Wto and Its Impact on International Business

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Unit 2-1 WTO and Its Impact on
International Business

Content to be discussed
• WTO, Impact of WTO on International
Business:
• Tariff and Non Tariff Barriers (NTBs), GATT,
GATS, TRIPs, TRIMs, ..

How WTO Emerged?
• The multilateral trading system—past, present
and future The World Trade Organization came
into being in 1995.
• One of the youngest of the international
organizations, the WTO is the successor to the
General Agreement on Tariffs and Trade (GATT)
established in the wake of the Second World War.
• While the WTO is still young, the multilateral
trading system that was originally set up under
GATT is well over 50 years old.

How WTO Emerged?
• Economic problems of Pre World War
– Failure of world monetary system – collapse of
Gold Standard
– Disruptions in world trade
– Destruction of Europe from WWII.
Great Depression of 1930s

How WTO Emerged?
Three Economic
Problems

Three pillars
proposed in 1944

Result

Failure of world
monetary system –
collapse of Gold Standard

International Monetary
Fund (IMF)

Established

Disruptions in world
trade

International Trade
Organization(ITO)

Failed: GATT
Introduced

Destruction of Europe
from WWII.

International Bank for
Reconstruction and
Development (IBRD)

Established

How WTO Emerged?
The Bretton Wood Institutions
• IMF was established in 1944 - to maintain the
order in world monetary system.
• IBRD was established in 1944 - to reconstruct and
develop world war devastated countries
• ITO failed
– In 1947, in order to foster and promote international
trade, world’s 23 major trading nations agreed to sign
GATT.
– GATT went through eight rounds of negotiations until
the end of eight round 1994. The last round called
Uruguay Round (1986-1994) created World Trade
Organization (WTO)

How WTO came into being?
SN Year

Place/
Round

Subjects/Results

Parties
Members

1
2
3
4
5
6

1947
1949
1951
1956
1960-61
1964-67

Geneva
Annecy
Torquey
Geneva
Geneva
Geneva

23
13
38
26
26
62

7

1973-79

Geneva

8

1986-94

Uruguay

Tariffs
Tariffs
Tariffs
Tariffs
Tariffs-Dillon Round
Tariffs and Antidumping measures –
Kennedy Round
Tariff and Non –tariff and
framework – Tokyo Round
Agriculture, Textiles and clothing,
IPR, Services, Dispute Settlement,
and WTO Secretariat.
? (Doha Development Agenda)

142

9

2001-?

Doha

120
123

WTO – brief history
• The system was developed through a series of trade
negotiations, or rounds, held under GATT. The first
rounds dealt mainly with tariff reductions but later
negotiations included other areas such as anti-dumping
and non-tariff measures. The last round — the 1986-94
Uruguay Round — led to the WTO’s creation.
• The negotiations did not end there. Some continued
after the end of the Uruguay Round. In February 1997
agreement was reached on telecommunications
services, with 69 governments agreeing to wideranging liberalization measures that went beyond those agreed in the Uruguay Round.

WTO – brief history
• In the same year 40 governments successfully
concluded negotiations for tariff-free trade in
information technology products, and 70
members concluded a financial services deal
covering more than 95% of trade in banking,
insurance, securities and financial information.
• In 2000, new talks started on agriculture and
services. These have now been incorporated into
a broader agenda launched at the fourth WTO
Ministerial Conference in Doha, Qatar, in
November 2001.

WTO – Doha Development Agenda
• The work programme, the Doha Development
Agenda (DDA), adds negotiations and other
work on non-agricultural tariffs, trade and
environment, WTO rules such as anti-dumping
and subsidies, investment, competition policy,
trade facilitation, transparency in government
procurement, intellectual property, and a
range of issues raised by developing countries
as...
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