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Sr. No 1 2 3 4 5 6 7 8 Topic Introduction Evaluation Principle objectives of WTO Functions of WTO Round from GATT to WTO Impact of WTO Conclusion Bibliography Page. No 8 11 14 17 20 21 23 24

Project on World Trade Organization

Guided by PROF. JAGRUTI TRIVEDI of Gurukul College of Commerce Tilak Road, Ghatkopar (E) Year 2009-2010

Our Group Members

Roll No 61 65 68 Name Sahu Sarita Patro Suprabha Khan Shahnaz Sign

This is to certify that the project made on World Trade Organization is sincered offered by us and a partial requirement of university of Mumbai the entire project work is done by us. Sign of Professor Prof. Jagruti Trivedi of Commerce

We sincerely thank our guiding professor Jagruti Trivedi for her immense support and regular guidance . We also thank our teacher , friends and family members. Who had directly or indirectly helped us to prepare this project.

World Trade Organization is an international organization designed to supervise and liberalize international trade. The WTO came into being on January 1, 1995, and is the successor to the General Agreement on Tariffs and Trade (GATT), which was created by in 1947, and continued to operate for almost five decades as a de facto international organization. The World Trade Organization deals with the rules of trade between nations at a near-global level, It is responsible for negotiating and implementing new trade agreements, and is in charge of policing member countries adherence to all the WTO agreements, signed by the bulk of the worlds trading nations and ratified in their parliaments.

Most of the WTOS current works comes from the 198694 negotiations under the GATT. The organizations are currently the host to new negotiations, under the Doha development agenda (DDA) launched in 2001. The WTO is governed by a ministerial conferences, which meets every two years; a general council, which implements the conferences policy decisions and is responsible for day to day administration; and a directorgeneral, who is appointed by the ministerial conference. The WTOS headquarters are in Geneva, Switzerland

GATT was intended to be an interim secretariat for international trade negotiations. It became the de facto linchpin of international trade only after the International Trade Organization (ITO) failed. Founded as a result of the Havana Charter of 1948, the ITO was to be an organization that would ensure fairness in world trade, resolve disputes between members, and institute coverage for the emerging markets in services and intellectual property rights, as well as direct investment. The United States refused to accept the "perceived threats to national sovereignty and the danger of too much ITO intervention in markets" that membership in the ITO would have entailed. Without United States membership, the ITO died quietly, leaving the "interim" GATT as the major arbiter of world trade for almost fifty years. Based in Geneva Switzerland, GATT acted as "a conduit for multilateral negotiations on a variety of international trade issues, including tariff and quota policy and trading practices". Although it maintained a "headquarters" in Geneva, GATT was not a formal organization. Rather, it was a format for discussions between members. The strength of GATT stemmed from its most far reaching tenant, that of Most Favored Nation (MFN) status. This policy stated that every member nation was entitled to the same trade conditions that applied to any other member's "most favored" trading partner. This virtually eliminated the possibility that autarkic trading blocs would emerge to factionalize world trade, as occurred in the 1930's.

GATT suffered from three major limitations, the first being that it was strictly a Western organization (despite the inclusion of Japan). Thus, while it encompassed the great majority of the world's wealth, it excluded the majority of the world's population. The second major limitation on GATT was its anemic enforcement powers. If a member nation sought redress for a perceived improper trade practice by another member, the accused member could block the establishment of a panel to hear the dispute. Even if the accused member submitted to a panel, "the accused country could dissent from the finding, effectively vetoing it and preventing the complaining country from retaliation within the GATT framework". Assuming that the accused country not only agreed to a panel but also agreed to be punished, the only enforcement power available to GATT was to grant the aggrieved member permission to institute punitive tariffs and/or quotas. Thus the resolution of a dispute could easily escalate rather than alleviate trade tensions between members! The third major limitation of the GATT accord was its failure to include "coverage of so-called new trade issues (for example, non-border measures, trade in services, intellectual property rights, trade-related investment)" .

Principle objectives of wto

(i) Trade Without Discrimination: Trade without discrimination through the application of Most Favoured Nation (MFN) principle. As per MFN clause, a member nation of WTO must accord the same preferential treatment (in case of tariff reduction or concession) to other member nations, which it gives to any other member nation. (ii) Settlement Of Disputes: Settlement of disputes among members through consultation, conciliation, and as a last resort through dispute settlement procedures. (iii) Raising Standard of Living: Raising standard of living and incomes and ensuring full employment of the citizens of its member nations. (iv) Optimum Use of Worlds Resources: Ensuring optimum use of worlds resources and, thereby, expanding world production and trade of goods as well as services.

(v) Protection of Environment: Preserving and protecting the environment of the world so as to benefit all the nations of the world. (vi) Growth of Less Developed Countries (LDCs): Recognizes the need for positive efforts designed to ensure that developing countries, especially the LCDs, secure a better share of growth in international trade. (vii) Employment: WTO aims at generating full employment and broad increase in effective demand. (viii) Enlargement of Production and Trade: WTO aims to enlarge production and trade of goods as well as services.

Functions of WTO
1.The WTO facilitates the implementation, administration and operation, and furthers the objectives, of this Agreement and the Multilateral Trade Agreements, and also provide framework for the implementation, administration and operation of the Plurilateral Trade Agreements. 2. The WTO provides the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the agreements and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference. 3. The WTO administers the Understandings on Rules and Procedures governing the Settlement of Disputes.

4. The WTO administers the Trade Policy Review Mechanism (TPRM). 5. With a view to achieving greater coherence in global economic policy-making, the WTO cooperates as appropriate, with the International Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (World Bank) and its affiliate agencies.

Rounds from GATT to WTO

GATT and WTO trade rounds Location Geneva Annecy Torquay Geneva II Dillon Kennedy Tokyo Duration 7 months 5 months 8 months 5 months 11month 37month 74month Countries 23 13 38 26 26 62 102 Subject covered Tariffs Tariffs Tariffs Tariffs, Admission of Japan Tariffs Tariffs Anti-dumping Tariffs, non-tariff Measures, framework Agreements Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, investment, transparency, patents etc

Uruguay Doha

102 mont

123 141

Impact of WTO
The WTO came into existence in 1995 by replacing GATT. The WTO is more of a permanent institution as compared of GAT. It aims at expanding world trade and development by reducing trade barriers not only on goods but also on services. From 123 member countries in 1995, the membership of WTO has increased to 150 countries by December 2006. The last entrant to WTO in December 2005 was Saudi Arabia.

Participation in WTO has implications on foreign trade and development of developed as well as developing nations. Although the ultimate goal of WTO is to free world trade in the interest of all nations of the world, yet in reality the WTO agreements have benefited the developed nations more as compared to developing ones. This is because; the developed countries of Europe and America have powerful influence on the WTO agreements.

The World Trade Organization is the first truly worldwide trade organization. It has supplanted the GATT accords and completely overshadows the ineffectual trade regulation attempts of the United Nations. Although highly politicized, the WTO is the closest thing to a democratic international organization that the nations of the world have ever seen. It lacks even the "permanent member" caveats of the United Nations Security Council. If the WTO can avoid the attempts to polarize it into a "developed nations" versus "developing nations" forum and the perception that it seeks to establish economic hegemony by undermining the sovereignty of its member nations, it has the potential to play a pivotal (important) role in the advancement of the human condition.


Books Referred
Business Economics III (Mario Dias) Export Marketing (Shaoming)