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WTo and GATT
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GATT & WTO
Presented by-
Suditi BhagatArpit MittalNaman Jain
GATT
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
Introduction Of GATT(1948 - 1994)
1930 Depression in international trade. Restrictions- safe guard their interest Oct 30 1947,23 countries at Geneva signed an
agreement-GATT Post World War II, the victory nations sought to
create institutions - eliminate the causes of war.
To resolve/prevent war through the United Nations
To eliminate the economic causes of war by establishing three international economic
institutions.
Back ground
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
Objectives of GATT
Non Discrimination
Prohibition of Quantitative Restrictions
Concept of consultation aims to avoid damage to trading interests of contracting parties.
GATT provides frame work within which the negotiations can be held for reduction of tariff another barrier to trade and structure for embodying results of such negotiations.
Fundamental Principles of GATT
Matters related to the tariff and related matters granted to any of
the trading partner. Ensures that any tariff reduction or any other trade concession is
extended to all GATT parties. National treatment: GATT members must give imported goods treatment equal to that
of domestic goods. No restrictions on charges like rates may be applied to imported
goods unless equally treated. Protection through tariff: Prohibits quantitative restrictions / Quotas. Contracting parties are expected to provide protection by means of
tariffs which are transparent and subject to negotiations in the GATT.
Dispute Settlement: Procedures from Uruguay round negotiations provides more
automatic and effective resolution of disputes between member nations.
FUNCTIONS OF GATT
Established: 1st January 1995 with its origin in Bretton Woods Conference post World War II .
Motive:- Formed for economic stability, peace and for reconstruction
Created By: Uruguay Round negotiations (1986-1994)
Headquarter: Geneva, Switzerland
Membership: 160 member states (26th June 2014)
Secretariat Staff: 640
INTRODUCTION OF WTO
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.
WORLD TRADE ORGANIZATION
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
WTO MEMBERS
The GATT (1948) multilateral instrument governing international trade managed to operate for almost half a century as a semi institutionalized multilateral treaty regime on a provisional basis.
Seven 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 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.
FORMATION OF WTO
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)
Areas of Uruguay Round
Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring National Trade policies Technical assistance and training for developing
countries Cooperation with other international
organizations.
Functions of WTO
1. Non-Discrimination. 2. Reciprocity.3. Binding and enforceable commitments. The tariff commitments 4. Transparency. 5. Safety valves.
Principles of WTO
WTO has 160 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.
STRUCTURE OF WTO
The agreements are the outcome of negotiations between the members.
The current set of agreements are the result of 1986-1994 Uruguay round of negotiations, which is a revision of GATT.
A non-discriminatory trading system is operated through these agreements, which enlist the rights & obligations of the members.
The various WTO agreements in different sectors are:a. In case of Goodsb. In case of Servicesc. In case of Intellectual property
WTO AGREEMENTS
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 WTO AND INDIA
Increase in Export Earnings Agricultural Exports Export of textile and clothing Multilateral rules and disciplines Growth to service exports Foreign investment
IMPACT ON INDIAN ECONOMY
The World Trade Organization (WTO)
deals with the global rules of trade between nations.
Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.