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World Trade Organisation (WTO) Agreement

History:
India is the founder member of both GATT (1947) and successor organization the WTO. Wor d Trade Organisation (WTO) came into e!istence on "anuar# 1st$ 199% re& acing GATT (Genera Agreement on Tariff and Trade). India became a fonder member of WTO b# ratif#ing the WTO agreement on '( )ecember 1994. It incor&orates )un*e +ro&osa s$ i.e. )un*e )raft in res&ect of internationa trade and trade re ated matters. )un*e draft ,as made in )ecemeber 1991 b# Arthur )un*e ,ho ,as the )irector Genera of GATT. The successfu conc usion of -rugua# .ound mar*ed the beginning of ne, era in the functioning of the g oba trading s#stem. /efore the com& etion of -rugua# .ound negotiation$ the future sha&e of the g oba trading en0ironment ,as far from encouraging. 1ai ing agreement$ ,or d cou d ha0e fragmented into e!c usi0e regiona trading b ocs$ ,ith the &ros&ect of countries resorting to uni atera action to sett e dis&utes. The -rugua# .ound agreement has ensure the continuation an o&en ,or d trading s#stem$ based on non2discrimination and sett ement dis&utes ,ith a mu ti atera frame ,or*. The ne, trading ru es co0ers sectors &re0ious # e!c uded from mu ti atera negotiations and disci& ines$ such as te!ti e$ c othing and agricu ture. WTO has gi0en the mandate to negotiate mu ti atera ru es in ne, areas inc uding ser0ices$ inte ectua &ro&erties and trade re ated in0estment measures. O0er time$ these ru es ma# be e!tended to the border as&ects of foreign in0estment$ com&etition &o ic# and trade re ated in0estment measures. The Wor d Trade Organization came into e!istence in nineteen ninet#2 fi0e. It o&erates a s#stem of trade ru es. It ser0es as a & ace for nations to sett e dis&utes and negotiate agreements to reduce trade barriers.

The ne,est of its one hundred fift# members$ 3ietnam$ 4oined in "anuar#. /ut the roots of the W.T.O. date bac* to Wor d War T,o and the #ears that fo o,ed. In nineteen fort#2four$ a meeting too* & ace in /retton Woods$ 5e, 6am&shire7 the Internationa 8onetar# 9onference. There$ negotiators agreed to create the Internationa 8onetar# 1und and the Wor d /an*. /ut the# cou d not agree on an organization to dea ,ith internationa trade. Three #ears ater$ in nineteen fort#2se0en$ t,ent#2three nations a&&ro0ed the Genera Agreement on Tariffs and Trade$ or GATT. It ,as meant to be tem&orar#. Trade negotiations under GATT ,ere carried out in a series of ta *s ca ed rounds. The first round o,ered im&ort ta!es on one2fifth of ,or d trade. :ater rounds &roduced additiona cuts$ and negotiators added more issues. The si!th round began in nineteen si!t#2three. It ,as ca ed the ;enned# .ound after the murder of +resident "ohn 1. ;enned#. The resu ts inc uded an agreement against trade dum&ing. This is ,hen one countr# se s a &roduct in another countr# at an unfair # o, &rice. The eighth round of ta *s began in +unta de <ste$ -rugua#$ in nineteen eight#2si!. The -rugua# .ound asted a most t,ice as ong as & anned. In a $ one hundred t,ent#2three nations too* &art in se0en2and2a2ha f #ears of ,or*. The# set time imits for future negotiations. The# a so agreed to create a &ermanent s#stem to sett e trade dis&utes. In A&ri of nineteen ninet#2four$ most of those one hundred t,ent#2 three nations signed an agreement. It re& aced GATT ,ith the Wor d Trade Organization. The W.T.O. aunched a ne, round on de0e o&ment issues in )oha$ =atar$ in 5o0ember of t,o thousand one. These ta *s ,ere su&&osed to end b# "anuar# of t,o thousand fi0e. /ut negotiators cou d not agree on issues in0o 0ing agricu tura &rotections. The current round has been sus&ended since ast "u #.

Introduction to World Trade Organisation


The Wor d Trade Organization (WTO) is the on # g oba internationa organization dea ing ,ith the ru es of trade bet,een nations. At its heart are the WTO agreements$ negotiated and signed b# the bu * of the ,or d>s trading nations and ratified in their &ar iaments. The goa is to he & &roducers of goods and ser0ices$ e!&orters$ and im&orters conduct their business. The Wor d Trade Organisation (WTO) came into e!istence on "anuar# 1$ 199% re& a#ing the GATT$ ,ith a membershi& of ?1 countries. The membershi& has increased to 14@ countries as on 4 A&ri $ A(('. It ,as born out of -rugua# .ound of negations. WTO is an Organisation for ibera izing trade. It is a forum for go0ernments to negotiate trade agreements and a so to sett e trade dis&utes. It o&erates a s#stem of trade ru es. At its heart are the WTO Agreements$ negotiated and signed b# the bac* of the ,or d>s trading nations. These documents &ro0ide the ega ground ru es for internationa commerce. The# are essentia # contracts$ binding go0ernments to *ee& their trade &o icies ,ithin agreed imits. A though negotiated and signed b# go0ernments$ the goa is to he & &roducers of goods and ser0ices$ e!&orters and im&orters conduct their business$ ,hi e a o,ing go0ernments to meet socia and en0ironmenta ob4ecti0es.
The Wor d Trade Organization (WTO) is the on # g oba internationa organization dea ing ,ith the ru es of trade bet,een nations. At its heart are the WTO agreements$ negotiated and signed b# the bu * of the ,or d>s trading nations and

ratified in their &ar iaments. The goa is to he & &roducers of goods and ser0ices$ e!&orters$ and im&orters conduct their business.

The WTO$ as the cornerstone of the mu ti atera trading s#stem see*s to im&ro0e and strengthen ru es designed to &romote the e!&ansion of internationa trade. It is res&onsib e for negotiating and im& ementing ne, trade agreements and is in charge of &o icing member countriesB adherence to a the WTO Agreements. The basic &rinci& es ,hich guide the WTO are as fo o,s7 a) 5on2)iscrimination +rinci& e 815 treatment 5ationa Treatment b) Cecurit# and &redictabi it# of mar*et access. c) Increasing the &artici&ation of de0e o&ing countries in the mu ti atera trading C#stem. d) 1air trade 2&ossibi it# to res&ond to unfair trading &ractices such as dum&ing and Cubsidization. e) Trans&arenc#.

What is WTO
There are a number of ,a#s of oo*ing at the WTO. It>s an organization for ibera izing trade. It>s a forum for go0ernments to negotiate trade agreements. It>s a & ace for them to sett e trade dis&utes. It o&erates a s#stem of trade ru es.
Above all, its a negotiating forum: <ssentia #$ the WTO is a & ace ,here member

go0ernments go$ to tr# to sort out the trade &rob ems the# face ,ith each other. Its a set of rules: ega At its heart are the WTO agreements$ negotiated and commerce. The# are essentia # contracts$

signed b# the bu * of the ,or d>s trading nations. These documents &ro0ide the ground2ru es for internationa binding go0ernments to *ee& their trade &o icies ,ithin agreed imits. A though negotiated and signed b# go0ernments$ the goa is to he & &roducers of goods and ser0ices$ e!&orters$ and im&orters conduct their business$ ,hi e a o,ing go0ernments to meet socia and en0ironmenta ob4ecti0es.

It helps to settle disputes:This is a third im&ortant side to the WTO>s ,or*. Trade re ations often in0o 0e conf icting interests. Agreements$ inc uding those &ainsta*ing # negotiated in the WTO s#stem$ often need inter&reting. The most harmonious ,a# to sett e these differences is through some neutra &rocedure based on an agreed ega foundation. That is the &ur&ose behind the dis&ute sett ement &rocess ,ritten into the WTO agreements.

Principles of WTO The WTO Agreements are ength# and com& e! because the# are ega tests co0ering a ,ide range of acti0ities. The# dea ,ith agricu ture$ te!ti es and c othing$ ban*ing$ te ecommunication$ go0ernment &urchases$ industria standards and &roduct safet#$ food$ sanitation regu ations$ inte ectua &ro&ert# and so on. /ut a number of sim& e$ fundamenta &rinci& es run throughout a if these documents. These &rinci& es are the foundation of the mu ti atera trading s#stem. The im&ortant &rinci& es are7 1. Non-Discrimination Principle7 The &rinci& e of 5on2)iscrimination has t,o dimensions$ that is the most fa0oured nation (815) and the nationa treatment. a) !N treatment7 It means treating other &eo& e eDua #. -nder the WTO agreements$ countries cannot norma # discriminate bet,een their trading &artners. Grant someone a s&ecia fa0our (such as a o,er customs dut# rate for one of their &roducts) and #ou ha0e to do the same for a other WTO members. This &rinci& e is *no,n as most2fa0oured2nation (815) treatment. It is so im&ortant that it is the first artic e of the Genera Agreement on Tariffs and Trade (GATT)$ ,hich go0erns trade in goods. 815 is a so a &riorit# in the Genera Agreement on Trade in Cer0ices (GATC) (Artic e A) and the Agreement on Trade2.e ated As&ects of Inte ectua +ro&ert# .ights (T.I+C) (Artic e 4)$ a though in each agreement the &rinci& e is hand ed s ight # different #. Together$ those three agreements co0er a three main areas of trade hand ed b# the WTO. Come e!ce&tions are a o,ed. 1or e!am& e$ countries can set u& a free trade agreement that a&& ies on # to goods traded

,ithin the grou& E discriminating against goods from outside. Or the# can gi0e de0e o&ing countries s&ecia access to their mar*ets. Or a countr# can raise barriers against &roducts that are considered to be traded unfair # from s&ecific countries. And in ser0ices$ countries are a o,ed$ in imited circumstances$ to discriminate. /ut the agreements on # &ermit these e!ce&tions under strict conditions. In genera $ 815 means that e0er# time a countr# o,ers a trade barrier or o&ens u& a mar*et$ it has to do so for the same goods or ser0ices from a its trading &artners E ,hether rich or &oor$ ,ea* or strong.
-nder the WTO agreements$ countries cannot norma # discriminate bet,een their trading +artners. Grant someone a s&ecia fa0our (such as a o,er customs dut# rate for one of their &roducts) and #ou ha0e to do the same for a other WTO members. This &rinci& e is *no,n as most2fa0oured2nation (815) treatment. It is so im&ortant that it is the first artic e of the Genera Agreement on Tariffs and Trade (GATT)$ ,hich go0erns trade in goods. 815 is a so a &riorit# in the Genera Agreement on Trade in Cer0ices (GATC) and the Agreement on Trade2.e ated As&ects of Inte ectua +ro&ert# .ights (T.I+C) $ a though in each agreement the &rinci& e is hand ed s ight # different #. Together$ those three agreements co0er a the WTO. three main areas of trade hand ed b#

b) National Treatment: Treating foreigners and oca s eDua # The nationa Treatment c ause forbids discrimination bet,een a member>s o,n nationa s and the nationa s of others members. <ach members shou d accord to the nationa s of other members treatment no ess fa0ourab e than that it gi0es to the o,n nationa s ,ith res&ect of co&#right$ &atents$ trademar*s etc. Im&orted and oca #2&roduced goods shou d be treated eDua # E at east after the foreign goods ha0e entered the mar*et. The same shou d a&& # to foreign and

domestic ser0ices$ and to foreign and oca trademar*s$ co&#rights and &atents. This &rinci& e of Fnationa treatmentG (gi0ing others the same treatment as one>s o,n nationa s) is a so found in a the three main WTO agreements (Artic e ' of GATT)$ Artic e 17 of GATC and Artic e ' of T.I+C)$ a though once again the &rinci& e is hand ed s ight # different # in each of these. National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax.Imported and locally-produced goods
should be treated equally - at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.

A. "ecurit# and predicta$ilit# of mar%et access (!reer Trade): :o,ering trade barriers is one of the most ob0ious means of encouraging trade. The barriers concerned inc ude customs duties (or tariffs) and measures such as im&ort bans or Duotas that restrict Duantities se ecti0e #. 1rom time to time other issues such as red ta&e and e!change rate &o icies ha0e a so been discussed.Cince GATT>s creation in 194724? there ha0e been eight rounds of trade negotiations. A ninth round$ under the )oha )e0e o&ment Agenda$ is no, under,a#. At first these focused on o,ering tariffs (customs duties) on im&orted goods. As a resu t of the negotiations$ b# the mid2199(s industria countries> tariff rates on industria goods had fa en steadi # to ess than 4H./ut b# the 19?(s$ the negotiations had e!&anded to co0er non2tariff

barriers on goods$ and to the ne, areas such as ser0ices and inte ectua &ro&ert#.O&ening mar*ets can be beneficia $ but it a so reDuires ad4ustment. The WTO agreements a o, countries to introduce changes gradua #$ through F&rogressi0e ibera izationG. )e0e o&ing countries are usua # gi0en onger to fu fi their ob igations.Cince GATT>s creation in 194724? there ha0e been eight rounds
of trade negotiations. A ninth round$ under the )oha )e0e o&ment Agenda$ is no, under,a#. At first these focused on o,ering tariffs (customs duties) on im&orted goods. As a resu t of the negotiations$ b# the mid2199(s industria countries> tariff rates on industria goods had fa en steadi # to ess than 4H. O&ening mar*ets can be beneficia $ but it a so reDuires ad4ustment. The WTO agreements a o, countries to introduce changes gradua #$ through F&rogressi0e ibera izationG. )e0e o&ing countries are usua # gi0en onger to fu fi their ob igations.

