4. The WTO is a rules-based, member-driven
organization — all decisions are made by the
member governments, and the rules are the
outcome of negotiations among members.
Information about the institution.
5. .
The World Trade Organization (WTO) is the only
global international organization dealing with the
rules of trade between nations. At its heart are the
WTO agreements, negotiated and signed by the bulk
of the 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.
6. 6
WTO Objectives:
Raising standards of living
Ensuring full employment
Ensuring growth of real income and demand
Expanding production and trade
Sustainable development
Protection of the environment
WTO: What is its purpose?
8. World Trade Organization: History
Mid-1940s:
Meeting in Bretton Woods, New Hampshire, Created
IMF and World Bank
US tried to create ITO = International Trade
Organization
Interim agreement: GATT = General Agreement on
Tariffs and Trade
When ITO failed to be approved (by US!), GATT
governed trade policy by default
9. World Trade Organization: Rounds
Rounds of GATT
Multilateral Trade Negotiations
No. Years Name Accomplishments
1-5 1947-61 Reduced tariffs
6 1964-67 Kennedy Tariffs + anti-dumping
7 1973-79 Tokyo Tariffs + NTBs
8 1986-94 Uruguay Tariffs, NTBs, Services, Intellectual Property,
Textiles, Ag., Dispute Settlement, Created
WTO
9 2001-? Doha ? (Doha Development Agenda)
10. MISSION, FUNCTIONS AND PRINCIPLES
MISSION
The WTO's stated goal is to improve the welfare of the
people of its member countries, specifically by
lowering trade barriers and providing a platform for
negotiation of trade
Its main mission is "to ensure that trade flows as
smoothly, predictably and freely as possible".
11. .
FUNCTIONS
Among the various functions of the WTO, these are
regarded by analysts as the most important:
It oversees the implementation, administration and
operation of the covered agreements
It provides a forum for negotiations and for settling
disputes.
12. .
PRINCIPLES OF THE TRADING SYSTEM
The WTO establishes a framework for trade policies;
it does not define or specify outcomes. That is, it is
concerned with setting the rules of the trade policy
games. Five principles are of particular importance in
understanding both the pre-1994 GATT and the
WTO:
1. Non-Discrimination.
2.Reciprocity.
3.Binding and enforceable commitments.
4.Transparency.
5.Safety valves.
13. Non-Discrimination
It has two major components: the most favoured nation (MFN)
rule, and the national treatment policy. Both are embedded in
the main WTO rules on goods, services, and intellectual
property, but their precise scope and nature differ across these
areas. The MFN rule requires that a WTO member must apply
the same conditions on all trade with other WTO members, i.e.
a WTO member has to grant the most favorable conditions
under which it allows trade in a certain product type to all other
WTO members."Grant someone a special favour and you have
to do the same for all other WTO members." National
treatment means that imported goods should be treated no less
favorably than domestically produced goods (at least after the
foreign goods have entered the market) and was introduced to
tackle non-tariff barriers to trade (e.g. technical standards,
security standards et al. discriminating against imported
goods).[
14. Reciprocity
It reflects both a desire to limit the scope of free-
riding that may arise because of the MFN rule, and a
desire to obtain better access to foreign markets. A
related point is that for a nation to negotiate, it is
necessary that the gain from doing so be greater than
the gain available from unilateral liberalization;
reciprocal concessions intend to ensure that such
gains will materialise
Any country that benefits from another’s tariff reduction
should reciprocate to an equivalent extent.
15. Binding and enforceable
commitments
The tariff commitments made by WTO members in a
multilateral trade negotiation and on accession are
enumerated in a schedule (list) of concessions. These
schedules establish "ceiling bindings": a country can
change its bindings, but only after negotiating with its
trading partners, which could mean compensating
them for loss of trade. If satisfaction is not obtained,
the complaining country may invoke the WTO
dispute settlement procedures.
16. Transparency
The WTO members are required to publish their
trade regulations, to maintain institutions allowing
for the review of administrative decisions affecting
trade, to respond to requests for information by other
members, and to notify changes in trade policies to
the WTO. These internal transparency requirements
are supplemented and facilitated by periodic country-
specific reports (trade policy reviews) through the
Trade Policy Review Mechanism (TPRM).[38] The
WTO system tries also to improve predictability and
stability, discouraging the use of quotas and other
measures used to set limits on quantities of imports
17. Safety valves
In specific circumstances, governments are able to restrict trade.
The WTO’s agreements permit members to take measures to
protect not only the environment but also public health, animal
health and plant health.
There are three types of provision in this direction:
1. articles allowing for the use of trade measures to attain non-
economic objectives;
2. articles aimed at ensuring "fair competition"; members must not
use environmental protection measures as a means of disguising
protectionist policies.
3. provisions permitting intervention in trade for economic reasons.
Exceptions to the MFN principle also allow for preferential
treatment of developing countries, regional free trade
areas and customs unions.
18. 18
Set of rules
The negotiated legal rules included in the
various WTO agreements cover the following
topics:
Trade in Goods
Trade in Services
Trade-related aspects of intellectual property
rights
Dispute Settlement
Trade Policy Reviews
WTO: How does it work?
19. FORMAL STRUCTURE
According to WTO rules, all WTO
members may participate in all councils,
committees, etc., except the Appellate
Body, Dispute Settlement panels, and
plurilateral committees. Decisions within
the WTO are made by members, not staff,
and they are made by consensus, not by
formal vote.
20. COUNCILS FOR TRADE
The Councils for Trade work under the General Council.
There are three councils — Council for Trade in Goods,
Council for Trade-Related Aspects of Intellectual Property
Rights, and Council for Trade in Services — each council
works in different fields. Apart from these three councils,
six other bodies report to the General Council reporting on
issues such as trade and development, environmentalism,
regional trading arrangements and administrative issues.
21. .
COUNCIL FOR TRADE IN GOODS
COUNCIL FOR TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY RIGHTS
COUNCIL FOR TRADE IN SERVICES
22. COMMITTEES
The General council has several different committees,
working groups, and working parties. Committees on:
Trade and Environment
Trade and Development (Subcommittee on Least-
Developed Countries)
Regional Trade Agreements
Balance of Payments Restrictions
Budget, Finance and Administration
23. TRIPS (Trade Related Intellectual Property Rights
Agreement)
The agreement requires member countries to
provide patent protection to all products or
processes in all fields. The protection is granted
subject to the following three conditions:
The product or process is a new one.
It contains an inventive step.
It is capable of industrial application for 20 years
from the grant of the patent
24. TRIPS (Trade Related Intellectual
Property Rights Agreement)
TRIPS agreement covers the following seven
intellectual properties:
Patents
Copyright and other related Rights
Geographical Indications
Industrial Designs
Trade marks
Layout design of integrated circuits
Undisclosed information including trade secrets
25. TRIMS (Trade Related Investment
Measures)
TRIMS refers to certain conditions or
restrictions imposed by a government in
respect of foreign investment in the country.
In the late 1980's, there was a significant
increase in foreign direct investment
throughout the world.
TRIMS are widely employed by developing
countries. The Agreement on TRIMs provides
that no contracting party shall apply any TRIM
which is inconsistent with the WTO articles
