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WTO Established Jan 1, 1995 Created by : Uruguay round negotiation(1986-1994) Members: 153 Most recent: Saudi Arabia December 2005 Including: China (as of 2001) Not including: Russia, Iran, Iraq, N. Korea Headquarters: Geneva, Switzerland
merchandise goods. 2. Gatt dispute settlement system is slow 3. Gatt was just provisional agreement.
The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers ,who meet at least once every two years, Decisions are normally taken by consensus. the WTO is different from some other international organizations such as the World Bank and International Monetary Fund. In the WTO, power is not delegated to a board of directors or the organizations head.
Highest authority:
The countries
make their decisions through various councils and committees, whose membership consists of all WTO members.
The Ministerial
Conference can take decisions on all matters under any of the multilateral
For example : JAPAN is better than INDIA at making automobiles, and INDIA is better than JAPAN at making Agriculture and Textile product . It is obvious that both would benefit if JAPAN specialized in automobiles and INDIA specialized in Agriculture and Textile and they traded their products. That is a case of absolute advantage.
Absolute advantage
JAPAN produce Automobile product.
3. INTELLECTUAL PROPERTY
The WTOs 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 intellectual property should be protected when trade is involved.
4.DISPUTE SETTLEMENT
The WTOs procedure for resolving trade quarrels under the Dispute Settlement. Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly.
The Trade Policy Review Mechanisms purpose is to improve transparency, to create a greater understanding of the policies that countries are adopting, and to assess their
The WTOs overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does this by: Administering trade agreements Acting as a forum for trade negotiations Settling trade disputes Reviewing national trade policies Assisting developing countries in trade policy
DEVELOPING COUNTRIES
THE WTO DEALS WITH THE SPECIAL NEEDS OF DEVELOPING COUNTRIES IN THREE WAYS
1. WTO AGREEMENTS
In the agreements: more time, better
terms Legal assistance: a Secretariat service Least-developed countries: special focus A maison in Geneva: being present is important, but not easy for all
2. WTO COMMITTEES
Trade and Development Committee Sub-committee on Least-Developed
opportunities and concerns Erosion of preferences The ability to adapt: the supply-side
Ministerial Conference
First
ministerial conference at Singapore on December 9-13,1196. Second ministerial conference at Geneva on May 18-20,1998 Third ministerial conference at Seattle on November 30-december 3,1999. Fourth ministerial conference at Doha on November 9-13,2001. Fifth ministerial conference at Cancun on September 10-14,2003. Sixth ministerial conference at Hong Kong on December 13-18,2005.
for negotiation. Assess the implementation of commitments under WTO agreements. Examine developments in the world economy. Address the challenges of an evolving world economy.
as in the IMF and the World Bank to improve the coherence of international economic policy making with view to maximising the contribution that open, rule based trading system can make to stable growth for economies at all levels of development.
the ministers expressed determination to maintain the process of reform and liberalization of trade policies , thus ensuring that the system plays in full part in promoting recovery , growth and development objectives set out in the marrkesh agreement establishing the WTO and pledged to reject the use of protectionism.
of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The work programmed covers about 20 areas of trade. The Round is also known semi-officially as the Doha Development Agenda as a fundamental objective is to improve the trading prospects of developing countries.
Ministers launched at
doha successfully by the date of 1st january,2005. Ministers welcomed the decision on implementation of doha declaration on the TRIPS agreement and public health.
on negotiations and further actions in the areas of environment, dispute settlement understanding, special & differential treatment, matters relating to implementation, trips small economies trade, debt and finance, trade & transfer of technology, E-commerce and least developed countries.
Impact on India:
Problems faced Commitments made Potential solutions to existing problems
negotiations Non-tariff barriers being created by developed nations. Regional cooperation groups posing threat to utility of WTO agreement itself, which is multilateral encompassing all member countries Poor implementation of Doha Development Agenda
Intellectual Property rights (TRIPs) Sui generis system Trade related investment measures (TRIMs) General Agreement on Trade services (GATS)
up world-class infrastructure Should focus on R&D in important fields Helping textile and garment Industry go multinational Invoking reforms facilitating major FDI infows Should downsize non-plan expenditure in Subsidies Lots of potential in renewable energy generation business
The 10 benefits
1. The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government
Criticisms Of WTO
1> WTO is the fundamentally undemocratic 2> WTO will not make us safer 3> WTO tramples labour and Human Rights 4> WTO Would privatize essential services 5> WTO is increasing inequality 6> WTO is increasing hunger 7> WTO hurts poor ,small countries in favour
by rich countries for the benefit of the individual interest Example : Agriculture Export
government to ban a product based on the way It is produced such as a good produced with a child labour. -> It has also rules that government can not take into account non commercial value such as human rights