Location: Geneva, Switzerland

Established: 1 January 1995

Created by: Uruguay Round negotiations (1986–94)

Membership: 153 countries (since 23 July 2008)

Budget: 185 million Swiss francs for 2008

Secretariat staff: 625

Head: Pascal Lamy (Director-General)

Functions of WTO :
• 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
what is WTO?

the World Trade Organization (WTO) deals with the rules of trade
between nations at a global or near-global level. But there is more to it
than that.

• Is it a bird, is it a plane……
• Above all, it’s a negotiating forum …
• It’s a set of rules …
• or it a table………
Born in 1995, but not so young

• The WTO began life on 1 January 1995, but its trading system is half a
century older.

•Since 1948, the General Agreement on Tariffs and Trade (GATT) had
provided the rules for the system.

•
•The last and largest GATT round, was the Uruguay Round which
lasted from 1986 to 1994 and led to the WTO’s creation.
What happened to GATT?

• The WTO replaced GATT as an international organization,

• The General Agreement still exists as the WTO’s umbrella treaty for
trade in goods, updated as a result of the Uruguay Round
negotiations.

• Trade lawyers distinguish between GATT 1994, the updated parts of

GATT, and GATT 1947.

• the original agreement which is still the heart of GATT 1994.

Confusing? For most of us, it’s enough to refer simply to “GATT”.
Principles of the trading system

• Trade without discrimination

1. Most-favoured-nation (MFN): treating other people equally
2. 2. National treatment: Treating foreigners and locals equally

• Freer trade: gradually, through negotiation

• Predictability: through binding and transparency
Promoting fair competition
• Encouraging development and economic reform
The case for open trade

World trade and production have accelerated Both trade and GDP fell in
the late 1920s,before bottoming out in 1932. After World War II, both
have risen exponentially, most of the time with trade outpacing GDP.
(1950 = 100. Trade and GDP: log scale)
GATT trade rounds

Year Place/ Subjects covered Countries

name
1947 Geneva Tariffs 23
1949 Annecy Tariffs 13
1951 Torquay Tariffs 38
1956 Geneva Tariffs 26
1960–1961 Geneva Tariffs 26
1964–1967 Geneva Tariffs and anti-dumping 62
measures
1973–1979 Geneva Tariffs, non-tariff measures, 102
“framework” agreements

1986–1994 Geneva Tariffs non-tariff measures, rules, 123

services.
THE AGREEMENTS

The WTO is ‘rules-based’;

its rules are negotiated agreements
For
• Goods (under GATT)
• Agriculture
• Textiles and clothing
• Product standards (TBT)
• Investment measures
• Anti-dumping measures
• Customs valuation methods
• Preshipment inspection
• Rules of origin
• Import licensing
Agriculture: fairer markets for farmers

The new rules and commitments apply to:

• market access — various trade restrictions confronting imports
• domestic support — subsidies and other programmes, including those
that raise or guarantee farmgate prices and farmers’ incomes
• export subsidies and other methods used to make exports artificially
competitive.
Standards and safety

• Food, animal and plant products: how safe is safe?

• Technical regulations and standards

•Sanitary Measures Agreement or SPS

•Technical Barriers to Trade Agreement (TBT)

Services: rules for growth and investment
• All services are covered by GATS
• Most-favoured-nation treatment applies
to all services, except the one-off
temporary exemptions
• National treatment applies in the areas
where commitments are made
• Transparency in regulations, inquiry points
• Regulations have to be objective
and reasonable
• International payments: normally unrestricted
Anti-dumping, subsidies, safeguards:

•actions taken against dumping (selling at an unfairly low price)

• subsidies and special “countervailing” duties to offset the subsidies

Prohibited subsidies
Actionable subsidies

• emergency measures to limit imports temporarily, designed to

“safeguard” domestic industries.
Non-tariff barriers: red tape, etc

A number of agreements deal with various bureaucratic or legal issues

that could involve hindrances to trade.
• import licensing
• rules for the valuation of goods at customs
• preshipment inspection: further checks on imports
• rules of origin: made in ... where?
• investment measures
DEVELOPING COUNTRIES
•The WTO agreements contain special provisions on developing
countries
• the Committee on Trade and Development is the main body focusing
on work in
this area in the WTO, with some others dealing with specific topics
such as trade
and debt, and technology transfer
• the WTO Secretariat provides technical assistance (mainly training of
various
kinds) for developing countries.
•Least-developed countries: special focus
THE ORGANIZATION
The WTO is ‘member-driven’, with decisions taken by consensus among all
member governments

