c)  Cases giving false or misleading facts disparaging the goods, services or trade of another person will be

transferred to the CCI.

WHAT IS COMPETITION
1. Competition is central to the operation of markets, and fosters innovation, productivity and growth,
all of which create wealth and reduce poverty. However, markets do not always work well, and
uncompetitive markets are often those that matter most for the poor.
2. Competition, the process of rivalry between firms striving to gain sales and make profits, is the
driving force behind markets. Efficient and fair markets are essential for catalysing private sector
development and economic growth. Yet, while markets work fairly well much of the time, effective
competition is not automatic, and can be harmed by inappropriate government policies and
legislation, and by the anti-competitive conduct of firms.
3. Competition is a process of economics rivalry between market players to attract customer’s. These market
players can be multinational companies, domestic companies, wholesalers, retailers (even our
neighbourhood shopkeeper) or a cable operator.
4. Such a competitive situation may also be affected by market contestability, where in competition comes not
only from existing players, but also from new players that could enter and contest in the market.

In their pursuit to be better than other enterprises, market players adopt the following ways:
Fair: this relates to the adoption of fair means such as producing cost efficient, adopting the best available
technology more research and development and the like. In this sense, firms do their best in terms of
innovation, choice , quality and service.
Unfair this relates to the adoption of restrictive business practices such as predatory pricing exclusive
dealing , tied selling, resale price maintenance, cartelisation , refusal to deal and the like.
In either situation, competition in the sense of economic rivalry leads to concentrated market, as the number of
firms operating in them is reduced while the size of those still active increases considerably, resulting in a greater
market power. Thus, “Competition kills competition’. This is true , if one followers the inherent logic within
competition ; the natural tendency than world drive competition to result in monopoly.

Given this , the appropriate definition of completion is “a situation which ensures that markets always
remain open to potential new entrusts and that enterprises operate under the pressure of competition.
WHAT IS COMPETITION LAWS
1. Competition is a process of economic rivalry between market players to attract customers.
Competition also refers to a situation in a business environment where businesses independently
strive for the patronage of customers in order to achieve their business objective.
2. Free and fair competition is one of the pillars of an efficient business environment.
3. In the recent years the Indian economy has been one of the best performers and is on high growth
path. Infusion of greater degree of competition can play a catalytic role in unlocking the fuller
growth potential in many critical areas of the economy.
4. In the interest of consumers, and the economy as whole, it is necessary to promote an environment
that facilitates fair competition outcomes in the market, restrain anti-competitive behavior and
discourage market players from adopting unfair trade practices. Therefore, competition has
become a driving force in the global economy.

AN OVERVIEW OF MRTP ACT 1969

BACKGROUND
1. Passed in Parliament : 18.12.1969
2. Came into force : 01.06.1970
 3. Recommended by Dutt Committee
4. Applicable to whole of India except Jammu Kashmir
5. Significantly amended in 1982, 1984, 1985 and 1991
INTENT
1. Prevent concentration of economic power in the hands of few rich
2. Provide control of monopolies
3. Prohibit restrictive and unfair trade practices
4. A commission will be set-up to look after the proceedings under this act
GET TO KNOW THESE!
MONOPOLISTIC TRADE PRACTICE
1. Abuse market in terms of production and sales
2. Low quality product at high cost Monopolistic Trade Practice
UNFAIR TRADE PRACTICE
1. False representation of goods and services
2. Bogus advertisements to mislead consumers
RESTRICTIVE Trade Practice
1. Block flow of capital into production
2. Prohibit competition
INQUIRY BY THE COMMISSION
1. Upon receiving a complaint from any trade association, consumer or a registered consumer
association, or
2. Upon reference made to it by the Central Government or State Government
3. Upon an application to it by the Director General,
4. Upon its own knowledge or information.
POWER OF THE COMMISSION
1. Summoning and enforcing the attendance of any witness and examining him on oath;
2. Discovery and production of any document or other material object producible as evidence;
3. Requisition of any public record from any court or office.
4. Issuing any commission for examination of witness
5. Appearance of parties and consequence of non-appearance.
6. To require any person to produce before it and to examine and keep any books of accounts or other
documents relating to the trade practice, in its custody.
7. To require any person to furnish such information as may be in his possession in relation to the
trade carried on by any other person.
8. To authorize any of its officers to enter and search any undertaking or seize any books or papers,
relating to that particular undertaking, if the commission suspects that such books or papers are
being or may be destroyed, mutilated, altered, falsified or secreted.
REMEDIES UNDER THE ACT
1. Temporary Injunction :- Activities of the undertaking charged with, will be stopped until further
orders
2. Compensation:- The particular concern is liable to pay the compensation to those who were
affected
CURRENT STATUS OF THE ACT
 1. Not in force now
2. Replaced by ‘Competition Act, 2002’
3. Came into force : 01.09.2009
4. This act is not in force in India currently as it was repealed and was replaced by Competition Act
2002 with effect from September 1, 2009. The MRTP commission was replaced by Competition
Commission of India.
Aim of the Act :
1. Eliminate practices having adverse effect on competition
2. Promote and sustain competition
3. Protect interest of consumers
4. Ensure freedom of trade carried on by other participants
5. On the basis of recommendation of Dutt Committee, MRTP Act was enacted in 1969 to ensure that
concentration of economic power in the hands of few rich.
6. The act was there to prohibit mrtp
7. It extended to whole india except j & k