&' Increasing the participation of de(eloping countries in the multilateral trading "#stem (Predicta$ilit#)7
With stabi it# and &redictabi it#$ in0estment is encouraged$ 4obs are created and consumers can fu # en4o# the benefits of com&etition E choice and o,er &rices. The mu ti atera trading s#stem is an attem&t b# go0ernments to ma*e the business en0ironment stab e and &redictab e. In the WTO$ ,hen countries agree to o&en their mar*ets for goods or ser0ices$ the# FbindG their commitments. 1or goods$ these bindings amount to cei ings on customs tariff rates. Cometimes countries ta! im&orts at rates that are o,er than the bound rates. 1reDuent # this is the case in de0e o&ing countries. In de0e o&ed countries the rates actua # charged and the bound rates tend to be the same.

Cometimes$ &romising not to raise a trade barrier can be as im&ortant as o,ering one$ because the &romise gi0es businesses

a c earer 0ie, of their future o&&ortunities. With stabi it# and &redictabi it#$ in0estment is encouraged$ 4obs are created and consumers can fu # en4o# the benefits of com&etition E choice and o,er &rices. The mu ti atera trading s#stem is an attem&t b# go0ernments to ma*e the business en0ironment stab e and &redictab e.

The -rugua# .ound increased bindings +ercentages of tariffs bound before and after the 19?@294 ta *s )efore )e0e o&ed countries )e0e o&ing countries Transition economies 7? A1 7' After 99 7' 9?

(These are tariff ines$ so &ercentages are not ,eighted according to trade 0o ume or 0a ue) In the WTO$ ,hen countries agree to o&en their mar*ets for goods or ser0ices$ the# FbindG their commitments. 1or goods$ these bindings amount to cei ings on customs tariff rates. Cometimes countries ta! im&orts at rates that are o,er than the bound rates. 1reDuent # this is the case in de0e o&ing countries. In de0e o&ed countries the rates actua # charged and the bound rates tend to be the same. A countr# can change its bindings$ but on # after negotiating ,ith its trading &artners$ ,hich cou d mean com&ensating them for oss of trade. One of the achie0ements of the -rugua# .ound of mu ti atera trade ta *s ,as to increase the amount of trade under binding commitments (Cee Tab e). In agricu ture$ 1((H of

&roducts no, ha0e bound tariffs. The resu t of a this7 a substantia # higher degree of mar*et securit# for traders and in0estors. The s#stem tries to im&ro0e &redictabi it# and stabi it# in other ,a#s as ,e . One ,a# is to discourage the use of Duotas and other measures used to set imits on Duantities of im&orts E administering Duotas can ead to more red2ta&e and accusations of unfair & a#. Another is to ma*e countries> trade ru es as c ear and &ub ic (Ftrans&arentG) as &ossib e. 8an# WTO agreements reDuire go0ernments to disc ose their &o icies and &ractices &ub ic # ,ithin the countr# or b# notif#ing the WTO. The regu ar sur0ei ance of nationa trade &o icies through the Trade +o ic# .e0ie, 8echanism &ro0ides a further means of encouraging trans&arenc# both domestica # and at the mu ti atera e0e .

4. !air trade -possi$ilit# to respond to unfair trading practices such as dumping and "u$sidi*ation7 The WTO is sometimes described as a Ffree tradeG institution$ but that is not entire # accurate. The s#stem does a o, tariffs and$ in imited circumstances$ other forms of &rotection. 8ore accurate #$ it is a s#stem of ru es dedicated to o&en$ fair and undistorted com&etition.
The rules on non-discrimination !N and national treatment "ich "e explained before are designed to secure fair conditions of trade. #o too are those on dumping $exporting at belo" cost to gain market share% and subsidies. The issues are complex, and the rules try to establish "hat is fair or unfair, and ho" governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade

The ru es on non2discrimination E 815 and nationa treatment E are designed to secure fair conditions of trade. Co too are those on dum&ing (e!&orting at be o, cost to gain mar*et share) and subsidies. The issues are com& e!$ and the ru es tr# to estab ish

,hat is fair or unfair$ and ho, go0ernments can res&ond$ in &articu ar b# charging additiona im&ort duties ca cu ated to com&ensate for damage caused b# unfair trade. 8an# of the other WTO agreements aim to su&&ort fair com&etition7 in agricu ture$ inte ectua &ro&ert#$ ser0ices$ for e!am& e. The agreement on go0ernment &rocurement (a F& uri atera G agreement because it is signed b# on # a fe, WTO members) e!tends com&etition ru es to &urchases b# thousands of go0ernment entities in man# countries. And so on. +' ,ncouraging de(elopment and economic reform The WTO s#stem contributes to de0e o&ment. On the other hand$ de0e o&ing countries need f e!ibi it# in the time the# ta*e to im& ement the s#stem>s agreements. And the agreements themse 0es inherit the ear ier &ro0isions of GATT that a o, for s&ecia assistance and trade concessions for de0e o&ing countries. O0er three Duarters of WTO members are de0e o&ing countries and countries in transition to mar*et economies. )uring the se0en and a ha f #ears of the -rugua# .ound$ o0er @( of these countries im& emented trade ibera ization &rogrammes autonomous #. At the same time$ de0e o&ing countries and transition economies ,ere much more acti0e and inf uentia in the -rugua# .ound negotiations than in an# &re0ious round$ and the# are e0en more so in the current )oha )e0e o&ment Agenda. At the end of the -rugua# .ound$ de0e o&ing countries ,ere &re&ared to ta*e on most of the ob igations that are reDuired of de0e o&ed countries. /ut the agreements did gi0e them transition &eriods to ad4ust to the more unfami iar and$ &erha&s$ difficu t WTO &ro0isions E &articu ar # so for the &oorest$ F east2 de0e o&edG countries. A ministeria decision ado&ted at the end of the round sa#s better2off countries shou d acce erate im& ementing mar*et access commitments on goods e!&orted b# the east2de0e o&ed countries$ and it see*s increased technica

assistance for them. 8ore recent #$ de0e o&ed countries ha0e started to a o, dut#2free and Duota2free im&orts for a most a &roducts from east2de0e o&ed countries. On a of this$ the WTO and its members are sti going through a earning &rocess. The current )oha )e0e o&ment Agenda inc udes de0e o&ing countries> concerns about the difficu ties the# face in im& ementing the -rugua# .ound agreements.
The WTO s#stem contributes to de0e o&ment. On the other hand$ de0e o&ing countries need f e!ibi it# in the time the# ta*e to im& ement the s#stem>s agreements. And the agreements themse 0es inherit the ear ier &ro0isions of GATT that a o, for s&ecia assistance and trade concessions for de0e o&ing countries. O0er three Duarters of WTO members are de0e o&ing countries and countries in transition to mar*et economies. )uring the se0en and a ha f #ears of the -rugua# .ound$ o0er @( of these countries im& emented trade ibera ization &rogrammes autonomous #.

)retton -oods .onference


Definition of /)retton Woods Agreement/ & landmark system for monetary and exchange rate management established in '()). The *retton +oods &greement "as developed at the ,nited Nations onetary and !inancial -onference held in *retton +oods, Ne" .ampshire, from /uly ' to /uly 00, '()). a1or outcomes of the *retton +oods conference included the formation of the International onetary !und and the International *ank for 2econstruction and 3evelopment and, most importantly, the proposed introduction of an ad1ustable pegged foreign exchange rate system. -urrencies "ere pegged to gold and the I ! "as given the authority to intervene "hen an imbalance of payments arose.One of the &ro&osa s of the /retton Woods conference
,as that currencies shou d be con0ertib e for trade and other current account transactions. 1o o,ing the end of Wor d War II in 194%$ <uro&e and the rest of the ,or d embar*ed on a ength# &eriod of reconstruction and economic de0e o&ment to reco0er from the de0astation inf icted b# the ,ar. A though go d initia # ser0ed as the base reser0e currenc#$ the -.C do ar gained momentum as an internationa reser0e currenc# that ,as in*ed to the &rice of go d.

In "u # 1944$ re&resentati0es from 44 nations met at the 8ount Washington 6ote in /retton Woods$ 5e, 6am&shire for the -nited 5ations 8onetar# and 1inancia 9onference. The -nited Ctates go0ernment se ected the 8ount Washington 6ote as the site of the no, famous /retton Woods 9onference for 0arious reasons7 its remoteness offered sec usion from outside interferenceI the White 8ountains scener# ,as s&ectacu arI and ,ar2time securit# ,as more easi # managed. The 8ount Washington 6ote ,as c osed for business in 19'( and com& ete # refurbished before the conference.

Historic plaque with the inscription commemorating the Bretton Woods Conference, July 1-22, 19

!he "#$# $ecretary of the !reasury, Henry %orgenthau, Jr#, addresses the delegates to the Conference, July &, 19

a prodigious amount of work was done during the three weeks of the Conference. Many persons were assigned to both Bank and Fund committees, which met around the clock, and in addition to committee meetings, there were plenary sessions, where microphones were whisked from speaker to speaker by Boy Scouts reca s Chir e# /os*e# (Internationa /an* 5otes$ "u # 19%@)

'elegates in front of the %ount Washington Hotel, July 2, 19

(n informal gathering of the attendees of the Conference, July 19

8ore than a #ear ater$ re&resentati0es of A? nations gathered at the Ctate )e&artment in Washington$ ).9. to sign the /retton Woods 8onetar# Agreements &re iminar# agreed u&on at the /retton Woods 9onference.

(rticles of (greement of the )nternational %onetary *und and )B+', July 19

,Bretton Woods +ecalled, -y $hirley Bos.ey, )nternational Ban. /otes, July 1901

1red 3inson$ the -.C. Cecretar# of the Treasur#$ said at the time of the forma signing of the /retton Woods Agreements7 !istory is being written today as we e"ecute these documents and breathe the breath of life into the #nternational Monetary Fund and the #nternational Bank for $econstruction and %e&elopment. 'e can be thankful that the history we are now writing is not another chapter in the almost endless chronicle of war and strife. (urs is a mission of peace ) not *ust lip ser&ice to the ideals of peace ) but action, concrete action, designed to establish the economic foundations of peace on the bed rock of genuine international cooperation. +#f these two great international institutions are to achie&e the mission which the world has so hopefully entrusted to their care, it will re,uire the wholehearted and concerted cooperation of each of the member countries and their people+ (Treasur# )e&artment$ +ress .e ease$ )ecember A7$ 194%)

2ord 3eynes addressing the Conference meeting, July 19

"#$# (cting $ecretary of $tate 'ean (cheson addresses representati4es of 2& nations gathered to sign the Bretton Woods %onetary (greement, 'ecem-er 21, 19 0

Purposes and goals


The /retton Woods 9onference too* & ace in "u # 1944$ but some of its core accords did not become o&erati0e unti )ecember 19%?$ ,hen a <uro&ean currencies became con0ertib e. The I81 ,as de0e o&ed as a &ermanent internationa bod#. The summar# of agreements states$ JThe nations shou d consu t and agree on internationa monetar# changes ,hich affect each other. The# shou d out a, &ractices ,hich are agreed to be harmfu to ,or d &ros&erit#$ and the# shou d assist each other to o0ercome short2term e!change difficu ties.J The I/.) ,as created to s&eed u& &ost2,ar reconstruction$ to aid &o itica stabi it#$ and to foster &eace. This ,as to be fu fi ed through the estab ishment of &rograms for reconstruction and de0e o&ment. The main terms of this agreement ,ere7

1ormation of the I81 and the I/.)$ ,hich is toda# &art of the Wor d /an*. Ad4ustab # &egged foreign e!change mar*et rate s#stem7 The e!change rates ,ere fi!ed$ ,ith the &ro0ision of changing them if necessar#. 9urrencies ,ere reDuired to be con0ertib e for trade re ated and other current account transactions. The go0ernments$ ho,e0er$ had the &o,er to regu ate ostentatious ca&ita f o,s. As it ,as &ossib e that e!change rates thus estab ished might not be fa0ourab e to a countr#Bs ba ance of &a#ments &osition$ the go0ernments had the &o,er to re0ise them b# u& to 1(H. A member countries ,ere reDuired to subscribe to the I81Bs ca&ita .

