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SCOPESCOPE WHAT IS WTOWHAT IS WTO
STRUCTURE & PROCESSESS
MINISTERIAL CONFERENCES
AGREEMENTS
INDIAN CONTEXT
IMPLICATIONS
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WTO GENESISWTO GENESISWTO GENESISWTO GENESIS
TheThe GeneralGeneral AgreementAgreement onon TradeTrade andand TariffTariff
(GATT)(GATT) camecame intointo existenceexistence inin 19471947
ItIt soughtsought substantialsubstantial reductionreduction inin tariff tariff andand
otherother barriersbarriers toto tradetrade andand toto eliminateeliminate
discriminatorydiscriminatory treatmenttreatment inin internationalinternational
commercecommerce
IndiaIndia signatorysignatory toto GATTGATT 19471947 alongalong withwith twentytwenty
twotwo otherother countriescountries
EightEight roundsrounds ofof negotiationsnegotiations hadhad takentaken placeplace
duringduring fivefive decadesdecades ofof itsits existenceexistence
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HISTORY WTOHISTORY WTO GATT THE PARENT ORGANIZATION.GATT THE PARENT ORGANIZATION. CAME INTO FORCE ON 1CAME INTO FORCE ON 1STST JAN 1995.JAN 1995.
RESULT OF URGUARY ROUND (1986RESULT OF URGUARY ROUND (1986--1994)1994)
DEVELOPED NATIONSDEVELOPED NATIONS
FORMED MAJORITYFORMED MAJORITY
LESS WIDER SCOPELESS WIDER SCOPE
PROVISIONAL TREATYPROVISIONAL TREATY
TOLERATEDTOLERATED
PROTECTIVE POLICIESPROTECTIVE POLICIES
IN SENSITIVEAREAS eg.IN SENSITIVEAREAS eg.Anti Dumping, subsidiesAnti Dumping, subsidies
MORE GLOBAL MEMBERSHIPMORE GLOBAL MEMBERSHIP
WIDER SCOPEWIDER SCOPE
FULL FLEDGED INTERNATIONALFULL FLEDGED INTERNATIONALORGANISATIONORGANISATIONIN ITSELFIN ITSELF
ADMINISTERS UNIFIED PACKAGESADMINISTERS UNIFIED PACKAGESOF AGREEMENTSAGREED BY ALLOF AGREEMENTSAGREED BY ALL
REVERSED POLICIES OFREVERSED POLICIES OF
PROTECTION IN CERTAINPROTECTION IN CERTAINSENSITIVEAREAS eg exportSENSITIVEAREAS eg exportrestraints ontextile & clothing torestraints ontextile & clothing tobe dismantledbe dismantled
GATT vs WTOGATT vs WTO
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FinallyFinally Whatis WTO?Whatis WTO?ItIt is the onlyinternational organizationdealing withthe rules of trade betweennations. Atits heart are the WTO
agreements, negotiated and signed bythe bulk of the worlds trading nationsand ratifiedintheir parliaments. The
goalis to help producers of goods andservices, exporters, andimportersconducttheir business.
