Acknowledgement

I wish to express my sincere gratitude to Dr. D.N. MISHRA,

principal of Vidya Vikas College for providing me an
opportunity to do my project work on “World Trade
Organization” .This project bears on imprint of many peoples. I
sincerely thank to my project guide Mr Suresh Yadav, Professor
of Economics, Vidya Vikas college,Mumbai for guidance and
encouragement in carrying out this project work. Last but not
least I wish to avail myself of this opportunity, express a sense
of gratitude and love to my friends and my beloved guardians
for their manual support, strength and help and for everything.
 INDEX

1.Introduction
……………………………………………………………………………
….... 9
2. A brief history of the WTO
………………………………………………………………..…10
3.WTO GENESIS
………………………………………………………………………….…12
4. Different Phases of WTO
………………………………………………………………….14
5. The multilateral trading system—past, present and future
………………………………...22
6. Principles of the trading system
……………………………………………………............25
7.Organizational structure
…………………………………………………………………..26
8.Agreements
……………………………………………………………………………
…27
INTRODUCTION :

WORLD *** TRADE ***

ORGANIZATION

The principle of non-discrimination was meant to be the cornerstone of the World

Trade Organisation and the multilateral trading regime. But ten years down the
line, it is clear that the trade rules favour developed countries, and the promise of
greater market access for developing countries has not been sufficiently realised
The formation of the World Trade Organisation (WTO) in 1995 was a watershed
development in the sphere of international trade. It was a major advancement in
the multilateral trade regime, with the previous regime embodied in the form of a
treaty known as the General Agreement on Tariffs and Trade (GATT).

GATT was signed in 1948 and had close to 30 member countries. Its primary
objective was to see that impediments to international trade -- mainly in the form
of tariffs – were reduced or removed in order to facilitate the movement of goods
across borders.
In the course of six to seven rounds of negotiation, it succeeded in getting
countries to lower their tariff rates, thus enabling greater movement of goods.

However, over time, the nature and character of global trade started to get very
complex. Countries began to realise that GATT did not have all the answers to the
questions posed by the increasingly complicated nature of global trade.
This led member countries to launch a new round of negotiations, from 1986-
1994, known as the Uruguay Round (UR). This series of negotiations was much
more elaborate and detailed. It not only covered trade in goods but also brought
trade in services and intellectual property rights within the ambit of the
multilateral trading regime.

Even within trade in goods, a far more thorough set of rules was discussed and
negotiated. Further, trade in agricultural goods was brought into the fold of the
multilateral trading regime in a major way. In GATT, trade in agricultural goods
was, at best, minimal and at the fringes of the discussions. The end of the UR
resulted in the formation of the WTO, which established a substantial set of rules
regarding trade in goods -- including agricultural goods, included agreements on
trade in services and on trade-related aspects of intellectual property rights, as
well as a strong and comprehensive mechanism to settle trade disputes between
member countries.
A brief history of the WTO :