!ailed proposals

International Trade Organization


The 9onference a so &ro&osed the creation of an Internationa Trade Organization (ITO) to estab ish ru es and regu ations for internationa trade. The ITO ,ou d ha0e com& emented the other t,o /retton Woods &ro&osed internationa bodies7 the I81 and the Wor d /an*. The ITO charter ,as agreed on at the -.5. 9onference on Trade and <m& o#ment (he d in 6a0ana$ 9uba$ in 8arch 194?)$ but the charter ,as not ratified b# the -.C. Cenate. As a resu t$ the ITO ne0er came into e!istence. 6o,e0er$ in 199%$ during the -rugua# .ound of GATT negotiations estab ished the Wor d Trade Organization (WTO) as the re& acement bod# for GATT. The GATT &rinci& es and agreements ,ere ado&ted b# the WTO$ ,hich ,as charged ,ith administering and e!tending them.

International Clearing Union


"ohn 8a#nard ;e#nes &ro&osed the I9- as a ,a# to regu ate the ba ance of trade. 6is concern ,as that countries ,ith a trade deficit ,ou d be unab e to c imb out of it$ &a#ing e0er more interest to ser0ice their e0er greater debt$ and therefore stif ing g oba gro,th. The I9- ,ou d effecti0e # be a ban* ,ith its o,n currenc# (the JbancorJ)$ e!changeab e ,ith nationa currencies at a fi!ed rate. It ,ou d be the unit for accounting bet,een nations$ so their trade deficits or sur& uses cou d be measured b# it. On to& of that$ each countr# ,ou d ha0e an o0erdraft faci it# in its JbancorJ account ,ith the I9-. ;e#nes &ro&osed ha0ing a ma!imum o0erdraft of ha f the a0erage trade size o0er fi0e #ears. If a countr# ,ent o0er that$ it ,ou d be charged interest$ ob iging a countr# to reduce its currenc# 0a ue and &re0ent ca&ita e!&orts. /ut countries ,ith trade sur& uses ,ou d a so be charged interest at 1(H if their sur& us ,as more than ha f the size of their &ermitted o0erdraft$ ob iging them to increase their currenc# 0a ues and e!&ort more ca&ita . If$ at the #earBs end$ their credit e!ceeded the ma!imum (ha f the size of the o0erdraft in sur& us)$ the sur& us ,ou d be confiscated. :ione .obbins re&orted that Jit ,ou d be difficu t to e!aggerate the e ectrif#ing effect on thought throughout the ,ho e re e0ant a&&aratus of go0ernment ... nothing so imaginati0e and so ambitious had e0er been discussedJ. 6o,e0er$ 6arr# )e!ter White$ re&resenting America ,hich ,as the ,or dBs biggest creditor said JWe ha0e been &erfect # adamant on that &oint. We ha0e ta*en the &osition of abso ute # no.J

Instead he &ro&osed an Internationa Ctabi isation 1und (no, the I81)$ ,hich ,ou d & ace the burden of maintaining the ba ance of trade on the deficit nations$ and im&osing no imit on the sur& us that rich countries cou d accumu ate. White a so &ro&osed creation of the I/.) (no, &art of the Wor d /an*) ,hich ,ou d &ro0ide ca&ita for economic reconstruction after the ,ar.

0eneral Agreement on Tariff and Trade (0ATT)


The Genera Agreement on Tariffs and Trade (GATT) ,as origina # created b# the /retton Woods9onference as &art of a arger & an for economic reco0er# after Wor d War II. The GATTBs main&ur&ose ,as to reduce barriers to internationa trade. This ,as achie0ed through the reduction oftariff barriers$ Duantitati0e restrictions and subsidies on trade through a series of differentagreements. The GATT ,as an agreement$ not an organization. Origina #$ the GATT ,as su&&osed tobecome a fu internationa organization i*e the Wor d /an* or I81 ca ed the Internationa TradeOrganization. 6o,e0er$ the agreement ,as not ratified$ so the GATT remained sim& # an agreement. The functions of the GATT ha0e been re& aced b# the Wor d Trade Organization. What is the &ur&ose of GATTK According to the +reamb e of GATT$ the ob4ecti0es of the contracting&arties inc ude$ L raising standards of i0ing L ensuring fu em& o#ment L a arge and steadi # gro,ing 0o ume of rea income and effecti0e demand L de0e o&ing the fu use of the resources of the ,or d L e!&anding the &roduction and e!change of goods. The +reamb e a so states the contracting &artiesB be ief that Jreci&roca and mutua # ad0antageousarrangements directed to the substantia reduction in tariffs and other barriers to trade and to thee imination of discriminator# treatment in internationa commerceJ ,ou d contribute to,ard these goa s. Im&ortant #$ Jfree tradeJ is not the stated ob4ecti0e of GATT. The ro e of GATT in integrating de0e o&ing countries into an o&en mu ti atera trading s#stem is a soof ma4or conseDuence. The increasing &artici&ation of de0e o&ing countries in the GATT tradings#stem and the &ragmatic su&&ort &ro0ided to them through the f e!ib e a&& ication of certain ru eshe &ed de0e o&ing countries to both e!&and and di0ersif# their trade. It cou d no, be said that agreat number of these countries ha0e a read# become fu &artners in the s#stem as can be,itnessed b# their acti0e &artici&ation in the -rugua# .ound. The tas* of he &ing to integrate furtherthe east2de0e o&ed countries is one of the cha enges that ies ahead in the WTO. Cimi ar #$ the fu integration of countries ,ith economies in transit ion into the trading s#stem must be achie0ed inorder to strengthen economic interde&endence as a basis for greater &ros&erit# and ,or d &eace. These negotiations ,ere critica to ensure the future hea th of the ,or d econom# and the tradings#stem. The g oba ization of the ,or d econom# o0er the &ast decade has created a greater re iancethan e0er on an o&en mu ti atera trading s#stem. 1ree trade has become the bac*bone of

economic&ros&erit# and de0e o&ment throughout the ,or d. +art # as a resu t of this$ there has been a shift intrade &o ic# mechanisms from border measures to interna &o ic# measures$ substantia # affectingthe management of trade re ations. The -rugua# .ound sought to estab ish a ne, ba ance in rightsand ob igations among trading nations as a resu t of this &henomenon. We are gradua # mo0ingto,ards a g oba mar*et& ace$ and for that$ ,e need a g oba s#stem of ru es for trade re ationsamong &artners in that mar*et & ace. The cha enges that ,e face are therefore enormous. The on # ,a# bac* from this g oba ization in the,or d econom# ,ou d be through de&ression and e0entua chaos. We therefore ha0e no choice but tomo0e for,ard. In doing so$ ho,e0er$ ,e must be sure to &reser0e to the highest e!tent &ossib e thes&irit and tradition of the GATT$ ,hich t o a arge e!tent ,as the *e# to its success.

1istor# and role of 0ATT


)iscussions after the end of the Cecond Wor d War ed to the setting u& of the Internationa 8onetar# 1und (I81) and the Wor d /an*. It ,as intended that there ,ou d be a third internationa organisation dea ing ,ith trade. The Genera Agreement on Tariffs and Trade (GATT) ,as signed in 1947 and it functions as the ma4or internationa instrument ,hich a#s do,n ru es for trade acce&ted b# the eading trading nations. There are at &resent 9A member countries *no,n as contracting &arties. The ob4ecti0es of GATT are Bto ensure that internationa trade is conducted in order to ensure fu em& o#ment and a arge and steadi # gro,ing 0o ume of rea and effecti0e demand$ de0e o&ing the fu use of the resources of the ,or d and e!&anding the &roduction and e!change of goods.B To achie0e these ends the contracting &arties shou d ha0e Breci&roca and mutua # ad0antageous arrangements directed at the substantia reduction of tariff and other barriers to trade in internationa commerceB.
The origina intention ,as to create a third institution to hand e the trade side of internationa economic co2o&eration 4oining the t,o F/retton WoodsG institutions$ the Wor d /an* and the Internationa 8onetar# 1und. O0er %( countries &artici&ated in negotiations to create an Internationa Trade Organization (ITO) as a s&ecia ized agenc# of the -nited 5ations. The draft ITO 9harter ,as ambitious. It e!tended be#ond ,or d trade disci& ines$ to inc ude ru es on em& o#ment$ commodit# agreements$ restricti0e business &ractices$ internationa in0estment$ and ser0ices.

<0en before the ta *s conc uded$ A' of the %( &artici&ants decided in 194@ to negotiate to reduce and bind customs tariffs. With the Cecond Wor d War on # recent # ended$ the# ,anted to gi0e an ear # boost to trade ibera ization$ and to begin to correct the egac# of &rotectionist measures ,hich remained in & ace from the ear # 19'(s. 1irst round of negotiations resu ted in 4%$((( tariff concessions affecting M1( bi ion of trade$ about one fifth of the ,or d>s tota . This A' countries a so agreed that the# shou d acce&t some of the trade ru es of the draft ITO 9harter. The combined &ac*age of trade ru es and tariff concessions became *no,n as the Genera Agreement on Tariffs and Trade. It entered into force in "anuar# 194?$ ,hi e the ITO 9harter ,as sti being negotiated. The A' became founding GATT members. After this first round of negotiations in Gene0a N C,itzer and$ GATT im&ro0ed b# 7 more rounds of negotiations. 1ina # in the ?th round named -rugua# .ound creation of WTO co0ered.

The 0ATT is $ased on a fe- fundamental principles'


1. Non-discrimination <ach member countr#$ or contracting &art#$ has to treat a other member countries eDua #. It reDuires member countries to e!tend most2 fa0oured nation treatment or eDua treatment to other member countries (there are agreed ru es co0ering free trade areas and customs unions).

A. Open mar%etsThis s&ecifies that &rotection is to be in the form of tariffs ,ith a other forms &rohibited.

'. Pre(ention of damage to the membersB trading interests Whi e the Agreement does not out a, dum&ing or domestic subsidies$ a member countries ha0e the right to e0# an anti2dum&ing or subsid# counter0ai ing dut# if their industries are materia # in4ured b# goods dum&ed in their mar*et or entering ,ith the he & of subsidies.

4. The pro(ision of a negotiating frame,or* for the reduction of tariffs ,hereb# such agreements become binding.

Ce0en rounds of mu ti atera negotiations ha0e so far ta*en & ace under the aus&ices of GATT 2 the most recent being the To*#o .ound of 197'21979. The resu ting trade ibera isation ed to un&recedented increases in the 0o ume of trade in the 19%(s and the 19@(s. Cince the oi crisis$ there has been a s o,er gro,th of internationa trade and a gro,th of &rotectionism. +ractices in co0ert and o0ert contra0ention of the &rinci& es of GATT ha0e been set u& in man# member countries. The most significant internationa agreement contrar# to free trade &rinci& es is the 8u ti21ibre Arrangement ,hich ,as introduced in its first form in the ear # 19@(s to regu ate trade in te!ti es.1 It &ur&orted to bring about a gradua ibera isation of trade but has in fact become an instrument of &rotection against de0e o&ing and ne, # industria ising countries. 8ore genera #$ 0o untar# e!&ort restraints (3<.s)$ go0ernment &rocurement$ technica s&ecifications and administrati0e &rocedures are increasing # used as a barrier to im&orts. 9ountertrade (the use of barter2t#&e agreements) ,hich is no, thought to account for a ma!imum of % &er cent of ,or d trade is another form of trade restriction.

WTO20ATT Principles
WTO embodies man# reci&roca rights and ob igations for trading countries and its core &rinci& e is the 8ost21a0oured25ations (815) c ause.-nder this$ trade must be conducted on the basis of non2discrimination2a members are bound to accord each other treatment in tariffs and trade as fa0ourab e as the# gi0e to an# other member2countr#. A second &rinci& e is that$to the ma!imum e!tend &ossib e$trade &rotection shou d be gi0en to domestic industries not through non2tariff measures such as Duantitati0e restrictions$arbitrar# technica standards$and hea th regu ations$etcI but on # through the customs tariff$ so that the e!tent &rotection is c ear and com&etition is sti &ossib e. Other basic &ro0isions areGnationa treatmentG(non2 discrimination)$trans&arenc# of trade ru es$and genera

&rohibition of Duantitati0e restrictions or Duotas.A fina &rinci& e embodied in the WTO is Ofair com&etition>.1air com&etition in the GATT conte!t is ref ected in a number of &ro0isions.Go0ernment subsidization of e!&orts is &rohibited andPor counter0ai ab e b# im&orting countries. 9ertain t#&es of the beha0iour &ursued b# e!&orting firms(as o&&osed to go0ernments)are a so counter0ai ab e.Thus$dum&ing b# e!&orters2,hich usua # mean charging a &rice in the e!&ort mar*et that is ess than ,hat is charged in the home mar*et N ma#be offset b# im&orting countr# go0ernment>s through the im&osition of an anti2dum&ing dut# if the dum&ing in4ures domestic com&etitors.

