WTO was created in 1995 at the Uruguay round of GATT (General Agreement on Trade and Tariff) negotiations. It implements 28 treaties related with the international trade.
It is the “watch dog” of world trade. It has 149 members. The purpose of WTO is to promote free trade by reducing barriers like duties and quotas. Its headquarters is at Geneva. There are two committees—Dispute Settlement Body and Trade Policy Review Body that play significant role in the organization.
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1. Various Dimensions of WTOs Programmes:
1. Trade Related Intellectual Property Right (TRIPS):
To enforce Patent laws commensurate with WTO.
2. Trade Related Investment Measures (TRIMS):
To remove quantitative restrictions and ensure equal treatment of foreign investors.
3. General Agreement on Trade in Services (GATS)
4. Multi Fibre Agreement (MFN):
To phase out or dismantle restrictions or quotas.
5. General Agreement on reduction of Average level of import duties.
6. Agreement on Agriculture:
To ensure market access, reduce subsidies and patenting of seeds and plant varieties.
2. Objectives of WTO:
1. To improve standard of living of people in the members countries.
2. To ensure full employment and broad increase in effective demand.
3. To enlarge production and trade of goods. The above three objectives were also included in GATT, but WTO also included some other objectives which are:
4. To enlarge production and trade of services.
5. To ensure optimum utilization of world resources.
6. To accept the concept of sustainable development.
7. To protect environment.
3. Functions of WTO:
1. To provide facilities for implementation, administration and operation of multilateral and bilateral agreements of the world trade.
2. To provide a platform to member countries to decide future strategies related to trade and tariff.
3. To administer the rules and processes related to dispute settlement.
4. To implement rules and provisions related to trade policy review mechanism.
5. To assist IMF and IBRD for establishing coherence in universal economic policy determination.
6. To ensure the optimum use of world resources.
4. Conferences of WTO:
The implications of contemporary changes in international trade are crucial in relation to India. Globalization has integrated Indian economy with the other nation’s economy.
India seeks to benefit from the mechanisms of world trade by enhancing its cooperation with other countries. Though it remains to be seen as to how far globalization confers benefit on Indian economy but recent experience do not reveal a better picture.
The liberalization of Indian economy and downsizing of public sector have led to increase in unemployment. New forms of exploitation have started wherein poor, illiterate masses are getting trapped.
Multinational corporations are gaining control over Indian markets by destroying the traditional Indian market. Consequently, its consequences must be cautiously examined by leadership and the intelligential. Joseph Stieglitz in his “Globalization and Its Discontents” highlights the economic and financial turmoil brought about by Globalization in a decade.
According to him the culprit is “Washington consensus” at the U.S. Treasury and the IMF that has pushed the rest of the world to open too quickly and which has “pushed austerity on poor countries that instead needed stimulus”.
In his opinion, globalization can work only if the IMF is less aggressive in pushing countries to open their markets, and if countries themselves focus on social sectors.
Globalization has been a historical process with ebbs and flows. No country can hope to opt out of globalization.
Consequently, the aim of every country should be to evolve an appropriate framework to get maximum benefit out of international trade and commerce. There is an urgent need of aggressive, proactive policy and confident negotiations in the global fore.
The efforts by G-21 consisting of India, China, South Africa, Brazil and other countries to defeat the American measures in recent summit of WTO is a hallmark in this regard. However, only time can tell how the correspondence between multilateral institutions and member states are mutually beneficial.