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A PRESENTATION ON

GENERAL AGREEMENTS ON TARIFFS & TRADE AND WORLD TRADE ORGANIZATION

Presented To,Prof. Tejal Shah Presented By, Jaydip Bhatt Roll No.1

General Agreement On Tariffs and Trade {G.A.T.T.}

Introduction

G.A.T.T. was an international body having its headquarters in Geneva. It was founded in 1947 by 23 member countries including india. The body in 1994 comprised of 118 member countries of which around two-thirds are developing countries.

The primary objective of G.A.T.T. was to expand international Trade by liberalizing trade so as to bring all-round economic development. G.A.T.T. was converted from a provisional agreement into a formal international organization called World Trade Organization (W.T.O) with effect from January 1,1995

Thus, after about five decades , the original proposal of an International Trade Organization took shape as the WTO. WTO, which is a more powerful body than the GATT,has an enlarged role than the GATT India is one of the founder members of the IMF, World Bank-IBRD,GATT and WTO

Objectives of G.A.T.T.
1)

2)

3)

4)

Ensuring large growing volume of real income and effective demand & full employment. Expansion of production and international trade. Raising standard of living of people. Developing full use of the resources of the world.

Evaluation Of G.A.T.T.

when the GATT was signed in 1947 ,only 23 nations were party to the growing acceptance. it is increased to 99 by the time of the seventh round and 117 countries participated in the next .i.e. Uruguay round.it is interesting to note that the peoples Republic of china ,which was one of the original signatories to the GATT.

Principles of G.A.T.T.
a)

b)

Prohibition of Quantitative Restrictions:GATT limit restrictions on trade to the less rigid tariffs. certain exceptions to this prohibition are granted to the developing countries confronted difficulties of balance of payments. Consultation:GATT sought to resolve disagreements through consultation. so by providing a forum for continuing consultation it shows the complexity of the issues involved in the trade

World Trade Organization {W.T.O}

Introduction Of W.T.O.:o

The World Trade Organization (WTO) was formed in january 1,1995 with the general Agreement on Tariffs & Trade (GATT) as its basis. W.T.O. serves as a single institutional framework encompassing GATT and all results of the Uruguay round. It is directed by a ministerial Conference that will meet at least once every two years and its regular business is overseen by a General Council The WTO secretariat, based in Geneva, Switzerland.

W.T.O. is a more powerful body with enlarged functions than GATT and its envisaged to play a major role in the world economic affairs.

The purpose of the W.T.O. is to help producers of goods and services, exporters and importers to conduct there business.

Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986 94) Membership: 150 countries (since 11 January 2007) Budget: 175 million Swiss francs for 2006 Secretariat staff: 635 Head: Pascal Lamy (director-general)

Functions Of W.T.O:

Administering the WTO trade agreements. Monitoring national trade policies. Administering the mechanism for settling trade disputes between the member countries. Cooperating with other international organizations like IMF and IBRD with a view to achieving greater global policy making. WTO shall administer the Understanding on rules and Procedures governing the settlement of disputes Providing forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the agreements

Features of W.T.O.:

WTO is the main organ of implementing the Multilateral Trade Agreements. It is a full-fledged international organization in its own right. It administers a unified package of agreements to which all members are committed. The WTO has legal personality. The WTO is global in its membership. Its present membership is around 144 countries and with many other considering accession.

WTO principles:

To help trade flow as freely as possible To achieve further liberalization gradually through negotiation To set up an impartial means of settling disputes Extra provisions for less developed countries

Evaluation of W.T.O.:

WTO has come to play a very important role in the global and thereby, national; economies. when the GATT was signed in 1947 ,only 23 nations were party to it. The memberships of the WTO increased from 128 in July 1995 to 148 countries at the beginning of 2005 and about two dozens nations more were negotiating membership. At present 158 members of the WTO on 2nd feb,2013.

Benefits of WTO:

WTO has made significant achievements in reducing the Tariff and Non-Tariff Barrier. Developing countries too have been benefiting significantly out it. It has a system to settle trade disputes between nations. WTO provides a forum for multi-lateral discussions of economic relations between nations. The liberalization of investment has been fostering economic growth of a number of countries.

Drawback of WTO:

Negotiations and Decision making in WTO dominated by only Developed Countries. The WTO has not been successful to impose the organizational disciplines on the Developed Nations. Most Developing Countries do not have the Financial and Knowledge resources to effectively participate in the WTO agreement ,discussions &negotiations.

Difference Between GATT and WTO:GATT

WTO

GATT had contracting parties. GATT was Ad-Hoc and provisional. GATT system allowed existing domestic legislation in GATT agreement. GATT was less powerful, dispute settlement slow and inefficient.

WTO has members. WTO and its agreement are permanent. WTO does not permit this. In WTO dispute settlement is faster and more efficient.

GATT

WTO

GATT was a provisional agreement from legal point of view. The GATT was a set of rules for conducting international trade which are not institutional basis. The GATT dealt only with trade in goods.

WTO and its agreements are mandatory and permanent. WTO is an intergovernmental organization, and has its own secretariat. While WTO dealt with not only trade in goods but also trade in services, general council, TRIPS council as subsidiary bodies.

W.T.O. agreements-A birds eye view

Agreements on trade in goods Services Agreements on trade related intellectual Property Agreements on textile and clothing Dispute settlement Agreement on Agriculture Policy review Development and trade Technical assistance and Training

WTO and India

By being a part of WTO India enjoys the most favored nation status with all the other members of the WTO. India also gain of export much less than those of several other developing countries like china.The trade gains may consequently be placed at $ 2.7 billion exports per year. But the generous estimates range from $ 3.5 to 7 billion worth of extra exports. India is also get the competitive advantage because of the member of the WTO. India getting a platform to showcase its talent globally against developed countries.

Summary

The GATT which was set up in 1947 to promote international trade was not biased in favour of developed countries but had limited scope. As a result , various rounds of GATT to expand its scope. Ultimately Uruguay round of GATT provided for setting up of the WTO. The WTO started functioning on 1st january,1995. The WTO is more global and is broader in scope. Moreover ,it is not a rich mens club like GATT.India is one of the members of WTO and is bound by its agreements. There are certain positive effects and certain negative effects of WTO for India.