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World Trade Organisation (WTO)

Agreement

History:

India is the founder member of both GATT (1947) and successor

organization the WTO. Word Trade Organisation (WTO) came into

e!istence on "anuar# 1st$ 199% re&acing GATT (Genera Agreement on

Tariff and Trade). India became a fonder member of WTO b# ratif#ing

the WTO agreement on ' ecember 1994. It incor&orates un*e

+ro&osas$ i.e. un*e raft in res&ect of internationa trade and trade

reated matters. un*e draft ,as made in ecemeber 1991 b# Arthur

un*e ,ho ,as the irector Genera of GATT.

The successfu concusion of -rugua# ound mar*ed the beginning of

ne, era in the functioning of the goba trading s#stem. /efore the

com&etion of -rugua# ound negotiation$ the future sha&e of the

goba trading en0ironment ,as far from encouraging. aiing

agreement$ ,ord coud ha0e fragmented into e!cusi0e regiona

trading bocs$ ,ith the &ros&ect of countries resorting to uniatera

action to sette dis&utes.

The -rugua# ound agreement has ensure the continuation an o&en

,ord trading s#stem$ based on non2discrimination and settement

dis&utes ,ith a mutiatera frame ,or*. The ne, trading rues co0ers

sectors &re0ious# e!cuded from mutiatera negotiations and

disci&ines$ such as te!tie$ cothing and agricuture. WTO has gi0en the

mandate to negotiate mutiatera rues in ne, areas incuding

ser0ices$ inteectua &ro&erties and trade reated in0estment

measures. O0er time$ these rues ma# be e!tended to the borderas&ects of foreign in0estment$ com&etition &oic# and trade reated

in0estment measures.

The Word Trade Organization came into e!istence in nineteen ninet#2

fi0e. It o&erates a s#stem of trade rues. It ser0es as a &ace for nations

to sette dis&utes and negotiate agreements to reduce trade barriers.

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The ne,est of its one hundred fift# members$ 3ietnam$ oined in

"anuar#.

/ut the roots of the W.T.O. date bac* to Word War T,o and the #ears

that foo,ed.

In nineteen fort#2four$ a meeting too* &ace in /retton Woods$ 5e,

6am&shire the Internationa 8onetar# onference. There$ negotiators

agreed to create the Internationa 8onetar# und and the Word /an*.

/ut the# coud not agree on an organization to dea ,ith internationa

trade.

Three #ears ater$ in nineteen fort#2se0en$ t,ent#2three nations

a&&ro0ed the Genera Agreement on Tariffs and Trade$ or GATT. It ,as

meant to be tem&orar#. Trade negotiations under GATT ,ere carriedout in a series of ta*s caed rounds. The first round o,ered im&ort

ta!es on one2fifth of ,ord trade. :ater rounds &roduced additiona

cuts$ and negotiators added more issues.

The si!th round began in nineteen si!t#2three. It ,as caed the

;enned# ound after the murder of +resident "ohn . ;enned#. The

resuts incuded an agreement against trade dum&ing. This is ,hen

one countr# ses a &roduct in another countr# at an unfair# o, &rice.

The eighth round of ta*s began in +unta de

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Introduction to World Trade Organisation

The Word Trade Organization (WTO) is the on# goba internationa

organization deaing ,ith the rues of trade bet,een nations. At its

heart are the WTO agreements$ negotiated and signed b# the bu* of

the ,ord>s trading nations and ratified in their &ariaments. The goa is

to he& &roducers of goods and ser0ices$ e!&orters$ and im&orters

conduct their business.

The Word Trade Organisation (WTO) came into e!istence on "anuar# 1$

199% re&a#ing the GATT$ ,ith a membershi& of ?1 countries. The

membershi& has increased to 14@ countries as on 4 A&ri$ '. It ,as

born out of -rugua# ound of negations.

WTO is an Organisation for iberaizing trade. It is a forum forgo0ernments to negotiate trade agreements and aso to sette trade

dis&utes. It o&erates a s#stem of trade rues.

At its heart are the WTO Agreements$ negotiated and signed b# the

bac* of the ,ord>s trading nations. These documents &ro0ide the ega

ground rues for internationa commerce. The# are essentia#

contracts$ binding go0ernments to *ee& their trade &oicies ,ithin

agreed imits. Athough negotiated and signed b# go0ernments$ the

goa is to he& &roducers of goods and ser0ices$ e!&orters andim&orters conduct their business$ ,hie ao,ing go0ernments to meet

socia and en0ironmenta obecti0es.

The Word Trade Organization (WTO) is the on# goba internationa organization

deaing ,ith the rues of trade bet,een nations. At its heart are the WTO

agreements$ negotiated and signed b# the bu* of the ,ord>s trading nations and

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ratified in their &ariaments. The goa is to he& &roducers of goods and ser0ices$

e!&orters$ and im&orters conduct their business.

The WTO$ as the cornerstone of the mutiatera trading s#stem see*s

to im&ro0e and strengthen rues designed to &romote the e!&ansion of

internationa trade. It is res&onsibe for negotiating and im&ementingne, trade agreements and is in charge of &oicing member countriesB

adherence to a the WTO Agreements. The basic &rinci&es ,hich

guide the WTO are as foo,s

a) 5on2iscrimination +rinci&e

85 treatment

5ationa Treatment

b) Cecurit# and &redictabiit# of mar*et access.

c) Increasing the &artici&ation of de0eo&ing countries in the

mutiatera trading

C#stem.

d) air trade 2&ossibiit# to res&ond to unfair trading &ractices such

as dum&ing and

Cubsidization.

e) Trans&arenc#.