The principle of non-discrimination was meant to be the cornerstone of the World

Trade Organisation and the multilateral trading regime. But ten years down the line, it
is clear that the trade rules favour developed countries, and the promise of greater
market access for developing countries has not been sufficiently realised
The formation of the World Trade Organisation (WTO) in 1995 was a watershed
development in the sphere of international trade. It was a major advancement in the
multilateral trade regime, with the previous regime embodied in the form of a treaty
known as the General Agreement on Tariffs and Trade (GATT).
GATT was signed in 1948 and had close to 30 member countries. Its primary objective
was to see that impediments to international trade -- mainly in the form of tariffs -- were
reduced or removed in order to facilitate the movement of goods across borders. In the
course of six to seven rounds of negotiation, it succeeded in getting countries to lower
their tariff rates, thus enabling greater movement of goods.
However, over time, the nature and character of global trade started to get very
complex. Countries began to realise that GATT did not have all the answers to the
questions posed by the increasingly complicated nature of global trade.
This led member countries to launch a new round of negotiations, from 1986-1994,
known as the Uruguay Round (UR). This series of negotiations was much more
elaborate and detailed. It not only covered trade in goods but also brought trade in
services and intellectual property rights within the ambit of the multilateral trading
regime. Even within trade in goods, a far more thorough set of rules was discussed
and negotiated. Further, trade in agricultural goods was brought into the fold of the
multilateral trading regime in a major way. In GATT, trade in agricultural goods was, at
best, minimal and at the fringes of the discussions.
The end of the UR resulted in the formation of the WTO, which established a substantial
set of rules regarding trade in goods -- including agricultural goods,
included agreements on trade in services and on trade-related aspects of intellectual
property rights, as well as a strong and comprehensive mechanism to settle trade
disputes between member countries. Notwithstanding these additions, the WTO
retained some of the basic characteristics of GATT, such as the principles of
nondiscrimination
embodied in the Most Favoured Nation (MFN) and National Treatment
(NT) rules. Today the WTO, the youngest of the world's multilateral organisations, is
over 10 years old.It may be instructive to follow the journey of the WTO from 1995
onwards, even though it is difficult to assess the overall impact of the organisation on
the global economy or on individual developing countries. It has been good for some,
bad for others and a mixed bag for the remaining. It is also difficult to capture all the
developments that have taken place from 1995 to 2006. However, one can certainly
attempt to outline some of the key developments of the past decade.
Non-discrimination :

As mentioned above, the WTO recognised and institutionalised the principle of

nondiscrimination
embodied in the MFN clause, which was present in GATT as well.
According to the MFN principle, no WTO member country can discriminate against
other member countries. For example, if country X imposes a tariff rate of 5% on steel
coming from country Y, it has to impose the same tariff rate on all imported steel,
irrespective of the country of origin. This non-discrimination principle of the WTO is
said to be the cornerstone of the multilateral trading regime.

However, both GATT and the WTO also recognised certain exceptions to the MFN
principle. Preferential Trading Agreements (PTAs) constitute one such exception,
which permits two or more countries to sign an agreement to form a free trade area
where they can provide preferential access to each other's products. By signing a PTA,
countries would be able to violate the MFN obligation that they have with other WTO
member countries and provide preferences to countries that are members of the free
trade area.

Ten years into the WTO regime this exception appears to have become the rule, while
the primary principle of MFN is becoming an exception. By the end of 2004, about 300
PTAs had been notified with GATT and the WTO. Of these, close on 180 came into
existence after 1995 -- that is, after the formation of the WTO. In other words, about
60% of all PTAs in existence today came into effect after the most remarkable
advancement in the multilateral trading regime happened, in 1995. Estimates suggest
that by the end of 2007 the total number of PTAs will be well above the 300 mark.
Today, more than 50% of global trade takes place through PTAs, on a non-MFN basis.
Hence, what was considered an exception has now become the rule.

There could be many reasons for this development.

Industrially developed countries get into PTAs in order to extract benefits that they
would be unable to secure through the multilateral trading regime, such as a more
stringent intellectual property rights regime, as well as rules relating to competition,
investment, labour and the environment. Less economically developed countries are
lured into PTAs by the prospect of getting greater market access. However, the
growing number of PTAs has created a substantial degree of confusion in the global
trade regime, bringing in complicated rules and procedures and creating difficulties for
member countries in their administration.

WTO GENESIS
• The General Agreement on Trade and Tariff (GATT) came into existence in
1947
• It sought substantial reduction in tariff and other barriers to trade and to
eliminate discriminatory treatment in international commerce.
• India signatory to GATT 1947 along with twenty two other countries
• Eight rounds of negotiations had taken place during five decades of its
existence
• WTO Came into existence on 1-1-1995 with the conclusion of Uruguay Round
Multilateral Trade Negotiations at Marrakesh on 15th April 1994, to :

• Transparent, free and rule-based trading system

• Provide common institutional framework for conduct of trade relations
among members
• Facilitate the implementation, administration and operation of
Multilateral Trade Agreements
• Rules and Procedures Governing Dispute Settlement
• Trade Policy Review Mechanism
• Concern for LDCs and NFIDCs
• Concern on Non-trade issues such as Food Security, environment,
health, etc.

