textiles and clothing (Canada, the EU, Norway and the United States).
The integration took place in four steps over a ten year period, ending on 31
December 2004.
4.Helping least developed and food importing countries :
A number of developing countries that depend on imports for their food supply are
also concerned about possible rises in world food prices as a result of reductions in
richer countries subsidies. Although they accepted that higher prices can benefit
farmers and increase domestic production, they feel that their concerns about food
imports need to be addressed more effectively.