What is WTO

There are a number of ,a#s of oo*ing at the WTO. It>s an organization for

iberaizing trade. It>s a forum for go0ernments to negotiate trade agreements. It>s a

&ace for them to sette trade dis&utes. It o&erates a s#stem of trade rues.

Above all, its a negotiating forum:s trading nations. These documents &ro0ide theega ground2rues for internationa commerce. The# are essentia# contracts$

binding go0ernments to *ee& their trade &oicies ,ithin agreed imits. Athough

negotiated and signed b# go0ernments$ the goa is to he& &roducers of goods and

ser0ices$ e!&orters$ and im&orters conduct their business$ ,hie ao,ing

go0ernments to meet socia and en0ironmenta obecti0es.

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It helps to settle disputes:This is a third im&ortant side to the WTO>s ,or*.

Trade reations often in0o0e conficting interests. Agreements$ incuding those

&ainsta*ing# negotiated in the WTO s#stem$ often need inter&reting. The most

harmonious ,a# to sette these differences is through some neutra &rocedure

based on an agreed ega foundation. That is the &ur&ose behind the dis&ute

settement &rocess ,ritten into the WTO agreements.

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Principles of WTO

The WTO Agreements are ength# and com&e! because the# are egatests co0ering a ,ide range of acti0ities. The# dea ,ith agricuture$

te!ties and cothing$ ban*ing$ teecommunication$ go0ernment

&urchases$ industria standards and &roduct safet#$ food$ sanitation

reguations$ inteectua &ro&ert# and so on. /ut a number of sim&e$

fundamenta &rinci&es run throughout a if these documents. These

&rinci&es are the foundation of the mutiatera trading s#stem. The

im&ortant &rinci&es are

1. Non-Discrimination PrincipleThe &rinci&e of 5on2iscrimination has t,o dimensions$ that is

the most fa0oured nation (85) and the nationa treatment.

a) !N treatment

It means treating other &eo&e eDua#.

-nder the WTO agreements$ countries cannot norma#

discriminate bet,een their trading &artners. Grant someone a

s&ecia fa0our (such as a o,er customs dut# rate for one of

their &roducts) and #ou ha0e to do the same for a other WTO

members.

This &rinci&e is *no,n as most2fa0oured2nation (85)

treatment. It is so im&ortant that it is the first artice of the

Genera Agreement on Tariffs and Trade (GATT)$ ,hich

go0erns trade in goods. 85 is aso a &riorit# in the Genera

Agreement on Trade in Cer0ices (GATC) (Artice ) and the

Agreement on Trade2eated As&ects of Inteectua +ro&ert#

ights (TI+C) (Artice 4)$ athough in each agreement the

&rinci&e is handed sight# different#. Together$ those threeagreements co0er a three main areas of trade handed b# the

WTO.

Come e!ce&tions are ao,ed. or e!am&e$ countries can set

u& a free trade agreement that a&&ies on# to goods traded

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,ithin the grou& E discriminating against goods from

outside. Or the# can gi0e de0eo&ing countries s&ecia access

to their mar*ets. Or a countr# can raise barriers against

&roducts that are considered to be traded unfair# from

s&ecific countries. And in ser0ices$ countries are ao,ed$ inimited circumstances$ to discriminate. /ut the agreements

on# &ermit these e!ce&tions under strict conditions. In

genera$ 85 means that e0er# time a countr# o,ers a trade

barrier or o&ens u& a mar*et$ it has to do so for the same

goods or ser0ices from a its trading &artners E ,hether rich

or &oor$ ,ea* or strong.

-nder the WTO agreements$ countries cannot norma# discriminate

bet,een their trading +artners. Grant someone a s&ecia fa0our (such as a

o,er customs dut# rate for one of their &roducts) and #ou ha0e to do the

same for a other WTO members.

This &rinci&e is *no,n as most2fa0oured2nation (85) treatment. It is so

im&ortant that it is the first artice of the Genera Agreement on Tariffs

and Trade (GATT)$ ,hich go0erns trade in goods. 85 is aso a &riorit# in

the Genera Agreement on Trade in Cer0ices (GATC) and the Agreement

on Trade2eated As&ects of Inteectua +ro&ert# ights (TI+C) $ athough

in each agreement the &rinci&e is handed sight# different#. Together$those three agreements co0er a three main areas of trade handed b#

the WTO.

b) National Treatment:

Treating foreigners and ocas eDua#

The nationa Treatment cause forbids discrimination

bet,een a member>s o,n nationas and the nationas of othersmembers.

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domestic ser0ices$ and to foreign and oca trademar*s$

corights and &atents. This &rinci&e of Fnationa treatment

(gi0ing others the same treatment as one>s o,n nationas) is

aso found in a the three main WTO agreements (Artice ' of

GATT)$ Artice 17 of GATC and Artice ' of TI+C)$ athoughonce again the &rinci&e is handed sight# different# in each

of these.