BASIC PRINCIPLES :
1. NON-DISCRIMINATION
 MFN (exceptions RTAs, SPS)
 National Treatment (exceptions Government Procurement, GATS)
2. MARKET ACCESS
 Reduction and binding of tariffs
 General elimination of quantitative restrictions on imports and exports
 (exceptions Article XX, XXI of GATT

WTO Aims at :

• Fair and market oriented trading system

• Commitments on support and protection
• Operationally effective GATT Rules & Disciplines
• Equitable Trade Reform process
• Greater opportunities and Terms of Access to developing countries
• Concern for LDCs and NFIDCs
• Concern on Non-trade issues such as Food Security, environment,
health, etc.

Domestic Support :

• Green Box - Research, Extension, PDS, Decoupled

Payments etc;
• Blue Box - Production Limiting Subsidies ;

• Amber Box - AMS-subject to reduction commitments viz

Product specific (MSP)

Non product specific (input subsidies-fert. Power, irrigation)

THE MANDATE OF ARTICLE 20

ARTICLE 20 OF THE AoA MANDATES FRESH NEGOTIATIONS :

-STARTED IN 2000, TAKING INTO ACCOUNT

A) THE EXPERIENCE OF IMPLEMENTATION TO DATE

 B) THE EFFECTS ON WORLD TRADE IN AGRICULTURE

C) NON TRADE CONCERNS

D) WHAT FUTURE COMMITMENTS ARE NECESSARY TO ACHIEVE THE LONG TERM

OBJECTIVES

Phase I: March 2000 to March 2001

a) the experience of implementation to date

b) the effects on world trade in agriculture
c) non trade concerns
d) what future commitments are necessary to achieve the long term objectives
 
Around 45 Negotiation proposals submitted by 126 Members in Phase-I to cover:

Market Access

Domestic Support

Export Subsidies

Non Trade Concerns

Phase II: March 2001 to February 2002

Modalities and timeframe for of the negotiating process decided in the March 2001
Special Session.
  
Six Special Sessions of Committee on Agriculture held during 2001-02 and
discussed various negotiating proposals.

Modalities and timeframe for of the negotiating process decided in the March 2001
Special Session.
      
Six Special Sessions of Committee on Agriculture held during 2001-02 and
discussed various negotiating proposals.
Phase III: March 2002 to March 2003

  Commenced from March 2002

During 2002-03 , the meetings of Committee on Agriculture to discuss the issues on
export competition, market access and domestic support.

India’s Approach to the Negotiations

1. Comprehensive negotiating proposal submitted to WTO on 15.1.2001 covering
Food Security, Market Access, Domestic Support, and Export Competition
2. Non paper on Special and Differential Treatment to Developing Countries

India Seeks :

Protecting our food and livelihood security by having sufficient flexibility for
domestic policy measures.
Protecting domestic producers from the surge in imports or significant decline in
import prices.
Substantial reduction in export subsidies and domestic support to agriculture in the
developed countries for greater market access to products of developing countries.
Finally, a more equitable & fair trading framework for agricultural commodities.

Market Access :
The negotiations on market access should include the following issues:
     
Comprehensive binding of tariffs
Reduction of peak tariffs and removal of tariff escalations
Reduction in the number of tariff rate quotas (TRQs) in a progressive manner
Volume of imports allowed under quotas to be substantially expanded till TRQs are
eventually eliminated
Transparent administration of TRQs

Export Subsidies :
The negotiations on export subsidies should include the following issues:
     
Countries using export subsides should phase out this form of farm support within two
years of implementation of the revised disciplines to be followed by countries in the
agricultural sector.
 Export subsidies discipline should include all forms of spending that enhances the
capacities of exporters to increase trade, e.g. export credit, guarantees and insurance
programmes.
The Peace Clause “Article 13 (c)” shall not be extended beyond implementation
period.
Non-Trade Concerns

The issue of non-trade concerns should be articulated as under:

     Non-trade concerns should be adequately reflected in the decisions, particularly
those related to market access and domestic support.
The AoA needs to provide an enabling environment for the countries to address the
concerns relating to food security and livelihoods.
      The relevant decisions of the World Food Summit on food security and livelihoods
need to be integral part of the negotiations.

