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KRIPANGSHU MITRA (14020848011)KUMARAN VEERARAJAN (14020848012)MAHIMA KHOT (14020848013)RAGHAVENDRA PRASAD (14020848016)SATHISHKUMAR K (14020848018)

What is the WTO?The WTO is an organization that deals with rules of trade between nationsFunctions include acting as:An organization for liberalizing tradeA forum for trade negotiationsA set of rulesA system to settle disputes

2An Organization for Liberalizing TradeThe WTO is an organization which helps in removal of trade barriersGoes with the idea that the hands-off approach to markets is the most efficient in the long-run WTOs Stated Aim:Promote Free TradeStimulate Economic Growth

Liberalism in economics refers to an ideology that supports the individual rights of property and free contract

Trade barriers=Tariffs, Import Licenses, Import Quotas, Subsidy. The easing/eradication of these restrictions is called as promoting "free trade.Promotes exchange of goods between nations. Import lowers consumer cost and favors economic growth.Hands off approach= Let negotiating parties deal with aspects of trade than have laws around everything.

3A Forum for Trade NegotiationsA place where member governments go to try to sort out trade problemsMembers start by talking it out

WTO acts as a mediating body

Trade negotiation is a process in which nations meet together to discuss the possibility of trade, with the goal of reaching a trade agreement. Both nations have a vested interest in negotiating a successful trade agreement because it has the potential of promotingeconomic growthand allowing companies to expand their markets, but both are also concerned with protecting their economy and safety.4

The WTO as a Set of RulesWTO AgreementsSigned by most of the worlds trading nationsThe legal framework for international commerceContracts for governments to maintain certain trading policies

Purpose is to help exporters and importers, while making sure governments meet social objectives

The WTO oversees the implementation, administration and operation of the covered agreements

30,000 pages consisting of about 30 agreements.WTO members operate a trading system that spells out their rights and their obligations.Each country receives guarantees that its exports will be treated fairly in other countries markets and do the same for imports into its own market.5A System to Settle DisputesConflict of interests exists in trade relationsTrade agreements need interpreting

WTO is meant to be a neutral party to help settle trade disputes

DSB=dispute settlement bodyThird Party=Nations who have interest in the dispute and want to provide their inputs to the DSB panel.Appellate body=7 persons that hears appeals from reports issued by panels in disputes brought by WTO Members. The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate Body Reports, once adopted by the Dispute Settlement Body (DSB), must be accepted by the parties to the dispute.6Why WTO ?International peace:- by helping the trade to flow smoothly and dealing with disputes over trade issues

Risk reduction:- Confidence to nations to do more and more trade, thereby stimulating economic growth

7HistoryAfter World War II many nations had adopted a protectionist stance on tradeMany felt closed-protectionist positions was a cause of WWIIVictor nations set up economic institutions to prevent this from happening again

Bretton Woods System of 1946International Monetary Fund (IMF)World BankInternational Trade Organization (ITO)The General Agreement on Trade and Tariffs (GATT) was signed into place in 1947The ITO did not flyThe US said it was unfairGATT took the place of the ITO

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History - GATTGATT: main purpose was to reduce barriers to international tradeGATT was an agreement, not an organizationBecame the de facto organization for international tradeTrade Rounds negotiation meetingsFirst 6 rounds reduced tariffs from ~50% to ~12%7th, the Tokyo Round of the early 70s was first major effort at trade reformMainly about non-tariff barriers to trade, such as:SubsidiesQuotasForeign exchange controlsImport bansRestrictive licensing

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History - GATTThe 1986 Uruguay Rounds of trade negotiations covered new trade topicsTrade in services and intellectual propertySensitive subjects, like textiles and agricultureGATT was expanded by adding:General Agreement on Trade in Services (GATS)Agreement on Trade Related Aspects of Intellectual Property (TRIPS) Complexities of globalization strained the effectiveness of GATT