National treatment only applies once a product, service or item of intellectual

property has entered the market. Therefore, charging customs duty on an

import is not a violation of national treatment even if locally-produced

products are not charged an equivalent tax.Imported and locally-produced goods

should be treated equally - at least after the foreign goods have entered the market.

The same should apply to foreign and domestic services, and to foreign and local

trademarks, copyrights and patents.

. "ecurit# and predicta$ilit# of mar%et access (!reer

Trade):

:o,ering trade barriers is one of the most ob0ious means of

encouraging trade. The barriers concerned incude customs

duties (or tariffs) and measures such as im&ort bans or Duotas

that restrict Duantities seecti0e#. rom time to time other issues

such as red ta&e and e!change rate &oicies ha0e aso been

discussed.Cince GATT>s creation in 194724? there ha0e been

eight rounds of trade negotiations. A ninth round$ under the oha

e0eo&ment Agenda$ is no, under,a#. At first these focused on

o,ering tariffs (customs duties) on im&orted goods. As a resut of

the negotiations$ b# the mid2199s industria countries> tariff

rates on industria goods had faen steadi# to ess than 4H./ut

b# the 19?s$ the negotiations had e!&anded to co0er non2tariff

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barriers on goods$ and to the ne, areas such as ser0ices and

inteectua &ro&ert#.O&ening mar*ets can be beneficia$ but it

aso reDuires adustment. The WTO agreements ao, countries to

introduce changes gradua#$ through F&rogressi0e iberaization.e0eo&ing countries are usua# gi0en onger to fufi their

obigations.Cince GATT>s creation in 194724? there ha0e been eight rounds

of trade negotiations. A ninth round$ under the oha e0eo&ment Agenda$

is no, under,a#. At first these focused on o,ering tariffs (customs duties)

on im&orted goods. As a resut of the negotiations$ b# the mid2199s

industria countries> tariff rates on industria goods had faen steadi# to ess

than 4H. O&ening mar*ets can be beneficia$ but it aso reDuires adustment.

The WTO agreements ao, countries to introduce changes gradua#$ through

F&rogressi0e iberaization. e0eo&ing countries are usua# gi0en onger to

fufi their obigations.

&' Increasing the participation of deeloping countries in the

multilateral trading

"#stem (Predicta$ilit#)

With stabiit# and &redictabiit#$ in0estment is encouraged$ obs are created

and consumers can fu# eno# the benefits of com&etition E choice and o,er

&rices. The mutiatera trading s#stem is an attem&t b# go0ernments to

ma*e the business en0ironment stabe and &redictabe.

In the WTO$ ,hen countries agree to o&en their mar*ets for goods or

ser0ices$ the# Fbind their commitments. or goods$ these bindings amount

to ceiings on customs tariff rates. Cometimes countries ta! im&orts at rates

that are o,er than the bound rates. reDuent# this is the case in de0eo&ingcountries. In de0eo&ed countries the rates actua# charged and the bound

rates tend to be the same.

Cometimes$ &romising not to raise a trade barrier can be as

im&ortant as o,ering one$ because the &romise gi0es businesses

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a cearer 0ie, of their future o&&ortunities. With stabiit# and

&redictabiit#$ in0estment is encouraged$ obs are created and

consumers can fu# eno# the benefits of com&etition E choice

and o,er &rices. The mutiatera trading s#stem is an attem&t

b# go0ernments to ma*e the business en0ironment stabe and&redictabe.

The -rugua# ound increased bindings

+ercentages of tariffs bound before and after the 19?@294

ta*s

efore After

e0eo&ed countries 7? 99

e0eo&ing countries 1 7'

Transition economies 7' 9?

(These are tariff ines$ so &ercentages are not ,eighted

according to trade 0oume or 0aue)

In the WTO$ ,hen countries agree to o&en their mar*ets for

goods or ser0ices$ the# Fbind their commitments. or goods$

these bindings amount to ceiings on customs tariff rates.

Cometimes countries ta! im&orts at rates that are o,er than the

bound rates. reDuent# this is the case in de0eo&ing countries.

In de0eo&ed countries the rates actua# charged and the bound

rates tend to be the same.

A countr# can change its bindings$ but on# after negotiating ,ith

its trading &artners$ ,hich coud mean com&ensating them for

oss of trade. One of the achie0ements of the -rugua# ound of

mutiatera trade ta*s ,as to increase the amount of trade

under binding commitments (Cee Tabe). In agricuture$ 1H of

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&roducts no, ha0e bound tariffs. The resut of a this a

substantia# higher degree of mar*et securit# for traders and

in0estors.

The s#stem tries to im&ro0e &redictabiit# and stabiit# in other,a#s as ,e. One ,a# is to discourage the use of Duotas and

other measures used to set imits on Duantities of im&orts E

administering Duotas can ead to more red2ta&e and accusations

of unfair &a#. Another is to ma*e countries> trade rues as cear

and &ubic (Ftrans&arent) as &ossibe. 8an# WTO agreements

reDuire go0ernments to discose their &oicies and &ractices

&ubic# ,ithin the countr# or b# notif#ing the WTO. The reguar

sur0eiance of nationa trade &oicies through theTrade +oic#

e0ie, 8echanism&ro0ides a further means of encouragingtrans&arenc# both domestica# and at the mutiatera e0e.

