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INDEX

Sr. no Chapters

Topic name

Page no.

1.

Introduction

Introduction

Historical
background
of
Negotiation that led birth of WTO

2.

3.

WTO

Agreements
WTO

Bretton Woods Conference


GATT
Uruguay Round of Trade Negotiation

11
12
14

Functions of WTO

15

Principles of WTO
Objectives of WTO
Benefits of WTO
Structure of WTO
of Definition & Meaning
Tariff Cuts
Agriculture

17
19
21
23
32
33
33
34
35
36
37
37

Services
Intellectual Property
Trademark

4.
5.

Trade 11

Conclusion
We bliography

SUMMARY
Over the past 60 years, the WTO, which was established in 1995, and its
predecessor organization the GATT have helped to create a strong and prosperous
international trading system, thereby contributing to unprecedented global economic
growth. The WTO provides a forum for negotiating agreements aimed at reducing
obstacles to international trade and ensuring a level playing field for all. The WTO also
provides a legal and institutional framework for the implementation and monitoring of
these agreements, as well as for settling disputes arising from their interpretation and
application.
The WTO currently has 160 members, of which 117 are developing countries or
separate customs territories. WTO activities are supported by a Secretariat of some 700
staff, led by the WTO Director-General. The Secretariat is located in Geneva,
Switzerland,

and

has

an

annual

budget

of

approximately

CHF 200 million

($180 million, 130 million). The three official languages of the WTO are English,
French and Spanish.
Decisions in the WTO are generally taken by consensus of the entire
membership. The highest institutional body is the Ministerial Conference, which meets
roughly every two years. A General Council conducts the organization's business in the
intervals between Ministerial Conferences. Both of these bodies comprise all members.
Specialized

subsidiary

bodies

(Councils,

Committees,

Sub-committees),

also

comprising all members, administer and monitor the implementation by members of the
various WTO agreements.
The WTO's founding and guiding principles remain the pursuit of open borders,
the guarantee of most- favoured -nation principle and non-discriminatory treatment by
and among members, and a commitment to transparency in the conduct of its activities.
The opening of national markets to international trade will encourage and contribute to
sustainable development, raise people's welfare, reduce poverty, and foster peace and
stability. At the same time, such market opening must be accompanied by sound
domestic and international policies that contribute to economic growth and development
according to each member's needs and aspirations

INTRODUCTION

OBJECTIVES

This Unit would give you an Introduction to GATT & WTO by explaining
Introduction.
Historical background of Trade Negotiation that led birth of WTO
Bretton Woods Conference
GATT
Uruguay Round of Trade Negotiation

INTRODUCTION

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


and liberalize international trade. The World Trade Organization was founded on 1st January
1995 to replace the General Agreement on Tariffs and Trade (GATT). This multilateral
organization aims to lower tariffs and non-tariff barriers so as to increase international trade.
The 160 member states meet in ministerial sessions at least once every two years. The World
Trade Organization (WTO) is an international, multilateral organization, which sets the rules

for the global trading system and resolves disputes between its member states, all of whom
are signatories to its about 60 agreements.
WTO headquarters are located in Geneva, Switzerland. Roberto Azevedo is the
current Director-General. As of now, there are 160 members in the organization, with. All
WTO members are required to grant one another most favoured nation status, such that
( with some exceptions ) trade concessions granted by a WTO member to another country
must be granted to all WTO members. Since its inception in 1995, the WTO has been a
major target for protests by the anti-globalization movement. The WTO was born out of
negotiations, and everything the WTO does is the result of negotiations. The bulk of the
WTOs current work comes from the 198694 negotiations called the Uruguay Round and
earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO is
currently the host to new negotiations, under the Doha Development Agenda launched in
2001. Where countries have faced trade barriers and wanted them lowered, the negotiations
have helped to open markets for trade. But the WTO is not just about opening markets, and
in some circumstances its rules support maintaining trade barriers - for example, to protect
consumers or prevent the spread of disease. At its heart are the WTO agreements, negotiated
and signed by the bulk of the worlds 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 systems overriding
5

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.
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.

Historical background of Trade Negotiation that led birth of WTO

The need for an International Economic Order, goes back to the economic crisis of the
late 1920s and early 1930s. It was classic long term depression, with very low growth, in
some years negative growth, fall in international trade and an unstable international
monetary situation.

