Impact Of WTO on Indian Economy

Topics: International trade, World Trade Organization, General Agreement on Tariffs and Trade Pages: 9 (2596 words) Published: November 5, 2013


WTO GENESIS

The General Agreement on Trade and Tariff (GATT) came into existence in 1947

It sought substantial reduction in tariff and other barriers to trade and to eliminate discriminatory treatment in international commerce.

India became a signatory to GATT in 1947 along with twenty two other countries

Reasons for GATT to be carved into WTO

GATT faced many problems, with the world trade becoming more and more complex, GATT was unable to deal with it. Eg. In the agriculture sector, loopholes in the multilateral system were heavily exploited, and efforts at liberalizing agricultural trade met with little success. In the textiles and clothing sector, an exception to GATT’s normal disciplines was negotiated in the 1960s and early 1970s, leading to the Multifibre Arrangement. Even GATT’s dispute settlement systems were causing concern. The Uruguay round negotiations lasted for about seven and a half years, twice the time originally planned for.

But economists conclude that it was worth the trouble, basically all issues related to trade were discussed in these negotiations, GATT’s articles were reviewed and most importantly the Final Act concluding the Uruguay Round and officially establishing the WTO regime was signed during the April 1994 ministerial meeting at Marrakesh, Morocco, and hence is known as the Marrakesh Agreement.

WTO kept the basic objectives of GATT same, while worked on their implementation.

WTO
WTO on paper came into existence on 1-1-1995 with the conclusion of Uruguay Round Multilateral Trade Negotiations at Marrakesh. Finally, enforced on 1-1-2005: For Transparent, free and rule-based trading system

To provide common institutional framework for conduct of trade relations among members To facilitate the implementation, administration and operation of Multilateral Trade Agreements Follow rules and Procedures Governing Dispute Settlement

Trade Policy Review Mechanism
Concern on Non-trade issues such as Food Security, environment, health, etc.

What INDIA seeks from WTO
Protecting our food and livelihood security by having sufficient flexibility for domestic policy measures. Protecting domestic producers from the surge in imports or significant decline in import prices. Substantial reduction in export subsidies to other countries and domestic support to agriculture in the developed countries for greater market access to products of India as a developing country. Finally, a more equitable & fair trading framework for agricultural commodities

India and its Non-Trade Concerns
The issue of non-trade concerns was articulated as under:
The Article of Association provides an enabling environment for the countries to address the concerns relating to food security and livelihoods. Non-trade concerns were adequately reflected in the decisions, particularly those related to market access and domestic support. The relevant decisions of the World Food Summit on food security and livelihoods were taken as the integral part of the negotiations.

IMPACT OF WTO ON WORLD ECONOMY

SYNTHESIS OF WTO - WORLD TRADE ORGANISATION
One of the most eventful time that the world witnessed was the culmination of GATT 1947 into WTO, which came into force on 1st January 2005. This WTO had set very high expectations in various member countries regarding increase in world trade where India had insignificant share i.e. only 0.75% at the most. Even in IT exports the share of Indian exporters was just peanuts in view of overall world market.

PROBLEMS FACED BY INDIA IN WTO & ITS IMPLEMENTATION:
Predominance of developed nations in negotiations extracting more benefits from developing and least developed countries Resource and skill limitations of smaller countries to understand and negotiate under rules of various agreements under WTO - Incompatibility of developed and developing countries resource sizes thereby causing distortions in implementing...
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