Case study Colgate Palmolive (India) Ltd. vs MRTP Act,1969 Highlights:

1. “Colgate Trigard Family Good Habits Contest”
2. The commission alleged it to be:
i. An unfair trade practice causing injury and loss to the consumers (of tooth brushes) and
ii. A restrictive trade practice eliminating competition among the manufacturers of tooth
brushes
3. Colgate Palmolive (India) Ltd. won the case! COMPREHEND…
Provision of Constitution Leading to the Enactment of MRTP Act 1969
India has had a history of competitive markets. Kautilya‟s Arthashastra, deals with statecraft and economic
policy. Articles 38 and 39 of the Constitution of India mandate that the government  shall secure and
protect the society where people will get social, economic and political justice and it shall address all the
organizations of the nation, and the State shall direct its policy as-
 1. The ownership and control of material resources are so distributed as best to assist the common
good.
2. The economic system does not operate as it creates a concentration of wealth and means of
common detriment.

The MRTP Act was in consequence of the above mentioned prevention of concentration of economic
power  which is the mandate in the Directive Principles of the Constitution of India. India adopted a
planned economic development strategy since independence.
India chose a centrally planned economic structure also referred to as the Nehruvian socialism
model. The Nehruvian model was a mixed economy model – a model that was neither a market economy
like the United States of America nor a socialist economy like it was then in the USSR.
Under the mixed model, both the private and public sector co-existed. Since independence of the country
in 1947, India adopted and followed policies comprising ‘command and control‘ laws, rules, regulations and
executive orders.The Industrial Policy Resolution of 1948 and 1956 emphasized the state role in the
industrial development, growth, social justice as a regulator by defining the parameters of regulatory
mechanism.
Industrial (Department and Regulation) Act (IDRA), 1951 empowered the government to regulate almost
every aspect of the functioning of the private sector. The private sector was allowed limited licensed
capacity in the core sector and public sector were patronized to achieve growth and development of core
industries like coal, oil & natural gas , iron & steel, power & energy etc.
It evolved a market where there was no such contestable competitor as the state controlled almost all
areas of economic activities and intervened every step of the business process and financial actions of  the
private sector which restricted its growth and favoured public sector companies.
The public sector companies were  made responsible for the economic growth of the country. Entry or
exit was not easy for business. Interventions and restrictions were everywhere for private companies–
from plant size to site location, from financial allocations to foreign investments.
Free competition in the market suffered a lot  mainly because of Govt. policies– it only favoured public
sector and big business houses as they were in a position to raise huge fund and avail technical and
managerial supports to achieve the skill to grow. High tariff and no proper licence allocating system
established an environment where big businesspersons succeeded in getting entry into the industry and
survive with no competition. This led to the concentration of economic power in only a few individuals or
business groups which created monopolistic trade practices and License-Raj.
This compelled the Government to reform the Indian economy. The license raj regime continued until the
early 1990’s.The economic crisis faced by the country led to economic reforms and initiation of the New
Economic Policy (NEP) 1991 and the New Industrial Policy (NIP) 1991. Competition law became very
important than before in this new Liberalisation-Privatisation-Globalisation (LPG) era.
Competition has been helping the Indian consumer and industry to provide better public services since
then. Greater competition boosted the Indian economy to become one of the best performers in the
recent years. Competition has become a driving force in the Indian economy as an environment is essential
that facilitates fair competition, restrain anti-competitive behavior and unfair trade practices.
Evolution of MRTP as a Competition Law 
Even before the Glasnost and globalization which took place in the early 1990s, India took regulatory
measures by means of an antitrust act named Monopolies and Restrictive Trade Practices (MRTP) Act
in1969.
From 1969 to 2003 Govt. provided the regulation to the monopolistic trade for the first time by virtue of
the enactment of this Monopolies and Restrictive Trade Practices Act (MPTP Act) which inspired by the
mandate of the Directive Principles of State Policy in the Constitution of India. The Preamble of the MRTP
Act preached a socialistic philosophy intended to ensure that the operation of the economic system did
not led to the concentration of economic power to the common detriment.
The Act advocated for the prohibition of Monopolistic and Restrictive Trade Practices. However, it was not
meant for all sectors of the economic system and did not apply to the public sector, government
undertakings and undertakings by state & central Govt. corporation, banks , the State Bank of India and
insurance companies of India which restricted the scope of the Act. As a result, the Parliament of India
enacted Competition Act, 2002 in 2003. Competition Act deals with anti-competitive agreements, abuse
of a dominant position and a combination or an acquisition.
Three enquiries conducted by three different committees acted as the loadstar for the enactment of the
MRTP Act . Those are-