O$3ecti(e of the 0ATT


There ha0e been ' basic ob4ecti0es behind the estab ishment of the GATT. 1) It ,as to &ro0ide a frame,or* for conduct of trade re ations. A) It ,as to &ro0ide a frame,or* for and to &romote the &rogressi0e e imination of trade barriers. ') It ,as to &ro0ide a set of ru es that ,ou d &re0ent countries from ta*ing uni atera action. These ob4ecti0e aim to ma*e the internationa trade free from a the restriction and to faci ated the e!&ansion of internationa trade. .eduction in trade barriers and 0arious round of negotiations ha0e faci ited the e!&ansion of trade. 8ost fa0oured nation treatment under GATT has a so faci ated the e!&ansion of trade.

The 0ATT Period: 4567 to 4556

!rom '()4 to '((), the 5eneral &greement on Tariffs and Trade $5&TT% provided the rules for much of "orld trade and presided over periods that sa" some of the highest gro"th rates in international commerce. It seemed "ell-established, but throughout those )6 years, it "as a provisional agreement and organi7ation. The original intention "as to create a third institution to handle the trade side of international economic cooperation, 1oining the t"o 8*retton +oods9 institutions, the +orld *ank and the International onetary !und. :ver ;< countries participated in negotiations to create an International Trade :rgani7ation $IT:% as a speciali7ed agency of the ,nited Nations. The draft IT: -harter "as ambitious. It extended beyond "orld trade disciplines, to include rules on employment, commodity agreements, restrictive business practices, international investment, and services. The aim "as to create the IT: at a ,N -onference on Trade and =mployment in .avana, -uba in '()6. ean"hile, '; countries had begun talks in 3ecember '(); to reduce and bind customs tariffs. +ith the #econd +orld +ar only recently ended, they "anted to give an early boost to trade liberali7ation, and to begin to correct the legacy of protectionist measures "hich remained in place from the early '(><s. This first round of negotiations resulted in a package of trade rules and );,<<< tariff concessions affecting ?'< billion of trade, about one fifth of the "orld@s total. The group had expanded to 0> by the time the deal "as signed on >< :ctober '()6. The tariff concessions came into effect by >< /une '()4 through a 8Arotocol of Arovisional &pplication9. &nd so the ne" 5eneral &greement on Tariffs and Trade "as born, "ith 0> founding members $officially 8contracting parties9%. The 0> "ere also part of the larger group negotiating the IT: -harter. :ne of the provisions of 5&TT says that they should accept some of the trade rules of the draft. This, they believed, should be done s"iftly and 8provisionally9 in order to protect the value of the tariff concessions they had negotiated. They spelt out ho" they envisaged the relationship bet"een 5&TT and the IT: -harter, but they also allo"ed for the possibility that the IT: might not be created. They "ere right. The .avana conference began on 0' November '()6, less than a month after 5&TT "as signed. The IT: -harter "as finally agreed in .avana in arch '()4, but ratification in some national legislatures proved impossible. The most serious opposition "as in the ,# -ongress, even though the ,# government had been one of the driving forces. In '(;<, the ,nited #tates government announced that it "ould not seek -ongressional ratification of the .avana -harter, and the IT: "as effectively dead. #o, the 5&TT became the only multilateral instrument governing international trade from '()4 until the +T: "as established in '((;. !or almost half a century, the 5&TT@s basic legal principles remained much as they "ere in '()4. There "ere additions in the form of a section on development added in the '(B<s and 8plurilateral9 agreements $i.e. "ith voluntary membership% in the '(6<s, and efforts to reduce tariffs further continued. uch of this "as achieved through a series of multilateral negotiations

kno"n as 8trade rounds9 the biggest leaps for"ard in international trade liberali7ation have come through these rounds "hich "ere held under 5&TT@s auspices. In the early years, the 5&TT trade rounds concentrated on further reducing tariffs. Then, the Cennedy 2ound in the mid-sixties brought about a 5&TT &nti-3umping &greement and a section on development. The Tokyo 2ound during the seventies "as the first ma1or attempt to tackle trade barriers that do not take the form of tariffs, and to improve the system. The eighth, the ,ruguay 2ound of '(4B-(), "as the last and most extensive of all. It led to the +T: and a ne" set of agreements.

5&TT trade rounds Year Place/name '()6 5eneva '()( &nnecy '(;' Torquay '(;B 5eneva '(B<-'(B' 5eneva 3illon 2ound '(B)-'(B6 5eneva Cennedy 2ound '(6>-'(6( 5eneva Tokyo 2ound '(4B-'(() 5eneva ,ruguay 2ound Subjects covered Tariffs Tariffs Tariffs Tariffs Tariffs Tariffs and anti-dumping measures Tariffs, non-tariff measures, 8frame"ork9 agreements Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of +T:, etc Countries 0> '> >4 0B 0B B0 '<0

'0>

The Tokyo Round: The Tokyo 2ound lasted from '(6> to '(6(, "ith '<0 countries participating. It continued 5&TT@s efforts to progressively reduce tariffs. The results included an average one-third cut in customs duties in the "orld@s nine ma1or industrial markets, bringing the average tariff on industrial products do"n to ).6D. The tariff reductions, phased in over a period of eight years, involved an element of 8harmoni7ation9 the higher the tariff, the larger the cut, proportionally. In other issues, the Tokyo 2ound had mixed results. It failed to come to grips "ith the fundamental problems affecting farm trade and also stopped short of providing a modified

agreement on 8safeguards9 $emergency import measures%. Nevertheless, a series of agreements on non-tariff barriers did emerge from the negotiations, in some cases interpreting existing 5&TT rules, in others breaking entirely ne" ground. In most cases, only a relatively small number of $mainly industriali7ed% 5&TT members subscribed to these agreements and arrangements. *ecause they "ere not accepted by the full 5&TT membership, they "ere often informally called 8codes9. They "ere not multilateral, but they "ere a beginning. #everal codes "ere eventually amended in the ,ruguay 2ound and turned into multilateral commitments accepted by all +T: members. :nly four remained 8plurilateral9 those on government procurement, bovine meat, civil aircraft and dairy products. In '((6 +T: members agreed to terminate the bovine meat and dairy agreements, leaving only t"o.

"8..,"" O! 0ATT: One of the im&ortant achie0ement of GATT ,as the estab ishment of a forum for continuing consu tations. )is&utes that might other,ise ha0e caused continuing hard fee ing$ re&risa s and e0en di& omatic ru&ture ha0e been brought to the conference tab e and com&romised. GATT cou d achie0e considerab e tab e ibera ization.
/# stud#ing the histor# of GATT it can be sho,n that as the institution e0o 0ed it became more successfu in terms of the normati0e criterion. This dissertation e!amined ho, successfu # GATT ada&ted its aims to changing ,or d conditions$ and ,hether or not it achie0ed its ma4or aims through the use of its three main &rinci& es. This ,as achie0ed b# e!& oring the fundamenta ob4ecti0e of the &romotion of free and mu ti atera trade through the &rinci& es of transparency, reciprocity$ and non-discrimination as reDuired b# the normati&e criterion. Where the normati0e criterion is a techniDue that can be used to e0a uate institutions b# com&aring their initia aims to their outcomes. Throughout the histor# of GATT$ em&hasis ,as & aced on the reduction of tariff barriers. Tariffs ,ere &rogressi0e # reduced during each of the eight rounds of GATT$ and too* & ace through the &rinci& es of reci&rocit#$ non2discrimination$ and trans&arenc#. This meant a tariff reductions ,ere successfu under the normati0e criterion. /oth non2tariff barriers and agricu ture ,ere arge # e!c uded from the ear # rounds of GATT. As the# became increasing # im&ortant issues$ GATT successfu # ada&ted its ob4ecti0es to inc ude negotiations on non2tariff barriers and agricu tura &roducts. Qet it ,as not unti the -rugua# .ound that GATT achie0ed its ob4ecti0es in both areas$ and thus became successfu under the normati0e criterion. The integration of :)9s ,as a third area in ,hich itt e ,as achie0ed in the ear # rounds. )e0e o&ing countries remained dissatisfied ,ith the resu ts of both the ;enned# and To*#o .ounds$ e0en though GATT had successfu # ada&ted its ob4ecti0es to inc ude :)9s$ and achie0ed these ob4ecti0es in the To*#o .ound. Once again it ,as during the -rugua# .ound

that GATT achie0ed its ob4ecti0es in re ation to :)9s. This made the negotiations in this area successfu in terms of the normati0e criterion. 1ina #$ during the -rugua# .ound$ GATT a so ada&ted its ob4ecti0es to meet the other changing conditions. These ob4ecti0es ,ere a successfu # achie0ed$ ma*ing GATT successfu # under the normati0e criterion. The -rugua# .ound ended ,ith the creation of the WTO ,hich incor&orated the frame,or* of GATT into a &ermanent internationa institution. This strengthened the internationa trading s#stem and reduced the e0e of discrimination ma*ing it a success in terms of the normati0e criterion. Therefore it can be conc uded that each round ,as an im&ro0ement on the ast in terms of meeting the nominati0e criteria$ cu minating in the successfu transformation of GATT into the WTO$ ,hich incor&orated a the aims and &rinci& es of GATT into a sing e &ermanent institution.

Did

!TT succeedE

5&TT "as provisional "ith a limited field of action, but its success over )6 years in promoting and securing the liberali7ation of much of "orld trade is incontestable. -ontinual reductions in tariffs alone helped spur very high rates of "orld trade gro"th during the '(;<s and '(B<s around 4D a year on average. &nd the momentum of trade liberali7ation helped ensure that trade gro"th consistently out-paced production gro"th throughout the 5&TT era, a measure of countries@ increasing ability to trade "ith each other and to reap the benefits of trade. The rush of ne" members during the ,ruguay 2ound demonstrated that the multilateral trading system "as recogni7ed as an anchor for development and an instrument of economic and trade reform. *ut all "as not "ell. &s time passed ne" problems arose. The Tokyo 2ound in the '(6<s "as an attempt to tackle some of these but its achievements "ere limited. This "as a sign of difficult times to come. 5&TT@s success in reducing tariffs to such a lo" level, combined "ith a series of economic recessions in the '(6<s and early '(4<s, drove governments to devise other forms of protection for sectors facing increased foreign competition. .igh rates of unemployment and constant factory closures led governments in +estern =urope and North &merica to seek bilateral marketsharing arrangements "ith competitors and to embark on a subsidies race to maintain their holds on agricultural trade. *oth these changes undermined 5&TT@s credibility and effectiveness. The problem "as not 1ust a deteriorating trade policy environment. *y the early '(4<s the 5eneral &greement "as clearly no longer as relevant to the realities of "orld trade as it had been in the '()<s. !or a start, "orld trade had become far more complex and important than )< years beforeF the globali7ation of the "orld economy "as under"ay, trade in services not covered by 5&TT rules "as of ma1or interest to more and more countries, and international investment had expanded. The expansion of services trade "as also closely tied to further increases in "orld merchandise trade. In other respects, 5&TT had been found "anting. !or instance, in agriculture, loopholes in the multilateral system "ere heavily exploited, and efforts at liberali7ing agricultural trade met "ith little success. In the textiles and clothing sector, an exception to 5&TT@s normal disciplines "as negotiated in the '(B<s and early '(6<s, leading to

the ultifibre &rrangement. =ven 5&TT@s institutional structure and its dispute settlement system "ere causing concern. These and other factors convinced 5&TT members that a ne" effort to reinforce and extend the multilateral system should be attempted. That effort resulted in the ,ruguay 2ound, the arrakesh 3eclaration, and the creation of the +T:.

0ATT !ailures:

8rugua# 9ound:
It too* se0en and a ha f #ears$ a most t,ice the origina schedu e. /# the end$ 1A' countries ,ere ta*ing &art. It co0ered a most a trade$ from toothbrushes to & easure boats$ from ban*ing to te ecommunications$ from the genes of ,i d rice to AI)C treatments. It ,as Duite sim& # the argest trade negotiation e0er$ and most &robab # the argest negotiation of an# *ind in histor#.

The "ru#uay Round "as the 4th round of mu ti atera trade negotiations (8T5)
conducted ,ithin the frame,or* of the Genera Agreement on Tariffs and Trade (GATT)$ s&anning from 19?@ to 1994 and embracing 1A' countries as Jcontracting &artiesJ. The .ound ed to the creation of the Wor d Trade Organization$ ,ith GATT remaining as an integra &art of the WTO agreements. The broad mandate of the .ound had been to e!tend GATT trade ru es to areas &re0ious # e!em&ted as too difficu t to ibera ize (agricu turete!ti es) and increasing # im&ortant ne, areas &re0ious # not inc uded (trade in ser0ices$ inte ectua &ro&ert#$ in0estment &o ic# trade distortions).R1S The .ound came into effect in 199% ,ith dead ines ending in A((( (A((4 in the case of de0e o&ing countr# contracting &arties) under the administrati0e direction of the ne, # created Wor d Trade Organization (WTO).RAS The )oha )e0e o&ment .ound is the ne!t trade round$ beginning in A((1 and sti unreso 0ed after missing its officia dead ine of A((%. At times it seemed doomed to fai . /ut in the end$ the -rugua# .ound brought about the biggest reform of the ,or d>s trading s#stem since GATT ,as created at the end of the Cecond Wor d War. And #et$ des&ite its troub ed &rogress$ the -rugua# .ound did see some ear # resu ts. Within on # t,o #ears$ &artici&ants had agreed on a &ac*age of cuts in im&ort duties on tro&ica &roducts E ,hich are main # e!&orted b# de0e o&ing countries. The# had a so re0ised the ru es for sett ing dis&utes$ ,ith some measures im& emented on the s&ot. And the# ca ed for regu ar re&orts on GATT members> trade &o icies$ a mo0e considered im&ortant for ma*ing trade regimes trans&arent around the ,or d.

