INTRODUCTION

GATT was created in 1947. The purpose was to facilitate international bargaining and to reduce barriers to trade. WTO replaced GATT on January 1 1995.

The purpose was to facilitate smooth and hassle free trade.

Successor to GATT

International Organization embodied in results of Uruguay Round

Established: 1 January 1995 Member driven (153 Members) Decision making by CONSENSUS Single Undertaking several topics negotiated together

Serviced by Secretariat - 600+ staff

Based in Geneva

WTO Structure
Ministerial Conference

Trade Policy Review Council for Trade in Goods

General Council

Dispute Settlement
Council for Trade in Services

Committees

Council for TRIPS

Committees

Committees

Working Parties

Working Parties

Working Parties

GATT to WTO A half a century

WTO
WTO and its agreement are permanent WTO has members WTO is more powerful than GATT Dispute settlement mechanism faster and efficient.

GATT
GATT was Ad-Hoc and provisional GATT had contracting parties. GATT alloweddomestic legislative purview. GATT was less powerful, dispute settlement slow and inefficient

World map of WTO participation

History
The Bretton Woods Conference of 1944 proposed the creation of an International Trade Organization (ITO) to establish rules and regulations for trade between countries. Members of the UN Conference on Trade and Employment in Havana agreed to the ITO charter in March 1948, but ratification was blocked by the U.S. Senate (WTO, 2004b). Some historians have argued that the failure may have resulted from fears within the American business community that the International Trade Organization could be used to regulate (rather than liberate) big business (Lisa Wilkins, 1997; Helen Milner 1993). Only one element of the ITO survived: the General Agreement on Tariffs and Trade (GATT). Seven rounds of negotiations occurred under the GATT before the eighth round - known as the Uruguay Round which began in 1986 and concluded in 1995 with the establishment of the WTO. The GATT principles and agreements were adopted by the WTO, which was charged with administering and extending them and approximately 30 other agreements and resolving trade disputes between member countries. Unlike the GATT, the WTO has a substantial institutional structure.

Why Trade Facilitation at the WTO?

Trade barriers often exceed tariff barriers
Seen as necessary to fully reap benefits from dismantled trade barriers in other areas Dispute settlement provides method of enforcement
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Functions: The International -administer WTO Organization that trade agreements -forum for trade negotiations Governs the Rules of -handle trade Trade Between disputes -monitor national trade policies Nations -technical assistance and training -cooperate with international organizations

Benefits of WTO
The system helps promote peace. Rules make life easier for all. Disputes are handled constructively. Free trade cuts the cost of living .

Ministerial Conferences
+ Singapore (1996)
+ Geneva (1998)

+ Seattle (1999)
+ Doha, Qatar (2001)

+ Cancun, Mexico (2003)

+

Hong Kong, China (2005)

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The Uruguay Round

Uruguay Round (UR) was the 8thround of multilateral trade negotiations held in Sept 86. Due to the conflicting issues UR could not be concluded in Dec 90 as scheduled. Arthur Dunkel, the then Director General of GATT presented a draft act, popularly known as Dunkel Draft. Dunkel Draft was replaced by an enlarged and modified final text was approved by 125 Governments on 15th April 1994. This Draft led to the formation of WTO. An organization that was conceptualized 50 years back.

Doha Round
The WTO began the current round of negotiations, the Doha round, at the Fourth Ministerial Conference in Doha, Qatar in November 2001. The talks have been highly contentious and agreement has not been reached, despite continuing talks at Fifth Ministerial Conference in Cancn in 2003 and at the Sixth Ministerial Conference in Hong Kong on December 13 - December 18, 2005 and in Geneva - July 2006.

DOHA TRADE TALKS

Launched in 2001 Disagreement over liberalizing farm trade foiled talks in Cancun 2003 In 2004, rich countries pledged to cut agricultural subsidies Failures in Geneva 2006 and Potsdam 2007 further damaged the Doha round

DOHA CONTINUED
In July of 2008, trade ministers came close to a deal, agreeing on 18 of the 20 topics Disputes over protecting farmers in developing economies from import surges ruined the nine day meeting

CRITICISM
Anti-Democratic Demands too little of poorer members Often superseded by regional trade agreements Bad for the environment because governments cant ban dangerous imports Ineffective-trade has bloomed for members and non-members alike Lack of enforcement

GOVT. ANSWER TO CRITICS

No government has ever been forced to abide by a rule that it didnt support Policy changes are proposed and adopted by unanimous vote Countries are able to restrict imports of dangerous products (hormone treated beef example) WTO provides orderly dispute resolution between governments

Doha Development Agenda

Continue work on reduction of tariffs and nontariff Barriers Aim to reduce/abolish subsidies Special emphasis on needs of developing and LDC
Goal: to complete negotiations by end 2006
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REVIEW OF GATT/WTO PRINCIPLES

Protection only through Tariffs
Reduction and Binding of Tariffs National Treatment Most Favored Nation (MFN) Transparency

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WTO and Developing Countries

WTO provides a window for gradual rollout of TRIPS and IPR regulations. Provision for regional trade blocks. The principles of Non-discrimination, transparency, increased certainty, trade facilitation and protection from monopolistic competition.

WTO and India

Indias trade gain. Competitive advantage due to WTO. Potential of becoming a knowledge hub due to CBD (Connection on Biological Diversity) and better IPR protection. FDI and MNC Exposure

WTO Trade Statistics

Trade value up by about 17% in the fourth quarter of 2010 The value of world merchandise trade was 17% higher in the fourth quarter of 2010 compared to the same period of 2009, according to WTO figures released on 14 March 2011. Trade value growth slows in the third quarter of 2010 The value of world merchandise trade was 18% higher in the third quarter of 2010 than in the same period of 2009, according to the latest WTO quarterly figures released on 1 December 2010. This marks a slowdown in comparison with the 26% increase registered in the second quarter of 2010.

Criticism
Most Developing Countries do not have the Financial and Knowledge resources to effectively participate in the WTO discussions and negotiations.
Due to the dependence of Developing Countries on the Developed ones, the Developed countries are able to resort to armtwisting techniques. The WTO has not been successful to impose the organizational disciplines on the Developed Nations

 Negotiations and Decision making in WTO dominated by Developed Countries.