S&D in Doha Ministerial Declaration

    “We agree that special and differential treatment for developing countries shall be
an integral part of all elements of the negotiations and shall be embodied in the
Schedules of concessions and commitments and as appropriate in the rules and
disciplines to be negotiated, so as to be operationally effective and to enable
developing countries to effectively take account of their development needs,
including food security and rural development”.

S&D to Developing Countries

• Increase the levels of MFN tariffs on sensitive products

• Special Safeguards (SSGs)
• No requirement to provide minimum access requirements
• Administration of tariff rate quotas for improved market access
• Right to use export subsidies
• Exemption for resource poor farmers in Product Specific Support

Issues of Regional Importance

 
• 1. Crops that are significant from the point of view of sustaining livelihoods and
regional development
• 2. Crops in which the individual states can be considered to be efficient
producers considering the global trends
• 3.  Crops in which the states have been accumulated surpluses
• 4.   Crops that face the threat from cheap imports
• 5. Crops that have been facing fluctuating prices, resulting in uncertainties for
the farmers

Ministerial conferences
The topmost decision-making body of the WTO is the Ministerial Conference, which usually
meets every two years. It brings together all members of the WTO, all of which are countries or
customs unions. The Ministerial Conference can take decisions on all matters under any of the
multilateral trade agreements.

The inaugural ministerial conference was held in Singapore in 1996. Disagreements between
largely developed and developing economies emerged during this conference over four issues
initiated by this conference, which led to them being collectively referred to as the "Singapore
issues". The second ministerial conference was held in Geneva in Switzerland. The third
conference in Seattle, Washington ended in failure, with massive demonstrations and police and
National Guard crowd control efforts drawing worldwide attention.

The fourth ministerial conference was held in Doha In Persian Gulf nation of Qatar. The Doha
Development Round was launched at the conference. The conference also approved the joining of
China, which became the 143rd member to join. The fifth ministerial conference was held in
Cancún, Mexico, aiming at forging agreement on the Doha round. An alliance of 22 southern
states, the G20 developing nations (led by India, China[22], Brazil, ASEAN led by the Philippines),
resisted demands from the North for agreements on the so-called "Singapore issues" and called for
an end to agricultural subsidies within the EU and the US. The talks broke down without progress.

The sixth WTO ministerial conference was held in Hong Kong from 13-18 December 2005. It was
considered vital if the four-year-old Doha Development Agenda negotiations were to move
forward sufficiently to conclude the round in 2006. In this meeting, countries agreed to phase out
all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies
by the end of 2006. Further concessions to developing countries included an agreement to
introduce duty free, tariff free access for goods from the Least Developed Countries, following the
Everything but Arms initiative of the European Union — but with up to 3% of tariff lines
exempted. Other major issues were left for further negotiation to be completed by the end of 2010.

The WTO General Council, on 26 May 2009, agreed to hold a seventh WTO ministerial
conference session in Geneva from 30 November-3 December 2009. A statement by chairman
Amb. Mario Matus acknowledged that the prime purpose was to remedy a breach of protocol
requiring two-yearly "regular" meetings, which had lapsed with the Doha Round failure in 2005,
and that the "scaled-down" meeting would not be a negotiating session, but "emphasis will be on
transparency and open discussion rather than on small group processes and informal negotiating
structures". The general theme for discussion is "The WTO, the Multilateral Trading System and
the Current Global Economic Environment".

Non-tariff barriers :

The WTO came into existence at a time when tariffs -- the customs duties that
countries levy on goods entering their country -- were very low. The intent of
successive rounds of negotiations under GATT, which led to the formation of the WTO,
was to reduce barriers to international trade. Reduction of tariff barriers was one of the
consequences of this process.