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TRIVIATRIVIAFORMATION :FORMATION : 1 JAN 19951 JAN 1995
HEADQUARTERS :HEADQUARTERS : GENEVA, SWITZERLANDGENEVA, SWITZERLAND
MEMBERSHIP :MEMBERSHIP : 150150 ( INCLUSION VIETNAMON 11 JAN 07)( INCLUSION VIETNAMON 11 JAN 07)OFFICIAL LANGUAGE :OFFICIAL LANGUAGE : ENGLISH, FRENCH, GERMAN ANDENGLISH, FRENCH, GERMAN AND
SPANISHSPANISH
BUDGET :BUDGET : 170 MILLION SWISS FRANCS170 MILLION SWISS FRANCS
STAFF :STAFF : 635635
WEBSITE :WEBSITE : WWW.WTO.INTWWW.WTO.INT
DIRECTOR GENERAL :DIRECTOR GENERAL : PASCAL LAMIPASCAL LAMI
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STRUCURE AND PROCESSESSSTRUCURE AND PROCESSESS
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STRUCTUREOF WTOSTRUCTUREOF WTOSTRUCTUREOF WTOSTRUCTUREOF WTOMC( MINISTERIAL CONFERENCE)MC( MINISTERIAL CONFERENCE)
(EXECUTIVEOF WTO)(EXECUTIVEOF WTO)
GENERAL COUNCILGENERAL COUNCIL
PERFORMS FUNCTIONSPERFORMS FUNCTIONS OF MC DURING INTERVALOF MC DURING INTERVAL
FRAMES RULES AND PROCEDURESFRAMES RULES AND PROCEDURES FOR FUNCTIONAL COUNCILSFOR FUNCTIONAL COUNCILS TO DISCHARGETO DISCHARGERESPONSIBILITIESOF DISPUTESSETTLEMENTRESPONSIBILITIESOF DISPUTESSETTLEMENT BODYBODY
TO DISCHARGETO DISCHARGERESPONSIBILITIESOF TRADEPOLICY REVIEWRESPONSIBILITIESOF TRADEPOLICY REVIEW MECHANISMMECHANISM
(TPRM)(TPRM)
FUNC
TIO
NALCO
UNC
ILS
FUNC
TIO
NALCO
UNC
ILS
TRADE INTRADE IN GOODSGOODS
TRADE INTRADE IN SERVICESSERVICES
TRIPSTRIPS
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DECISION MAKINGDECISION MAKINGDECISION MAKINGDECISION MAKING
BY CONSENSUSBY CONSENSUS
REACHED BY VOTING,REACHED BY VOTING, EACH COUNTRY HAS ONEEACH COUNTRY HAS ONE
VOTEVOTE MC AND GC HASMC AND GC HAS EXCLUSIVE INTERPRETATIONEXCLUSIVE INTERPRETATION
POWERPOWER OF MTA, AGREEMENT ESTABLISHINGOF MTA, AGREEMENT ESTABLISHINGWTOWTO
INTERPRETATION ISINTERPRETATION IS ADOPTED BY CONSENSUSADOPTED BY CONSENSUSOR 3/4 MAJORITYOR 3/4 MAJORITY OF MEMBERSOF MEMBERS
MC CAN WAIVE OBLIGATIONMC CAN WAIVE OBLIGATION UNDER MTAANDUNDER MTAAND
OTHER AGREEMENT BY 3/4 MAJORITY OFOTHER AGREEMENT BY 3/4 MAJORITY OF
MEMBERSMEMBERS
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DISPUTESETTLEMENT
CONSULTATIONCONSULTATION
ESTABLISHMENT OF A PANELESTABLISHMENT OF A PANEL
PANEL EXAMINATIONPANEL EXAMINATION
ADOPTION OF PANEL REPORTADOPTION OF PANEL REPORT
APPELLATE REVIEWAPPELLATE REVIEW
IMPLEMENTATIONIMPLEMENTATION
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MINISTERIAL CONFERENCESMINISTERIAL CONFERENCES
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MINISTERIAL CONFERENCES
HIGHEST DECISION MAKING BODYHIGHEST DECISION MAKING BODY
HELD ONCE IN 2 YEARSHELD ONCE IN 2 YEARS
MEETINGS HELDMEETINGS HELD
SINGAPORE, 9SINGAPORE, 9--13 DECEMBER 199613 DECEMBER 1996
GENEVA, 18GENEVA, 18--20 MAY 199820 MAY 1998
SEATTLE, NOVEMBER 30SEATTLE, NOVEMBER 30 DECEMBER 3, 1999DECEMBER 3, 1999
DOHA, 9DOHA, 9--13 NOVEMBER 200113 NOVEMBER 2001
CANCN, 10CANCN, 10--1414 SEPTEMBER 2003SEPTEMBER 2003
HONG KONG, 13HONG KONG, 13--18 DECEMBER 200518 DECEMBER 2005
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PROGRESS THROUGH MINISTERIALPROGRESS THROUGH MINISTERIAL
CONFERENCESCONFERENCES
Assess the implementation of commitments underthe WTO Agreements and decisions;
Review the ongoing negotiations and Work
Programs;
Examine developments in World Trade; and
Address challenges of evolving world economy.