10History - WTOUruguay Round ended in 1994 with the formation of the World Trade OrganizationJan. 1, 1995 WTO was bornGATT, GATS and TRIPS still exist as the framework for the WTOs operations

Current Round Doha Began November 2001Ambitious agenda to make globalization more inclusive of the worlds poorTalks have been contentious No agreements have been reachedJuly 2006 talks were suspended by Director General, Pacel Lamy, but may go forward at anytime

11Formal Structure

12Formal StructureHighest Level Ministerial Conference

Meets at least every two yearsBrings together all members of WTOCan make decisions on all matters under any multilateral trade agreement

13Formal StructureSecond Level - General Council Meets regularlyMade up of representatives from all member nationsHas the authority to act on behalf of the Ministerial ConferenceAlso acts as:Dispute Settlement BodyTrade Policy Review Body

14Formal StructureThird Level-Councils for Trade Works under the General CouncilMade up of three councilsGATT CouncilTRIPS CouncilGATS Council

These councils are charged with overseeing the functioning of their various trade agreements

15Formal StructureFourth Level -Subsidiary Bodies These are sub-councils under the three councils for tradeExamples include:Textiles Monitoring Body, under the GATT CouncilInformation Technology Agreement Committee, under the TRIPS CouncilThe Services Council, under the GATS Council

16BenefitsThe system promotes peaceDisputes are handled constructivelyFree trade cuts the costs of livingIt provides more choices of productsTrade stimulates economic growthGovernments are shielded from lobbying

Stops nations from imposing unfair trade barriers that can increase tensions.Nations can consult with each other b4 WTO investigates the case. Also Nations involved cooperate on how to implement the mandate given by WTO.Imports can reduce cost of products and hence increase affordability.Customers hv more choice due to import than local manufactured ones.WTO promotes the MFN concept.17Dispute Settlement It is the central pillar of the multilateral trading system

It is a unique contribution to the stability of the global economy

It makes the trading system more secure and predictable

Provides a way for enforcing rules.Promise not to raise a trade barrier=promise gives businesses a clearer view of their future opportunities. With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition choice and lower prices.18Dispute SettlementPrinciples:EquitableFastEffectiveMutually acceptableStages :Consultation PanelAppeal

Eg:-Case of VenezuelaThe Complaint of U.S.A. against China

Principles that form the foundation of all the laws.Equitable=Agreements treat all nations alike(Most favoured Nation) Applying a barrier or relaxing applies to all trading partnersFast=All disputes are reviewed, judgment published and action verified in a time bound manner.Effective=Framework provides facility to trade and has room for incorporating changes.Mutually acceptable=Neutral authority ensures the agreement and dispute resolutions are mutually acceptable betwn partner countries.

If a country has done something wrong, It has to swiftly correct its fault. if it continues to break an agreement, It must offer compensation or suffer a suitable penalty.It must follow the recommendations of the panel report or the appeals report.It must state its intention to do so at a Dispute Settlement Body meeting held within 30 days of the reports adoption. If after 20 days, no satisfactory compensation is agreed, the complaining side may ask the Dispute Settlement Body for permission to impose limited trade sanctions against the other side. In any case, the Dispute Settlement Body monitors how adopted rulings are implemented.

60 days-Consultations, mediation, etc45 days-Panel set up and panelists appointed6 months-Final panel report to parties3 weeks-Final panel report to WTO members60 days-Dispute Settlement Body adopts report (if no appeal)Total = 1 year (without appeal)60-90 days-Appeals report30 days-Dispute Settlement Body adopts appeals reportTotal = 1y 3m(with appeal)

19India in WTOFounder memberEnsured more stability and predictabilityMFN status and national treatment for its exportsIndia is expected to snatch most of the business deals that are presently catering the developed nations which includes major service based industries like telecom, financial services, infrastructure services such as transport and power

Member since 1/1/95(from the days of GATT even b4 WTO)Fair treatment for itself.Increase in availability + reduction in tarrifs= MORE business for India.

