2. The World Trade Organization (WTO) deals with
the global rules of trade between nations. Its main
function is to ensure that trade flows as smoothly,
predictably and freely as possible.
The WTO agreements
How can you ensure that trade is as fair as
possible, and as free as is practical? By negotiating
rules and abiding by them.
3. GATT is now the WTO’s principal rule-book for
trade in goods.
The Uruguay Round also created new rules for
dealing with
trade in services,
relevant aspects of intellectual property,
dispute settlement, and
trade policy reviews.
The complete set runs to some 30,000 pages
consisting of about 30 agreements and
separate commitments (called schedules)
Intro
The WTO’s rules — the agreements — are the
result of negotiations between the members. The
current set were the outcome of the 1986–94
Uruguay Round negotiations which included a
major revision of the original General Agreement
on tariff & trade.
Through these agreements, WTO members
operate a non-discriminatory trading system that
spells out their rights and their obligations. Each
country receives guarantees that its exports will
be treated fairly and consistently in other
countries’ markets. Each promises to do the same
for imports into its own market. The system also
gives developing countries some flexibility in
implementing their commitments.
4. 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.
Goods
5. 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.
Services
6. The WTO’s intellectual property agreement
amounts to rules for trade and investment
in ideas and creativity. The rules state how
copyrights, patents, trademarks,
geographical names used to identify
products, industrial designs, integrated
circuit layout-designs and undisclosed
information such as trade secrets —
“intellectual property” — should be protected
when trade is involved.
Intellectual
Property
7. The WTO’s procedure for resolving trade quarrels under the
Dispute Settlement Understanding is vital for enforcing the
rules and therefore for ensuring that trade flows smoothly.
Countries bring disputes to the WTO if they think their rights
under the agreements are being infringed. Judgements by
specially-appointed independent experts are based on
interpretations of the agreements and individual countries’
commitments.
8. The system encourages countries to settle
their differences through consultation.
Failing that, they can follow a carefully
mapped out, stage-by-stage procedure that
includes the possibility of a ruling by a panel
of experts, and the chance to appeal the
ruling on legal grounds. Confidence in the
system is borne out by the number of cases
brought to the WTO — around 300 cases in
eight years compared to the 300 disputes
dealt with during the entire life of GATT
(1947–94).
Dispute
Settlement
9. The Trade Policy Review Mechanism’s
purpose is to improve transparency, to
create a greater understanding of the
policies that countries are adopting, and to
assess their impact. Many members also see
the reviews as constructive feedback on
their policies.
All WTO members must undergo periodic
scrutiny, each review containing reports by
the country concerned and the WTO
Secretariat.
Policy
Review
10. WTO AGREEMENTS
1. GENERAL AGREMENT ON
TARRIFS & TRADE
(GATT)
2. GENERAL AGREEMENT ON
TRADE IN SERVICES
(GATS)
3. TRADE RELATED ASPECTS
OF INTELLECTUAL
PROPERTY RIGHTS (TRIPS)
4. TRADE RELATED
INVESTMENT MEASURES
(TRIMS)
5. MULTI FIBRE
AGREEMENTS (MFA)
Frame work
starts with basic
principles
11.
12. DEALS IN :
How basic principles of the trading
system and other international
intellectual property agreements
should be applied.
How to give adequate protection to
intellectual property rights.
How countries should enforce those
rights adequately in their own
territories.
How to settle disputes on intellectual
property between members of the
WTO.
Special transitional arrangements
during the period when the new
system is being introduced.
TRIPS
It is the GATT Uruguay Round Agreement
on Trade Related Intellectual Property. It
deals with the protection & enforcement of
“Trade-Related” intellectual property“
rights". It establishes minimum levels of
protection that each government has to
give to the intellectual property of fellow
WTO members
14. TRIMS
Trade related Investment Measures does not provide any new
language , but It concentrates on 2 major articles. Article III &
Article IX which talks about National Treatment and Trade
Restrictions respectively.
DEALS IN :
ARTICLE III
● National treatment of imported product unless specified in other
agreements .
● Subjects the purchase or use by an enterprise of imported
products to less favorable conditions than the purchase of
domestic products.
ARTICLE XI
● Prohibition of quantitative restrictions on imports and exports.
● Part of the general trend in textiles and agriculture to out the use
of quantitative restrictions.
15. Objectives:
• To secure the eventual integration
of textiles and clothing sector.