• Highest authority: the Ministerial Conference

• Second level: General Council in three guises
The General Council
The Dispute Settlement Body
The Trade Policy Review body

Third level: councils for each broad area of trade, and more
The WTO Secretariat and budget

• The WTO Secretariat is located in Geneva. It has around 630 staff

and is headed by a director-general. Its responsibilities include:
• Administrative and technical support for WTO delegate bodies
(councils, committees, working parties, negotiating groups) for
negotiations and the implementation of agreements.
• Technical support for developing countries, and especially the least-
developed.
• Assistance from legal staff in the resolution of trade disputes involving
the interpretation of WTO rules and precedents.
• Dealing with accession negotiations for new members and providing
advice to governments considering membership.
 How to join the WTO: the accession process

First, “tell us about yourself”.

Second, “work out with us individually what you have to offer”.

Third, “let’s draft membership terms

Finally, “the decision”.

 DOHA ROUND
Place : Doha ( Quatar)
Doha development agenda ( DDA), Nov 2001
Objective : Its objective is to lower trade barriers around the
world, which allows countries to increase trade globally.
Major issues :Agriculture, industrial tariffs and non-tariff
barriers, services, and trade remedies.
Differences between developed and developing nations
( EU, USA and Japan vs India, Brazil, China, and South
Africa )
Also considerable contention against and between the EU
and the U.S. over their maintenance of agricultural subsidies
—seen to operate effectively as trade barriers
The most recent round of negotiations, July 23-29 2008,
broke down after failing to reach a compromise on
agricultural import rules
 Doha round contd…
Negotiations : TNC ( Trade Negotiation Committee)

Director General : Pascal Lamy

Topics covered : market access, development issues, WTO rules, trade

facilitation and other issues.

Doha,2001 : Agricultural and manufacturing markets, GATS( General

agreement on Trades in Services), TRIPS (Trade-Related Aspects of
Intellectual Property Rights).

Intention : Make trade rules fairer for developing countries.

Cancún,2003: Collapsed on issues ( Singapore issues) like government
procurement, trade facilitation (customs issues), trade and investment, and
trade and competition .
 Doha round contd…
• Geneva 2004 : 1)Pushed by USA would
focus on market access, including an
elimination of agricultural export subsidies.
2)EU accepted the elimination of agricultural
export subsidies “by date certain.3)
Singapore issues were moved off the Doha
agenda. 4)India and Brazil directly
negotiated with developed countries on
agriculture and trade facilitation.5)The idea
of “framework agreement” – which provides
guidelines for completing DOHA
 2005 Paris and Hong
Kong
• France protested to cut subisidies to farmers
• U.S., Australia, the EU, Brazil and India failed to
agree on issues relating to chicken, beef and rice .
• Hong Kong, 2005 – Sixth round
• Most of the world's governments reached a deal to
set a deadline for eliminating subsidies of
agricultural exports by 2013 .
• The final declaration also requires industrialized
countries to open their markets to goods from the
worlds poorest nations.
 Geneva 2006
• Failed to reach consensus on reducing
farming subsidies and lowering import
taxes.

• Dim chances to succeed because

Trade Act of 2002.

• What is Trade Act 2002 ?

Potsdam 2007. Geneva 2008
• Potsdam 2007 broke because of a deadlock between USA, the EU,
India and Brazil over opening up agricultural and industrial markets
in various countries and also how to cut rich nation farm subsidies.

• Geneva 2008
1)Talks were stalled on the issue of special safeguard mechanism
compromise.
2)US said it was ready to cap farm subsidies at $15 billion a year from
$18 billion on condition*
3)US & EU also offered an increase in the temp-work visas for
professional workers.
4) Disagreements on issued related to Indian & Chinese farmers, African
& Caribbean banana imports to EU.
5) Failure was blamed at India and China over over the special
safeguard mechanism (SSM)
 Doha 2009
• No negotiations

• Ministers reaffirmed the need to conclude

the Round in 2010

• Ministers want to finish Doha rounds so

that they may concentrate on urgent issues
like Climate change.
THANK YOU