4. !air trade -possi$ilit# to respond to unfair trading

practices such as dumping and "u$sidi*ation

The WTO is sometimes described as a Ffree trade institution$ but

that is not entire# accurate. The s#stem does ao, tariffs and$ inimited circumstances$ other forms of &rotection. 8ore

accurate#$ it is a s#stem of rues dedicated to o&en$ fair and

undistorted com&etition.

The rules on non-discrimination !N and national treatment "ich "e explained

before are designed to secure fair conditions of trade. #o too are those on dumping

$exporting at belo" cost to gain market share% and subsidies. The issues are complex, and

the rules try to establish "hat is fair or unfair, and ho" governments can respond, in

particular by charging additional import duties calculated to compensate for damage

caused by unfair trade

The rues on non2discrimination E 85 and nationa treatment E

are designed to secure fair conditions of trade. Co too are those

on dum&ing (e!&orting at beo, cost to gain mar*et share) and

subsidies. The issues are com&e!$ and the rues tr# to estabish

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,hat is fair or unfair$ and ho, go0ernments can res&ond$ in

&articuar b# charging additiona im&ort duties cacuated to

com&ensate for damage caused b# unfair trade.

8an# of the other WTO agreements aim to su&&ort faircom&etition in agricuture$ inteectua &ro&ert#$ ser0ices$ for

e!am&e. The agreement on go0ernment &rocurement (a

F&uriatera agreement because it is signed b# on# a fe, WTO

members) e!tends com&etition rues to &urchases b# thousands

of go0ernment entities in man# countries. And so on.

+' ,ncouraging deelopment and economic reform

The WTO s#stem contributes to de0eo&ment. On the other hand$

de0eo&ing countries need fe!ibiit# in the time the# ta*e to

im&ement the s#stem>s agreements. And the agreements

themse0es inherit the earier &ro0isions of GATT that ao, for

s&ecia assistance and trade concessions for de0eo&ing

countries.

O0er three Duarters of WTO members are de0eo&ing countries

and countries in transition to mar*et economies. uring the

se0en and a haf #ears of the -rugua# ound$ o0er @ of these

countries im&emented trade iberaization &rogrammes

autonomous#. At the same time$ de0eo&ing countries and

transition economies ,ere much more acti0e and infuentia in

the -rugua# ound negotiations than in an# &re0ious round$ and

the# are e0en more so in the current oha e0eo&ment Agenda.

At the end of the -rugua# ound$ de0eo&ing countries ,ere

&re&ared to ta*e on most of the obigations that are reDuired of

de0eo&ed countries. /ut the agreements did gi0e them transition

&eriods to adust to the more unfamiiar and$ &erha&s$ difficut

WTO &ro0isions E &articuar# so for the &oorest$ Feast2

de0eo&ed countries. A ministeria decisionado&ted at the end

of the round sa#s better2off countries shoud acceerate

im&ementing mar*et access commitments on goods e!&orted b#

the east2de0eo&ed countries$ and it see*s increased technica

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assistance for them. 8ore recent#$ de0eo&ed countries ha0e

started to ao, dut#2free and Duota2free im&orts for amost a

&roducts from east2de0eo&ed countries. On a of this$ the WTO

and its members are sti going through a earning &rocess. The

current oha e0eo&ment Agenda incudes de0eo&ingcountries> concerns about the difficuties the# face in

im&ementing the -rugua# ound agreements.

The WTO s#stem contributes to de0eo&ment. On the other hand$ de0eo&ing

countries need fe!ibiit# in the time the# ta*e to im&ement the s#stem>s

agreements. And the agreements themse0es inherit the earier &ro0isions of

GATT that ao, for s&ecia assistance and trade concessions for de0eo&ing

countries.

O0er three Duarters of WTO members are de0eo&ing countries and countries

in transition to mar*et economies. uring the se0en and a haf #ears of the

-rugua# ound$ o0er @ of these countries im&emented trade iberaization

&rogrammes autonomous#.

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retton oods .onference

Definition of /retton Woods Agreement/

& landmark system for monetary and exchange rate management established in '()). The

*retton +oods &greement "as developed at the nited Nations onetary and !inancial

onference held in *retton +oods, Ne" ampshire, from /uly ' to /uly 00, '()).

a1or outcomes of the *retton +oods conference included the formation of the International

onetary !und and the International *ank for 2econstruction and 3evelopment and, most

importantly, the proposed introduction of an ad1ustable pegged foreign exchange rate system.

urrencies "ere pegged to gold and the I! "as given the authority to intervene "hen an

imbalance of payments arose.One of the &ro&osas of the /retton Woods conference

,as that currencies shoud be con0ertibe for trade and other current account

transactions.

oo,ing the end of Word War II in 194%$

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Historic plaque with the inscription commemorating the

Bretton Woods Conference, July 1-22, 19 !he "#$# $ecretary of the !reasury, Henry

%orgenthau, Jr#, addresses the delegates to the

Conference, July &, 19

a prodigious amount of work was done during the three weeks of theConference. Many persons were assigned to both Bank and Fund

committees, which met around the clock, and in addition to committee

meetings, there were plenary sessions, where microphones were whisked

from speaker to speaker by Boy Scoutsrecas Chire#

/os*e#(Internationa /an* 5otes$ "u# 19%@)

'elegates in front of the %ount Washington Hotel,

July 2, 19

(n informal gathering of the attendees of the

Conference, July 19

8ore than a #ear ater$ re&resentati0es of ? nations gathered at the Ctatee&artment in Washington$ .. to sign the /retton Woods 8onetar#

Agreements &reiminar# agreed u&on at the /retton Woods onference.