Singapore IssuesSingapore Issues..
Foreign Investments.Foreign Investments.
Competition Policies.Competition Policies.
Govt ProcurementGovt Procurement
Trade Facilitation.Trade Facilitation.
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Second Ministerial Conference at GenevaSecond Ministerial Conference at Geneva
Focused on the review of the 50 years ofFocused on the review of the 50 years of
working of the system.working of the system. Expressed concerns over marginalization ofExpressed concerns over marginalization of
LDC and small economies.LDC and small economies.
Third Ministerial Conference In SeattleThird Ministerial Conference In Seattle..
Largest ever global conference on tradeLargest ever global conference on trade 135135
Countries.Countries.
It failed because of :
Bulkiness of the agenda on record. No progress was on the areas of agriculture,
services and intellectual property.
The developing and Least Developed Nations
were sidelined in the negotiations.
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Fourth Ministerial Conference In DohaFourth Ministerial Conference In Doha..
Fifth Ministerial Conference In Cancun.
Meeting held to break the deadlock of trade liberalisation
and fast track implementation of Doha talks.
To address imbalance in agricultural trade.
Talks collapsed as disagreement on Singapore Issues and
internal conflict between EU members.
Draft text did not reflect the concerns of developing and the
Least Developed nations.
Doha Development Agenda (DDA) was adopted, a blueprint
for the development of developing countries.
Crucial to bolstering international economic growth andhelping developing countries integrate into the global
economy.
Substantial increase in market access.
Reduction of all export subsidies. Substantial reduction in trade distorting domestic support.
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Revised Framework at Geneva 2004.
Key issues agriculture, tariff and custom
procedure. Foundation for the new treaty.
Balanced agreement.
Level playing field in agriculture.
147 members were in favour.
Sixth Ministerial Conference In Hong Kong.
Agenda. Implementation of Doha Development
Round. Differences Over Three Key Issues.
Agriculture. Non Agriculture Market Access ( NAMA ). S
ervices.
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Agriculture. Eliminate all forms of subsidies by 2013.
Developing countries allowed to declare appropriate
number of special products on self selection basis. Special Safeguard Mechanism Neutralize effects of
surge in imports.
NAMA.
Concession to developing countries on reduction ofindustrial tariffs.
Draft takes note on Indias recommendation to adopt
Swiss Formula three nations (Argentina-Brazil-India)
recommended a multiple co-efficientS
wiss Formulabased on each countrys tariff average.
Services.
Policy space for developing countries preserved.
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AGREEMENTSAGREEMENTS
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AGREEMENTSAGREEMENTS ANTIANTI--DUMPINGDUMPING
Exports a product at a price
lower than the price it normally
charges in its own home
market
Keeps check against such
dumped imports if causing
injury to a domestic industry.
Criteria
Dumping of goods has
taken place.
There was an injury to the
domestic industry, and
There exists an causal link
between dumping and
injury.
SAFEGUARDSSAFEGUARDS
Allows to take a safeguard
action to protect a specificdomestic industry from anunforeseen increase of imports
Members must not seek, take ormaintain any voluntary exportrestraints, orderly marketingarrangements
An import surge should justifysafeguard action
SUBSIDIES AND COUNTERVAILINGSUBSIDIES AND COUNTERVAILINGMEASURESMEASURES
Disciplines the use of subsidies,
and it regulates the actions
countries can take to counter theeffects of subsidies.
Applies to agricultural goods as
well as industrial products.
Two categories of subsidies:
prohibited and actionable.
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AGREEMENTSAGREEMENTS TRADE RELATED INVESTMENTTRADE RELATED INVESTMENT
MEASURES (TRIMS)MEASURES (TRIMS)
Promotion of progressiveliberalization of world trade
Facilitation of investment acrossinternational frontiers.
Applies only to trade in goods
Restrict preference of domesticfirms
Elimination two years fordeveloped countries, five yearsfor developing countries andseven years for LDCs.
TECHNICAL BARRIERS TO TRADETECHNICAL BARRIERS TO TRADE
Recognizes rights to adopt thestandards nations consider appropriate. eg, for human, animalor plant life or health, for theprotection of the environment orto meet other consumer interests.