 The Committee under the chairmanship of Mr. Hazari studied licensing procedure for the Industrial
sector under the Industries (Development and Regulation) Act, 1951. The Committee found that
licensing system led to the disproportionate growth of some big business houses (Hazari, 1965).

 In October 1960 a committee was set up which was chaired by Professor Mahalanobis. The
Committee enquired the distribution and levels of income and came to a conclusion in February
1964 that the top 10% of Indian population cornered almost
40% of the income and the big business companies were flourishing because of the existence of
country’s ‘planned economy’.

 The Government of India appointed ‘The Monopolies Inquiry Commission (MIC)’ in April, 1964
which was chaired by Mr. Das Gupta. The Committee researched about the monopoly practice in
the industry and its impact on the Indian economy. The Commission reported in October 1965 that
product wise and industry wise  concentration of economic power existed in the system due to
large-scale restrictive and monopolistic trade practices as a few business houses were operating a
large number of companies.
As a consequence of its findings, the Monopolies Inquiry Commission drafted a Bill which was amended by
a Parliamentary Committee and became the ‘Monopolies and Restrictive Trade Practices Act, 1969 (MRTP
Act)’ and was enacted from 1st June, 1970.
The MRTP Act intended to protect consumers as well as to avoid concentration of wealth and aimed to
prevent-
(a) Concentration of economic power
(b) Prohibition of monopolistic, unfair or restrictive trade
Economic Reforms and its Impact on the MRTP Act
The MRTP Act became ineffective for different reasons. For example–  the frequently changing industrial
policy of Indian Government. Major amendments to MRTP Act was undertaken in –

 (i) 1984 – major addition was relating to Unfair Trade Practices

 (ii) 1991 – deletion of chapter relating to Mergers and Acquisitions and Addition relating to Award
of Compensation
The monopoly of the public sector was abolished in 1991. For example- licensing had been abolished and
opened for the private sector in 6 core industrial sectors like steel, heavy electrical equipment, aircraft, air
transport, shipbuilding, telecommunication equipment and electric power were made open for private
sector investments.
Some difficulties arose while practicing and implementing MRTP Act were as follows –

 Lack of clarity on various definitions and interpretations – the Act neither define nor even mention
certain trade practices which are restrictive in character. Such as- abuse of dominance, cartels,
collusion and price fixing, bid rigging, boycotts and refusal to deal, predatory pricing etc.

 Discrimination between public and private sector – in spite of being a competition law, the MRTP
Act could not be effective in the absence of the element of competition. For example, the
protection and favour offered in pricing and purchase preferences to public sector, hampered
competition where the private companies were also operating in the market without getting any
favour from the Govt.
Upon realization of the necessity for review of the MRTP Act, the government appointed a high-powered
expert committee chaired by Justice Rajinder Sachar, in June 1977 to consider and suggest suitable
changes. The Sachar Committee presented a report to the Government in August , 1977.

