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Gatt and Wto

Gatt and Wto

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Published by: rohitk55 on Jul 27, 2009
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11/17/2012

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GATT AND WTO Realizing that trade will suffer if there is no proper organization and agreement to regulate trade

policy came the General Agreement on Traiffs and Trade [GATT] in 1947-48 to ensure orderly and transparent international trade. The fundamental principles of such agreement are: 1. Most favoured nation [MFN] every signatory will extend to every other signatory member, the same and the equal treatment in a non discriminatory manner. 2. National treatment, imported goods and domestically produced goods will be treated alike. GATT is a multinational treaty that was signed in 1948 by 102 countries with the objective of bringing down the tariffs and non tariff barriers to international trade. The Uruguay Round Agreements of GATT [1986 to 1994] envisaged an increase in the coverage of the legal provisions and establishment of WTO occurred. The WTO was formed in 1995 with GATT with the objective to help producers of goods and services, exporters and importers conduct their business internationally. Ministerial Conference held once every 2 years would be primary decision making body of WTO. The General Council of WTO is responsible for overseeing regulatory operations and acts as a body for dispute settlement mechanism. The arguments for a country to join WTO can be listed below: • Disputes are settled officially. • WTO rules are consumer friendly • Free trade cuts the cost of many goods • WTO provides more choices of products.

Things that are thought against WTO: • It dictates the terms • It is for free trade at any cost • Small producers find it difficult to compete against MNC • Indigenous products have no place • Small countries are powerless in the WTO system.

GATS classification of services: • Services supplied from one country to another officially known as “cross border supply” • Consumers and firms making use of a service in another country officially known as “ consumption abroad”. • A foreign company setting up subsidiaries to provide services in another country known as “commercial presence” • Individuals traveling from their own country to supply services in another country officially called “presence of natural persons”.

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