BRETTON WOODS CONFERENCE

With a view to avoid recurrence of the chaos that the world economic crisis of 1930s
had produced, the non socialist, industrial, capitalist countries along with some Asian,
African and Latin American countries had met at Bretton Woods in New Hampshire (USA)
in July, 1944 to discuss the establishment of an International Economic Order.
In the Bretton Woods Conference, an organizationally managed international
economic framework was developed. The Bretton Woods conference was sponsored by, the
United States, United Kingdom, France, erstwhile USSR and China. However, at the time of
finalizing various international arrangements ,Soviet Union came out of these negotiations
primarily due to the engulfing cold war.
This group of countries established two central instruments for international financial
monetary cooperation. The first instrument was the International Bank for Reconstruction
and Development (IBRD), also known as World Bank. The second instrument, which the
Bretton Woods group, established was the International Monetary Fund (IMF). The voting
rights in these two institutions were determined by the size of the quota of the country

A need was felt for a separate organization for problems of commodities, their fluctuating
prices and the consequent vulnerability of the under developed nations to such fluctuations in
international market. Accordingly, the Havana charter was framed and signed in 1948 in
Cuba. This Havana charter was to establish the International Trade Organization (ITO). But it
7

could not be established due to resistance from the US Senate. In its place, however, a
protocol of Provisional Application was signed by 23 original members; India was one of the
23 members. The protocol ushered in General Agreement on Tariffs and Trade (GATT) on
1stJanuary, 1948 to bring international trade in order.

General Agreement on Tariffs and Trade (GATT)


The GATT has been the only multilateral body around, from 1948 to1994 that
provided rules for much of the World Trade. The contracting parties of GATT continuously
expanded the area and scope of the rules during the successive trade rounds.
The guiding principles of GATT were:
Trade should be on a non-discriminatory basis.
Domestic industry should only be protected by means of customs tariffs.
The aim of consultations should be to avoid damage to the interest of the members.
GATT should serve as a forum within which negotiations could be held to reduce tariffs and
other trade.
In the earlier rounds of talks only relatively simple issues were discussed and thus a
negotiated settlement was found.
During the first 30 years of the GATTs existence, seven major trade negotiations took place:
The Geneva Round (Switzerland, 1947); Annecy Round (France, 1949); Torquay Round
8

(England, 1951); Geneva Round (Switzerland, 1956); Dillon Round (Switzerland, 1960-62);
Kennedy Round (Switzerland, 1964-67) and Tokyo Round (Japan, 1973-79). Finally, the
Uruguay Round, the eighth round of negotiations commenced in September, 1986

THE GATT TRADE ROUND


Year
Place of the Subject covered
round

No. of
nations

1947
1949
1951
1960-61
1956
1964-67
1973-79

1986-94

Geneva
Annecy
Torquay
Geneva
/
Kennedy rd
Geneva
Geneva/
Kennedy rd.
Geneva/Tokyo rd.

Tariffs
Tariffs
Tariffs
Tariffs and anti-dumping measures

23
13
38
26

Tariffs
Tariffs & Anti dumping measures

26
62

Geneva/Uruguay
rd.

Tariffs, non-tariff measures, rules,


123
services, IPRs, dispute settlement,
textiles, agriculture, creation of WTO.

Tariffs,
non-tariff
framework agreements

measures 102

In the Geneva Round (1947), 20 schedules were established which covered tariff
concessions. In the Torquay Round (1951), tariffs were reduced by 25 per cent in relation to
the 1948 levels. Tariff concessions on a product-wise basis continued to be made in each
successive round.
The earlier trade rounds were primarily focused over cuts in tariffs of goods, but later these
gradually became more ambitious in scope. The Kennedy Round in the mid-sixties brought

about a GATT anti-dumping Agreement and a section on development. The Tokyo Round
during the seventies was the first major attempt to tackle trade barriers that do not take the
form of tariffs, and to improve the system, by adopting a series of agreements on non-tariff
barriers. Because these plurilateral agreements were not accepted by the full GATT
membership, they were often informally called "codes". Several of these codes were
amended in the Uruguay Round, and turned into multilateral commitments accepted by all
WTO members. Only four remained plurilateral (those on government procurement, bovine
meat, civil aircraft and dairy products), but in 1997 WTO members agreed to terminate the
bovine meat and dairy agreements, leaving only two.