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(rticles of (greement of the )nternational %onetary *undand )B+', July 19

Bretton Woods +ecalled y

$hirley Bos.ey, )nternational

Ban. /otes, July 190

red 3inson$ the -.C. Cecretar# of the Treasur#$ said at the time of the forma

signing of the /retton Woods Agreements !istory is being written today as

we e"ecute these documents and breathe the breath of life into the

#nternational Monetary Fund and the #nternational Bank for $econstruction

and %e&elopment. 'e can be thankful that the history we are now writing is

not another chapter in the almost endless chronicle of war and strife. (urs is

a mission of peace ) not *ust lip ser&ice to the ideals of peace ) but action,

concrete action, designed to establish the economic foundations of peace on

the bed rock of genuine international cooperation.

+#f these two great international institutions are to achie&e the mission which

the world has so hopefully entrusted to their care, it will reuire the

wholehearted and concerted cooperation of each of the member countries

and their people+(Treasur# e&artment$ +ress eease$ ecember 7$ 194%)

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ord 3eynes addressing the Conference meeting,

July 19 "#$# (cting $ecretary of $tate 'ean (cheson

addresses representati4es of 2& nations gatheredto sign the Bretton Woods %onetary (greement,'ecemer 2, 190

Purposes and goals

The /retton Woods onference too* &ace in "u# 1944$ but some of its core

accords did not become o&erati0e unti ecember 19%?$ ,hen a

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International Trade Organization

The onference aso &ro&osed the creation of an Internationa Trade

Organization(ITO) to estabish rues and reguations for internationa trade.

The ITO ,oud ha0e com&emented the other t,o /retton Woods &ro&osed

internationa bodies the I8 and the Word /an*. The ITO charter ,as

agreed on at the -.5. onference on Trade and

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Instead he &ro&osed an Internationa Ctabiisation und (no, the I8)$ ,hich

,oud &ace the burden of maintaining the baance of trade on the deficit

nations$ and im&osing no imit on the sur&us that rich countries coud

accumuate. White aso &ro&osed creation of the I/ (no, &art of the Word

/an*) ,hich ,oud &ro0ide ca&ita for economic reconstruction after the ,ar.

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0eneral Agreement on Tariff and Trade (0ATT)

The Genera Agreement on Tariffs and Trade (GATT) ,as origina# created

b# the /retton Woodsonference as &art of a arger &an for economicreco0er# after Word War II. The GATTBs main&ur&ose ,as to reduce barriersto internationa trade. This ,as achie0ed through the reduction oftariffbarriers$ Duantitati0e restrictions and subsidies on trade through a series ofdifferentagreements. The GATT ,as an agreement$ not an organization.Origina#$ the GATT ,as su&&osed tobecome a fu internationa organizationi*e the Word /an* or I8 caed the Internationa TradeOrganization.6o,e0er$ the agreement ,as not ratified$ so the GATT remained sim anagreement.

The functions of the GATT ha0e been re&aced b# the Word Trade

Organization.What is the &ur&ose of GATTK According to the +reambe of GATT$ theobecti0es of the contracting&arties incude$L raising standards of i0ingL ensuring fu em&o#mentL a arge and steadi# gro,ing 0oume of rea income and effecti0e demandL de0eo&ing the fu use of the resources of the ,ordL e!&anding the &roduction and e!change of goods.The +reambe aso states the contracting &artiesB beief that Jreci&roca andmutua# ad0antageousarrangements directed to the substantia reduction intariffs and other barriers to trade and to theeimination of discriminator#treatment in internationa commerceJ ,oud contribute to,ard these goas.Im&ortant#$ Jfree tradeJ is not the stated obecti0e of GATT.The roe of GATT in integrating de0eo&ing countries into an o&en mutiateratrading s#stem is asoof maor conseDuence. The increasing &artici&ation ofde0eo&ing countries in the GATT tradings#stem and the &ragmatic su&&ort&ro0ided to them through the fe!ibe a&&ication of certain rueshe&edde0eo&ing countries to both e!&and and di0ersif# their trade. It coud no,be said that agreat number of these countries ha0e aread# become fu&artners in the s#stem as can be,itnessed b# their acti0e &artici&ation in the-rugua# ound. The tas* of he&ing to integrate furtherthe east2de0eo&edcountries is one of the chaenges that ies ahead in the WTO. Cimiar#$ thefuintegration of countries ,ith economies in transit ion into the tradings#stem must be achie0ed inorder to strengthen economic interde&endenceas a basis for greater &ros&erit# and ,ord &eace.These negotiations ,ere critica to ensure the future heath of the ,ordeconom# and the tradings#stem. The gobaization of the ,ord econom#o0er the &ast decade has created a greater reiancethan e0er on an o&enmutiatera trading s#stem. ree trade has become the bac*bone of

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economic&ros&erit# and de0eo&ment throughout the ,ord. +art# as aresut of this$ there has been a shift intrade &oic# mechanisms from bordermeasures to interna &oic# measures$ substantia# affectingthemanagement of trade reations. The -rugua# ound sought to estabish ane, baance in rightsand obigations among trading nations as a resut of

this &henomenon. We are gradua# mo0ingto,ards a goba mar*et&ace$and for that$ ,e need a goba s#stem of rues for trade reationsamong&artners in that mar*et &ace.The chaenges that ,e face are therefore enormous. The on# ,a# bac* fromthis gobaization in the,ord econom# ,oud be through de&ression ande0entua chaos. We therefore ha0e no choice but tomo0e for,ard. In doingso$ ho,e0er$ ,e must be sure to &reser0e to the highest e!tent &ossibethes&irit and tradition of the GATT$ ,hich t o a arge e!tent ,as the *e# to itssuccess.

