CHAPTER-16 - WORLD TRADE ORGANISATION
Q.1 : Discuss the objectives and functions of WTO. (M.2011)
Ans. A) EMERGENCE OF WTO :-
After the Second World War, many countries got down together to work on ways and means to promote international trade. The result was signing of General Agreement on Tariffs and Trade (GATT) by 23 countries in 1947. India was one of the founder members of GATT. GATT was created to reduce global depression and to liberalise and regulate the world trade by reducing tariff barriers. GATT has been replaced by WTO in 1995. WTO is wider in scope as it regulates world trade in goods, as well as in services intellectual property rights, and investment. In January 2010, the membership of WTO was 153 countries. Its rules and policies are the outcome of negotiations among WTO members. Thus WTO is a member driven, consensus based organisation.
B. PRINCIPAL OBJECTIVES OF WTO
1) Trade Without Discrimination :-
Trade without discrimination through the application of Most Favoured Nation (MFN) Principle. As per MFN clause, a member nation of WTO must accord (give) the same preferential treatment to other member nations which it gives to any other member nation.
2) Raising The Standard Of Living :-
Raising the standard of living and incomes and ensuring full employment of the citizens of its member nations.
3) Optimum Use Of World's Resources :-
Ensuring optimum use of world's resources and, thereby, expanding world production and trade of goods as well as services.
4) Settlement Of Disputes :-
Settlement of disputes among members through consultation, conciliation, and as a last resort through dispute settlement procedures.
5) Growth Of Less Developed Countries (LDCs) :- It recognises the need for positive efforts designed to ensure that developing countries especially the LDCs, secure a better share of growth in international trade.
6) Protection Of Environment
Preserving and protecting the environment of the world so as to benefit all the nations of the world.
7) Enlargement Of Production And Trade
WTO aims to enlarge production and trade of goods as well as services.
WTO aims at generating full employment and increase in effective demand. C) FUNCTIONS OF WTO
WTO has following functions
1) Implementation Of Reduction In Trade Barriers WTO shall check the implementation of tariff cuts and reduction of non-tariff measures agreed upon the member nations at the conclusion of Uruguay Round.
2) Forum For Negotiation
WTO shall provide the forum of negotiations among its members concerning their multilateral trade relations.
3) Settlement Of Disputes
WTO shall administer the understanding on rules and procedures governing the settlement of disputes.
4) Assistance To IMF And IBRD
WTO shall co-operate with IMF, IBRD and its affiliated agencies to achieve greater coherence in global economic policy.
5) Administration Of Agreements
WTO shall look after the administration of 29 agreements (signed at the conclusion of Uruguay Round in 1994), plus a number of other agreements, entered into after Uruguay Round.
6) Examination Of Trade Policies
WTO shall regularly examine the foreign trade policies of member nations, to see that such policies are in line with WTO’s guidelines.
7) Consultancy Services
WTO shall keep a watch on the developments in the world economy and it provides consultancy services to its member nations.
8) Collection Of Foreign Trade Information
WTO shall collect information on import - export trade and on various trade measures and other trade statistics of member nations.
Q.2 : Explain the Salient Features of WTO Agreements reached on the basis
of Uruguay Rounds. OR Explain the main WTO Agreements.
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