Presentation On

By: Karan

WORLD TRADE ORGANIZATION

World Trade Organization

The WTO was born out of the General Agreement on Tariffs and Trade (GATT)

Headquarters : Geneva, Switzerland

Formation : 1 January 1995

Membership : 153 member countries

Budget : 163 million USD (Approx).

Globalization of agriculture and WTO

Globalization (or globalisation, also mundialisation or mundialization) is a common term for processes of international integration arising from increasing human connectivity and interchange of worldviews, products, ideas, and other aspects of culture

Globalization is an attempt to abolish barriers, especially in trade

In fact, globalization has been around longer than you might think

Globalization is an elimination of barriers to trade, communication, and cultural exchange

The theory behind globalization is that worldwide openness will promote the inherent wealth of all nations

Globalization is the system of interaction among the countries of the world in order to develop the global economy

Globalization refers to the integration of economics and societies all over the world

Globalization involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure

Effects of GlobalizationAccording to economists, there are a lot of global events connected with globalization and integration

It is easy to identify the changes brought by globalization

Improvement of International Trade. Because of globalization, the number of countries where products can be sold or purchased has increased dramatically

Technological Progress. Because of the need to compete and be competitive globally, governments have upgraded their level of technology

Increasing Influence of Multinational Companies. A company that has subsidiaries in various countries is called a multinational

Often, the head office is found in the country where the company was established

An example is a car company whose head office is based in Japan

This company has branches in different countries

While the head office controls the subsidiaries, the subsidiaries decide on production

The subsidiaries are tasked to increase the production and profits

They are able to do it because they have already penetrated the local markets

The rise of multinational corporations began after World War II

Large companies refer to the countries where their subsidiaries reside as host countries

Globalization has a lot to do with the rise of multinational corporations

•Power of the WTO, IMF, and WB. According to experts, another effect of globalization is the strengthening power and influence of international institutions such as the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB)

•Greater Mobility of Human Resources across Countries. Globalization allows countries to source their manpower in countries with cheap labour

For instance, the manpower shortages in Taiwan, South Korea, and Malaysia provide opportunities for labour exporting countries such as the Philippines to bring their human resources to those countries for employment

Greater Outsourcing of Business Processes to Other Countries. China, India, and the Philippines are tremendously benefiting from this trend of global business outsourcing. Global companies in the US and Europe take advantage of the cheaper labour and highly skilled workers that countries like India and the Philippines can offer.

7. Civil Society. An important trend in globalization is the increasing influence and broadening scope of the global civil society.

OBJECTIVES OF WTO The primary aim of WTO is to implement the new world trade agreement.

To promote multilateral trade .

To promote free trade by abolishing tariff & non-tariff barriers.

To enhance competitiveness among all trading partners so as to benefit consumers.

To increase the level of production & productivity with a view to increase the level of employment in the world.

To expand & utilise world resources in the most optimum manner.

To improve the level of living for the global population & speed up economic development of the member nations.

To take special steps for the development of poorest nations.

Functions oF WTO• Implementing WTO agreements & administering the international

trade.

• Cooperating with IMF & World Bank & its associates for establishing coordination in Global Trade Policy-Making.

• Settling trade related disputes among member nations with the help of its Dispute Settlement

• Reviewing trade related economic policies of member countries with help of its Trade Policy Review Body (TPRB).

• Providing technical assistance & guidance related to management of foreign trade & fiscal policy to its member nations.

• Acting as forum for trade liberalisation.

Scope of WTO• Trade in Goods.

• Trade Related Intellectual Property Rights (TRIPs).

• Trade Related Investments Measures (TRIMs).

• General Agreement on Trade in Services. (GATS).

More specifically, the WTO's main activities are:

•negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade) and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies, product standards, etc.)

•administering and monitoring the application of the WTO's agreed rules for trade in goods, trade in services, and trade-related intellectual property rights

•monitoring and reviewing the trade policies of members, as well as ensuring transparency of regional and bilateral trade agreements

•settling disputes among members regarding the interpretation and application of the agreements

•building capacity of developing country government officials in international trade matters

•assisting the process of accession of some 30 countries who are not yet members of the organization

•conducting economic research and collecting and disseminating trade data in support of the WTO's other main activities

•explaining to and educating the public about the WTO, its mission and its activities.

Ten benefits of the WTO trading system

1. The system helps promote peace2. Disputes are handled constructively3. Rules make life easier for all4. Freer trade cuts the costs of living5. It provides more choice of products and qualities6. Trade raises incomes7. Trade stimulates economic growth8. The basic principles make life more efficient9. Governments are shielded from lobbying10. The system encourages good government

The ten misunderstandings1. The WTO dictates policy2. The WTO is for free trade at any cost3.Commercial interests take priority over development4. and over the environment5. and over health and safety6. The WTO destroys jobs, worsens poverty7. Small countries are powerless in the WTO8. The WTO is the tool of powerful lobbies9. Weaker countries are forced to join the WTO10. The WTO is undemocratic

WTO powers

• WTO covers a much broader purview, including

subsidies, intellectual property, food safety and other

policies that were once solely the subject of national

governments.

• The WTO also has strong dispute settlement

mechanisms. As under GATT, panels weigh trade

disputes, but these panels have to adhere to a strict

time schedule.

It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating lower customs duty rates and other trade barriers; the text of the General Agreement spelt out important rules, particularly non-discrimination.

Since 1995, the updated GATT has become the WTO’s umbrella agreement for trade in goods. It has annexes dealing with specific sectors such as agriculture and textiles, and with specific issues such as state trading, product standards, subsidies and actions taken against dumping.

GATT

Banks, insurance firms, telecommunications companies, tour operators, hotel chains and transport companies looking to do business abroad can now enjoy the same principles of freer and fairer trade that originally only applied to trade in goods.

These principles appear in the new General Agreement on Trade in Services (GATS). WTO members have also made individual commitments under GATS stating which of their services sectors they are willing to open to foreign competition, and how open those markets are.

(GATT) is a multilateral agreement regulating international trade. Its purpose is the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis.

It was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO).

GATT was signed in 1947 and lasted until 1993, when it was replaced by the World Trade Organization in 1995. The original GATT text (GATT 1947) is still in effect under the WTO framework, subject to the modifications of GATT 1994

Achievements of GATT

• GATT has enjoyed a membership of over 100 countries and generated

about 85-90% of world trade.

(i) trade liberalization in industrial products (Kennedy Round)

(ii) Adopted codes on NTBs (Tokyo Round)

(iii) No world wars since 1948 (Increased trade promotes world peace)

(iv) Replaced by WTO on January 1, 1995.

Achievements of GATT

• GATT has enjoyed a membership of over 100 countries and generated

about 85-90% of world trade.

(i) trade liberalization in industrial products (Kennedy Round)

(ii) Adopted codes on NTBs (Tokyo Round)

(iii) No world wars since 1948 (Increased trade promotes world peace)

(iv) Replaced by WTO on January 1, 1995.

• To raise the standard of living.

• To ensure full employment and a large and steadily growing volume of real income and effective demand.

• To develop the full use of the resource of the world

• To expand production and international trade.

OBJECTIVES OF GATT

In the textiles and clothing sector, an exception to GATT’s normal disciplines was negotiated

in the 1960s and early 1970s, leading to the Multifibre Arrangement. Even GATT’s dispute

settlement systems were causing concern.

The WTO framework ensures a “single undertaking approach” to the results of the Uruguay

Round thus, membership in the WTO entails accepting all the results of the round without

exception