 The LPG Paradigm – after the economic reforms in 1991, there had been a subsequent change in
the economic scenario with the effects of liberalization, privatization and globalization, which
impelled the need for a new competition law.
As a result of adopting liberalization, India accepted and agreed to two important agreements of the World
Trade Organization namely General Agreement on Tariffs and Trade (GATT) and Trade Related Aspects of
Intellectual Property Rights (TRIPS).  It led to the capability of multinational companies to enter the Indian
market which  made the MRTP Act less important and less effective and MRTP Commission under the
MRTP Act realized that a new legislation was needed.
The Govt. of India constituted a High Level Committee on Competition Policy and Competition Law, chaired
by Mr. S V S Raghavan , a retired senior Central Govt. officer (popularly known as ‘Raghavan Committee’) in
October 1999 to advise a new and effective contemporary competition law to cope up with the
international economic developments and to recommend a suitable legislative framework, which may
imply a new law relating to competition law for necessary amendments in the MRTP Act,1969.
The Raghavan Committee considered between amending the existing MRTP Act and enacting a new
modern competition law. They agreed to the finance minister’s view that the MRTP Act has become
obsolete in certain areas in line with the international economic developments relating to competition
laws.
The amendments of  MRTP Act would only be beneficial for curbing monopolies and it wouldn’t be
effective for the fair competition in the market economy. It was perceived by the Raghavan Committee that
drafting a new and modern competition law suitable for Indian economy would be most beneficial for
promoting competition and suitable for dealing with issues of the competition of the new liberal business
atmosphere, which was the main focus of the Indian Govt.
This led to the enactment of the Competition Act. The report of the Raghavan Committee concluded in
May 2000. The committee studied the government strategies and policies and their effect on the Indian
industrial system, the insufficiencies and inadequacies of the Industry to compete with multi-nationals.
The major recommendations and suggestions submitted to the government were:
1. To repeal the MRTP Act and to enact a new Competition Act for the regulation of Anti-competitive
agreements and to prevent the abuse of dominance and combinations including mergers.
2. To eliminate reservation of products in a phased manner for the Small Scale Industries and the
Handloom Sector.
3. To divest the shares and assets of the government in state monopolies and privatize them.
 4. To bring all industries in the private as well public sector within the proposed legislation.
RAGHAVAN COMMITTEE
Report of High Level Committee on Competition Policy and Law (Raghavan Committee Report)
The Government appointed a committee on Competition Policy and Law under the chairmanship of Mr. S.
V. S. Raghavan in October 1999 for shifting the focus of the law from curbing monopolies to promoting
competition in line with the international environment. The Committee submitted its report to the Prime
Minister on May 22, 2000.
The main recommendations of the Committee are:
1. The enactment of an Indian Competition Act, the setting up of a Competition Commission of
India (CCI), the repeal of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969,
and winding up the MRTP Commission. The pending cases in the MRTP Commission may be
transferred to the concerned consumer Courts under the Consumer Protection Act, 1986.
The pending MTP and RTP Cases in MRTP Commission may be taken up for adjudication by
the CCI from the stages they are in.
2. State monopolies, government procurement and foreign companies should be subject to the
Competition Law.
3. Competition law should cover all consumers who purchase goods or services, regardless of the purpose
for which the purchase is made.
4. The Committee recommended that the unfair trade practice cases may be transferred
to the consumer courts concerned under the Consumer Protection Act, 1986.
5. The pending monopolies and restrictive trade practices cases in the MRTPC may be taken up for
adjudication by the CCI.
6. The Committee also believed that the repeal of the various laws mentioned would constitute the
prerequisites for laying the foundation over which the edifice of the Competition Policy and the
Competition Law needs to be raised.
7. The Industries (Development and Regulation) Act, 1951 may no longer be necessary except for location
(avoidance of urban-centric location), for environmental protection and for monuments and national
heritage protection considerations, etc.
8. The Industrial Disputes Act, 1947 and the connected statutes need to be amended to provide for an easy
exit to the non-viable, ill-managed and inefficient units subject to their legal obligations in respect of their
liabilities.
9. The Board for Industrial Finance & Restructuring (BIFR) formulated under the provisions of Sick Industrial
Companies (Special Provisions) Act, 1985 should be abolished.
10. There should be necessary provision and teeth to examine and adjudicate upon anti competition
practices that may accompany or follow developments arising out of the implementation of WTO
Agreements. Particularly, agreements relating to foreign investment, intellectual property rights, subsidies,
countervailing duties, antidumping measures, sanitary and technical barriers to trade and Government
procurement need to be reckoned in the Competition Policy/Law with a view to dealing with anti-
competition practices.
11. The competition law should be made extra territorial. It is pertinent to note that this High Level
Committee only discussed the comparative approach with respect to existing laws in other countries in
their recommendations in the report. It however does not mention the subject of imposing criminal
sanctions on Individuals as a penalty. The High level Committee mentioned about the existing criminal
penalties with reference to other jurisdictions only in passing reference.
WORLD TRADE ORGANIZATION
The World Trade Organization (WTO) is an intergovernmental organization which regulates international
trade. The WTO officially commenced on 1 January 1995, signed by 123 nations on 15 April 1994, replacing
the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.
The WTO deals with regulation of trade between participating countries by providing a framework for
negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence
to WTO agreements, which are signed by representatives of member governments and ratified by their
parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations,
especially from the Uruguay Round (1986–1994).
The WTO is attempting to complete negotiations on the Doha Development Round, which was launched in
2001 with an explicit focus on developing countries. As of June 2012, the future of the Doha Round
remained uncertain: the work programme lists 21 subjects in which the original deadline of 1 January 2005
was missed, and the round is still incomplete.
The conflict between free trade on industrial goods and services but retention of protectionism on farm
subsidies to domestic agricultural sector (requested by developed countries) and the substantiation of fair
trade on agricultural products (requested by developing countries) remain the major obstacles. This
impasse has made it impossible to launch new WTO negotiations beyond the Doha Development Round. As