URUGUAY ROUND OF TRADE NEGOTIATION


Before GATT's 40th anniversary, its members concluded that the GATT system was
straining to adapt to a new globalizing world economy. In response to the problems identified
in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain
countries' policies on world trade GATT could not manage etc.), the eighth GATT round
known as the Uruguay Round was launched in September 1986, in Punta del Este,
Uruguay.
It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend
the trading system into several new areas, notably trade in services and intellectual property,
and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT
articles were up for review. The Final Act concluding the Uruguay Round and officially

10

establishing the WTO regime was signed 15 April 1994, during the ministerial meeting at
Marrakesh, Morocco, and hence is known as the Marrakesh Agreement.
The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of
the Uruguay Round negotiations. GATT 1994 is not however the only legally binding
agreement included via the Final Act at Marrakesh; a long list of about 60 agreements,
annexes, decisions and understandings was adopted.
The agreements fall into a structure with six main parts:
The Agreement Establishing the WTO
Goods and investment the Multilateral Agreements on Trade in Goods including the
GATT 1994 and the Trade Related Investment Measures (TRIMS)
Services the General Agreement on Trade in Services
Intellectual property the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS)
Dispute settlement (DSU)
Reviews of governments' trade policies (TPRM)
In terms of the WTO's principle relating to tariff "ceiling-binding" (No. 3), the Uruguay
Round has been successful in increasing binding commitments by both developed and

11

developing countries, as may be seen in the percentages of tariffs bound before and after the
19861994 talks.

WORLD TRADE ORGANIZATION (WTO) AND


GLOBAL TRADE

OBJECTIVES

This Unit would give you an Introduction to WTO by explaining:


Functions of WTO
Principles of WTO
Objectives of WTO
Benefits of WTO
Structure of WTO

FUNCTIONS OF WTO
While the WTO is driven by its member states, it could not function without its
Secretariat to coordinate the activities. The Secretariat employs over 600 staff, and its experts

12

- lawyers, economists, statisticians and communications experts - assist WTO members on a


daily basis to ensure, among other things, that negotiations progress smoothly, and that the
rules of international trade are correctly applied and enforced. The former GATT was not
really an organization; it was merely a legal arrangement. On the other hand, the WTO is a
new international organization 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 functions of WTO:
Trade Negotiations:

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. These agreements are
not static; they are renegotiated from time to time and new agreements can be added to the
package. Many are now being negotiated under the Doha Development Agenda, launched by
WTO trade ministers in Doha, Qatar, in November 2001.

Implementation and Monitoring:

WTO agreements require governments to make their trade policies transparent by


notifying the WTO about laws in force and measures adopted. Various WTO councils and
committees seek to ensure that these requirements are being followed and that WTO
agreements are being properly implemented. All WTO members must undergo periodic
13

scrutiny of their trade policies and practices, each review containing reports by the country
concerned and the WTO Secretariat.

Dispute Settlement:

The WTOs procedure for resolving trade quarrels under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that trade flows
smoothly. Countries bring disputes to the WTO if they think their rights under the
agreements are being infringed. Judgments by specially appointed independent experts are
based on interpretations of the agreements and individual countries commitments.

Building Trade Capacity:

WTO agreements contain special provision for developing countries, including longer
time periods to implement agreements and commitments, measures to increase their trading
opportunities, and support to help them build their trade capacity, to handle disputes and to
implement technical standards. The WTO organizes hundreds of technical co-operation
missions to developing countries annually. It also holds numerous courses each year in
Geneva for government officials. Aid for Trade aims to help developing countries develop
the skills and infrastructure needed to expand their trade.
Outreach:

14

The WTO maintains regular dialogue with non-governmental organizations,


parliamentarians, other international organizations, the media and the general public on
various aspects of the WTO and the ongoing Doha negotiations, with the aim of enhancing
cooperation and increasing awareness of WTO activities.

PRINCIPLES OF WTO

The WTO agreements are lengthy and complex because they are legal texts covering
a wide range of activities. But a number of simple, fundamental principles run throughout all
of these documents. These principles are the foundation of the multilateral trading system.

Non - discrimination:

Under the WTO agreements, countries cannot normally discriminate between their
trading partners, grant someone a special favor (such as a lower customs duty rate for one of
their products). If you do the same you have to do that for all other WTO members. This
principle is known as Most Favored Nation (MFN) treatment. It is so important that it is the
first article of the World Trade Organization (WTO), which governs trade in goods. MFN is
also a priority in the General Agreement on Trade in Services (GATS) and the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
15

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 (GATT, GATS and 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.

More Competitive:

The WTO is sometimes described as a free trade institution, but that is not entirely
accurate. The system does allow tariffs and, in limited circumstances, other forms of
protection. More accurately, it is a system of rules dedicated to open, fair and undistorted
competition. The rules on non-discrimination - MFN and national treatment are designed to
secure fair conditions of trade. The issues are complex, and the rules try to establish what is
fair or unfair, and how governments can respond, in particular by charging additional import
duties calculated to compensate for damage caused by unfair trade. Many of the other WTO
agreements aim to support fair competition in agriculture, intellectual property, services, for
example, the agreement on government procurement (a pluri-lateral agreement because it

16

is signed by only a few WTO members) extends competition rules to purchases by thousands
of government entities in many countries.