Although barriers to international trade in the form of tariffs have come down, other non-
tariff barriers have increased manifold after the formation of the WTO.

These non-tariff barriers exist mainly in the form of food standards, technical
requirements, antidumping duties, etc. Industrially developed countries often impose
stricter food standards on imports from developing countries.

These standards are sometimes even stricter than what is warranted under existing
international standards. An interesting trend in the imposition of non-tariff barriers after
the formation of the WTO has been the growing tendency of developing countries to use
these measures.

It is important to recall that antidumping rules represent a remedial tool whereby

countries impose additional duties on imports that are sold in their markets at prices
lower than the domestic price of the imported goods in their country of origin.

For instance, India has emerged as the biggest imposer of antidumping duties after the
formation of the WTO.
 Export vs import of agricultural products

35000.00
R s . in c ro re s
30000.00
Total
25000.00
Agricultural
20000.00 exports
15000.00
10000.00 Total
5000.00 Agricultural
Imports
0.00
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
91 92 93 94 95 96 97 98 99 2000 01

Export vs import of total products

250000.00
Rs . in c rore s

200000.00 Total
National
150000.00
exports
100000.00
Total
50000.00
National
0.00 Im ports

Export vs import of other products

250000.00

200000.00
Rs . in c r or e s

Export of
other
150000.00
products

100000.00 Import of
other
products
50000.00

0.00
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
91 92 93 94 95 96 97 98 99 2000 01
 Export of important agricultural products

5000.00
4500.00
exports
4000.00
Rs. in crores

Rice
3500.00
3000.00 exports
2500.00 spices
2000.00
1500.00 exports
1000.00 Tea
500.00 exports
0.00 Coffee
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
91 92 93 94 95 96 97 98 99 2000 01

Issues of Export Competitiveness of Select Agro-products

Rice:

• The rice export is projected to increase to 2.7 million tonnes in 2005 from
current level of 1.8 million tonnes.

• In spite of much favourable domestic resource cost, the nominal protection co-
efficient is marginal which is due to volatile international prices.
•
• The domestic supply gap, quality, processing, marketing, transportation etc.,
are going to be key factors for sustaining India’s rice export potential.

Spices:

• Owing to expanding global demand of spices, there is potential for

accelerating Indian spice export but the rising competition would require
concerted efforts.

• The problem of aflotoxin, pesticide residue and low yields are to be tackled.
Tea:

• The Indian tea export is projected to increase marginally from 159 thousand
tonnes during 1993-95 to 165 thousand tonnes in 2005.

• India’s export competitiveness as well as share in export of tea is declining.

• The strategies include promotional measures, joint ventures for tea blending
and marketing and support for importing machinery and packaging materials.

Coffee:

• The coffee export is projected to reach to 180 thousand tonnes in 2005 from
the level of 160 thousand tonnes in 90s.

• There is emergence of new markets in Asia and Eastern Europe and hence India
has to focus on this aspect as well.

• The quality, R&D and post-harvest methods are important to sustain the
growth.

Cashew :

• India’s export is projected to increase to 95,000 tonne by 2005 from current

exports of 80,000 tonne.

• The emergence of Vietnam and Brazil as exporters, decline in domestic

production of raw cashew and quality stipulations by importing countries, may
make these projections un-achievable.

• The improvement in the processing facility, land development for additional

plantation crop area and removal of legal barriers for such area expansion are
suggested for sustaining the export potential.

Marine Products :
 Indian marine products are expected to increase by about 10.2%, per annum, in
the next five years.

The marine processing industry is well developed but to sustain the growth,
availability of raw materials for effective production planning and development of
scientifically managed aqua-culture and brackish water resources are envisaged.

The transport and other infrastructure to support export are also envisaged.