• This Arrangement was not negative
for all developing countries. For
example the European Union (EU)
imposed no restrictions or duties on
imports from the very poorest
countries, such as Bangladesh,
leading to a massive expansion of
the industry there.
16. It is the first and the only comprehensive
multilateral discipline covering international
trade in Services, which was negotiated
during Uruguay Round & came into force
along with other WTO agreements in January
1995.
A simple definition of services is that services
are the tradables, which are intangible,
invisible, and incapable of storage and,
therefore, requiring simultaneous production
and consumption. This description does have
its limitations as technical advancements
have made it possible for the services to be
visible and capable of storage(for example, a
foreign consultant prepares a documentary
film for a local company and sends it to that
company in the form of a video cassette).
GATS
17. As per WTO services are divided into
12 areas and sub divided into 164
areas
Business Services, Communication
Services, Construction and
Engineering Services ,Distribution
Services, Education Services,
Environmental Services, Financial
Services, Health Services, Tourism and
travel Services, Recreation, cultural
and sporting Services, Transport
Services, Other Services not included
elsewhere.
18. MODES OF SUPPLY OF SERVICES
Mode 1: (Cross - Border Supply) - This refers to the delivery of service from the territory
of one country to the territory of the other country by crossing international border.
examples : financial trading, maritime transport and telecommunication services.
Mode 2: (Consumption Abroad) - In this method, consumer moves to a foreign country
to get services, such as tourism, education, medical treatment etc.
examples :such as repair and maintenance of aircrafts.
Mode 3: (Commercial Presence) - In this method, foreign service-providing companies
establish their local subsidiary offices (affiliates) to supply services in the domestic
market. Establishment of local branches of foreign banks or insurance companies is
example of services provided through this mode.
Mode 4: (Movement of Natural persons) - In this mode, the service supplying foreign
person moves to the host territory on temporary basis.
examples : business consultants, engineers and I.T. experts traveling to some country
fora short period of time.
19. The important principles falling in this category are Most Favored Nation principle
(MFN),Domestic Regulations and Transparency.
MFN is the first principle and key instrument to prevent discrimination amongst the trading
partners and it is included in all the agreements of the WTO.
First principle "Most Favored Nation" may be confusing but the principle itself is quite simple.
It means that if a country grants a favour (tariff concession, favorable rules, formalities etc.) to
any other country, the same favour shall have to be granted to all the member countries of the
WTO (there are few exceptions also to this rule).
Second important principle to be followed is that of “transparency” which means that the
information relevant to Trade in Services regarding domestic policies, procedures, laws and
regulations should be notified to the WTO Secretariat to be circulated amongst all other
member countries.
Third principle is related to the right of each member to “regulate on the supply of services within
her territory”
21. The Multi Fibre Arrangement (MFA) governed the world trade in textiles and garments from 1974
through 2004, imposing quotas on the amount developing countries couldexport to developed
countries.
It expired on 1 January 2005.
The MFA was introduced in 1974 as a short-term measure intended to allow developed countries
to adjust to imports from the developing world. Developing countries and countries without a
welfare state have an absolute advantage in textile production because it is labor-intensive and
their poor social insurance systems allow them low labor costs.According to a World
Bank/International Monetary Fund (IMF) study, the system has cost the developing world 27
million jobs and $40 billion a year in lost exports.Developing countries have resisted moves
such as a social clause in tariff agreements, to link them to improvements in working conditions.
The Arrangement was not negative for all developing countries. For example, the European Union
(EU) imposed no restrictions or duties on imports from the emerging countries, such as
Bangladesh, leading to a massive expansion of the industry there in buildings such as Rana
Plaza.
At the General Agreement on Tariffs and Trade (GATT) Uruguay Round, it was decided to bring
the textile trade under the jurisdiction of the World Trade Organization. The Agreement on
Textiles and Clothing provided for the gradual dismantling of the quotas that existed under the
MFA. This process was completed on 1 January 2005. However, large tariffs remain in place on
many textile products.
MFA
22. Bangladesh was expected to suffer the most from the ending of
the MFA, as it was expected to face more competition, particularly
from China. However, this was not the case. It turns out that even
in the face of other economic giants, Bangladesh’s labor is
"cheaper than anywhere else in the world." While some smaller
factories were documented making pay cuts and layoffs, most
downsizing was essentially speculative – the orders for goods kept
coming even after the MFA expired. In fact, Bangladesh's exports
increased in value by about $500 million in 2006.However, poorer
countries within the developed world, such as Greece and
Portugal, are expected to lose out.
Effect.
Source:Wikipedia .trade.gov