More Beneficial for Less Developed Countries:

Giving them more time to adjust, greater flexibility and special privileges; over three
quarters of WTO members are developing countries and countries in transition to market
economies. The WTO agreements give them transition periods to adjust to the more
unfamiliar and perhaps difficult WTO provisions.
Protect the Environment:

The WTOs agreements permit members to take measures to protect not only the
environment but also public health, animal health and plant health. However, these measures
must be applied in the same way to both national and foreign businesses. In other words,
members must not use environmental protection measures as a means of disguising
protectionist policies.

17

OBJECTIVES OF WTO
To implement the new world trade system as visualized in the Agreement;
To promote World Trade in a manner that benefits every country;
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.
To demolish all hurdles to an open world trading system and usher in international
economic renaissance because the world trade is an effective instrument to foster
economic growth;
To enhance competitiveness among all trading partners so as to benefit consumers
and help in global integration;

18

To increase the level of production and productivity with a view to ensuring level
of employment in the world;
To expand and utilize world resources to the best;
To improve the level of living for the global population and speed up economic
development of the member nations.

OTHER OBJECTIVES
To create a knowledge base on various matter concerning various National and
International Trade Laws and Protocols, and their National and International implications
and ramifications.

Carry out research and development and the building up of a clearing-house of cases on all
matters of WTO agreements which are of national concern including safeguards and
redressal mechanisms and suggesting alternative formulation in national interest.

Increasing awareness amongst domestic industry, business, agriculture, service and other
sectors on the impacts of trade laws arising out of WTO agreement and other treaties as
member of WTO.

19

Co-operating with industry associates, bodies set up by Government of India on various


issues related to tariff, non-tariff and tactical barriers and undertake drive for awareness
campaign by jointly or severally holding conferences, seminars, group discussions and other
mode of awareness and campaign as also to develop linkages with overseas organizations.

Exploit all potential provisions of WTO agreement available to the developing nations and
advising and counseling the Government of India on all such issues of national importance.

To assist the Government in negotiating with the International Community and to help
strengthen the Indian position in these regards in all possible ways.

Identify areas of non-fulfillment of the WTO agreement which concern Indian interest and
suggest line of action and remedies open for fulfillment of these obligations.

Initiate discussions on making the domestic trade and export and import policies more WTO
compatible and suggest initiatives to be taken in this respect at various levels to ensure high
growth in export and economy.

To study the impact and threat perception of WTO agreement on the growing service sector
industries including all those covered under 'business services' of GATS agreement.

20

To develop a base of expertise amongst the members of the Institute on Intellectual Property
Rights, TRIPS, Anti-dumping laws, EXIM Policy matters etc., through seminars, training
programs and such other methods as may be considered effective.

BENEFITS OF WTO
Helps promote peace within nations:
Peace creates international confidence and co-operation that the WTO creates and
reinforces.
Disputes are handled constructively:
As trade expands in volume, in the numbers of products traded and in the number
of countries and company trading, there is a greater chance that disputes will arise.
WTO helps resolve these disputes peacefully and constructively. If this could be
left to the member states, the dispute may lead to serious conflict, but lot of trade
tension is reduced by organizations such as WTO.

Rules make life easier for all:

21

WTO system is based on rules rather than power and this makes life easier for all
trading nations. WTO reduces some inequalities giving smaller countries more
voice, and at the same time freeing the major powers from the complexity of
having to negotiate trade agreements with each of the member states

Free trade cuts the cost of living:


WTO lowers trade barriers through negotiation and applies the principle of
nondiscrimination. The result is reduced costs of production ( because imports used
in production are cheaper ) and reduced prices of finished goods and services, and
ultimately a lower cost of living.

It provides more choice of products and qualities:


It gives consumer more choice and a broader range of qualities to choose from.

Trade stimulates economic growth:


With upward trend economic growth, jobs can be created and this can be enhanced
by WTO through careful policy making and powers of freer trade.
Basic principles make life more efficient:
The basic principles make the system economically more efficient and they cut
costs. Many benefits of the trading system are as a result of essential principle at
the heart of the WTO system and they make life simpler for the enterprises directly
involved in international trade and for the producers of goods/services

Governments are shielded from lobbying:

22

WTO system shields the government from narrow interest. Government is better
placed to defend themselves against lobbying from narrow interest groups by
focusing on trade-offs that are made in the interests of everyone in the economy.

The system encourages good governance:


The WTO system encourages good government. The WTO rules discourage a
range of unwise policies and the commitment made to liberalize a sector of trade
becomes difficult to reverse. These rules reduce opportunities for corruption.