! round to end all roundsE The seeds of the ,ruguay 2ound "ere so"n in November '(40 at a ministerial meeting of 5&TT members in 5eneva. &lthough the ministers intended to launch a ma1or ne" negotiation, the conference stalled on agriculture and "as "idely regarded as a failure. In fact, the "ork programme that the ministers agreed formed the basis for "hat "as to become the ,ruguay 2ound negotiating agenda. Nevertheless, it took four more years of exploring, clarifying issues and painstaking consensusbuilding, before ministers agreed to launch the ne" round. They did so in #eptember '(4B, in Aunta del =ste, ,ruguay. They eventually accepted a negotiating agenda that covered virtually every outstanding trade policy issue. The talks "ere going to extend the trading system into

several ne" areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles. &ll the original 5&TT articles "ere up for revie". It "as the biggest negotiating mandate on trade ever agreed, and the ministers gave themselves four years to complete it. T"o years later, in 3ecember '(44, ministers met again in ontreal, -anada, for "hat "as supposed to be an assessment of progress at the round@s half-"ay point. The purpose "as to clarify the agenda for the remaining t"o years, but the talks ended in a deadlock that "as not resolved until officials met more quietly in 5eneva the follo"ing &pril. 3espite the difficulty, during the ontreal meeting, ministers did agree a package of early results. These included some concessions on market access for tropical products aimed at assisting developing countries as "ell as a streamlined dispute settlement system, and the Trade Aolicy 2evie" echanism "hich provided for the first comprehensive, systematic and regular revie"s of national trade policies and practices of 5&TT members. The round "as supposed to end "hen ministers met once more in *russels, in 3ecember '((<. *ut they disagreed on ho" to reform agricultural trade and decided to extend the talks. The ,ruguay 2ound entered its bleakest period. 3espite the poor political outlook, a considerable amount of technical "ork continued, leading to the first draft of a final legal agreement. This draft 8!inal &ct9 "as compiled by the then 5&TT director-general, &rthur 3unkel, "ho chaired the negotiations at officials@ level. It "as put on the table in 5eneva in 3ecember '(('. The text fulfilled every part of the Aunta del =ste mandate, "ith one exception it did not contain the participating countries@ lists of commitments for cutting import duties and opening their services markets. The draft became the basis for the final agreement. :ver the follo"ing t"o years, the negotiations lurched bet"een impending failure, to predictions of imminent success. #everal deadlines came and "ent. Ne" points of ma1or conflict emerged to 1oin agricultureF services, market access, anti-dumping rules, and the proposed creation of a ne" institution. 3ifferences bet"een the ,nited #tates and =uropean ,nion became central to hopes for a final, successful conclusion. In November '((0, the ,# and =, settled most of their differences on agriculture in a deal kno"n informally as the 8*lair .ouse accord9. *y /uly '((> the 8Guad9 $,#, =,, /apan and -anada% announced significant progress in negotiations on tariffs and related sub1ects $8market access9%. It took until '; 3ecember '((> for every issue to be finally resolved and for negotiations on market access for goods and services to be concluded $although some final touches "ere completed in talks on market access a fe" "eeks later%. :n '; &pril '((), the deal "as signed by ministers from most of the '0> participating governments at a meeting in arrakesh, orocco. The delay had some merits. It allo"ed some negotiations to progress further than "ould have been possible in '((<F for example some aspects of services and intellectual property, and the creation of the +T: itself. *ut the task had been immense, and negotiation-fatigue "as felt in trade bureaucracies around the "orld. The difficulty of reaching agreement on a complete

package containing almost the entire range of current trade issues led some to conclude that a negotiation on this scale "ould never again be possible. Het, the ,ruguay 2ound agreements contain timetables for ne" negotiations on a number of topics. &nd by '((B, some countries "ere openly calling for a ne" round early in the next century. The response "as mixedI but the arrakesh agreement did already include commitments to reopen negotiations on agriculture and services at the turn of the century. These began in early 0<<< and "ere incorporated into the 3oha 3evelopment &genda in late 0<<'.

The $ost%"ru#uay Round built%in a#enda any of the ,ruguay 2ound agreements set timetables for future "ork. Aart of this 8built-in agenda9 started almost immediately. In some areas, it included ne" or further negotiations. In other areas, it included assessments or revie"s of the situation at specified times. #ome negotiations "ere quickly completed, notably in basic telecommunications, financial services. $ ember governments also s"iftly agreed a deal for freer trade in information technology products, an issue outside the 8built-in agenda9.% The agenda originally built into the ,ruguay 2ound agreements has seen additions and modifications. & number of items are no" part of the 3oha &genda, some of them updated. There "ere "ell over >< items in the original built-in agenda. This is a selection of highlightsF There "ere "ell over >< items in the original built-in agenda. This is a selection of highlightsF &''(

aritime servicesF market access negotiations to end $>< /une '((B, suspended to 0<<<, no" part of 3oha 3evelopment &genda% #ervices and environmentF deadline for "orking party report $ministerial conference, 3ecember '((B% 5overnment procurement of servicesF negotiations start

&'')

*asic telecomsF negotiations end $'; !ebruary% !inancial servicesF negotiations end $>< 3ecember% Intellectual property, creating a multilateral system of notification and registration of geographical indications for "inesF negotiations start, no" part of 3oha 3evelopment &genda

&''*

Textiles and clothingF ne" phase begins ' /anuary

#ervices $emergency safeguards%F results of negotiations on emergency safeguards to take effect $by ' /anuary '((4, deadline no" arch 0<<)% 2ules of originF +ork programme on harmoni7ation of rules of origin to be completed $0< /uly '((4% 5overnment procurementF further negotiations start, for improving rules and procedures $by end of '((4% 3ispute settlementF full revie" of rules and procedures $to start by end of '((4%

&'''

Intellectual propertyF certain exceptions to patentability and protection of plant varietiesF revie" starts

+,,,

&gricultureF negotiations start, no" part of 3oha 3evelopment &genda #ervicesF ne" round of negotiations start, no" part of 3oha 3evelopment &genda Tariff bindingsF revie" of definition of 8principle supplier9 having negotiating rights under 5&TT &rt 04 on modifying bindings Intellectual propertyF first of t"o-yearly revie"s of the implementation of the agreement

+,,+

Textiles and clothingF ne" phase begins ' /anuary

+,,

Textiles and clothingF full integration into 5&TT and agreement expires ' /anuary

World Trade Organisation (WTO): ,sta$lishment:


WTO ,as estab ished on 1st "anuar# 199%. In A&ri 1994$ the 1ina Act ,as signed at a meeting in 8arra*esh$ 8orocco. The 8arra*esh )ec aration of 1%th A&ri 1994 ,as formed to strengthen the ,or d econom# that ,ou d ead to better in0estment$ trade$ income gro,th and em& o#ment throughout the ,or d. The WTO is the successor to the Genera Agreement of Tariffs and Trade (GATT). India is one of the founder members of WTO. WTO re&resents the atest attem&ts to create an organisationa foca &oint for ibera trade management and to conso idate a g oba organisationa structure to go0ern ,or d affairs. WTO has attem&ted to create 0arious organisationa attentions for regu ation of internationa trade. WTO created a Dua itati0e change in internationa trade. It is the on # internationa bod# that dea s ,ith the ru es of trades bet,een nations.

"cope of World Trade Organisation: In order to analyses at "hat extent +T: is contributing to the facilitation of the international trade it is necessary to establish the scope of the organi7ation. -urrently +T: has ';> members and >< observers, most of "hom are striving to be members $ embers and :bservers, online 0<''%. oreover, the amount of trade engaged in by +T: members account for over (6 percent of the total "orld trade. The contribution of trade to the economy of a country is beyond any doubts. The positive contribution of trade to the economy of a country is done through creation of ne" 1obs, encouraging entrepreneurial activities, and bringing ne" skills, kno"ledge and competencies into the country. !ounded in '((; +orld Trade :rganisation $+T:% deals "ith the rules of trade bet"een nations at a global or near-global level by providing a negotiating forum and helping to settle disputes. ,ntil its formation in '((;, some of the main function of +T: including formulating the rules of international trade "as performed by the 5eneral &greement on Tariffs and Trade $5&TT% since '()4 $Aeng, 0<<(%. Article I Scope and Definition
1. This Agreement applies to measures by Members affecting trade in services. 2. For the purposes of this Agreement, trade in services is defined as the supply of a service: (a from the territory of one Member into the territory of any other Member!

(b in the territory of one Member to the service consumer of any other Member! (c by a service supplier of one Member, through commercial presence in the territory of any other Member! (d by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member. ". For the purposes of this Agreement: (a #measures by Members$ means measures ta%en by: (i central, regional or local governments and authorities! and (ii non&governmental bodies in the e'ercise of po(ers delegated by central, regional or local governments or authorities! )n fulfilling its obligations and commitments under the Agreement, each Member shall ta%e such reasonable measures as may be available to it to ensure their observance by regional and local governments and authorities and non&governmental bodies (ithin its territory! (b #services$ includes any service in any sector e'cept services supplied in the e'ercise of governmental authority! (c #a service supplied in the e'ercise of governmental authority$ means any service (hich is supplied neither on a commercial basis, nor in competition (ith one or more service suppliers.

.unctions o/ World Trade Or#anisation: .unctions o/ WTO The former 5&TT "as not really an organisationI it "as merely a legal arrangement. :n the other hand, the +T: is a ne" international organisation set up as a permanent body. It is designed to play the role of a "atchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc. &rticle III has set out the follo"ing five functions of +T:I $i% The +T: shall facilitate the implementation, administration and operation and further the ob1ectives of this &greement and of the ultilateral Trade &greements, and shall also provide the frame "ork for the implementation, administration and operation of the plurilateral Trade &greements. $ii% The +T: shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt "ith under the &greement in the &nnexes to this &greement. $iii% The +T: shall administer the ,nderstanding on 2ules and Arocedures 5overning the #ettlement of 3isputes.

$iv% The +T: shall administer Trade Aolicy 2evie"

echanism.

$v% +ith a vie" to achieving greater coherence in global economic policy making, the +T: shall cooperate, as appropriate, "ith the international onetary !und $I !% and "ith the International *ank for 2econstruction and 3evelopment $I*23% and its affiliated agencies. Objectives o/ WTO Important ob1ectives of +T: are mentioned belo"F $i% to implement the ne" "orld trade system as visualised in the &greementI $ii% to promote +orld Trade in a manner that benefits every countryI $iii% to ensure that developing countries secure a better balance in the sharing of the advantages resulting from the expansion of international trade corresponding to their developmental needsI $iv% to demolish all hurdles to an open "orld trading system and usher in international economic renaissance because the "orld trade is an effective instrument to foster economic gro"thI $v% to enhance competitiveness among all trading partners so as to benefit consumers and help in global integrationI $vi% to increase the level of production and productivity "ith a vie" to ensuring level of employment in the "orldI $vii% to expand and utili7e "orld resources to the bestI $viii% to improve the level of living for the global population and speed up economic development of the member nations.

