World War I to World War II 1918 - 1939

Great Depression
US stock market collapse Smoot-Hawley Act (1930)
US had positive trade balance with world Act imposes tariffs to protect U.S. firms. Foreign response was to impose own barriers US exports tumbled

GATT
The General Agreement on Tariffs and Trade remained in existence for a period of 46 years it came into force on 1 Jan 1948, as a result of Bretton Woods Conference 1944. GATT started as a agreement for trade concessions among 23 nations, including India. Its membership increased to 117 countries as on 31st Dec 1994 - the day it ceased to exist. GATT was a multilateral treaty which provided a forum to discuss trade problems faced by member countries known as contacting parties.

Ever since the beginning of 1980, the economy has been passing through a new phase of transition. The essential feature of this transition has been the opening up of their economies by developed and developing countries. Over the past 50 years ever since formation of GATT in 1948, trade has been powerful engine for growth. The policy of trade liberalization was underlined by multi-lateral trading system governed by GATT till 31st Dec 1994 and now by WTO since 1st Jan 1995.

S.N o 1.

Roun d . First

Place

Year

Features

2.

Secon d Third

Geneva (Switzerland ) Annecy (France) Torquay (Britain) Geneva (Switzerland ) Geneva (Switzerland ) Geneva (Switzerland ) Tokyo (Japan) Uruguay

1947

Tariff cuts for 45000 products worth $10 billion of trade on an annual basis . Custom duty were reduced for another 5000 items of goods. Adopted 8700 tariff reduction.

1949

3.

195051 195556 196062 196467 197379 198693

4.

Fourt h Fifth

To further cut duties for goods worth $2.5 billion. It was known as Dillon Round. Custom duties charged for 4000 items worth $5 billion. It was known as Kennedy Round. Cut tariffs for industrial goods upto 50%. Ended at Geneva. Participants cut custom duties by 20-30% for goods traded. This was known as Uruguay Round. Lead to the formation of WTO.

5.

6.

Sixth

7.

Seven th Eight

8.

The World Trade Organization (WTO)

Multilateral negotiations under GATT
%
Annual Growth Under GATT

9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0

1953-63

World Trade World Income

1963-73

DIFFERENCE BETWEEN GATT AND WTO

WTO is more global in its membership than GATT. GATT was adhoc and provisional, WTO and its agreements are permanent. WTO has members , GATT had contracting parties. GATT dealt in trade in goods, WTO also includes services and intellectual property WTO dispute settlement system is faster, than the old GATT system based on consensus of all members.

FORMAL STRUCTURE
Highest Level: Ministerial Conference Second level: General Council Third level: Councils for Trade Fourth level: Subsidiary Bodies

Functions of W.T.O.
Institutional Characteristic Ministerial Conference Taking Decisions Settling Dispute

Principles of Trading
Non-discrimination MFN National Treatment Free Trade Predictable and transparent

Textiles
Fighting a good fight End of Multi Fibre Arrangements ( M.F.A.) Back in main stream

Agriculture
Improving Market access Reducing domestic support in the form of trade-distorting subsidies

Trade Remedies
Anti-dumping actions Subsidies and countervailing measures Safegaurding precedure

Technical Barriers to Trade

Standard and Technical regulation Right to adopt standards Sanitary and Phytosanitary Measures

Sanitary and PhytoSanitary (SPS) Agreement

Under the SPS agreement, the WTO sets constraints on member-states policies relating to food safety (bacterial contaminants, pesticides, inspection and labelling) as well as animal and plant health (imported pests and diseases). SPS agreement was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the beginning of 1995.

TRIPs
Patent Copyright & Trademark Industrial Design Geographical indication Trade Secrets

TRIMs

WTO provisions explicitly prohibits the following Trade restrictive and Trade distortive measure:

Local content Requirements Trade-balancing requirement Foreign exchange balancing requirements Exchange restrictions Export performance requirements

Other Committees
Trade and Environment Trade and Development (Subcommittee on Least-Developed Countries) Regional Trade Agreements Balance of Payments Restrictions Budget, Finance and Administration Working parties on Accession

Sixth Ministerial Conference

The sixth WTO Conference Ministerial was held in Hong Kong from December 13 December 18, 2005.

ISSUES
The main issues discussed included reduction of domestic support and elimination of export subsidies by developed countries, development package for Least Developed Countries (LCDs).

CONTD.
In this meeting, countries agreed to phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. concessions to developing countries included an agreement to introduce duty free, tariff free access for goods from the Least Developed Countries

OUTCOME
Resolved to complete the Doha Work Programme fully and conclude negotiations in 2006 Amendment to WTO TRIPS Agreement reaffirmed to address public health concerns of developing countries Establish modalities in agriculture and nonagriculture market access (NAMA).

WTO experience for developing countries

Tariff Peaks (high import duties on certain products) remain No gains yet from the supposed phasing-out of textiles quotas. Increase in non-tariff barriers (AD, SPS, TBT) Continued high protection in Agriculture (USA- Sugar 244%, Peanuts 174%; Japan- Wheat 353%) up to 36% reduction? Implementation Problems faced by developing countries