STRUCTURE OF WTO

23

Highest level:- Ministerial Conference

24

The topmost decision-making body of the WTO is the Ministerial Conference, which
has to meet at least every two years. It brings together all members of the WTO, all of which
are countries or customs unions. The ministerial conference shall carry out the functions of
the WTO and shall have authority to take decision on all matters under any of the
Multilateral Trade Agreement.

Second Level:- General Council


The daily work of the ministerial conference is handled by three groups

The General Council:


It is the WTOs highest level decision - making body in Geneva, meeting regularly
to carry out the functions of the WTO. It has representatives (usually ambassadors or
equivalent) from all member governments and has the authority to act on behalf of the
ministerial conference which only meets about every two years. The council acts on behalf of
the Ministerial Council on all of the WTO affairs. The current chairperson is H.E. Mr.
Jonathan FRIED (Canada).

The Dispute Settlement Body:


A dispute arises when a member government believes another member government is
violating an agreement or a commitment that it has made in the WTO. The authors of these
agreements are the member governments themselves the agreements are the outcome of
negotiations among members. Ultimate responsibility for settling disputes also lies with

25

member governments, through the Dispute Settlement Body. The current chairperson is
Fernando DE MATEO (Mexico)

The Trade Policy Review Body (TPRB):


The WTO General Council meets as the Trade Policy Review Body to
undertake trade policy reviews of members under the TRPM. The TPRB is thus
open to all WTO members. The current chairperson is Mariam MD SALLEH
(Malaysia).

Third Level: Councils For Trade:


The Councils for Trade work under the General Council. There are three councils:

Council for Trade in Goods:


The workings of the General Agreement on Tariffs and Trade (GATT) which covers
international trade in goods, are the responsibility of the Council for Trade in Goods. It is made
up of representatives from all WTO member countries. The current chairperson is Joakim
REITER (Sweden)

Council for Trade-Related Aspects of Intellectual Property Rights:


Information on intellectual property in the WTO, news and official records of the
activities of the TRIPS Council, and details of the WTOs work with other international
organizations in the field. The current chairperson is Mr. Palai MOTHUSI (Botswana).

26

Council for Trade in Services:


The Council for Trade in Services operates under the guidance of the General Council
and is responsible for overseeing the functioning of the General Agreement on Trade in
Services (GATS). It is open to all WTO members, and can create subsidiary bodies as
required. The current chairperson is Seokyoung CHOI (Korea) Apart from these three
councils, FIVE other bodies report to the General Council reporting on issues:-

Committee

on

Trade

&

Development:

The Trade and Environment Committee is the standing forum dedicated to dialogue
between governments on the impact of trade policies on the environment, and of
environment policies on trade. Created in 1995, the Committee has followed a
comprehensive work programme. The regular committee also looks at the effects of
environmental measures on market access, the intellectual property agreement and
biodiversity, and labeling for environmental purposes.

Committee on Trade and development


The WTO agreements recognize the link between trade and development and contain
special provisions for developing countries. More than two-thirds of WTO members are
classified as developing countries.

27

At the Doha Ministerial Conference, in November 2001, Trade Ministers launched the Doha
Development Agenda. With this Agenda, WTO members have placed development issues
and the interests of developing countries at the heart of the WTOs work.
In the Hong Kong Ministerial Declaration of 2005, members emphasized the central
importance of development to the Doha Round. At the same time, the Aid for Trade Initiative
was launched, designed to help developing countries build supply-side capacity in order to
expand trade.
At the Bali Ministerial Conference in December 2013, ministers adopted a number of
decisions under the developmental pillar, including those aimed at boosting least-developed
countries' trade.
Regional trade agreements
Regional trade agreements (RTAs) have become increasingly prevalent since the early
1990s. As of15 June 2014, some 585 notifications of RTAs (counting goods, services and
accessions separately) had been received by the GATT/WTO. Of these, 379 were in force.
What all RTAs in the WTO have in common is that they are reciprocal trade agreements
between two or more partners. Information on RTAs notified to the WTO is available in the
RTA Database.
The WTO also receives notifications from WTO members regarding preferential trade
arrangements (PTAs). In the WTO, PTAs are unilateral trade preferences. Information on
PTAs notified to the WTO is available in the PTA Database.

28

Working Group on Trade and Transfer of Technology


The Working Group on Transfer of Technology was established by the Ministers in
Doha and aims to examine the relationship between trade and the transfer of technology from
developed to developing countries, and ways to increase the flow of technology to
developing countries. The current chair is Ambassador Abdolazeez AL-OTAIBI (Saudi
Arabia, Kingdom of).
Working Group on Trade, Debt and Finance
Many developing countries face serious external debt problems and have been
through financial crises. WTO ministers decided in Doha to establish a Working Group on
Trade, Debt and Finance to look at how trade-related measures can contribute to find a
durable solution to these problems. This working group will report to the General Council
which will in turn report to the next Ministerial Conference. The current chairperson is
Ambassador Faizel ISMAIL (South Africa)

29

The Trade Negotiations Committee


The Trade Negotiations Committee (TNC) operates under the authority of the General
Council. It was set up by the Doha Declaration, which in turn assigned it to create subsidiary
negotiating bodies to handle individual negotiating subjects. The chairman is Mr. Roberto
Azevdo.