"tructure of World Trade Organisation:

The +orld Trade :rgani7ation came into force on /anuary ', '((;, fully replacing the previous 5&TT #ecretariat as the organi7ation responsible for administering the international trade regime. The basic structure of the +T: includes the follo"ing bodies

The Ministerial Conference$ ,hich is com&osed of internationa trade ministers from a member countries. This

is the go0erning bod# of the WTO$ res&onsib e for setting the strategic direction of the organization and ma*ing a fina decisions on agreements under its ,ings. The 8inisteria 9onference meets at east once e0er# t,o #ears. A though 0oting can ta*e & ace$ decisions are genera # ta*en b# consensus$ a &rocess that can at times be difficu t$ &articu ar # in a bod# com&osed of 1'@ 0er# different members. The General Council$ com&osed of senior re&resentati0es (usua # ambassador e0e ) of a members. It is res&onsib e for o0erseeing the da#2to2da# business and management of the WTO$ and is based at the WTO headDuarters in Gene0a. In &ractice$ this is the *e# decision2ma*ing arm of the WTO for most issues. Ce0era of the bodies described be o, re&ort direct # to the Genera 9ounci . The Trade Policy Re ie! "ody is a so com&osed of a the WTO members$ and o0ersees the Trade +o ic# .e0ie, 8echanism$ a &roduct of the -rugua# .ound. It &eriodica # re0ie,s the trade &o icies and &ractices of a member states. These re0ie,s are intended to &ro0ide a genera indication of ho, states are im& ementing their ob igations$ and to contribute to im&ro0ed adherence b# the WTO &arties to their ob igations. The #ispute $ettle%ent "ody is a so com&osed of a the WTO members. It o0ersees the im& ementation and effecti0eness of the dis&ute reso ution &rocess for a WTO agreements$ and the im& ementation of the decisions on WTO dis&utes. )is&utes are heard and ru ed on b# dis&ute reso ution &ane s chosen indi0idua # for each case$ and the &ermanent A&&e ate /od# that ,as estab ished in 1994. )is&ute reso ution is mandator# and binding on a members. A fina decision of the A&&e ate /od# can on # be re0ersed b# a fu consensus of the )is&ute Cett ement /od#. The Councils on Trade in Goods and Trade in $er ices o&erate under the mandate of the Genera 9ounci and are com&osed of a members. The# &ro0ide a mechanism to o0ersee the detai s of the genera and s&ecific agreements on trade in goods (such as those on te!ti es and agricu ture) and trade in ser0ices. There is a so a 9ounci for the Agreement on Trade2.e ated As&ects of Inte ectua +ro&ert# .ights$ dea ing ,ith 4ust that agreement and sub4ect area. The $ecretariat and #irector General of the WTO reside in Gene0a$ in the o d home of GATT. The Cecretariat no, numbers 4ust under %%( &eo& e$ and underta*es the administrati0e functions of running a as&ects of the organization. The Cecretariat has no ega decision2ma*ing &o,ers but &ro0ides 0ita ser0ices$ and often ad0ice$ to those

,ho do. The Cecretariat is headed b# the )irector Genera $ ,ho is e ected b# the members.

The Co%%ittee on Trade and #e elop%ent and Co%%ittee on Trade and <n0ironment are t,o of the se0era committees continued or estab ished under the Marrakech .greement in 1994. The# ha0e s&ecific mandates to focus on these re ationshi&s$ ,hich are es&ecia # re e0ant to ho, the WTO dea s ,ith sustainab e de0e o&ment issues. The 9ommittee on Trade and )e0e o&ment ,as estab ished in 19@%. The forerunner to the 9ommittee on Trade and <n0ironment (the Grou& on <n0ironmenta 8easures and Internationa Trade) ,as estab ished in 1971$ but did not meet unti 199A. /oth 9ommittees are no, acti0e as discussion grounds but do not actua # negotiate trade ru e

"ecretariat of World Trade Organisation:


The *T+ ,ecretariat is organi-ed into divisions. These are normally headed by a director (ho reports to a .eputy .irector&/eneral or directly to the .irector&/eneral. The Appellate 0ody has its o(n ,ecretariat.The WTO Cecretariat is headed b# a )irector2Genera . )i0isions come direct # under the )irector2Genera or one of his de&uties. This is the structure as of 1 October A(1'.

WTO Secretariat
Accessions Division The (or% of the division is to facilitate the negotiations bet(een *T+ members and states and entities re1uesting accession to the *T+ by encouraging their integration into the multilateral trading system through the effective liberali-ation of their trade regimes in goods and services! and to act as a focal point in (idening the scope and geographical coverage of the *T+. There are at present nearly "2 accession (or%ing parties in operation.

Administration and General Services Division The Administration and /eneral ,ervices .ivision is responsible for providing administrative and general services geared to meet the needs of the ,ecretariat and *T+ members. )ts responsibilities encompass budgetary, financial, travel, procurement, facility and pension management. )n addition, the division ensures the safety and security of the staff and buildings occupied by the ,ecretariat. The division also services the needs of *T+ members by supporting the (or% of the 3ommittee on 0udget, Finance and Administration.

Agriculture and Commodities Division The division handles all matters related to the ongoing negotiations on agriculture. !urthermore, the division provides support in the implementation of the existing +T: rules and commitments on agriculture, including by ensuring that the process for multilaterally revie"ing these commitments by the -ommittee on &griculture is organi7ed and conducted in an efficient manner. The "ork of the division encompasses to facilitate implementation of the &greement on the &pplication of #anitary and Ahytosanitary easures, including by servicing the #A# -ommittee. :ther activities of the division include support for the implementation of the inisterial 3ecision on easures -oncerning the Aossible Negative =ffects of the 2eform Arogramme on Jeast-3eveloped and Net !oodImporting 3eveloping -ountriesI dealing "ith matters related to trade in fisheries and forestry products as "ell as natural resource-based productsI providing services for dispute settlement in the area of agriculture and #A#I providing technical assistance in all areas under its purvie"I and cooperation "ith other international organi7ations and the private sector.

Council and Trade Negotiations Committee Division The -ouncil and Trade Negotiations -ommittee 3ivision provides support to the inisterial -onference, the 5eneral -ouncil, the Trade Negotiations -ommittee and the 3ispute #ettlement *ody. It is responsible for ensuring the efficient management of all formal, informal and other consultative meetings of these bodies and coordinating

follo"-up activities. It provides advice and support to the 3irector-5eneral and chairs of these bodies $and other members of senior management% in connection "ith their responsibilities in these areas, and prepares and circulates the +T: publication *asic Instruments and #elected 3ocuments. The division also coordinates "ork of the +T: -onference :ffice in the scheduling of formal, informal and consultative meetings of +T: bodies, symposia, "orkshops and seminars organi7ed under the auspices of +T: bodies and operational divisions of the +T: #ecretariat.

Development Division The .evelopment .ivision is the focal point for all policy issues related to trade and development. The division monitors and provides input to senior management and the *T+ ,ecretariat as a (hole on issues relating to trade and development, including the participation of developing countries 4 especially least&developed countries (5.3s 4 in the multilateral trading system. The division services the 3ommittee on Trade and .evelopment in regular session as (ell as its dedicated session on small and vulnerable economies, and its special sessions on special and differential treatment. The division services the ,ub&3ommittee on 5.3s. )t also serves the *or%ing /roup on Trade and Transfer of Technology. )n addition, it facilitates the meetings of the African /roup, the 5.3 /roup and the )nformal /roup of .eveloping 3ountries. The division is also responsible for coordinating the Aid for Trade initiative, (hich aims to help developing countries, particularly 5.3s, build trade&related s%ills and the infrastructure needed to e'pand their trading opportunities. The aim of the initiative is to create closer cooperation in national capitals bet(een trade, finance and development officials and to engage international and regional inter&governmental organi-ations and donors active in building trade capacity to address national and regional Aid for Trade needs. The .evelopment .ivision also serves as the focal point for the *T+6s participation in the enhanced )ntegrated Frame(or% (7)F , including in its governing bodies, the 7)F 0oard and the 7)F ,teering 3ommittee. The *T+ is one of the core 7)F agencies and (or%s (ith other international agencies, donors and other development partners to respond to the trade development needs of 5.3s.

Economic esearc! and Statistics Division The =conomic 2esearch and #tatistics 3ivision provides economic analysis and research in support of the +T:@s operational activities, including monitoring and reporting on current economic ne"s and developments. It carries out economic research on broader policy-related topics in connection "ith the +T:@s "ork programme, as "ell as on other +T:-related topics of interest to delegations arising from the on-going integration of the "orld economy, the spread of market-oriented reforms, and the increased importance of economic issues in relations bet"een countries. The division prepares the 8+orld Trade 2eport9, an annual publication that aims to deepen understanding about trends in trade, trade policy issues and the multilateral trading system. The division cooperates "ith other international organi7ations and the academic community through conferences, seminars and coursesI prepares special research pro1ects on policy-related topics in the area of international tradeI and prepares briefings to senior management. It is responsible for the 8coherence9 mandate "ith other international organi7ations, including in relation to linkages bet"een trade and finance, and for the +orking 5roup on Trade, 3ebt and !inance :n the statistics side, the division supports +T: members and the #ecretariat "ith quantitative information in relation to economic and trade policy issues. The division is the principal supplier of +T: trade statistics through the annual 8International Trade #tatistics9 and via the Internet and Intranet. The division is responsible for the maintenance and development of the Integrated 3ata *ase $I3*% and the -onsolidated Tariff #chedules $-T#%

"hich supports the arket &ccess -ommittee@s information requirements in relation to tariffs. The division@s statisticians also provide members "ith technical assistance in relation to the I3*--T# databases. The division plays an active role in strengthening cooperation and collaboration bet"een international organi7ations in the field of merchandise and services trade statistics, ensuring that +T: requirements "ith respect to the concepts and standards underpinning the international statistical system are met.

0uman Resources Division The .uman 2esources 3ivision is responsible for the human resources management of over 6<< +T: staff members $regular and temporary%. The divisionKs responsibilities include division restructuring, performance management, development and training $in areas such as management development and interpersonal skills% , "orkforce planning, recruitment and selection, career management $including internal career mobility%, management of staff benefits and entitlements, and staff counselling . The central aim of the division is to respond to the evolving needs of the +T:, aligning the "orkforce "ith the needs of the organi7ation. 1n/ormation Technolo#y Solutions Division The Information Technology #olutions 3ivision ensures the efficient operation of the +T:Ks information technology $IT% infrastructure as "ell as the development and support of the necessary systems to cover the needs of +T: members and the +T: #ecretariat. In response to changing needs and fast-evolving technology, the division performs the necessary research and "ork needed to constantly enhance IT services and procedures, to comply "ith the core mandate of the organi7ation and to better facilitate the dissemination of information to +T: members and the public through the Internet and speciali7ed databases. The division also ensures the efficient operation of the IT and communication infrastructure for special events such as inisterial -onferences. The division supports a complex desktop and net"ork environment and provides a multitude of services $=2A, :ffice &utomation, =-mail, Intranet, Internet, +eb and -lientL#erver #ystem 3evelopment, Telecommuting, IT Training, IT &sset anagement, Mideo -onferencing, etc.%. This includes implementation and regular revision of the IT security policy. The division also provides IT expertise regarding the creation and upgrading of +T: 2eference -entres in the capitals of developing and least-developed countries and participates in technical cooperation missions.
1n/ormation and 23ternal Relations Division The )nformation and 7'ternal 8elations .ivision communicates information about the *orld Trade +rgani-ation to a variety of audiences. This is made available through the *T+ (eb site, an e'tensive publications programme and regular briefings aimed at specific audiences, such as 9ournalists, non& governmental organi-ations (:/+s , parliamentarians and students. The division organi-es an annual ;ublic Forum, (hich is the ma9or opportunity for governments, :/+s, academics, businesses and students to come together to discuss issues regarding the multilateral trading system. The division (or%s closely (ith counterparts in other international governmental

organi-ations and regional bodies, such as the <nited :ations and the +rgani-ation for 7conomic 3ooperation and .evelopment. )t is also responsible for official relations (ith *T+ members, including protocol matters, in close liaison (ith the +ffice of the .irector&/eneral.

Institute for Training and Tec!nical Cooperation Trade-related technical assistance is the +T:Ks contribution to the functioning of the &id for Trade Initiative, "hich aims to help developing, least-developed countries and other lo"-income transition economies to mainstream trade into their national economic development plans and strategies. The Institute for Training and Technical -ooperation $ITT-% designs, coordinates and implements trade-related technical assistance activities. +ith support across the +T: #ecretariat, the ITT- delivers specific technical assistance products as mandated by +T: members in the regularly updated Technical &ssistance and Training Alans. These plans focus on strengthening the ability of beneficiaries to understand their rights and obligations "ithin the multilateral trading system, to take full advantage of the rules-based system, to participate effectively in trade negotiations, and to develop, on a long-term basis, their capacity to ad1ust to +T: rules and disciplines.

Intellectual "ropert# Division The )ntellectual ;roperty .ivision is responsible for the *T+6s (or% in trade&related intellectual property rights (T8);, , government procurement and competition policy (it should be noted that substantive (or% in the latter area in the *T+ has been on hold since 222= . )n the T8);, area, the .ivision provides service to the T8);, 3ouncil and to dispute settlement panels, services any negotiations that may be launched on intellectual property matters and provides assistance to *T+ members through technical cooperation, including in cooperation (ith the *orld )ntellectual ;roperty +rgani-ation (*);+ and other relevant international organi-ations, and through the provision of information>advice more generally. )t also maintains and develops lines of communication (ith other intergovernmental organi-ations, non&governmental organi-ations, intellectual property practitioners and the academic community. )n the area of government procurement, the .ivision services the 3ommittee established under the plurilateral Agreement on /overnment ;rocurement and dispute settlement panels that may arise, in addition to providing technical cooperation and information>advice more generally to *T+ members. )n the area of competition policy, the .ivision monitors developments at the international level and (ould be responsible for any further (or% in the *T+ *or%ing /roup on the )nteraction bet(een Trade and 3ompetition ;olicy, in the event that that body should resume its (or%.