1istor# and role of 0ATTiscussions after the end of the Cecond Word War ed to the setting u& of

the Internationa 8onetar# und (I8) and the Word /an*. It ,as intended

that there ,oud be a third internationa organisation deaing ,ith trade. The

Genera Agreement on Tariffs and Trade (GATT) ,as signed in 1947 and it

functions as the maor internationa instrument ,hich a#s do,n rues for

trade acce&ted b# the eading trading nations. There are at &resent 9

member countries *no,n as contracting &arties. The obecti0es of GATT are

Bto ensure that internationa trade is conducted in order to ensure fu

em&o#ment and a arge and steadi# gro,ing 0oume of rea and effecti0edemand$ de0eo&ing the fu use of the resources of the ,ord and e!&anding

the &roduction and e!change of goods.B To achie0e these ends the

contracting &arties shoud ha0e Breci&roca and mutua# ad0antageous

arrangements directed at the substantia reduction of tariff and other

barriers to trade in internationa commerceB.

The origina intention ,as to create a third institution to hande the trade side of

internationa economic co2o&eration oining the t,o F/retton Woods institutions$

the Word /an* and the Internationa 8onetar# und. O0er % countries &artici&atedin negotiations to create an Internationa Trade Organization (ITO) as a s&eciaized

agenc# of the -nited 5ations. The draft ITO harter ,as ambitious. It e!tended

be#ond ,ord trade disci&ines$ to incude rues on em&o#ment$ commodit#

agreements$ restricti0e business &ractices$ internationa in0estment$ and ser0ices.

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s tota. This ' countries aso agreed that the#

shoud acce&t some of the trade rues of the draft ITO harter. The combined

&ac*age of trade rues and tariff concessions became *no,n as the Genera

Agreement on Tariffs and Trade. It entered into force in "anuar# 194?$ ,hie the ITO

harter ,as sti being negotiated. The ' became founding GATT members.

After this first round of negotiations in Gene0a N C,itzerand$ GATT im&ro0ed b# 7more rounds of negotiations. ina# in the ?th round named -rugua# ound

creation of WTO co0ered.

The 0ATT is $ased on a fe fundamental

principles'

1. Non-discrimination

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4. The proision of a negotiatingframe,or* for the reduction of tariffs

,hereb# such agreements become binding.

Ce0en rounds of mutiatera negotiations ha0e so far ta*en &ace under theaus&ices of GATT 2 the most recent being the To*#o ound of 197'21979.

The resuting trade iberaisation ed to un&recedented increases in the

0oume of trade in the 19%s and the 19@s. Cince the oi crisis$ there has

been a so,er gro,th of internationa trade and a gro,th of &rotectionism.

+ractices in co0ert and o0ert contra0ention of the &rinci&es of GATT ha0e

been set u& in man# member countries. The most significant internationa

agreement contrar# to free trade &rinci&es is the 8uti2ibre Arrangement

,hich ,as introduced in its first form in the ear# 19@s to reguate trade in

te!ties.1 It &ur&orted to bring about a gradua iberaisation of trade but has

in fact become an instrument of &rotection against de0eo&ing and ne,#industriaising countries. 8ore genera#$ 0ountar# e!&ort restraints (3

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&rohibition of Duantitati0e restrictions or Duotas.A fina &rinci&e

embodied in the WTO is fair com&etition>.air com&etition in the

GATT conte!t is refected in a number of &ro0isions.Go0ernment

subsidization of e!&orts is &rohibited andPor counter0aiabe b#

im&orting countries.

ertain t#&es of the beha0iour &ursued b# e!&orting firms(as

o&&osed to go0ernments)are aso counter0aiabe.Thus$dum&ing

b# e!&orters2,hich usua# mean charging a &rice in the e!&ort

mar*et that is ess than ,hat is charged in the home mar*et N

ma#be offset b# im&orting countr# go0ernment>s through the

im&osition of an anti2dum&ing dut# if the dum&ing inures

domestic com&etitors.

O$3ectie of the 0ATT

There ha0e been ' basic obecti0es behind the estabishment of the GATT.

1) It ,as to &ro0ide a frame,or* for conduct of trade reations.

) It ,as to &ro0ide a frame,or* for and to &romote the &rogressi0e

eimination of trade barriers.

') It ,as to &ro0ide a set of rues that ,oud &re0ent countries from

ta*ing uniatera action.

These obecti0e aim to ma*e the internationa trade free from a the

restriction and to faciated the e!&ansion of internationa trade.

eduction in trade barriers and 0arious round of negotiations ha0e faciited

the e!&ansion of trade.

8ost fa0oured nation treatment under GATT has aso faciated the e!&ansion

of trade.

