The World Trade Organization came into being in 1995.

One of the youngest of the

international organizations, the WTO is the successor to the General Agreement on
Tariffs and Trade (GATT) established in the wake of the Second World War.
So while the WTO is relatively young, the multilateral trading system that was originally
set up under the GATT is over 70 years old.
The system was developed through a series of trade negotiations, or rounds, held under
the GATT. The first rounds dealt mainly with tariff reductions but later negotiations
included other areas such as anti-dumping and non-tariff measures. The 1986-94 round
– the Uruguay Round – led to the WTO’s creation.

Goods
It all began with trade in goods. From 1947 to 1994, the GATT was the forum for
negotiating lower tariffs and other trade barriers; the text of the GATT spelt out
important rules, particularly non- discrimination. Since 1995, the Marrakesh Agreement
Establishing the WTO and its annexes (including the updated GATT) has become the
WTO’s umbrella agreement. It has annexes dealing with specific sectors relating to
goods, such as agriculture, and with specific issues such as product standards, subsidies
and actions taken against dumping. A recent significant addition was the Trade
Facilitation Agreement, which entered into force in 2017.

Services
Banks, insurance firms, telecommunications companies, tour operators, hotel chains
and transport companies looking to do business abroad enjoy the same principles of
more open trade that originally only applied to trade in goods. These principles appear
in the General Agreement on Trade in Services (GATS). WTO members have also made
individual commitments under the GATS stating which of their service sectors they are
willing to open to foreign competition, and how open those markets are.

Intellectual property
The WTO’s Intellectual Property Agreement contains rules for trade in ideas and
creativity. The rules state how copyrights, patents, trademarks, geographical names
used to identify products, industrial designs and undisclosed information such as trade
secrets – “intellectual property” – should be protected when trade is involved.

Dispute settlement
The WTO’s procedure for resolving trade conflicts under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that trade flows
smoothly. Governments bring disputes to the WTO if they think their rights under the
WTO agreements are being infringed. Judgements by specially appointed independent
experts are based on interpretations of the agreements and individual members'
commitments. The system encourages members to settle their differences through
consultation with each other. If this proves to be unsuccessful, they can follow a stage-
by-stage procedure that includes the possibility of a ruling by a panel of experts and the
chance to appeal the ruling on legal grounds. Confidence in the system is borne out by
the number of cases brought to the WTO – more than 500 cases since the WTO was
established compared with the 300 disputes dealt with during the entire life of the GATT
(1947-94).

Trade monitoring
The WTO's Trade Policy Review Mechanism is designed to improve transparency, to
create a greater understanding of the trade policies adopted by WTO members and to
assess their impact. Many members see the reviews as constructive feedback on their
policies. All WTO members must undergo periodic scrutiny, each review containing
reports by the member concerned and the WTO Secretariat. In addition, the WTO
undertakes regular monitoring of global trade measures. Initially launched in the wake
of the financial crisis of 2008, this global trade monitoring exercise has become a
regular function of the WTO, with the aim of highlighting WTO members'
implementation of both trade- facilitating and trade-restricting measures.

How the WTO is organized

Functions
The WTO’s overriding objective is to help trade flow smoothly, freely and predictably. It
does this by:

 administering trade agreements

 acting as a forum for trade negotiations
 settling trade disputes
 reviewing national trade policies
 building the trade capacity of developing economies
 cooperating with other international organizations

Structure
The WTO has 164 members, accounting for 98% of world trade. A total of 22 countries
are negotiating membership.
Decisions are made by the entire membership. This is typically by consensus. A majority
vote is also possible but it has never been used in the WTO, and was extremely rare
under the WTO’s predecessor, the GATT. The WTO’s agreements have been ratified in
all members’ parliaments.
The WTO’s top level decision- making body is the Ministerial Conference, which meets
usually every two years.
Below this is the General Council (normally ambassadors and heads of delegation based
in Geneva but sometimes officials sent from members’ capitals) which meets several
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, the Goods Council, Services Council and Intellectual Property (TRIPS)
Council report to the General Council.
Numerous specialized committees, working groups and working parties deal with the
individual agreements and other areas, such as the environment, development,
membership applications and regional trade agreements.

India has been a WTO member since 1 January 1995 and  a member

of GATT since 8 July 1948.
 Countrie Reduction In
Country Year In Billions
s Tariffs

Geneva- $10 billion of trade which was

1947 23 45000
(Swiss) 20% of global trade
Annecy
1949 13 5000 tariff -----
France
Cutting the tariffs levels by 25 %
Torquay UK 1950 38 8700 tariff concession
of 1945 level
Geneva II 2.5 billion dollars
1955-56 26 Tariff reductions
Swiss worth
Geneva
1960-61 26 Tariff reductions Worth 4.9 billion dollars
Swiss
Geneva Concessions were made $40
1964 62 ---
Swiss billion worth
Tokyo 1973-79 102 $300 billion reduction Non tariff reductions
Uruguay 1986-94 125 WTO was formed…

 23 countries met in Geneva in Oct 30, 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)
 It Consists of 8 Rounds – Rounds of trade negotiations

 Eight rounds of negotiations occurred under the GATT.