Under Council for Trade and Goods, following committees are formed:-

Committee on Agriculture:

The WTOs Agriculture Agreement was negotiated in the 198694 Uruguay Round
and is a significant first step towards fairer competition and a less distorted sector. WTO
member governments agreed to improve market access and reduce trade-distorting subsidies
in agriculture. In general, these commitments were phased in over a six years from 1995 (10
years for developing countries). Work on this subject is handled by the Agriculture
Committee, which reports to the Goods Council. The work is officially recorded in the
committees annual reports to the Goods Council and in the Secretariats summary reports.
The current chair is Ms. Miriam CHAVES (Argentina).

30

Committee on Anti dumping:

If a company exports a product at a price lower than the price it normally charges on
its own home market, it is said to be dumping the product. The WTO Agreement does not
regulate the actions of companies engaged in "dumping". Its focus is on how governments
can or cannot react to dumping it disciplines anti-dumping actions, and it is often called
the Anti-dumping Agreement. The Committee on anti-dumping practices is the focus on
WTO work in this area. The current chair is Ms. Parima DAMRITHAMANIJ (Thailand).

Committee on Sanitary and phytosanitary measures

The Agreement on the Application of Sanitary and Phytosanitary Measures (the


"SPS Agreement") entered into force with the establishment of the World Trade Organization
on 1 January 1995. It concerns the application of food safety and animal and plant health
regulations. Work on this subject is handled by the SPS Committee, which reports to the
Goods Council. The work is officially recorded in the committees annual reports to the
General Council and in summary reports (equivalent to minutes) of the committees
meetings. The current chair is Mrs. Lillian BWALYA (Zambia).

31

Committee on Market Access


The General Council established the WTO Committee on Market Access with the following
terms of reference:
The Committee on Market Access shall:
in relation to market access issues not covered by any other WTO body:
supervise the implementation of concessions relating to tariffs and non-tariff
measures;
provide a forum for consultation on matters relating to tariffs and non-tariff
measures;
Oversee the application of procedures for modification or withdrawal of tariff
concessions;
Ensure that GATT Schedules are kept up-to-date, and that modification, including
those resulting from changes in tariff nomenclature, is reflected;
Oversee the content and operation of, and access to, the Integrated Data Base;
Report periodically and in any case not less than once a year to the Council on
Trade in Goods.
The current chair is Mrs. Alana HUDSON (New Zealand).

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Committee on Technical barriers to trade


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. Work on
technical regulations, standards and a conformity assessment procedure in the WTO is
handled by the TBT Committee, which reports to the Council for Trade in Goods.
Discussions are officially recorded in summary reports (minutes) of the Committees
meetings and in its annual reviews.

Committee on Subsidies and countervailing measures


The WTO Agreement on Subsidies and Countervailing Measures disciplines the use
of subsidies, and it regulates the actions countries can take to counter the effects of subsidies.
Under the agreement, a country can use the WTOs dispute-settlement procedure to seek the
withdrawal of the subsidy or the removal of its adverse effects. Or the country can launch its
own investigation and ultimately charge extra duty (countervailing duty) on subsidized
imports that are found to be hurting domestic producers.

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The Subsidies and Countervailing Duties Committee supervises the implementation of the
Agreement. It meets at least twice a year. The current chair is Mr. Marcus BARTLEY
JOHNS (Australia).
Committee on Customs Valuation
The WTO agreement on customs valuation aims for a fair, uniform and neutral system
for the valuation of goods for customs purposes. The Committee on Customs Valuation of the
Council for Trade in Goods (CGT) carries out work in the WTO on customs valuation, in the
context of a range of measures for trade facilitation. The current chair is Ms. Joanna K.Y.
CHEUNG (Hong Kong, China)
Committee on Import licensing
The Agreement on Import Licensing Procedures says import licensing should be
simple, transparent and predictable so as not to become an obstacle to trade. For example, the
agreement requires governments to publish sufficient information for traders to know how
and why the licenses are granted. It also describes how countries should notify the WTO
when they introduce new import licensing procedures or change existing procedures.
Work on this subject is handled by the Committee on Import Licensing. The
committee supervises the implementation of the Agreement. It reviews at least once every
two years the implementation and operation of the Agreement. Members are required to
notify the Committee of any changes in their laws and regulations concerning import
licensing. The current chair is Mr. Tsotetsi MAKONG (Lesotho)