4an#ua#es5 Documentation and 1n/ormation 6ana#ement Division The Janguages, 3ocumentation and Information types of complementary servicesF

anagement 3ivision $J3I 3% provides t"o

services such as translation, printing, dissemination of documentation, and interpretation for meetings information management services, "hich include the +T: library, correspondence, the registration of notifications, archiving and preservation of materials, and document research.

any of these services, such as the -entral 2egistry of Notifications and the 83ocuments :nline9 database of official +T: documents, are provided to +T: members, observers and the public through the Internet. J3I 3 ensures that +T: documents, publications and other materials are available in the +T:Ks three "orking languages =nglish, !rench and #panish both in hard copy and in electronic form. The +T: library supports +T: activities and research through its print and electronic collection of documents, including an online catalogue and bibliographic reference services. The library is the depository of 5&TTL+T: official documents and publications dating back to the .avana -harter, and has a comprehensive collection of national statistics from +T: members and observers.

$egal Affairs Division The principal mission of the 5egal Affairs .ivision is to provide legal advice and information to *T+ dispute settlement panels, other *T+ bodies, *T+ members and the *T+ ,ecretariat. The division?s responsibilities include assisting members in the composition of dispute settlement panels, providing timely secretarial and technical support and legal assistance to *T+ dispute settlement panels, providing legal advice to the .ispute ,ettlement 0ody and its 3hairman on the operation of the .ispute ,ettlement <nderstanding, and providing legal advice to the .irector&/eneral, the ,ecretariat and members on all *T+ agreements and on other legal issues as they may arise. +ther responsibilities include advising the .irector&/eneral on administrative la( issues related to the operation of the *T+ and the ,ecretariat, providing legal information to *T+ members and preparing legal publications relating to the *T+ dispute settlement system, and providing legal support in respect of accessions. The division also provides training regarding dispute settlement procedures and *T+ legal issues through special courses on dispute settlement, regular *T+ training courses and *T+ technical cooperation missions. +n behalf of the ,ecretariat, representatives from the division attend meetings of other international organi-ations concerning international legal issues and attend international conferences on dispute settlement and other legal matters of relevance to the *T+.

%ar&et Access Division The arket &ccess 3ivision "orks "ith the follo"ing +T: bodiesF the -ouncil for Trade in 5oods, the -ommittee on arket &ccess, the -ommittee on -ustoms Maluation, the -ommittee on 2ules of :rigin, the -ommittee on Import Jicensing and the -ommittee of Aarticipants on the =xpansion of Trade in Information Technology Aroducts $IT&%. The "ork of the division includes organi7ing meetings for these bodies.

:ffice of Internal &udit The :ffice of Internal &udit $:I&% "as created in arch 0<<4 to undertake the independent examination and evaluation of the +T:@s financial and budgetary control systems and processes. The :I& makes recommendations for strengthening accountability, financial risk management, internal controls and governance processes, "ith the aim of ensuring that the financial resources made available to the +T: by its members are used efficiently and effectively to obtain the best value for money.

ules Division The role of the division is to ensure the smooth functioning of all +T: bodies serviced by the division. This includes facilitating ne" and on-going negotiations and consultations, monitoring and actively assisting in the implementation of +T: agreements in the areas of anti-dumping, subsidies and countervailing measures, safeguards, trade-related investment measures, state-trading and civil aircraft. It also includes providing all necessary implementation assistance, counselling and expert advice to +T: members concerning the above agreements, providing secretaries and legal officers to +T: dispute settlement panels involving these agreements and participating in the +T: technical assistance programme. The bodies serviced by the 2ules 3ivision include the Negotiating 5roup on 2ules, the -ommittee on &nti3umping Aractices, the -ommittee on #ubsidies and -ountervailing easures, the -ommittee on #afeguards, the -ommittee on Trade-2elated Investment easures, the -ommittee on Trade in -ivil &ircraft, the +orking Aarty on #tate-Trading =nterprises, the Aermanent 5roup of =xperts of the #ubsidies &greement as "ell as the Informal 5roup on &nti--ircumvention and the +orking 5roup on Implementation, both concerning the &greement on &nti3umping.

Tec!nical Cooperation Audit Division The Technical -ooperation &udit $T-&% 3ivision is responsible for ensuring ongoing monitoring and evaluation of all forms of technical assistance provided by the +T:. The division conducts on-site and ex-post evaluations and prepares an &nnual 2eport for discussion at the -ommittee on Trade and 3evelopment.

Trade and Environment Division The division provides service and support to *T+ committees dealing (ith trade and environment and technical barriers to trade. For Trade and 7nvironment, it supports the (or% of the 3ommittee on Trade and 7nvironment (3T7 by providing technical assistance to *T+ members! reporting to senior management and *T+ members on discussions in other intergovernmental organi-ations ()/+s , including negotiation and implementation of trade&related measures in multilateral environmental agreements. The division maintains contacts and dialogue (ith :/+s and the private sector on issues of mutual interest in the area of trade and environment. )ts (or% in the area of technical barriers to trade includes providing service to the *or%ing /roup on Technical 0arriers to trade (*/T0T , if the T0T 3ommittee so decides! providing technical assistance to *T+ members! providing ,ecretariat support to dispute panels and accessions e'amining aspects of the T0T Agreement. The division follo(s and reports on matters related to the T0T Agreement, and maintains contacts (ith the private sector on issues of mutual interest in this area.

Trade in Services Division The Trade in #ervices 3ivision provides support and technical advice to +T: members on the implementation of the 5eneral &greement on Trade in #ervices $5&T#% and on further negotiations mandated by the &greement. It performs this role by supporting the -ouncil for Trade in #ervices $both in regular and special session% as "ell as other bodies established under the 5&T#. These include the -ommittee on !inancial #ervices, the -ommittee on #pecific -ommitments, the +orking Aarty on 3omestic 2egulation, and the +orking Aarty on 5&T# 2ules. +ithin the +T: #ecretariat, the division provides information and advice to the 3irector-5eneral and senior management on trade in services as "ell as support to relevant dispute settlement panels. :ther "ork includes providing technical cooperation to +T: members, undertaking research on trade in services,

cooperating "ith other international organi7ations on services-related pro1ects, participating in public outreach activities and providing public information on the 5&T# through various forms of media. The division also assists other bodies in the +T: on matters relating to services, such as the -ommittee on 2egional Trade &greements $in its "ork relating to &rticle M of the 5&T# and the 2T& transparency mechanism%, the Trade Aolicy 2evie" *ody and various accession "orking parties.

Trade "olicies evie' Division The Trade Aolicies 2evie" 3ivision has several areas of responsibility. :ne is to support the "ork of the 3irector5eneral and +T: members under the Trade Aolicy 2evie" echanism $&nnex > of the +T: &greement %, "hich includes preparing periodic reports on membersK trade policies, servicing meetings of the Trade Aolicy 2evie" *ody at "hich revie"s of membersK policies are carried out, and preparing an &nnual :vervie" of trade policy developments on behalf of the 3irector-5eneral. The division is responsible for providing #ecretariat support to the -ommittee on 2egional Trade &greements and the -ommittee on *alance-of-Aayments 2estrictions, and for servicing the 3oha 2ound Negotiating 5roup on 2ules related to regional trade agreements. It is also responsible for servicing the 3oha 2ound Negotiating 5roup on Trade !acilitation and for managing and delivering the technical assistance programme that supports the participation of developing and least-developed countries in that negotiation.

&ppellate *ody #ecretariat


The &ppellate *ody #ecretariat provides legal and administrative support to the &ppellate *ody. The #ecretariat is located "ithin the headquarters of the +T:. The director of the #ecretariat heads a team of ten la"yers and four support staff. &ppellate *ody #ecretariat staff members are bound by the 2ules of -onduct of the 3ispute #ettlement ,nderstanding, "hich seek to ensure independence, impartiality, the avoidance of conflicts of interest, and the confidentiality of the proceedings. #ecretariat staff also participate in technical cooperation activities carried out by the +T: #ecretariat, especially those related to dispute settlement.

"tatus of World Trade Organisation: The purpose of observer status for international intergovernmental organi7ations in the +T: is to enable these organi7ations to follo" discussions therein on matters of direct interest to them. The guidelines on observer status for international organi7ations $+TLJL'B', &nnex >% provide that requests for observer status from organi7ations shall not be considered for meetings of the -ommittee on *udget, !inance and &dministration or the 3ispute #ettlement *ody, therefore these bodies are not included in this list. &lso not included are the Textiles onitoring *ody, "hich has no international intergovernmental organi7ation observers, and &ccession +orking Aarties.The International Trade -entre ,N-T&3L+T:, as a 1oint subsidiary organ of the +T: and ,N-T&3, is not required to formally submit a request for observer status in the +T: bodies and is invited as appropriate to attend meetings of those +T: bodies it "ishes to attend $+TL5-L L0;, item '%. The I ! and +orld *ank have observer status in +T: bodies as provided for in their respective &greements "ith the +T: $+TLJL'(;%. Decision 6akin# o/ the World Trade Or#anisation

)ecision ma*ing in the WTO has become e0er more difficu t as the number of members increases and the range of issues tac* ed broadens.his &a&er oo*s at reasons ,h# as&ects of decision2ma*ing might be changed and discusses a number of &otentia &itfa s that change ,ou d ha0e to a0oid$ such as a di ution of commitments and fragmentation of the mu ti atera trading s#stem. It then ta*es a detai ed oo* at the notion of Ocritica mass> decision2ma*ing. It argues for this a&&roach under certain conditions$ as it ,ou d7 i) a o, for the emergence of a more &rogressi0e and res&onsi0e WTO agendaI ii) b unt the di0ersion of trade coo&eration initiati0es to .TAsI iii) a o, more efficient differentiation in the e0e s of rights and ob igations among a communit# of high # di0erse economiesI and i0) &romote greater efficienc# in mu ti atera #2based negotiations on trade ru es$ and &erha&s$ sectora mar*et access agreements. The o&eration of the (WTO) dis&ute sett ement &rocess in0o 0es the &arties and third &arties to a case$ the )C/ &ane s$ the A&&e ate /od#$ the WTO Cecretariat$ arbitrators$ inde&endent e!&erts and se0era s&ecia ized institutions. This cha&ter gi0es an introduction to the WTO bodies in0o 0ed in the dis&ute sett ement s#stem. The in0o 0ement of the &arties and third &arties$ the &rimar# &artici&ants in a dis&ute sett ement &roceeding$ has a read# been out ined here. The &recise tas*s and ro es of each of the actors in0o 0ed in the dis&ute sett ement &rocess ,i become c ear in the ater cha&ter on the stages of the dis&ute sett ement &rocess. Among the WTO bodies in0o 0ed in dis&ute sett ement$ one can distinguish bet,een a &o itica institution$ the )C/$ and inde&endent$ Duasi24udicia institutions such as &ane s$ the A&&e ate /od# and arbitrators. !unctions and composition

The 5eneral -ouncil discharges its responsibilities under the )C- through the )C/ (Artic e
I37' of the WTO Agreement). :i*e the Genera 9ounci $ the )C/ is com&osed of re&resentati0es of a WTO 8embers. These are go0ernmenta re&resentati0es$ in most cases di& omatic de egates ,ho reside in Gene0a (,here the WTO is based) and ,ho be ong to either the trade or the foreign affairs ministr# of the WTO 8ember the# re&resent. As ci0i ser0ants$ the# recei0e instructions from their ca&ita s on the &ositions to ta*e and the statements to ma*e in the )C/. As such$ the )C/ is a &o itica bod#. The )C/ is res&onsib e for administering the )C-$ i.e. for o0erseeing the entire dis&ute sett ement &rocess. The )C/ has the authorit# to estab ish &ane s$ ado&t &ane and A&&e ate /od# re&orts$ maintain sur0ei ance of im& ementation of ru ings and recommendations and authorize the sus&ension of ob igations under the co0ered agreements (Artic e A.1 of the )C-). A ater cha&ter on the stages of the dis&ute sett ement &rocedure ,i e!& ain e!act # ,hat a these actions mean. In ess technica terms$ the )C/ is res&onsib e for the referra of a dis&ute to ad4udication (estab ishing a &ane )I for

ma*ing the ad4udicati0e decision binding (ado&ting the re&orts)I genera #$ for su&er0ising the im& ementation of the ru ingI and for authorizing Freta iationG ,hen a 8ember does not com& # ,ith the ru ing. The )C/ meets as often as is necessar# to adhere to the time2frames &ro0ided for in the )C- (Artic e A.' of the )C-). In &ractice$ the )C/ usua # has one regu ar meeting &er month. When a 8ember so reDuests$ the )irector2Genera con0enes additiona s&ecia meetings. The staff of the WTO Cecretariat &ro0ides administrati0e su&&ort for the )C/ (Artic e A7.1 of the )C-). Decision-ma%ing in the D")