Encourages countries to useinternational standards .
.
AGREEMENT ON PRESHIPMENTAGREEMENT ON PRESHIPMENTINSPECTIONINSPECTION
Recourse to preshipment inspection
Verify the quality, quantity or price
of imported goods
Provide transparency of the
operation
RULESOF ORIGINRULESOF ORIGIN
Their application facilitate the flow
of international trade.
Clear and predictable rules
Rules of origin do not nullify or
impair the rights of members under
GATT 1994.
TRADE IN SERVICESTRADE IN SERVICES
Establish a multilateral framework ofprinciples and rules for trade inservices
Right of members to regulateintroduce new regulations withintheir territories in order to meet
national policy objectives.
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OTHER AGREEMENTSOTHER AGREEMENTS
AGRICULTUREAGRICULTURE
SANITARY AND PHYSOSANITARY MEASURESSANITARY AND PHYSOSANITARY MEASURES
TEXTILES AND CLOTHINGTEXTILES AND CLOTHING
CU
ST
OMSV
ALUATIO
NSC
US
TOMS
V
ALUATIO
NS
IMPORT LICENSING PROCEDURESIMPORT LICENSING PROCEDURES
INFORMATION TECHNOLOGYINFORMATION TECHNOLOGY
BASIC TELECOMMUNICATIONSBASIC TELECOMMUNICATIONS
FINANCIAL SERVICESFINANCIAL SERVICES
MOVEMENT OF NATURAL PERSONSMOVEMENT OF NATURAL PERSONS
MARITIME TRANSPORTMARITIME TRANSPORT
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DECISION MAKING IN WTODECISION MAKING IN WTO
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PRINCIPLESOF THE TRADING SYSTEMPRINCIPLESOF THE TRADING SYSTEMFOLLOWSFOLLOWS THESETHESE FUNDAMENTALFUNDAMENTAL PRINCIPLESPRINCIPLES OFOF TRADINGTRADING..
TRADINGTRADING SYSTEMSYSTEM SHOULDSHOULD BEBE FREEFREE OFOF DISCRIMINATIONDISCRIMINATION..
TRADINGTRADING SYSTEMSYSTEM SHOULDSHOULD TENDTEND TOWARDTOWARD MOREMORE FREEDOMFREEDOM..
TRADINGTRADING SYSTEMSYSTEM SHOULDSHOULD BEBE PREDICTABLEPREDICTABLE..
TRADINGTRADING SYSTEMSYSTEM SHOULDSHOULD TENDTEND TOWARDTOWARD GREATERGREATER
COMPETITIONCOMPETITION..
TRADINGTRADING SYSTEMSYSTEM SHOULDSHOULD BEBE MOREMORE ACCOMMODATINGACCOMMODATING FORFOR
LESSLESS DEVELOPEDDEVELOPED COUNTRIESCOUNTRIES..
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REALITYREALITY Lack of internal transparency
Lack of participation of developing countries in
decision-making processes.
A country wishing to oppose a harmful proposal
can be effective only if it puts up a formalopposition at the time a decision by consensus is
sought.
Has to muster the support of the majority of the
members present. Thus, even today about half to two-thirds of any
full Green Room process would be comprised of
developing country participants
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PROBLEMSPROBLEMS
The practice of the consensus system isoften unfair to developing countries.
The overloaded agenda and too manymeetings held simultaneously have put
resource-deficient developing countries at agreat disadvantage.
Economic and political pressures areapplied on developing countries to influencetheir negotiating position.
There is great difficulty or impossibility tochange existing rules, even if they are
imbalanced or damaging.
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PROPOSALS TO IMPROVE DECISION MAKINGPROPOSALS TO IMPROVE DECISION MAKING
Permanent management or steering group needs to beestablished .
A small, informal steering committee (20 or so in number)to be set that can be delegated responsibility for developing consensus on trade issues among the membercountries.
Would not undercut existing WTO rights and obligationsnor the rule of decision making by consensus;
The formation of groups of countries would serve twoimportant functions.
significantly increase the number of WTO members
represented in the Green Room process. provide a forum for information sharing and
consultation among group members, and a channel forthe provision of technical assistance on WTO matters.Small countries in particular would benefit from such
pooling of resources.