Simplification=customs procedures, use of electronic payments, shipping risks and faster clearances at ports. 20India in WTO - AgricultureReduction in domestic subsidiesAmber box, Green box and Blue boxTotal Aggregate Measurement of Support (AMS) is negative so not required to undertake reduction commitments in any of its productReduction in export subsidiesNo direct subsidies except marketing and transport subsidiesTariff binding and progressive reduction of tariffsPrimary agricultural products 100%Processed foods at 150% and edible oils at 300%

WTO terminology= subsidies are identified by Boxes. Red/Amber/GreenAmber box-Subsidies that distort trade. Minimize themBlue Box-subsidies that are tied to programmes that limit productionGreen box-subsidies that are not restricted as they dont distort trade.Tariff binding=Commitment not to increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties.A tariff binding is a ceiling level above which a Member cannot apply a tariff. In other words, it is the maximum tariff that may be applied by a Member.AMS = Max monetary value provided by government for support to a sector. The AMS, as defined in the WTO Agreement on Agriculture, includes both budgetary outlays as well as revenue transfers from consumers to producers as a result of policies that distort market prices.21India in WTO - TextilesThe textile sector remained outside the GATT disciplines for many decades1974: MFAATC : negotiated during the Uruguay RoundAccounted for about 36% of total exports from IndiaLargest net foreign exchange earner for the country

The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974 through 2004, imposing quotas on the amount developing countries could export to developed countries. It expired on 1 January 2005.Developing countries have advantage in textile production because it is labor-intensive and they have low labor costs. The system has cost developing world 27 million jobs and $40 billion a year in lost exports.Agreement on Textiles and Clothing (ATC) integration of textile sector into WTO. Under this all quota arrangements in the sector set thru MFA will be removed gradually.22India in WTO - Textiles

ANTI-DUMPING PROBES AGAINST INDIA

European UnionUnbleached Cotton Fabrics (UCF)Cotton Type BedlinerPolyester Texturised Filament Yarn (PTFY)

TurkeyPolyester Texturised Yarn (PTY)

South AfricaPrinted and dyed bed linen Acrylic fibre blankets23India in WTO IT & ITesKey contributor to the Services Sector accounting for 5.8% of Indias overall GDP[Source: PWC report for CII]

The increase in availability and reduction in tariffs has prompted many developed nations to go for business with India especially in IT and ITeS industry

Software exports from the Rajiv Gandhi Chandigarh Technology Park rose from Rs.504 crore in 2007-08 to Rs.750 crore last year.

24India in WTO IT & ITes100% Income Tax exemption on export profits available to SEZ units for 5 years, 50% for next 5 years and 50% of ploughed back profits for 5 years thereafter.Exemption from Central seal Tax.Exemption from Service Tax.Single window clearance for Central and State level approval.This scheme has a significant impact on future exports & employment. About 235 IT-ITES specific SEZs have been notified by the DOC.

25India in WTO IT & ITes

26India in WTO IPRSeven typesCopyrightsTrademarks Geographical indicationsIndustrial designsPatents Integrated circuitsTrade secrets

27TRIPS in IndiaTheAgreementon Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an internationalagreementadministered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members.

Indias patent policy allowed very little scope for patents in agricultureProtecting some of the geographical indications of interest to India e.g. Basmati rice, Darjeeling tea, Mysore Dosa, Alleppey Green Cardamom, Madurai Malli etc,.Exclusive Marketing Rights for the producers of patented drugs and agrochemicals

28SPS/TBTSanitary and Phytosanitary Measures and Technical barriers to tradeProtects human, animal and plant life and health including from pests and diseases of food

Size, shape, weight and packaging material requirements including labeling and handling safety

Peanuts, Marine products, Mushrooms in EU

29Sources /References : http://en.wikipedia.org/wiki/World_Trade_Organizationhttps://www.wto.org/www.calstatela.edu

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