Schedule of Regional Consultations :

 
Dates Location Region
 
• 11th May, 2002 Delhi Northern

• 31st May, 2002 Hyderabad Southern

• 7th June, 2002 Guwahati North-East

• 14th June, 2002 Pune Western

• 28th June, 2002 Jaipur Central

• 5th July, 2002 Bhubaneshwar Eastern

Get tariff data

The WTO website now offers sophisticated options for researching members’ customs duty rates
and in many cases imports. One, the new Tariff Analysis Online, draws on two databases to offer
tariff rates on products defined at the highest level of detail, import statistics and the ability to
analyse these interactively. Another, the Tariff Download Facility, provides standardized tariff
statistics, in slightly less detail but with the ability to compare between countries immediately.

In the ten years of its existence, WTO panels composed of corporate attorneys have ruled that: the
US law protecting sea turtles was a barrier to "free trade"; that US clean air standards and laws
protecting dolphins are too; that the European Union law banning hormone-treated beef is illegal.
According to the WTO, our democratically elected public officials no longer have the rights to
protect the environment and public health.

Unlike United Nations treaties, the International Labor Organization conventions, or multilateral
environmental agreements, WTO rules can be enforced through sanctions. This gives the WTO
more power than any other international body. The WTO's authority even eclipses national
governments.

In November 1999, 50,000 people went to Seattle to challenge this corporate agenda and to
demand a more democratic, socially just and environmentally sustainable global economy. The
protests succeeded in shutting down the trade talks and derailing the expansion of the WTO.

The fourth ministerial took place in 2001 in Qatar, a country where free-speech rights are
effectively nonexistent. Behind closed doors and out of the civil-society and media spotlight, hard
pressure was applied. Empty promises were made that this round of negotiations would focus on
development and the needs of the poorest countries—an implicit acknowledgment of the
unfairness of the current system. The US and the EU thus succeeded in launching the so-called
Doha Development Round, a misnomer of epic proportions.

In 2003 the process moved to Cancún, Mexico, where the rich countries sought to expand the
scope of the WTO. But a remarkable new alliance of developing countries argued that the unfair
global agricultural system had to be cleaned up first, before new issues could come onto the table.
The tragic suicide of Korean farmer Lee Kyung Hae brought the collective rage of the outside
civil-society mobilization inside the closed gates of the negotiating halls. Most important, an
alliance of the poorest countries stood their ground. The talks fell apart on the last day.

Then, in the summer of 2004, the most powerful countries cobbled together a minimal consensus
to get the negotiations back on track by giving false assurances that agriculture would be fairly
reformed. The WTO held its next ministerial in 2005, in Hong Kong, China. Though mired in
controversy, negotiations continued on key issues including agriculture, services, and market
access for industrial goods and natural resources.

The multilateral trading system—past, present and future

The World Trade Organization came into being in 1995. One of the youngest of the
international organizations, the WTO is the successor to the General Agreement on
Tariffs and Trade (GATT) established in the wake of the Second World War.

So while the WTO is still young, the multilateral trading system that was
originally set up under GATT is well over 50 years old.

The past 50 years have seen

an exceptional growth in
world trade. Merchandise
exports grew on average by
6% annually. Total trade in
2000 was 22-times the level
of 1950. GATT and the WTO
have helped to create a
strong and prosperous
trading system contributing
to unprecedented growth.

The system was developed

through a series of trade
negotiations, or rounds, held under GATT. The first rounds dealt mainly
with tariff reductions but later negotiations included other areas such as
anti-dumping and non-tariff measures. The last round — the 1986-94
Uruguay Round — led to the WTO’s creation.

The negotiations did not end there. Some continued after the end of the
Uruguay Round. In February 1997 agreement was reached on
telecommunications services, with 69 governments agreeing to wide-
ranging liberalization measures that went beyond those agreed in the
Uruguay Round.

In the same year 40 governments successfully concluded negotiations for

tariff-free trade in information technology products, and 70 members
concluded a financial services deal covering more than 95% of trade in
banking, insurance, securities and financial information.

In 2000, new talks started on agriculture and services. These have now
been incorporated into a broader agenda launched at the fourth WTO
Ministerial Conference in Doha, Qatar, in November 2001.