a result, there have been an increasing number of bilateral free trade agreements between governments.
As of July 2012, there were various negotiation groups in the WTO system for the current agricultural trade
negotiation which is in the condition of stalemate.
Contrary to the temporary nature of GATT, WTO is a permanent organization which has been established
on the basis of an international treaty approved by participating countries. It achieved the international
status like IMF and IBRD, but it is not an agency of the United Nations Organization (UNO).
STRUCTURE
The WTO has nearly 153 members accounting for over 97% of world trade. Around 30 others are
negotiating membership. Decisions are made by the entire membership. This is typically by consensus.
A majority vote is also possible but it has never been used in the WTO and was extremely rare under the
WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments.
The WTO’s top level decision-making body is the Ministerial Conferences which meets at least once in
every two years. Below this is the General Council (normally ambassadors and heads of delegation in
Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in the
Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Disputes
Settlement Body.
Objectives:
The important objectives of WTO are:
1. To improve the standard of living of people in the member countries.
2. To ensure full employment and broad increase in effective demand.
3. To enlarge production and trade of goods.
4. To increase the trade of services.
5. To ensure optimum utilization of world resources.
6. To protect the environment.
7. To accept the concept of sustainable development
The main functions of WTO are discussed below:
1. To implement rules and provisions related to trade policy review mechanism.
2. To provide a platform to member countries to decide future strategies related to trade and tariff.
3. To provide facilities for implementation, administration and operation of multilateral and bilateral
agreements of the world trade.
4. To administer the rules and processes related to dispute settlement.
5. To ensure the optimum use of world resources.
6. To assist international organizations such as, IMF and IBRD for establishing coherence in Universal
Economic Policy determination.
WTO AGREEMENTS
The WTO’s rule and the agreements are the result of negotiations between the members. The current sets
were the outcome to the 1986-93 Uruguay Round negotiations which included a major revision of the
original General Agreement on Tariffs and Trade (GATI).
GATT is now the WTO’s principal rule-book for trade in goods. The Uruguay Round also created new rules
for dealing with trade in services, relevant aspects of intellectual property, dispute settlement and trade
policy reviews.
The complete set runs to some 30,000 pages consisting of about 30 agreements and separate
commitments (called schedules) made by individual members in specific areas such as, lower customs duty
rates and services market-opening.
Through these agreements, WTO members operate a non-discriminatory trading system that spells out
their rights and their obligations. Each country receives guarantees that its exports will be treated fairly and
consistently in other countries’ markets. Each country promises to do the same for imports into its own
market. The system also gives developing countries some flexibility in implementing their commitments.
(a) Goods:
It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating lower customs
duty rates and other trade barriers; the text of the General Agreement spelt out important, rules,
particularly non-discriminations since 1995, the updated GATT has become the WTO s umbrella agreement
for trade in goods.
It has annexes dealing with specific sectors such as, agriculture and textiles and with specific issues such as,
state trading, product standards, subsidies and action taken against dumping.
(b) Services:
Banks, insurance firms, telecommunication companies, tour operators, hotel chains and transport
companies looking to do business abroad can now enjoy the same principles of free and fair that originally
only applied to trade in goods.
These principles appear in the new General Agreement on Trade in Services (GATS). WTO members have
also made individual commitments under GATS stating which of their services sectors, they are willing to
open for foreign competition and how open those markets are.
(c) Intellectual Property:
The WTO’s intellectual property agreement amounts to rules for trade and investment in ideas and
creativity. The rules state how copyrights, patents, trademarks, geographical names used to identify
products, industrial designs, integrated circuit layout designs and undisclosed information such as trade
secrets “intellectual property” should be protected when trade is involved.
(d) Dispute Settlement:
The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for
enforcing the rules and therefore, for ensuring that trade flows smoothly.
Countries bring disputes to the WTO if they think their rights under the agreements are being infringed.
Judgments by specially appointed independent experts are based on interpretations of the agreements and
individual countries’ commitments.
The system encourages countries to settle their differences through consultation. Failing that, they can
follow a carefully mapped out, stage-by-stage procedure that includes the possibility of the ruling by a
panel of experts and the chance to appeal the ruling on legal grounds.
Confidence in the system is bourne out by the number of cases brought to the WTO, around 300 cases in
eight years compared to the 300 disputes dealt with during the entire life of GATT (1947-94).
(e) Policy Review:
The Trade Policy Review Mechanism’s purpose is to improve transparency, to create a greater
understanding of the policies that countries are adopting and to assess their impact. Many members also
see the reviews as constructive feedback on their policies.
All WTO members must undergo periodic scrutiny, each review containing reports by the country
concerned and the WTO Secretariat.
Interaction between Trade and Competition Policy
3. This is one of the so-called “new issues” in the WTO, addressing how domestic and
international competition policy instruments, such as antitrust or competition laws, interact
with international trade.
4. In July 2004 the General Council of the WTO decided that the interaction between trade and
competition policy (in addition to investment, and transparency in government
procurement) would no longer form part of the Work Programme set out in the Doha
Ministerial Declaration and therefore that no work towards negotiations on any of these
issues will take place within the WTO during the Doha Round.
5. As a result of the Ministerial Conference in Singapore (1996), the Working Group on the
Interaction between Trade and Competition Policy (WGTCP) was established to study
various aspects of this issue, with the participation of all WTO Members.
6. Under the Doha Ministerial Declaration (2001), the study work within the Working Group
was focusing on the clarification of:
i. core principles, including transparency, non-discrimination and procedural fairness
ii. provisions on hardcore cartels;
iii. modalities for voluntary cooperation; and
iv. support for progressive reinforcement of competition institutions in developing
countries through capacity building.
The Working Group is currently inactive but the WTO Secretariat continues to respond to national requests
for technical assistance in this area for the benefit of interested WTO Members and countries seeking
accession to the WTO.
  