The general rule is for the 3#* to take decisions by consensus $&rticle 0.) of the 3#,%. !ootnote ' to &rticle 0.) of the 3#, defines consensus as being achieved if no +T: ember, present at the meeting "hen the decision is taken, formally ob1ects to the proposed decision. This means that the chairperson does not actively ask every delegation "hether it supports the proposed decision, nor is there a vote. :n the contrary, the chairperson merely asks, for example, "hether the decision can be adopted and if no one raises their voice in opposition, the chairperson "ill announce that the decision has been taken or adopted. In other "ords, a delegation "ishing to block a decision is obliged to be present and alert at the meeting, and "hen the moment comes, it must raise its flag and voice opposition. &ny ember that does so, even alone, is able to prevent the decision. .o"ever, "hen the 3#* establishes panels, "hen it adopts panel and &ppellate *ody reports and "hen it authori7es retaliation, the 3#* must approve the decision unless there is a consensus against it $&rticles B.', 'B.), '6.') and 00.B of the 3#,%. This special decision-making procedure is commonly referred to as 8negative9 or 8reverse9 consensus. &t the three mentioned important stages of the dispute settlement process $establishment, adoption and retaliation%, the 3#* must automatically decide to take the action ahead, unless there is a consensus not to do so. This means that one sole ember can al"ays prevent this reverse consensus, i.e. it can avoid the blocking of the decision $being taken%. To do so that ember merely needs to insist on the decision to be approved. No ember $including the affected or interested parties% is excluded from participation in the decision-making process. This means that the ember requesting the establishment of a panel, the adoption of the report or the authori7ation of the suspension of concessions can ensure that its request is approved by merely placing it on the agenda of the 3#*. In the case of the adoption of panel and &ppellate *ody reports, there is at least one party "hich, having prevailed in the dispute, has a strong interest in the adoption of the report$s%. In other "ords, any ember intending to block the decision to adopt the report$s% has to persuade all other +T: embers $including the adversarial party in the case% to 1oin its opposition or at least to stay passive. Therefore, a negative consensus is largely a theoretical possibility and, to date, has never occurred. !or this reason, one speaks of the quasi-automaticity of these decisions in the 3#*. This contrasts sharply "ith the situation that prevailed under 5&TT '()6 "hen panels could be established, their reports adopted and retaliation authori7ed only on the basis of a positive consensus. ,nlike under 5&TT '()6, the 3#, thus provides no opportunity for blockage by individual embers in decision-making on these important matters. Negative consensus applies

no"here else in the +T: decision-making frame"ork other than in the dispute settlement system. +hen the 3#* administers the dispute settlement provisions of a plurilateral trade agreement $of &nnex ) of the +T: &greement%, only embers that are parties to that agreement may participate in decisions or actions taken by the 3#* "ith respect to disputes under these agreements $&rticle 0.' of the 3#,%. +ith respect to the more operational aspects of the 3#*@s "ork, the 2ules of Arocedure for eetings of the 3#* provide that the 2ules of Arocedure for #essions of the inisterial -onference and eetings of the 5eneral -ouncil apply, sub1ect to a fe" special rules on the chairperson and except as other"ise provided in the 3#,. &n important organi7ational aspect of these general rules is the requirement for embers to file items to be included on the agenda of an upcoming meeting no later than on the "orking day before the day on "hich the notice of the meeting is to be issued, "hich is at least ten calendar days before the meeting $2ule > of the 2ules of Arocedure%. In practice, this means that items for the agenda must be made on the ''th day before the 3#* meeting, and on the '0th or '>th day if the ''th day "ere to fall on a #aturday or #unday.

9riticism of WTO
&lthough +T: is considered to be a big force positively influencing international trade among its members, nevertheless the organisation has attracted a range of criticism regarding various aspects of its operations. &ccording to $5ilbert, 0<<)% although +T: maintains that it is reducing sociological gap bet"een rich and poor, it@s policies and practising actually producing reverse results, "idening the sociological gap bet"een rich and poor. oreover, $.oekman and avroidis, 0<<6% state that developing countries are being greatly disadvantaged "ithin +T: for various reasons, but mainly due to anti dumping measures against them, high barriers for agricultural products in developed countries, and the organisation itself being influenced by rich countries, a d even rich multinational corporations. :ther criticisms to"ards +T: include labour and environmental issues caused by +T: being ignored $Nielsen, 0<<(%, and inefficient and complicated decision-making $.o"se, 0<<6%. The popular idea is that negligence of environmental issues can cause massive ecological and other problems in later periods of time.

.ecommendations
2ecommendations can be made to +T: senior-level management that if implemented, "ould greatly help the organisation to achieve its ob1ectives more efficiently, and contribute even more to trade bet"een it@s members. !irstly, +T: should make progress in considering the applications from 2ussia and Ca7akhstan,

because the ascendance of these large, resourceful countries into +T: "ould positively contribute the amount of trade bet"een members. #econdly, labour and environmental issues should be addressed by +T:, because other"ise environmental or other"ise crisis may occur that "ill have tragic consequences for the members involved. Thirdly, +T: management should critically evaluate their approach to"ards developing countries, and be more cooperative in terms of addressing their concerns in order to avoid possible conflict and improve their image. oreover, +T: should not allo" the interests of individual multinational companies to influence it@s decision-making process in one "ay or the other. World Trade Or#ani7ation *ibliography *ooksF =conomics of 5lobal Trade N !inance &uthorF 3r. A.&./ohnson and &.3. ascarendhas. AublisherF ananArakashan, umbai- )<<<;6.

)ate of +ub ication72 Ce&tember$ ? A((?. .eference 7 GATT Agreement Wor d Trade 9entre +ub ication

!irst =dition 0<<4

&bbreviationsF

GATT815Genera Agreement on Trade in Cer0ices (GATC)Agreement on Trade2.e ated As&ects of Inte ectua +ro&ert# .ights (T.I+C) most2
fa0oured2nation (815)I81 and the I/.)I9-I/.)Internationa 8onetar# 1und (I81)Internationa Trade Organization (ITO)0o untar# e!&ort restraints (3<.s):)9s #ispute $ettle%ent "ody least&developed countries (5.3s the Integrated )ata /ase (I)/) and the 9onso idated Tariff Cchedu es (9TC) information techno og# (IT) non&governmental organi-ations (:/+s *orld )ntellectual ;roperty +rgani-ation (*);+ The :anguages$ )ocumentation and Information 8anagement )i0ision (:)I8)) Office of Interna Audit (OIA Technica 9oo&eration Audit (T9A) 3ommittee on Trade and 7nvironment
(3T7 intergovernmental organi-ations ()/+s *or%ing /roup on Technical 0arriers to trade (*/T0T .egiona Trade Agreements (in its ,or* re ating to Artic e 3 of the GATC and the .TA

Cases :

&o artis

' Union of India ( Others

Novartis v. Union of India & Others is a landmark decision by a t"o-1udge bench of the Indian #upreme -ourt on the issue of "hether Novartis could patent 5leevec in India, and "as the culmination of a seven-year-long litigation fought by Novartis. The #upreme -ourt upheld the Indian patent officeKs re1ection of the patent application. The patent application at the center of the case "as filed by Novartis in India in '((4, after India had agreed to enter the +orld Trade :rgani7ation and to abide by "orld"ide intellectual property standards under the T2IA# agreement. &s part of this agreement, India made changes to its patent la"I the biggest of "hich "as that prior to these changes, patents on products "ere not allo"ed, "hile after"ards they "ere, albeit "ith restrictions. These changes came into effect in 0<<;, so NovartisK patent application "aited in a OmailboxO "ith others until then, under procedures that India instituted to manage the transition. India also passed certain amendments to its patent la" in 0<<;, 1ust before the la"s came into effect, "hich played a key role in the re1ection of the patent application. The patent application claimed the final form of 5leevec $the beta crystalline form of imatinib mesylate%. In '((>, during the time India did not allo" patents on products, Novartis had patented imatinib, "ith salts vaguely specified, in many countries but could not patent it in India. The key differences bet"een the t"o patent applications, "ere that the '((4 patent application specified the counterion $5leevec is a specific salt - imatinib mesylate% "hile the '((> patent application did not claim any specific salts nor did it mention mesylate, and the '((4 patent application specified the solid form of 5leevec - the "ay the individual molecules are packed together into a solid "hen the drug itself is manufactured $this is separate from processes by "hich the drug itself is formulated into pills or capsules% - "hile the '((> patent application did not. The solid form of imatinib mesylate in 5leevec is beta crystalline. &s provided under the T2IA# agreement, Novartis applied for =xclusive arketing 2ights $= 2% for 5leevec from the Indian Aatent :ffice and the = 2 "ere granted in November 0<<>. Novartis made use of the = 2 to obtain orders against some generic manufacturers "ho had already launched 5leevec in India. Novartis set the price of 5leevec at ,#3 0BBB per patient per monthI generic companies "ere selling their versions at ,#3 '66 to 0BB per patient per month. Novartis also initiated a program to assist patients "ho could not afford its version of the drug, concurrent "ith its product launch. +hen examination of NovartisK patent application began in 0<<;, it came under immediate attack from oppositions initiated by generic companies that "ere already selling 5leevec in India and by advocacy groups. The application "as re1ected by the patent office and by an appeal board. The key basis for the re1ection "as the part of Indian patent la" that "as created by amendment in 0<<;, describing the patentability of ne" uses for kno"n drugs and modifications of kno"n drugs. That section, Aaragraph >d, specified that such inventions are patentable only if Othey

differ significantly in properties "ith regard to efficacy.O &t one point, Novartis "ent to court to try to invalidate Aaragraph >dI it argued that the provision "as unconstitutionally vague and that it violated T2IA#. Novartis lost that case and did not appeal. Novartis did appeal the re1ection by the patent office to IndiaKs #upreme -ourt, "hich took the case. The #upreme -ourt case hinged on the interpretation of Aaragraph >d. The #upreme -ourt decided that the substance that Novartis sought to patent "as indeed a modification of a kno"n drug $the ra" form of imatinib, "hich "as publicly disclosed in the '((> patent application and in scientific articles%, that Novartis did not present evidence of a difference in therapeutic efficacy bet"een the final form of 5leevec and the ra" form of imatinib, and that therefore the patent application "as properly re1ected by the patent office and lo"er courts. &lthough the court ruled narro"ly, and took care to note that the sub1ect application "as filed during a time of transition in Indian patent la", the decision generated "idespread global ne"s coverage and reignited debates on balancing public good "ith monopolistic pricing and innovation "ith affordability. .ad Novartis "on and gotten its patent issued, it could not have prevented generics companies in India from continuing to sell generic 5leevec, but it could have obligated them to pay a reasonable royalty under a grandfather clause included in IndiaKs patent la".

0onduras .iles WTO Dis$ute Case 8s9 !ustralia Over Tobacco 1PR
.onduras announced today it has requested formal consultations "ith &ustralia under the +orld Trade :rgani7ation dispute settlement procedures, charging that &ustralia@s public health la" requiring tobacco to be sold in plain packaging violates the +T: intellectual property agreement. The small -entral &merican nation follo"s ,kraine in challenging the &ustralia la" at the +T:. ,kraine requested consultations "ith &ustralia on '> arch $IPW, +T:LT2IA#, ') arch 0<'0%. They argue a violation of the +T: &greement on Trade-2elated &spects of Intellectual Aroperty 2ights $T2IA#%. 8.onduras has decided to take this action given that &ustralia@s la" contravenes several +T: obligations on intellectual property rights and technical barriers to trade, and given the serious economic consequences that this measure "ould have on .onduran tobacco exports,9 the .onduras #ecretary of Industry and -ommerce said in a press release PpdfQ. &t issue is a la" requiring all tobacco products to be sold in plain packaging as of ' 3ecember 0<'0. &ustralian authorities say the method has been tested and is sho"n to be effective in

reducing the public health plague of smoking, and that it is a suggested approach under the +orld .ealth :rgani7ation !rame"ork -onvention on Tobacco -ontrol. The .onduras announcement comes on the final day of a meeting at the +.: of the !rame"ork -onvention on Tobacco -ontrol that focussed on illicit trade in tobacco products. +.: also held a meeting on economic alternatives to tobacco. #ources said the +.: meeting sa" a debate over the definition of counterfeit tobacco products and decided in the end today to declare that the convention does not address intellectual property rights. +.: 3irector 5eneral argaret -han has called on the "orld to support &ustralia in its effort to fight tobacco and the po"erful tobacco industry $IPW, +.:, 00 arch 0<'0%. .onduras said it is a party to the convention and 8is in favour of legitimate measures to reduce smoking prevalence.9 8Alain packaging, ho"ever, is not an appropriate measure to address smoking prevalence and is not in conformity "ith &ustralia@s +T: obligations,9 .onduras said. 8&ustralia@s la" clearly infringes intellectual property rights by requiring that trademarks for tobacco products be displayed in standard font and si7e,9 it added. The plain packaging requirements 8"ould defeat the basic function of a trademark, "hich is to allo" consumers to distinguish bet"een products of different companies.9 .onduras also said that the tobacco industry has been part of its history for more than a century, and that it employs several hundred thousand people directly and indirectly throughout the supply chain in the country, "hich it said translates into tens of millions of dollars for its economy.

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