The work programme, the Doha Development Agenda (DDA) , adds

negotiations and other work on non-agricultural tariffs, trade and
environment, WTO rules such as anti-dumping and subsidies, investment,
competition policy, trade facilitation, transparency in government
 procurement, intellectual property, and a range of issues raised by
developing countries as difficulties they face in implementing.

The organization
The WTO’s 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 issues, through
technical assistance and training programmes
 Cooperating with other international organizations

Structure  

The WTO has nearly 150 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 Conference
which meets at least once 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
Dispute Settlement Body.

At the next level, the Goods Council, Services Council and Intellectual
Property (TRIPS) Council report to the General Council.

Numerous specialized committees, working groups and working parties

deal with the individual agreements and other areas such as the
environment, development, membership applications and regional trade
agreements.

 
 
Secretariat  

The WTO Secretariat, based in Geneva, has around 600 staff and is
headed by a director-general. Its annual budget is roughly 160 million
Swiss francs. It does not have branch offices outside Geneva. Since
decisions are taken by the members themselves, the Secretariat does not
have the decision-
making role that
other international
bureaucracies are
given.

The Secretariat’s
main duties are to
supply technical support for the various councils and committees and the
ministerial conferences, to provide technical assistance for developing
countries, to analyze world trade, and to explain WTO affairs to the
public and media.

The Secretariat also provides some forms of legal assistance in the

dispute settlement process and advises governments wishing to become
members of the WTO.
Principles of the trading system :

The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned
with setting the rules of the trade policy games.Five principles are of particular importance in understanding both the
pre-1994 GATT and the WTO:

1. Non-Discrimination. It has two major components: the most favoured nation (MFN) rule, and the national
treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their
precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same
conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions
under which it allows trade in a certain product type to all other WTO members. [35] "Grant someone a special favour
and you have to do the same for all other WTO members."[36] National treatment means that imported goods should
be treated no less favorably than domestically produced goods (at least after the foreign goods have entered the
market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al.
discriminating against imported goods).

2. Reciprocity: It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule,
and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary
that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions
intend to ensure that such gains will materialise.

3. Binding and enforceable commitments : The tariff commitments made by WTO members in a multilateral trade
negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling
bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean
compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO
dispute settlement procedures.

4.Transparency : The WTO members are required to publish their trade regulations, to maintain institutions
allowing for the review of administrative decisions affecting trade, to respond to requests for information by other
members, and to notify changes in trade policies to the WTO. These internal transparency requirements are
supplemented and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy
Review Mechanism (TPRM).
The WTO system tries also to improve predictability and stability, discouraging the use of quotas and other measures
used to set limits on quantities of imports.

5. Safety valves : In specific circumstances, governments are able to restrict trade. There are three types of
provisions in this direction: articles allowing for the use of trade measures to attain noneconomic objectives; articles
aimed at ensuring "fair competition"; and provisions permitting intervention in trade for economic
reasons.Exceptions to the MFN principle also allow for preferential treatment of developing countries, regional free
trade areas and customs unions.
Organizational structure :
The General Council has multiple bodies which oversee committees in different areas, and they are the following:
Council for Trade in Goods There are 11 committees under the jurisdiction of the Goods Council each with a specific
task. All members of the WTO participate in the committees. The Textiles Monitoring Body is separate from the
other committees but still under the jurisdiction of Goods Council. The body has its own chairman and only 10
members. The body also has several groups relating to textiles.

Council for Trade-Related Aspects of Intellectual Property Rights

Information on intellectual property in the WTO, news and official records of the activities of the TRIPS
Council, and details of the WTO’s work with other international organizations in the field.
Council for Trade in Services
The Council for Trade in Services operates under the guidance of the General Council and is responsible for
overseeing the functioning of the General Agreement on Trade in Services (GATS). It is open to all WTO members,
and can create subsidiary bodies as required.

Trade Negotiations Committee

The Trade Negotiations Committee (TNC) is the committee that deals with the current trade talks round. The chair is
WTO’s director-general. The committee is currently tasked with the Doha Development Round. The Service Council
has three subsidiary bodies: financial services, domestic regulations, GATS rules and specific commitments. The
General council has several different committees, working groups, and working parties.

