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Introduction to GATT and WTO The World Trade Organization (WTO) was established to govern international trade. It was found on 1 st January, 1995 and headquartered.

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Presentation on theme: "Introduction to GATT and WTO The World Trade Organization (WTO) was established to govern international trade. It was found on 1 st January, 1995 and headquartered."— Presentation transcript:

1 Introduction to GATT and WTO The World Trade Organization (WTO) was established to govern international trade. It was found on 1 st January, 1995 and headquartered in Geneva, Switzerland. The current Director- General of the WTO is Pascal Lamy.

2  The WTO has 625 staff and had a budget of approximately $182 million in 2009. It had a membership of 153 countries, which account for over 97% global trade.  The WTO replaced the General Agreement on Tariffs and Trade (GATT) which served as the forum to regulate international trade. It was established in 1948 soon after the World War II.

3 WTO deals with : a) Regulation of trade occurring among member states; b) Providing a forum for trade agreements; c) Facilitating settlement of trade disputes in accordance with WTO agreements. During its existence of about 46 years during 1948- 1994, the GATT saw seven rounds of trade negotiations among the trading countries. Among them the Tokyo round, Uruguay round and the Doha round of discussions were recent and become unimportant.

4 WTO Framework (Organizational structure) WTO has the general council consisting of several bodies which have committees to address specific trade issues. They are: (1) Council for trade in goods. It has 11 committees, each having a specific task relating to goods. The committees include representatives of member countries. There is also the Textiles Monitoring body (apart from the 11 committees) having a chairman and 10 members. It has many groups to deal with trade in textiles. (2) Council for Trade – Related Aspects of Intellectual Property Rights It deals with IPR, TRIPS council and organizations which work in these issues.

5 (3) Council for Trade in Services It monitors the functioning of the General Agreement on Trade in services (GATs) and open to all WTO members. (4) Trade Negotiations Committee (TNC) It deals with the current trade talks, which is the DOHA Development Round. The WTO director – general is the chairman of this committee.

6 Principles of trading system The WTO has a framework for trade policies. The following principles form the basis of the framework. a) Non – discrimination b) Reciprocity c) Binding and Enforceable commitments d) Transparency e) Safety valves

7 Voting System The WTO has 153 members and follows one country, one role principle while decision is taken. Generally decisions are made on consensus. Countries with huge market size will have an advantage in the bargaining process. However, reaching consensus is a slow, time – taking process. So, the trade talks get extended over a long period of time.

8 Dispute settlement  In 1994, the WTO member countries agreed on the “Understanding in Rules and Procedures governing the Settlement of Disputes” (DSU) which was annexed to the “Final Act” signed in Marrakesh in 1994. Resolution of disputes among member countries is one of the most important functions of the WTO.  When member countries feel that their trading partners violate the WTO rules they can seek resolution of the disputes through “multi lateral systems” so that they can avoid taking decisions unilaterally.


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