The 0ATT Period: 4567 to 4556

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!rom '()4 to '((), the 5eneral &greement on Tariffs and Trade $5&TT% provided the rules formuch of "orld trade and presided over periods that sa" some of the highest gro"th rates ininternational commerce. It seemed "ell-established, but throughout those )6 years, it "as aprovisional agreement and organi7ation.

The original intention "as to create a third institution to handle the trade side of internationaleconomic cooperation, 1oining the t"o 8*retton +oods9 institutions, the +orld *ank and theInternational onetary !und. :ver ;< countries participated in negotiations to create anInternational Trade :rgani7ation $IT:% as a speciali7ed agency of the nited Nations. The draftIT: harter "as ambitious. It extended beyond "orld trade disciplines, to include rules onemployment, commodity agreements, restrictive business practices, international investment, andservices. The aim "as to create the IT: at a N onference on Trade and =mployment inavana, uba in '()6.

ean"hile, '; countries had begun talks in 3ecember '(); to reduce and bind customs tariffs.+ith the #econd +orld +ar only recently ended, they "anted to give an early boost to trade

liberali7ation, and to begin to correct the legacy of protectionist measures "hich remained inplace from the early '(>< /une '()4 through a 8Arotocol of Arovisional &pplication9. &nd so the ne" 5eneral&greement on Tariffs and Trade "as born, "ith 0> founding members $officially 8contractingparties9%.

The 0> "ere also part of the larger group negotiating the IT: harter. :ne of the provisions of

5&TT says that they should accept some of the trade rules of the draft. This, they believed,should be done s"iftly and 8provisionally9 in order to protect the value of the tariff concessionsthey had negotiated. They spelt out ho" they envisaged the relationship bet"een 5&TT and theIT: harter, but they also allo"ed for the possibility that the IT: might not be created. They"ere right.

The avana conference began on 0' November '()6, less than a month after 5&TT "as signed.The IT: harter "as finally agreed in avana in arch '()4, but ratification in some nationallegislatures proved impossible. The most serious opposition "as in the # ongress, eventhough the # government had been one of the driving forces. In '(;

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kno"n as 8trade rounds9 the biggest leaps for"ard in international trade liberali7ation havecome through these rounds "hich "ere held under 5&TT@s auspices.

In the early years, the 5&TT trade rounds concentrated on further reducing tariffs. Then, theCennedy 2ound in the mid-sixties brought about a 5&TT &nti-3umping &greement and a

section on development. The Tokyo 2ound during the seventies "as the first ma1or attempt totackle trade barriers that do not take the form of tariffs, and to improve the system. The eighth,the ruguay 2ound of '(4B-(), "as the last and most extensive of all. It led to the +T: and ane" set of agreements.

5&TT trade rounds

Year Place/name Subjects covered Countries

'()6 5eneva Tariffs 0>

'()( &nnecy Tariffs '>

'(;' Torquay Tariffs >4

'(;B 5eneva Tariffs 0B

'(B

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agreement on 8safeguards9 $emergency import measures%. Nevertheless, a series of agreementson non-tariff barriers did emerge from the negotiations, in some cases interpreting existing5&TT rules, in others breaking entirely ne" ground. In most cases, only a relatively smallnumber of $mainly industriali7ed% 5&TT members subscribed to these agreements andarrangements. *ecause they "ere not accepted by the full 5&TT membership, they "ere often

informally called 8codes9.

They "ere not multilateral, but they "ere a beginning. #everal codes "ere eventually amendedin the ruguay 2ound and turned into multilateral commitments accepted by all +T: members.:nly four remained 8plurilateral9 those on government procurement, bovine meat, civilaircraft and dairy products. In '((6 +T: members agreed to terminate the bovine meat anddairy agreements, leaving only t"o.

"8..,"" O! 0ATT:

One of the im&ortant achie0ement of GATT ,as the estabishment of a forum

for continuing consutations. is&utes that might other,ise ha0e caused

continuing hard feeing$ re&risas and e0en di&omatic ru&ture ha0e been

brought to the conference tabe and com&romised. GATT coud achie0e

considerabe tabe iberaization.

/# stud#ing the histor# of GATT it can be sho,n that as the institution e0o0ed it

became more successfu in terms of the normati0e criterion. This dissertation

e!amined ho, successfu# GATT ada&ted its aims to changing ,ord conditions$

and ,hether or not it achie0ed its maor aims through the use of its three main

&rinci&es. This ,as achie0ed b# e!&oring the fundamenta obecti0e of the&romotion of free and mutiatera trade through the &rinci&es oftransparency,

reciprocity$ and non-discrimination as reDuired b# the normati&ecriterion. Where

the normati0e criterion is a techniDue that can be used to e0auate institutions b#

com&aring their initia aims to their outcomes. Throughout the histor# of GATT$

em&hasis ,as &aced on the reduction of tariff barriers. Tariffs ,ere &rogressi0e#

reduced during each of the eight rounds of GATT$ and too* &ace through the

&rinci&es of reci&rocit#$ non2discrimination$ and trans&arenc#. This meant a tariff

reductions ,ere successfu under the normati0e criterion. /oth non2tariff barriers

and agricuture ,ere arge# e!cuded from the ear# rounds of GATT. As the#

became increasing# im&ortant issues$ GATT successfu# ada&ted its obecti0es toincude negotiations on non2tariff barriers and agricutura &roducts. Qet it ,as not