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Committee on Safeguard measures


The Committee on Safeguards monitors, and reports annually to the Goods Council,
on the general implementation of the agreement. A member affected by a safeguard measure
may ask the committee to make a finding on whether the measure complies with the
agreements procedural requirements. At the request of members, the committee may assist
consultations, or review proposals for retaliatory action. It monitors the phase-out of the
notified grey-area measures, and reviews all safeguard notifications. The current chair is
Mr. Alex YUN-HSING NI (Chinese Taipei).
Under Council for Trade in Services, following committees are formed:
The Committee on Financial Services
The Committee on Trade in Financial Services carry out discussions on matters relating to
trade in financial services and formulate proposals or recommendations for consideration by
the Council. It is responsible for the continuous review and surveillance of the application of
the GATS with respect to this sector, and serves as a forum for technical discussions and
examination of regulatory developments affecting financial services trade.
The Working Party on Domestic Regulation

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The Working Party on Domestic Regulations is drafting disciplines relating to technical


standards, licensing and qualification requirements for all services sectors.

The Working Party on GATS Rules


The Working Party on GATS Rules continues its work on subsidies, government
procurement and safeguards

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AGREEMENTS OF WTO
OBJECTIVES
This Unit would give you insight about agreement of WTO by explaining:
Definition & meaning
Tariff cuts
Agriculture
Services
Intellectual property
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 WTOs
trade rules, and the WTO is often described as rules-based, a system based on rules.

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An agreement starts with three broad principles:


GENERAL AGREEMENT ON TARIFFS & TRADE (GATT)
GENERAL AGREEMENT ON TRADE IN SERVICES (GATS)
TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS)
TARIFFS CUTS

Developed countries tariff cuts were for the most part phased in over five years from
1 January 1995. The result is a 40% cut in their tariffs on industrial products, from an
average of 6.3% to 3.8%. The value of imported industrial products that receive duty-free
treatment in developed countries will jump from 20% to 44%. There will also be fewer
products charged high duty rates. The proportion of imports into developed countries from
all sources facing tariffs rates of more than 15% will decline from 7% to 5%. The proportion
of developing country exports facing tariffs above 15% in industrial countries will fall from
9% to 5%. On 26 March 1997, 40 countries accounting for more than 92% of world trade in
information technology products, agreed to eliminate import duties and other charges on
these products by 2000 (by 2005 in a handful of cases). As with other tariff commitments,
each participating country is applying its commitments equally to exports from all WTO
members (i.e. on a most favored nation basis), even from members that did not make
commitments.

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Developed countries increased the number of imports whose tariff rates are bound
(committed and difficult to increase) from 78% of product lines to 99%. For developing
countries, the increase was considerable:- from 21% to 73%. Economies in transition from
central planning increased their bindings from 73% to 98%. This all means a substantially
higher degree of market security for traders and investors.

AGRICULTURE

The objective of the Agriculture Agreement is to reform trade in the sector and to
make policies more market-oriented. This would improve predictability and security for
importing and exporting countries alike.
The features of Agreement on Agriculture are:
Market Access:
This includes tariff action, tariff reduction and access opportunities. Tariff action means that
all non-tariff barriers need to be abolished and converted into an
equivalent tariff. Ordinary tariffs are to be reduced by an average of 36% with minimum rate
of reduction of 15% for each tariff item over a 6 year period. Developing countries are
required to reduce tariffs by 24% in 10 years.

Export Subsidies

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The agreement contains provisions regarding members commitment to reduce Export


Subsidies. Developed countries are required to reduce their export subsidy expenditure by
36% and volume by 21% in 6 years, in equal installment (from 1986-1990 levels). For
developing countries the percentage cuts are 24% and 14% respectively in equal annual
installment over 10 years. The agreement also specifies that for products not subject to
export subsidy reduction commitments, no such subsidies can be granted in the future. The
agreement does allow governments to support their rural economies, but preferably through
policies that cause less distortion to trade. Developing countries do not have to cut their
subsidies or lower their tariffs as much as developed countries, and they are given extra time
to complete their obligations.

SERVICES:
The General Agreement on Trade in Services (GATS) is the first and only set of
multilateral rules governing international trade in services. Negotiated in the Uruguay
Round, it was developed in response to the huge growth of the services economy over the
past 30 years.

