TABLE OF CONTENTS • INTRODUCTION • BACKGROUND OF WTO • GATT AND WTO ROUNDS • FROM GATT TO WTO • WTO AND AGRICULTURE • IMPACT • IN A NUTSHELL
INTRODUCTION • The World Trade Organization (WTO) is an international organization designed by its founders to supervise and liberalize international trade. The organization officially commenced on January 1,1995 under the Marrakesh Agreement. • The World Trade Organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements,
Has 153 members, representing more than 95% of total world trade and 30 observers, most seeking membership. • Is governed by a ministerial conference, meeting every two years; a general council, which implements the conference's policy decisions and is responsible for day-to-day administration; and a director-general, who is appointed by the ministerial conference. • Headquarters is at the Centre William Rappard, Geneva, Switzerland.
MISSION • The WTO's stated goal is to improve the welfare of the people of its member countries, specifically by lowering trade barriers and providing a platform for negotiation of trade. • Its main mission is "to ensure that trade flows as smoothly, predictably and freely as possible". This main mission is further specified in certain core functions serving and safeguarding five fundamental principles, which are the foundation of the multilateral trading system.
FUNCTIONS • Administering WTO trade agreements • Forum for trade negotiations • Handling trade disputes • Monitoring national trade policies • Technical assistance and training for developing countries • Cooperation with other international organizations
BACKGROUND The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation - notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund.
FROM GATT TO WTO • On 1 January 1995, the WTO replaced GATT, which had been in existence since 1947, as the organization overseeing the multilateral trading system. The governments that had signed GATT were officially known as “GATT contracting parties”. • Upon signing the new WTO agreements (which include the updated GATT, known as GATT 1994), they officially became known as “WTO members”.
WTO members have agreed that, if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. • The operation of the WTO dispute settlement process involves the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts and several specialized institutions.
ABOUT GATT • The General Agreement on Tariffs and Trade (typically abbreviated GATT) was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). GATT was formed in 1947 and lasted until 1994, when it was replaced by the World Trade Organization in 1995. • Whereas GATT was a set of rules agreed upon by nations, the WTO is an institutional body. The WTO expanded its scope from traded goods to trade within the service sector and intellectual property rights.
WTO AND AGRICULTURE Agreement on Agriculture (AoA) The Agreement on Agriculture came into effect with the establishment of the WTO at the beginning of 1995. The central feature of the AoA is the reduction in production subsidies paid by developed countries to their farmers and the rolling back of some of the non-tariff barriers which have restricted agricultural trade.
. The AoA has three central concepts, or "pillars": 1.Domestic support, 2.Market access 3.Export Subsidies
DUNKEL PLANS • The plan was introduced by Arthur Dunkel which was incorporated on 15th Dec., 1993. • It offered certain definite proposals for the reform of the agriculture sector of various countries. • It has recognized the importance of developmental needs of agriculture in the less developed and developing countries of the world.
PROPOSALS OF DUNKEL PLAN • A basic agreement on modalities of the reform program. • A supplementary agreement on the modalities for specific binding commitments under the reforms program. • A decision on application of sanitary and phycosanitary measures. • A declaration on measures to assist food importing centres
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. Some of which are mentioned below:- • Agreement on Agriculture (AoA) • General Agreement on Trade in Services (GATS) • Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPs) • Sanitary and Phyto-Sanitary (SPS) Agreement
WTO AND ITS IMPACT(A Special case study of CHINA) • Taiwan's accession to the World Trade Organization (WTO) in January 2002 created new opportunities for growth by providing wider access to global markets under the most-favored-nation trading status. • The simple average nominal duty rate for Taiwan's industrial sectors was 6.03 percent before its accession to the WTO. The rate was cut to 5.79 percent in 2002 and will be reduced further to 4.15 percent by the end of 2004, when the scheduled tariff concessions (covering 3,470 industrial items) are completely phased in.
According to the WTO, Taiwan's tariff reductions following its entry will eventually create an additional market for imports of industrial and farm products worth approximately US$1 billion. • Imports have increased in previously protected industries including agriculture, automotives, tobacco, alcohol and consumer electronics. These industries were most vulnerable after WTO accession, because they target mainly domestic markets. • It is hoped that Taiwan's entry to the WTO will add 1.72 percent to Taiwan's GDP growth by the year 2004.
IN A NUTSHELL • 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