There are committees on the following: Trade and Environment; Trade and Development (Subcommittee on Least-
Developed Countries); Regional Trade Agreements; Balance of Payments Restrictions; and Budget, Finance and
Administration. There are working parties on the following: Accession.

There are working groups on the

following: Trade, debt and finance; and Trade and technology transfer.

Voting system :
The WTO operates on a one country, one vote system, but actual votes have never been taken. Decision making is
generally by consensus, and relative market size is the primary source of bargaining power. The advantage of
consensus decision-making is that it encourages efforts to find the most widely acceptable decision.

Main disadvantages include large time requirements and many rounds of negotiation to develop a consensus decision,
and the tendency for final agreements to use ambiguous language on contentious points that makes future
interpretation of treaties difficult.

In reality, WTO negotiations proceed not by consensus of all members, but by a process of informal negotiations
between small groups of countries. Such negotiations are often called "Green Room" negotiations (after the colour of
the WTO Director-General's Office in Geneva), or "Mini-Ministerials", when they occur in other countries.

These processes have been regularly criticised by many of the WTO's developing country members which are often
totally excluded from the negotiations..
Richard Harold Steinberg (2002) argues that although the WTO's consensus governance model provides law-based
initial bargaining, trading rounds close through power-based bargaining favouring Europe and the U.S., and may not
lead to Pareto improvement.

Members and observers :

The WTO has 153 members (almost all of the 123 nations participating in the Uruguay Round signed on at its
foundation, and the rest had to get membership).[54] The 27 states of the European Union are represented also as the
European Communities. WTO members do not have to be full sovereign nation-members. Instead, they must be a
customs territory with full autonomy in the conduct of their external commercial relations.

Thus Hong Kong (as "Hong Kong, China" since 1997) became a GATT contracting party, and the Republic of China
(ROC) (commonly known as Taiwan, whose sovereignty has been disputed by the People's Republic of China or
PRC) acceded to the WTO in 2002 under the name of "Separate Customs Territory of Taiwan, Penghu, Kinmen and
Matsu" (Chinese Taipei).

A number of non-members (30) are observers at WTO proceedings and are currently negotiating their membership.
As observers, Iran, Iraq and Russia are not yet members. Russia is the biggest economy outside WTO and after the
completion of Russia's accession, Iran would be the biggest economy outside the WTO.

With the exception of the Holy See, observers must start accession negotiations within five years of becoming
observers. Some international intergovernmental organizations are also granted observer status to WTO bodies.14
states and 2 territories so far have no official interaction with the WTO.

Agreements :
The WTO oversees about 60 different agreements which have the status of international legal texts. Member
countries must sign and ratify all WTO agreements on accession.A discussion of some of the most important
agreements follows. The Agreement on Agriculture came into effect with the establishment of the WTO at the
beginning of 1995. The AoA has three central concepts, or "pillars": domestic support, market access and export
subsidies. The General Agreement on Trade in Services was created to extend the multilateral trading system to
service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for
merchandise trade. The Agreement entered into force in January 1995. The Agreement on Trade-Related Aspects of
Intellectual Property Rights sets down minimum standards for many forms of intellectual property (IP) regulation. It
was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.
The Agreement on the Application of Sanitary and Phytosanitary Measures — also known as the SPS Agreement was
negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the
establishment of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets constraints on
members' policies relating to food safety (bacterial contaminants, pesticides, inspection and labelling) as well as
animal and plant health (imported pests and diseases). The Agreement on Technical Barriers to Trade is an
international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General
Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the end of 1994. The
object ensures that technical negotiations and standards, as well as testing and certification procedures, do not create
unnecessary obstacles to trade".The Agreement on Customs Valuation, formally known as the Agreement on
Implementation of Article VII of GATT, prescribes methods of customs valuation that Members are to follow.

Bibliography
 Internet
 Social Media
 WTO Website
 Internet Journals