 The Tokyo round during the 70’s - tackle trade barriers that do not take the form of tariffs and
to improve the system but the agreements were not accepted by all the member nations of
GATT.
 These agreements and policies were amended in URUGUAY ROUND (1986-94) leading to
acceptance by the member nations and formation of WTO.
 This final act concluding the Uruguay round and officially establishing the WTO regime was
signed in 1994 at Marrakesh, Morroco and hence known as Marrakesh Agreement.
  1930 Depression in international trade after Ist world war. It was known as “The Great
Depression era” of the world.
 Post World War II, the victory nations sought to create institutions - eliminate the economic
causes of war.
 The prolonged recession before the world war 2nd & the devastation caused by the world war
2nd led to the BRETTON WOODS conference (1944) resulting in the formation IMF , IBRD &
ITO.
 The IMF, IBRD and ITO, were formed in 1945 but USA didn’t ratify ITO.

 ™ Set of multilateral trade agreements

 ™ To provide an international forum - expansion of world trade
 ™ That encouraged free trade between member states
 ™ By regulating and reducing tariffs on traded goods
 ™ Providing a common mechanism for resolving trade disputes eliminating discrimination

 ™ To provide equal opportunities to all countries in terms of trade in international market

 ™ Increase effective demand for real income growth goods
 ™ Minimize tariffs and other restrictions on trade
 ™ Provide amicable solutions to dispute related to international trade
 ™ Ensure better living standard
 ™ To strengthen and clarify rules for agricultural trade

 Organization that intends to supervise and liberalize international trade

 Only global international organization dealing with the rules of trade between nations
 WTO deals with agreements, negotiated and signed by the bulk of world’s trading nations and
ratified in their parliaments.
 The goal is to help producers of goods and services, exporters and importers conduct their
business.

™
 The WTO is composed of 160 countries which represents 95% of World Trade.
 Of these, 123 were signed during the Uruguay round.
 WTO members do not have to be full-sovereign nation members. Instead, they must be a
custom territory with full autonomy in their external relations.
 Over 3/4th of WTO members are developing or least developed countries.
 There are 24 countries that are not members known as Observers. These countries are currently
 negotiating membership.
 The biggest of these non-members is Russia, however they are in the process of accession.
 YEMEN became the newest member on 26 June, 2014

 Tariffs and Non-tariff measures

 Tropical product
 Textile product
 National resource based products
 Textile & clothing
 Agriculture
 GATT –articles
 Safeguards
 Multilateral trade agreements & arrangement
 Subsidies
 Dispute settlement
 Trade related aspects of intellectual property rights (TRIPs)

 To arrange the implementation, administration and operations of trade agreements.

 Settlement of disputes.
 Trade relations in issues deal with under the agreements.
 To provide a framework for implementing of the results arising out of the deliberations which
taken place at ministerial conference level.
 To manage effectively and efficiency the trade policy review mechanism (TRIM).
 To create more together relationship with all nations in respect of global economic.
WTO has 164 members, around 24 other countries are negotiating members.

WTO’S top level decision making body is the “Ministerial Conference”.

The second level is the “General Council” (normally head by the ambassadors & delegations)

The General Council also meets the Trade policy Review Body and the ‘Dispute settlement body

The third level is The goods council, Services Council & Intellectual Property Council, which reports

to the General Council.

After Marrakesh Agreement, India joined WTO since inception in 1995.

Developing countries like India availed greater trade opportunities and also challenged a certain policies
of developed countries.

For India, exposure to volatile international market would affect not only domestic prices but also
incomes of poor.

Aim to participate in WTO rule based system with greater stability, transparency and predictability in
governance of international trade.

 The system helps promote peace.

 The system allows disputes to be handled constructively.
 A system based on rules rather than power makes life easier for all.
 Freer trade cuts the cost of living.
 It gives consumers more choice and a broader range of qualities to choose from.
 Trade raises incomes.
 Trade stimulates economic growth and that can be good news for employment.
 The basic principles make the system economically more efficient, and they cut costs.

 The primary aim of WTO is to implement the new world trade agreement.
 To promote multilateral trade.
 To promote free trade by abolishing tariff & non-tariff barriers.
 To enhance competitiveness among all trading partners so as to benefit consumers.
 To increase the level of production & productivity with a view to increase the level of
employment in the world.
 To expand & utilise world resources in the most optimum manner.
 To improve the level of living for the global population & speed up economic development of
the member nations.
 To take special steps for the development of poorest nations.
 Implementing WTO agreements & administering the international trade.
 Cooperating with IMF & World Bank & its associates for establishing coordination in Global
Trade Policy-Making.
 Settling trade related disputes among member nations with the help of its Dispute Settlement
 Reviewing trade related economic policies of member countries with help of its Trade Policy
Review Body (TPRB).
 Providing technical assistance & guidance related to management of foreign trade & fiscal policy
to its member nations.
 Acting as forum for trade liberalisation.