Faiza Yaqoob Roll. No; 208 Musarat shaheen Roll. No; 235 Farah Virk Roll.

No; 234

World Trade Organization

Introduction of WTO History of WTO Structure of WTO Objectives of WTO Principles of WTO Implications of WTO in Pakistan

Faiza Yaqoob Roll. No: 208

What Does WTO Mean?

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade.

WTO is an international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible.

History of WTO
The organization officially commenced on January 1, 1995 under the Marrakech Agreement. By replacing the General Agreement on Tariffs and

But the roots of the W.T.O. date back to World War-II and the years that followed. In 1944, a meeting took place in Bretton Woods, New Hampshire: the International Monetary Conference.

There, negotiators agreed to create the International Monetary Fund and the World Bank. But they could not agree on an organization to deal with international trade. 3years later, in 1947, 23 nations approved GATT. It was meant to be temporary. Trade negotiations under GATT were carried out in a series of talks called rounds.

The first round lowered import taxes on one-fifth of world trade. Later rounds produced additional cuts, and negotiators added more issues. The sixth round began in 1963. It was called the Kennedy Round after the murder of President John F. Kennedy.

The results included an agreement against trade dumping. This is when one country sells a product in another country at an unfairly low price. The eighth round of talks began in Punta del Este, Uruguay, in 1986. The Uruguay Round lasted almost twice as long as planned.

In all, 123 nations took part in 7.5 years of work. They set time limits for future negotiations. They also agreed to create a permanent system to settle trade disputes. In April 1994, most of those 123 nations signed an agreement. It replaced GATT with the World Trade Organization.

Musarat Shaheen Roll. No; 235

WTO Structure
WTO has 153 members representing more than 97% of total world trade.

The WTO is governed by :

a ministerial conference meeting every 2years a general council, which implements the conference's policy decisions and is responsible for day-to-day administration.

The WTO's headquarters is at, Geneva, Switzerland. The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).

When WTO rules impose disciplines on countries policies that is the outcome of negotiations among WTO members. The rules are enforced by the members themselves under agreed procedures that they negotiated, including the possibility of trade sanctions.

OBJECTIVES OF WTO:
Administering World Trade Organization (WTO) trade agreement Forum the trade negotiation Handling trade disputes Monitoring national trade policy Technical assistance and training for developing countries

Co-operation with other international organization (like help from World Bank and IMF). To provide a forum for negotiations To provide a dispute settlement mechanism. Raising standards of living. Ensuring full employment.

To increase the level of production and productivity with a view to ensuring level of employment in the world. To expand and utilize world resources to the best. To promote World Trade in a manner that benefits every country.

To improve the level of living for the global population and speed up economic development of the member nations. To ensure the conduct the international trade on nondiscrimination basis.

Farah Virk Roll. No: 234

WTO Basic Principles

The trading system should be: without discrimination a country should not discriminate between its trading partners (giving them equally most-favored-nation or MFN status);

Predictable foreign companies, investors and governments should be confident that trade barriers

More Competitive discouraging unfair practices such as export subsidies and dumping products at below cost to gain market share.

More Beneficial for less developed countries

giving them more time to adjust, greater flexibility, and special privileges.

Implications of WTO in Pakistan impact of There is a considerable

WTO on all sectors of Pakistan's economy, particularly, its industry, textile, agriculture and services.

As far as the industrial sector is concerned, Pakistans main exports are textile and related products. The non-textile exports of Pakistan are very low but have a potential to grow tremendously under the WTO regime.

On the import side, Pakistan has been rationalizing its tariff structure to a large extent under the trade liberalization principle as envisaged by WTO. The average tariff in Pakistan is around 17 percent however, there is a need to ensure that there are no adverse affects of trade liberalization on the domestic producers.

The complete integration of all textile and clothing products into the free trade environment under the Agreement on Textile and Clothing (ATC) on 1st January 2005 was one of the most significant changes for Pakistan under the world trade regime.

However, a quota-free trade era calls for structural and operational adjustments in the textile sector, to enable Pakistan's exporters to be globally competitive. China is the biggest challenge to Pakistan T&C exports in this post ATC regime.

As regards agriculture, Pakistan being an agrarian economy is still a net importer of food items. The Agreement on Agriculture (AOA) of WTO has been significant in molding agricultural policies of Pakistan. The Agreement on Agriculture provides rules regarding export

Apart from the major crops, Pakistan needs to exploit its comparative advantage in the production and exports of meat, dairy products, fruits, vegetables etc.

Moreover, Pakistan has a comparative advantage in many primary commodities. But in order to fully utilize its comparative advantage, it needs to focus on and solve the problems in supply side (domestic requirements).

Pertaining to the Agreement on trade related aspects of intellectual property rights (TRIPS), Pakistan needs to ensure that the industry is encouraged to provide intellectual property protection for its products. and also make certain that there is effective protection of the intellectual property rights attached to imported products.

Services are the largest and most dynamic component of both developed and developing country. It is impossible for any country to prosper today under the burden of an inefficient and expensive services infrastructure. In Pakistan, the services sector contributes more than half of the GDP.

Workers remittances account for the largest component of services and the country has a large number of expatriates throughout the world. Being a developing country, Pakistan has adopted a cautious approach while making commitments in trade in services.

Pakistans domestic industry also faces problems of increased imports and unfair practices under the global trade regime.

WTO Agreements have an in-built mechanism providing for trade remedial measures to counteract the effect of dumping, subsidies and surge of imports.

Accordingly, Pakistan through national legislation has come up with anti-dumping laws against dumping, countervailing duties laws against subsidies and

In a nutshell, at present Pakistan maintains a fairly liberal trade regime, where all quantitative restrictions on imports have either been removed or converted into tariffs.

However, quality control is integral to competitiveness of Pakistan's exports. Low quality products fetch low price in the international market. The obvious problems of quality for Pakistan are those of technical precision, grading and

Proper support and prudent policies for the industry, along with intelligent balancing of imports and exports is vital for the sustainability and growth of Pakistan's economy and is likely to lead towards a bright future and trade enhancement under the WTO regime.