World Trade Organisation (WTO)
The world trade organisation (WTO) is the
only international body dealing with the rules of trade
between nations. At its heart are the WTO agreements, negotiated
and signed by the bulk of the worlds trading nations. These
documents provide the legal ground rules for international
commerce. They are essentially contracts, binding governments
to keep trade policies within agreed limits. Although negotiated
and signed by governments, the goal is to help producers
of goods and services, exporters and importers conduct their
business.
Objective:
The WTO’s overriding objective is
to help trade flow smoothly, freely, fairly and predictably.
This is done by:
The WTO’s top-level decision-making body
is The Ministerial Conference, which meets at least once
every two years. Below this, is the General council, which
meets several times a year in the Geneva headquarters. The
General Council also meets as the Trade Policy Review Body
and the Dispute Settlement Body.
At the next level, the Goods Council, Services
Council and Intellectual Property Council report to the
General Council.
Numerous specialised committees, working groups
and working parties deal with the individual agreements
and other areas such as the environment, development, membership
applications and regional trade agreements.
WTO Agreements:
The WTO agreements cover goods, services and
intellectual property. They spell out the principles of
liberalisation and the permitted exceptions. They include
individual countries’ commitments to lower custom tariffs
and other trade barriers and to keep services markets open.
They set procedures for settling disputes. They prescribe
special treatment for developing countries. They require
governments to make their trade policies transparent.
The Evolution of WTO
The period 1947 to 1993 witnessed eight rounds
of negotiations to lay down a set of multinationally agreed
rules to govern international trade, through General Agreement
on Tariffs and Trade (GATT). The eighth round had the participation
of 117 countries and covered more than $300 billion worth
of trade across borders. This round also paved the way for
the establishment of the World Trade Organisation (WTO)
from January 1,1995.
The final Act signed at Marrakesh, Morocco
consists of 15 separate agreements, negotiations, decisions
and understanding. The aim is to provide more market access
across member countries for products ranging from agriculture
to industrial goods including special provisions related
to textile and clothing. Member countries have committed
to reduced tariffs for goods, in some cases even zero tariff
and also reducing or removing non-tariff barriers like surcharge,
variable levies, price control measures and quantitative
restrictions. The members shall provide Most Favoured Nation
(MFN) status to other members and extend national treatment
for important items.
India’s Commitment
India has committed to WTO to reduce tariffs
on capital goods, components, intermediaries and industrial
raw material by year 2001 to:
Domestic industries will face competition
from imported goods flowing freely from other countries due
to lower tariff. Goods produced within the country for domestic
consumption by foreign companies using their own trademark
and technology can also affect domestic producers. Internationally,
the Indian industries will face competition from other developing
countries and due to non-tariff barriers like environment,
health, safety, and prohibition of use of child labour and
technical standard requirements.