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GENERAL PROPOSALSGENERAL PROPOSALS
Consensus system should be applied in a manner that fully
respects the views of developing-country members. The views of every member must be respected in a
decision involving consensus and explicit consensus,especially in the case of important issues.
WTO should adopt a realistic agenda and work schedulethat is fair especially for smaller delegations.
Developing countries should not be subjected to economicand political pressure relating to negotiations.
Decisions should not be made until all members are
technically ready. Developed countries should be ready to resolve
development issues (including implementation and specialand differential treatment) without exacting a new price.
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IMPLICATIONSIMPLICATIONS
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TheThe worldworld facesfaces thethe prospectprospect ofof 400400
preferentialpreferential tradetrade agreementsagreements byby 20102010 andand
thethe challengechallenge ofof ensuringensuring theythey contributecontributetoto thethe healthhealth ofof worldworld tradetrade
DirectorDirector--GeneralP
ascal LamyGeneralP
ascal Lamy(CII in Bangalore : 17 Jan 2007)(CII in Bangalore : 17 Jan 2007)
IMPLICATIONS
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WT
O Concerns all the
Countries.
Every Economic activity will be influenced by
agreements emanating from Negotiations in WTO.
Market access will improve with lowering of tariffs
and dismantling of other import restrictions. Lower tariffs will mean higher access to domestic
markets for foreign companies.
Broadened International scope ofBusiness.
Increased Products life. Easier and less expensive access to foreign
market.
Improved access ofConsumers to Product.
High Quality at Low Price. High Value forMoney.
IMPLICATIONS
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Consumer is the King Improved Business Efficiency (Inputs optimized).
Exploitation of Economies of Scale
(Encouraging product wise SEZ concept).
Increased importance of Marketing Research togain and retain market.
More importance to Environment Standards,
Health and Safety issues.
More FDI due to liberalized Foreign investmentregime.
Multilateral Globalized Forums help in coping with
trade accidents.
Brings order to International Trade
IMPLICATIONS
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Present Scenario : -ve Implications
Since inception in 1995, a Major Focus for
Protests by Civil Society Groups in many countries.
WTO rules evolved in Developed Countries
reflect their concerns / ideologies.
Free Trade not making Ordinary People's Lives
more Prosperous But Rich becoming Richer.
WTO Treaties: Unfair Bias towards MNC and
Wealth Countries
IMPLICATIONS
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Under Devp / Developing Countries wield littleInfluence - Influential Nations Focus own
Commercial Interests.
Developing Countries forced to sign on Dotted
lines. Issues of Health, Safety and Environment are
ignored.
Developing countries have given more than what
they have received. India has changed its IPRs, QRs and Textile
Policies But No Benefits Visible.
Rich Countries Maintain High Import Duties and
Quotas, blocking imports from devp countries.
IMPLICATIONS
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Anti-Dumping Measures against developingcountries.
High protection to agriculture in developed
countries : Developing ones pressuried to opentheir markets.
The TRIPS agreement limits developing countries
from utilizing technology originating from abroad.
Many developing countries do not have the
capacity to participate actively and follow the
negotiations.
IMPLICATIONS
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Present Scenario : +ve Implications
Developing Countries Reviewed antiqueted
trade policies like QRs : to meet realities of
market.
USA forced to abodan its Super 301 provision.
Developing Countries using multilateral forum tonegtiate beter deals for themselves.
IMPLICATIONS
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India - FounderMemberOf GATT
Relevance To India Access To World Market
Boost To Export Industry
More Competative
Multi Trading System
Rising Import/export
Agriculture most critical
Validation of GIs-GeographicalIndications
Issues India needs to decide Tariff cuts
Custom procedures
Consensus
INDIAN CONTEXT
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INDIASCONTRIBUTION IN WTO
Liberising Tariffs & MarketAccess
Active Role In G-20/G-33
Equal Role In Services
Key Role In TRIPS AGREEMENT
Has Challenged EU & US At
Dispute Settlement Body
India Opposed The Declaration
At Cancun Meet 2003.
WTO DG Recognizes Indias
Ambitions
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