Module-I

GATT (1948-1994)
Introduction Historical background-1930s GD ITO- non acceptabatility to 23 countries USA govt declaration 1950 ITO was dead. GATT was in force till WTO came in existence. WTO created in 1995.

BRETTON WOODS CONFERENCE

1. IMF 2. IBRD World Bank 3. ITO UN Specialized Agency, Havana - Cuba 1947 ITO charter drafted World Trade Disciplines Rules on Empt Commodity trade agreements Restrictive business practices International investment activities International level service extension activities 4. 1945 15 countries started discussion to reduce customs and tariffs 1930s legacy of great depression 5. 23 big countries of ITO formed their group ITO rules and draft un-acceptable 6. By 1950 US govt declared ITO was dead & GATT was in force.

OBJECTIVES
Based on international trade code of conduct. 1. To follow unconditional MFN principle. 2. principle of non discrimination , reciprocity & transferecy. 3. To grant protection to domestic industry through tariff . 4. To liberalize tariff & non tariff measures through multi lateral negotiations. 5. Multi-lateral trade negotiations. 6. Consultation, conciliation & settlement of disputes. 7. Tariff waiving in exceptional cases

 The ultimate aim of establishing liberal world trading system to raise living stds, ensure full empt through steadily growing effective demand & real income, develop fully the resources of the world & expand the production & exchange of goods on global level.

Provisions of GATT.
1. 2. 3. 4. 5. MFN clause . Schedules of tariff concessions.. General elimination of quantitative restrictions. Emergency safe guard code,Art-XIX of GATT . Exceptions-Artls-XX,XXI . a) BOP problems. b) UDCs apply qty restrictions-for domestic economy. c) to protect domestic agriculture & allied activities. d) Less scope for dumping & subsidies. e) protective measures for industries. f) to form customs at agreed level. Rules on subsidies & counter veiling duties. Settlement of disputes.

6. 7.

GATT Rounds & Global Trade Negotiations

Year 1947 1949 1951 1956 1960-61 1964-67 1973-79 1986-94 Place Geneva (Swiss) Annecy (France) Torque (England) Geneva Geneva , Dillon round Geneva Kennedy round Geneva Tokyo (Japan) Round Geneva Uruguay round (Punta Del Este Uruguay) Subject covered Tariffs Tariffs Tariffs Tariffs Tariffs Tariff & Anti-dumping measures Tariff & non tariff agreements Tariff & non tariff, rules for services , IPR disputes & settlement, textile, agriculture & creation of WTO & others 123 Countries present 23 13 38 26 26 62

GAINS FROM URGUAY ROUND

1. Income & trade a) World income increased $10 billion-2005 b) World trade increased $745 billion-2005 c) World goods trade increased 60% b in clothing, 20% in agri & allied, 19 % processed food & beverages 2005. d) world ex & im increased by 50% 2005. 2. Tariff reduction a) ADCs 99% to 78%. b) UDCs 72% to 22% c) Agri - 100% to 81% & 100% to 22% resptly. d) sharing of tariff more by UDCs. e) average rate of tariff cut down 3. Market access world at large by member countries 4. Rules & disciplines for world trade 5. TRIMS Trade Related Investment Measures 6. GATS Trade Agreements on Trade & Services use of MFN cloth & non discrimination. 7. TRIPS Trade Related Intellectual Property Rights.

WTO

1. 2.

Introduction. The Uruguay round of GATT negotiations

concluded on April-1994 at Marrakesh, Morocco. Total members : 123 countries (including India) singed WTO Act. Agreements-are Formation of WTO as an Organization & rules for governing. Ministerial decisions & declarations contain imp. Agreements covering trade in goods , services. IPR & pluri-lateral trade ( Information Technology Agreement Committees). Dispute settlement rules & trade policy review system. Original GATT is part of WTO Agreement in force Jan-1995.

3. 4.

SUCCESSOR OF GATT AS WTO

WTO as world trade organization. It has legal status as enjoyed by IMF & WORLD BANK. Members sit together, meet from time to time discuss & solve world trade problems.