 GATT
GATT expands to General Agreement on Tariffs and Trade, is an international trade treaty, that came into
existence in the year 1947, just after the second world war, as a result of Bretton Woods Agreement. It is a
multilateral legal agreement which was signed by 23 nations. It was enacted to bolster the economic
recovery which aimed at expanding world trade, by abolishing those trade barriers, such as reducing tariff,
quota, subsidies etc.
There are three main provisions made in this regard, which are:
When it’s about the tariff, all the member nations are considered as equal.Restriction on the number of
imports and exports are prohibited but subject to certain exceptions. Special provisions are made to
encourage trade of developing nations. Over the years, changes have been made to the agreement. GATT
remained till 1994, after which it was replaced by WTO and at that time the total number of contracting
parties (member nations) were 123.
WTO :------- WTO stands for World Trade Organization, is the sole international body concerned with the provisions
of cross-country trade, based in Geneva, Switzerland. Basically, there is an agreement called WTO agreement, which
is duly signed and negotiated by member nations of the world and confirmed in their parliaments.

In the real sense, WTO is a place, where the governments of member countries attempt to resolve their
trade problems, encountered by them during the trade with other countries. The member governments
(who can be ministers or their ambassadors or delegates) operate WTO and all decisions are also taken by
consensus.
The organization helps the producer of goods and services deal in just and fair manner, to carry out their
business throughout the world. It is aimed at liberalizing trade, for the benefit of all the nations, but it also
imposes certain barriers, such as to provide protection to consumers or stop the spreading a disease.