Background

(GATT to WTO)
General Agreement on Tariffs and Trade(GATT)
was set up after 2nd World War to undertake the
process of post war construction of the global
economy in 1947 signed by 23 countries.
India was one of the founder member of GATT.
The main purpose of GATT was to ensure competition
in commodity trade by removal of trade barriers.
It was not an organisation ; it was merely a legal
agreement.
The Eight round of GATT negotiation (Uruguay Round)
gave birth to the World Trade Organization in April
1994.

History
1947 GATT is drawn to record the results of trade
negotiations between 23 countries. Enters
(provisionally) in force on January 1 1948
1950 US administration abandons efforts to seek
congressional support for the International Trade
Organization
1949-1956 First four rounds of tariff negotiations
1962 Derogations to the GATT rules in the areas of
cotton and fibers were negotiated. Later to evolve in to
the Multifibre agreements
1964-67 Kennedy Round. UNCTAD is created to press for
trade measures to favor the developing countries
1973-1979 The Tokyo round. Multifibre agreement
negotiated in1974 to restrict export growth, and
extended several times thereafter
1986-1994 Uruguay Round of negotiations.
April 15 1994: The Marrakech protocol signed,

World Trade
Organization (WTO)
The WTO agreement was signed by 104
member nations of GATT and it came
into force from January 1st 1995.
It is essentially an extension of GATT
It is a permanent international
institution designed to play the role of
Watchdog of International Trade.
The present membership of WTO is 153
countries (as on March 2011).

Objectives of WTO
To develop an integrated, viable and durable
multilateral trading system
Raise the standard of living in member countries
by ensuring full employment
To promote sustainable development in member
countries by the optimal use of resource
Help developing countries to get a share in the
growth of international trade
To reduce tariff and other trade barriers among
member countries
To ensure linkages between trade and
environmental policies

Structure of WTO
A)The Ministerial Conference (MC): It is the
highest level consisting of representative members. It
has authority to take decision in any matter for World
trade. It meets at least once in every two years

B)The General Council (GC): It discharges

functions of MC during interval between two meetings
of MC. The GC meets as and when necessary. It has
its own rules and procedure.

C)Dispute Settlement Body (DSB): It is

empowered to establish panels, exercise surveillance
for compliance with rules and regulations and
authorize measures in case of non-implementation of
recommendations

WTO Agreements
1. Agreement on Agriculture (AOA)
2. General Agreement on Trade in
Services(GATS)
3. Agreement on Trade Related Investment
Measures (TRIMs)
4. Agreement on Trade Related Intellectual
Properties (TRIPs)
5. Agreement on Trade in Textiles and
clothing (Multi Fiber Arrangements-MFA)

Agreement on Agriculture (AOA)

Under this agreement, members
agree to provide a framework for
long term reforms in agricultural
trade and domestic policies.
The members have to transform their
non tariff barriers into equivalent
tariff measures.
In the result tariff on agriculture
products are to be reduced by 36%
of developed countries and 24% of

General Agreement on Trade in

Services(GATS)
It is based on the fact that there is
growing importance of trade in
services for growth and development
of the world economy.
It aims at establishing a multinational
framework of trade in services
(banking, insurance, telecom,
transport etc).
It provides a multilateral framework
of principles to govern the trade in

TRIPS Agreement
TheAgreement on Trade Related Aspects of
Intellectual Property Rights(TRIPs) is aninternational
agreementadministered by theWorld Trade
Organization(WTO) which sets down minimum
standards for many forms ofintellectual property(IP)
regulation as applied to all WTO Members.
The areas of intellectual property that it covers are:
a) copyrightandrelated rights(i.e. the rights of performers,
producers of sound recordings and broadcasting
organizations);
b) trademarksincluding service marks;
c) geographical indicationsincluding appellations of origin;
d) industrial designs;
e) patentsincluding the protection of new varieties of plants;
f) trade secrets and test data

TRIMs Agreement
TheAgreement on Trade Related
Investment Measures(TRIMs) are rules
that apply to the domestic regulations
a country applies to foreign investors,
often as part of anindustrial policy. The
agreement was agreed upon by
allmembersof theWTO.
In other words, it compels member
countries to give national treatment to
foreign capital.

Features of TRIMs
All restrictions on foreign
capital/investors/companies should be
scrapped.
No restriction will be imposed on any area of
investment.
Foreign investors will not be obliged to use
local products and materials.
Export of the part of the output will no longer
be mandatory
Import of raw material and components will
be allowed freely

Agreement on Trade in Textiles

and clothing (MFA)
It provides for the phasing out of the
import quotas on textiles and
clothing under the Multi Fiber
Arrangements since 1974.
As a result of this agreement , quotas
on textiles and clothing have now
been abolished.