DIFFERENCE BETWEEN GATT & WTO

1. 2. 3. 4. 5. WTO is not an extension of GATT, but it is a successor. WTO completely replaces GATT. GATT has no legal status, WTO has as IMF & IBRD GATT has set of multiple agreements, rules in nature. Any member country can stay outside GATT Agreements, but in WTO no scope & may be penalized. 6. Agreement is permanent & binding. 7. GATT dispute settlement mechanism was not effective, but in WTO very strong. 8. GATT was toothless but WTO has fine grip of teeth. 9. GATT was a forum meets once in a decade to discuss & solve problems. WTO works on time bound manner. Dead line extended only on consensus. 10. GATT rules applied to goods but WTO includes goods, services, IPRs & no. of agreements. 11. GATT has small Secrete rate managed but Director General but WTO has huge body Of orgsn

ORGANISATION OF WTO
Director General

General Council Dispute settlement Body

Ministerial Conference

General council Trade policy review body

General Council

A. Committees on
Trade & Environment Trade & Development Regional Trade Agreements Balance of Payments. Budget, Finance & Administration. Trade ,Debt & Finance Trade & Technology transfer. Trade & Investment interactions. Trade & competition policy.

B. COUNCIL FOR TRADE IN GOODS

          

Market Access. Coverage of Agri. Sanitary & phytosanitary measures. Technical barriers to trade. Subsidies & counter veiling measures. Anti-dumping policy. Customs valuation. Import licensing. Trade related investment measures. Safe guard measures. State trade enterprises.

. Related Aspects of C. Council for Trade

IPRs

D. Council for Trade in Services.

1.Trade in financial services & special commitments. 2. Domestic regulations & GATT rules. 3. Trade in civil Aircraft committee. 4. Govt. procurement committee.

DOHA DEVELOPMENT AGENDA Trade Negotiations Committees.

Special Sessions on.

a. services council b. TRIPS. C. Dispute settlement body. d. Agricultural committee. e. cotton sub committee. F. trade & development committee. G. trade & environment committee.

Negotiating Groups on
* Market access rules. * Trade facilitation

Special Policies
Assisting developing & transition economies. Specialized help for export promotion. Cooperation in global economic policy making. Routine notification when members introduce new trade measures or old ones. Transferences in WTO activities.

Membership, Alliance & Bureaucracy All members who joined the system as a result of negotiation and therefore membership means balance of rights & obligations.  All member countries have to make commitments to open their markets and abide by the rules & negotiations.  The member countries of WTO are called as observers.


How to Join WTO

ANY STATE OR CUSTOMS TERRITORY HAVING FULL AUTONOMY IN THE CONDUCT ITS TRADE POLICIES MAY JOIN WTO, BUT WTO MEMBERS MUST AGREE ON YHE TERMS. THEY ARE,

 First -tell us about yourself.  Second Workout with us individually what you have offer.  Third Lets draft membership terms.  Finally - Decision.

Representing Groups of Countries.

 G-20 Argentina, Brazil, China, Egypt, India, S.A, Thailand.  C-4Cotton fourAlliance of sub-Saharan countries.  European countries.  ASEAN- Association of South East Asian countries.  Southern common market.  NAFTANorth American Free Trade Agreements.  African Group.  Less Developed countries Group.  ACP African, Caribbean & pacific Group.  SELALatin AMERICAN Economic System.

WTO-FUNCTIONS.
Among various functions of the WTO, these are most imp.  It oversees the implementation, administration & operation of the covered agreements.  It provides a forum for negotiations and for setting disputes.  WTOs duty is to review & propagate the national trade policies and to ensure the coherence and transparency of trade policy.  WTOs priority is to assist developing countries.  WTOs special help to Least developed countries.  It co-operates with the IMF & WORLD BANK and its affiliated agencies with a view to achieving greater coherence in global economic policy making.

WTO AGREEMENTS.
The Agreements are the outcome of Uruguay Round of the Multilateral Trade Negotiations. 1. Multilateral Agreements on Trade in goods. GATT Rules of 1994. 2. General Agreements on Trade in Services. 3. Agreement on TRIPS & TRIMS 4. Understanding on Rules & Procedures governing the settlement of disputes. 5. Pluri-lateral Trade Agreements (information technology agreement committees). 6. Trade policy Review Mechanism

Dumping: Selling goods abroad at a lower price than home market by unfair business practices. It is an offence practiced at international level by the exporting countries. Ant-Dumping: GATT/WTO is incompatible with dumping. It is not permissible. A written complaint against dumping country will be looked differently & action will be initiated. E.g. it exceeds 2% of exports other wise complaint will be rejected. Heavy anti-dumping duty may be imposed. it is a safeguard measure. Sanitation: Preserving natural &nature's environment. Pytho-sanitary: Greenery preservation & promotion by way afforest ration, control over exploitation natural resources & natural habitants. Who affects/ damages the nature will be looked differently & action initiated. The production & products allowed to preserve nature. Ozone layer is depleting .It is dangerous to not only human life but also to entire nature/world. India is trying sincerely to create world wide awareness using WTO
forum.