World Trade OrganizationUnfolding the One World Story

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Class of PGDM 2008-10

History

Old wine in a new bottle

The idea of WTO was conceptualized in Bretton Woods Conference in 1944, along with World Bank and IMF.

International Trade Organization (ITO) Charter was rectified to form an interim arrangement in the form of GATT (1948).

Finally born, on 1st August, 1994 and came into act from 1st January, 1995.

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The Uruguay Round

Uruguay Round (UR) was the 8th round of multi-lateral trade negotiations held in Sept ’86.

Due to the conflicting issues UR could not be concluded in Dec ‘90 as scheduled.

Arthur Dunkel, the then Director General of GATT presented a draft act, popularly known as Dunkel Draft.

Dunkel Draft was replaced by an enlarged and modified final text was approved by 125 Governments on 15th April 1994.

This Draft led to the formation of WTO. An organization that was conceptualized 50 years back.

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Functions of WTO

The WTO has 5 specific functions.

a) The WTO shall facilitate the implementation, administration and operation of multi-lateral and pluri-lateral trade agreements.

b) The WTO shall administer the Trade Review Mechanism.

c) The WTO shall provide the forum for negotiation among the members concerning the multi-lateral trades.

d) The WTO shall administer the understanding on rules and procedures governing the settlement of disputes.

e) With a view to achieve greater coherence in Global Economic Policy making the WTO shall co-operate with IMF, IBRD and its affiliated agencies.

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GATT to WTO – A half a century Journey

WTO

WTO and its agreement are permanent

WTO has members

WTO is more powerful than GATT

Dispute settlement mechanism faster and efficient.

Very difficult to block its rulings.

GATT

GATT was Ad-Hoc and provisional

GATT had contracting parties.

GATT allowed domestic legislative purview.

GATT was less powerful, dispute settlement slow and inefficient.

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WTO and Developing Countries

i) WTO provides a window for gradual roll-out of TRIPS and IPR regulations.

ii) Provision for regional trade blocks.

iii) The principles of Non-discrimination, transparency, increased certainty, trade facilitation and protection from monopolistic competition.

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WTO and India

i) India’s trade gain.

ii) Competitive advantage due to WTO.

iii) Potential of becoming a knowledge hub due to CBD (Connection on Biological Diversity) and better IPR protection.

iv) FDI and MNC Exposure.

v) India getting a platform to showcase its talent globally.

“Seattle is Bangalored…”

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WTO and Agriculture

Blue Box, Green Box and Amber Box Subsidy

Dumping and Tariff Barrier.

Quarantine Barriers.

Mango Vs. Harley Davidson.

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Ministerial Round and Present Deadlock

i) Ministerial Conference is the highest body of WTO.

ii) Due to conflict of interests between developed and emerging nations, especially in-terms of agricultural subsidies last few ministerial conferences have failed miserably.

iii) BRIC and MERCOSUR trade blocks are building another axis of power apart from Euro and US making world economy tripolar.

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Evaluation of WTO

Benefits of WTO:

i) WTO has made significant achievements in reducing the Tariff and Non-Tariff Barrier.

ii) The liberalization of investments had been fostering economic growth of a number of countries.

iii) WTO provides a forum for multi-lateral discussions of economic relations between nations.

iv) It has a system to settle trade disputes between nations.

v) Malta to Morocco, Stockholm to Shanghai World on one platform .

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Evaluation of WTO

Criticism:

i) Negotiations and Decision making in WTO dominated by Developed Countries.

ii) Most Developing Countries do not have the Financial and Knowledge resources to effectively participate in the WTO discussions and negotiations.

iii) Due to the dependence of Developing Countries on the Developed ones, the Developed countries are able to resort to arm-twisting techniques.

iv) The WTO has not been successful to impose the organizational disciplines on the Developed Nations.

v) Sub-Saharan, Third World and OECD countries are becoming new Colonies- Thanks to WTO.

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It is the current round of negotiations started in November 2001.

An ambitious effort to make globalisation more inclusive and help the world's poor.

The Ministerial attracted a lot of attention, due to conflicts between the developing and developed countries.

The multilateral trading system embodied in the World Trade Organization has contributed significantly to economic growth, development and employment throughout the past fifty years.

The TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Members can set aside the patent laws if they have to face epidemics

The talks have been highly contentious and agreement has not been reached.

DOHA round

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Cancun to Singapore

Go Back Go Back…!!!