The General Agreement on Trade in Services has three elements:


The main text containing general obligations and disciplines;
Annexes dealing with rules for specific sectors; Individual countries specific commitments
to provide access to their markets, The development of new transmission technologies
facilitating the supply of services (e.g. satellite communication, electronic banking, tele
-education), the opening of monopolies in many countries (e.g. voice telephony), and gradual
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liberalization of hitherto regulated sectors like transport, banking and insurance combined
with changes in consumer preferences, enhanced the trade ability of services. These
developments increased international services flows and created a similar need for
multilateral disciplines as in the area of goods. Thus, the main purpose for the creation of
the General Agreement on Trade in Services (GATS) was to create a credible and reliable
system of international trade rules, which ensured fair and equitable treatment of all
countries on the principles of non-discrimination.

IMPORTANCE OF GATS

Economic performance
Presence of an efficient services infrastructure is a precondition for economic success.
Services such as tele-communications, banking, insurance and transport, supply strategically
important inputs for all sectors, both in goods and services.

Development :- Access to world class services help exporters and producers in developing
countries to capitalize on their competitive strength, whatever goods and services they are
selling.

Consumer Choice :- There is strong evidence in many services, e.g: Telecom, that
liberalization leads to lower prices, better quality and wider choice for consumers

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Technology Transfer :- Services liberalization encourages, foreign direct investment (FDI).


Such FDI generally brings with it new skills and technologies that spill over into the wider
economy in various ways.

INTELLUCTUAL PROPERTY:The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is
an international agreement administered by the World Trade Organization (WTO) that sets
down minimum standards for many forms of intellectual property (IP) regulation as applied
to nationals of other WTO Members. The TRIPS agreement introduced intellectual property
law into the international trading system for the first time and remains the most
comprehensive international agreement on intellectual property to date

Intellectual property rights included in TRIPS are:

Copyrights & related rights:- Copyright is a right given by the law to creators of
literary, dramatic, musical and artistic works and producers of cinematograph films and
sound recordings. It is a bundle of rights including, inter-alia, rights of reproduction,
communication to the public, adaptation and translation of the work. There could be slight
variations in the composition of the rights depending on the work.

Trademark :-

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Trademark is a distinctive sign which identifies certain goods or services as those


produced or provided by a specific person or enterprise. . A trademark provides protection to
the owner of the mark by ensuring the exclusive right to use it to identify goods or services
or to authorize another to use it in return for a payment. The period of protection varies, but a
trademark can be renewed indefinitely beyond the time limit on payment of additional fees.

Geographical Indications :-

Geographical Indications of goods are defined as that aspect of intellectual property


which refers to the geographical indication referring to a country or to a place situated
therein as being the country or place of origin of that product.

Industrial Designs :Industrial designs are an element of intellectual property. Industrial designs refer to
creative activity, which result in the ornamental or formal appearance of a product. Design
rights refer to a novel or original design that is accorded to the proprietor of a validly
registered design.

Patents :43

A Patent is an exclusive right granted by a country to the inventor to make, use,


manufacture and market the invention that satisfies the conditions of novelty, innovativeness
and usefulness. Patents shall be granted for any inventions, whether products or processes, in
all field of technology, provided they are new, involve an inventive step and are capable of
industrial application.

CONCLUSION:

The Uruguay Round and the establishment of the WTO changed the
character of the trading system. The World Trade Organization (WTO) deals with
the global rules of trade between nations. Its main function is to ensure that trade
flows as smoothly, predictably and freely as possible. At its heart are the WTO
agreements, negotiated and signed by the bulk of the worlds trading nations and
ratified in their parliaments. The goal is to help producers of goods and services,
exporters and importers conduct their business. Its main aim is to To create
economic peace and stability in the world through a multilateral system based on
consenting member states, which have ratified the rules of the WTO in their
individual countries as well. The GATT was very much a market access oriented
institution. The dynamic worked less well for developing countries, where the
burden of liberalization rested much more heavily on the shoulders of
governments. Even if they wanted to, their scope to use the GATT was often
limited because exporters had fewer incentives and were less powerful than in
industrial countries. WTO helped to cover up loopholes of GATT. WTOs work
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and performance on agreements like anti-dumping agreement, GATS, TRIP,


agriculture, etc. were explained earlier. Thus, WTO has worked on its founding and
guiding principles of open borders, the guarantee of most favored nation principle
and nondiscriminatory treatment by and among members and a commitment to
transparency in the conduct of its activities

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BIBLIOGRAPHY

Introduction of
WTO :- e-book: Introduction to WTO & Opportunities for CA for
International Trade Laws & WTO
WTO :- www.slideshare.com
Structure of WTO :- www.wto.org
Committees of WTO :- www.wto.org
Agreement of WTO :- www.slideshare.com
Agreement of WTO :- www.wto.org

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