Introduction

Bretton Woods Conference held in 1944 was the starting point for a new world order. It was envisaged that the new world economic order would be organised around three International Organisations i.e. - (i) the International Bank for Reconstruction and Development (IBRD- World Bank) (ii) International Monetary Fund (IMF) (iii) International institutions came into existence the third one view came into existence due to non-ratification of its charter by the U.S. administration in 1950.

Despite the non-adoption of the charter of ITO, the developed nations were keen to ensure reduction of trade barriers. Tariff negotiations were started among 23 nations and as a result of this an extensive set of bilateral trade concessions were then extended to all participants and were incorporated in a General Agreement on Tariffs and Trade (GATT) established in 1947

As per preamble of the GATT the main objectives were to-

• raise the standard of living.

• Ensure the full employment and increase the volume of real income and effective demand.

• Ensure better utilisation of the resources of the world.

• Ensure expansion of production and Intentional trade since the establishment of the GATT, eight rounds of negotiations of reduce the tariffs and trade barriers in the trade in goods have been held.

The Geneva Round held in 1947 was attended by 23 countries and resulted in exchange of tariff cuts. The Amnesty Round held in 1949 was held in France followed by Torguey Round held in Britain in 1950-56 in Switzerland.

The Dillon Round of 1960-61 was held in Geneva was the fifth round followed by the Kennedy Round in 1964-67 which was attended by 48 countries including 35 developing countries. This round included a new anti-dumping agreement. The Tokyo Round held in 1973-79 was attended by 102 countries was a continuation of the GATT’s efforts to progressively reduce tariffs.

The eighth round i.e. Uruguay Round was held in 1986-93 in which 123 members participated was the most comprehensive round.

The final act was signed in 1994 at Marrakesh (Morocco) and the GATT 1994 finally emerged as WTO in 1995.

Thus, WTO was established on 1 January 1995 as a successor to the GATT. The Headquarters of WTO are in Geneva, Switzerland.

Membership and structure

The original members comprise of the members to the GATT as on the date of entry into force of this agreement. Besides these, other states may accede to the agreement and the multilateral trade agreements annexed thereto to become other members. At present the membership of the WTO is 14. It is headed by a director general (WHO at present is supachai Panitchpakdi) who is assisted by four deputies from different member states. The director General is appointed by the General Council for a four year term after consultation among member countries.

The structure of WTO consists of the following bodies-

1. The Ministerial Conference

The ministerial conference (MC) is the Primary body composed of the representations of all the members. It is the executive of the WTO and carries out the functions of the WTO. It meets at least once every two years. It has the authority to take decisions on all matters under any of the multilateral trade agreements on the request of the members.

2. The General Council

The General Council handles the day to day work of the WTO and reports to the MC. It comprises of representatives of all the members. It can meet as many times as is appropriate and necessary. It has three functional council working under its supervision and guidance- council for Trade in goods, council for trade in services and council for trade related aspects of Intellectual Property Rights.

3. The Dispute Settlement Body

It usually meets truce a month on which all members can sit to hear the complaints of violations of WTO rules and agreements. It sets up expert panels to study disputes.

4. The Trade Policy Review Body

It is the forum for the entire membership to review the trade policies of all WTO member countries. Major trading powers trade policies are reviewed every two years while the trade policies of the other individual members are reviewed every four years.

5. The committee on Trade and Development, the committee on BOP and the committee on budget finance and administration

The committee on trade and development is concerned with issues related to developing and least developed countries. The committee on BOP is responsible for consultations between the WTO members and countries which take trade restrictive measures in order to cope with their BOP difficulties.

The committee on budged, finance and administration deals with issues relating to the WTO’s financing and budget

Functions

The main functions of WTO are-

• To facilitate and implement action, operation, administration and the promotion of the agreement, the multilateral and plurilateral trade agreements which together make up the WTO

• To provide the forum of negotiations among its members in respect of multilateral trade relations

• To administer the rules and procedures governing the settlement of trade disputes among members. 

• To oversee national trade policies by administering Trade Policy Review Mechanism (TRPM).

• To cooperate with the IMF, World Bank and other International institutions involved in global policy making.

WTO in Action

1. The First Ministerial Conference, 1996 (Singapore)

The conference ended with a declaration dealing with six major areas viz. labour standard, investment, competition policies government procurement, textiles and agriculture.

2. The second Ministerial Conference, 1998 (Geneva)

The three main features of this conference were celebrations of 50th anniversary of multilateral trading year, a ministerial declaration laying the foundation for next year for a new set of global talks in certain areas such as Trade Related Intellectual Property Rights (TRIPS), Trade Related Investment Measures (TRIMS), Dispute Settlement, Technical Barriers to Trade etc. and the conclusion on an agreement on duty free trade in electronic commerce.

3. The third Ministerial Conference, 1999 (Seattle)

In this conference, while the US preferred on the agenda of WTO core labour standards, environment protection. Industrial tariffs, e-commerce, transparency in govt. procurement practices; the European Union, Japan and few other industrialised countries wanted comprehensive discussions on all new issues such as investment rules, competition policy, govt. procurement, labour and environmental standards, industrial tariffs; the developing countries including India wanted the future work programme of the WTO confined to the ‘built-in’ agenda of the existing agreements. The session was ultimately suspended due to protests and demonstrations.

4. Doha (Qatar) Ministerial Conference (Nov.2001)

A compromise was reached in this conference on Intellectual Property Rights (IPR) which was regarded as one on the contention and difficult implementation issues pertaining to access to medicine and public health concerns in and developing countries, the accords is known as TPIPS.

5. Cancun Ministerial Conference (Sep. 2003)

The fifth conference was held in Mexico. The main task was to take stock of progress in negotiations and other work under the Doha Development Agents. No consensus was reached on any issue.

WTO and India

India is a signatory to the WTO declaration and has to pay heed to its obligations in shopping its future macroeconomic policies. India has constantly been phasing out Quantitative Restrictions on imports and with the withdrawal of tariffs on imports, India has provided access to cheaper inputs of productions but the producers of domestically produced identical goods are facing tough competition In 19947, the developed and developing countries entered into “historic” accord to remove International barriers to the expansion of banking, insurance and securities. In 1998, India took a proactive stand at the WTO meeting demanding amendments to the TRIPS, improved market access in service and better deal in agriculture. India has also expressed concern on the General Agreement on Trade in service (GATS), environment issues, trade and Investment, trade and competition, trade facilitation and transparency, Intellectual Property Rights and other agreements over the years.

Summary

The establishment of the WTO as the first major international trade institution in the post-cold war era is an epoch-making event. The biggest gain is the existence and expansion of a trading system based on internationally agreed and enforceable rules and disciplines to both overseas and guarantee progress in the sphere of international trade. The credibility and effectiveness of the new multilateral system based on open, just and undistorted competition rests on the WTO member government full compliance with the rules, disciplines and commitments resulting from the historic Marrakesh agreement.

Reference

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