unti the -rugua# ound that GATT achie0ed its obecti0es in both areas$ and thus

became successfu under the normati0e criterion. The integration of :s ,as a

third area in ,hich itte ,as achie0ed in the ear# rounds. e0eo&ing countries

remained dissatisfied ,ith the resuts of both the ;enned# and To*#o ounds$ e0en

though GATT had successfu# ada&ted its obecti0es to incude :s$ and achie0ed

these obecti0es in the To*#o ound. Once again it ,as during the -rugua# ound

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that GATT achie0ed its obecti0es in reation to :s. This made the negotiations in

this area successfu in terms of the normati0e criterion. ina#$ during the -rugua#

ound$ GATT aso ada&ted its obecti0es to meet the other changing conditions.

These obecti0es ,ere a successfu# achie0ed$ ma*ing GATT successfu# under

the normati0e criterion. The -rugua# ound ended ,ith the creation of the WTO

,hich incor&orated the frame,or* of GATT into a &ermanent internationainstitution. This strengthened the internationa trading s#stem and reduced the

e0e of discrimination ma*ing it a success in terms of the normati0e criterion.

Therefore it can be concuded that each round ,as an im&ro0ement on the ast in

terms of meeting the nominati0e criteria$ cuminating in the successfu

transformation of GATT into the WTO$ ,hich incor&orated a the aims and &rinci&es

of GATT into a singe &ermanent institution.

Did !TT succeedE

5&TT "as provisional "ith a limited field of action, but its success over )6 years in promotingand securing the liberali7ation of much of "orld trade is incontestable. ontinual reductions intariffs alone helped spur very high rates of "orld trade gro"th during the '(;

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the ultifibre &rrangement.=ven 5&TT@s institutional structure and its dispute settlementsystem "ere causing concern.

These and other factors convinced 5&TT members that a ne" effort to reinforce and extend themultilateral system should be attempted. That effort resulted in the ruguay 2ound, the

arrakesh 3eclaration, and the creation of the +T:.

0ATT !ailures:

http://www.wto.org/english/tratop_e/texti_e/texti_e.htmhttp://www.wto.org/english/tratop_e/texti_e/texti_e.htmhttp://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htmhttp://www.wto.org/english/tratop_e/texti_e/texti_e.htmhttp://www.wto.org/english/thewto_e/whatis_e/tif_e/fact5_e.htm

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8rugua# 9ound:

It too* se0en and a haf #ears$ amost t,ice the origina schedue. /# the end$ 1'

countries ,ere ta*ing &art. It co0ered amost a trade$ from toothbrushes to

&easure boats$ from ban*ing to teecommunications$ from the genes of ,id rice to

AIC treatments. It ,as Duite sim the argest trade negotiation e0er$ and most

&robab# the argest negotiation of an# *ind in histor#.

The "ru#uay Round"as the 4th round of mutiatera trade negotiations(8T5)conducted ,ithin the frame,or* of the Genera Agreement on Tariffs and Trade(GATT)$ s&anning from 19?@ to 1994 and embracing 1' countries as Jcontracting&artiesJ. The ound ed to the creation of the Word Trade Organization$ ,ith GATTremaining as an integra &art of the WTO agreements. The broad mandate of theound had been to e!tend GATT trade rues to areas &re0ious# e!em&ted as toodifficut to iberaize (agricuturete!ties) and increasing# im&ortant ne, areas

&re0ious# not incuded (trade in ser0ices$ inteectua &ro&ert#$ in0estment &oic#trade distortions).R1SThe ound came into effect in 199% ,ith deadines ending in (4 in the case of de0eo&ing countr# contracting &arties) under theadministrati0e direction of the ne,# created Word Trade Organization(WTO).RS

The oha e0eo&ment oundis the ne!t trade round$ beginning in 1 and stiunreso0ed after missing its officia deadine of %.

At times it seemed doomed to fai. /ut in the end$ the -rugua# ound brought

about the biggest reform of the ,ord>s trading s#stem since GATT ,as created at

the end of the Cecond Word War. And #et$ des&ite its troubed &rogress$ the

-rugua# ound did see some ear# resuts. Within on# t,o #ears$ &artici&ants hadagreed on a &ac*age of cuts in im&ort duties on tro&ica &roducts E ,hich are

main# e!&orted b# de0eo&ing countries. The# had aso re0ised the rues for

setting dis&utes$ ,ith some measures im&emented on the s&ot. And the# caed for

reguar re&orts on GATT members> trade &oicies$ a mo0e considered im&ortant for

ma*ing trade regimes trans&arent around the ,ord.

! round to end all roundsE

The seeds of the ruguay 2ound "ere so"n in November '(40 at a ministerial meeting of5&TT members in 5eneva. &lthough the ministers intended to launch a ma1or ne" negotiation,the conference stalled on agriculture and "as "idely regarded as a failure. In fact, the "orkprogramme that the ministers agreed formed the basis for "hat "as to become the ruguay2ound negotiating agenda.

Nevertheless, it took four more years of exploring, clarifying issues and painstaking consensus-building, before ministers agreed to launch the ne" round. They did so in #eptember '(4B, inAunta del =ste, ruguay. They eventually accepted a negotiating agenda that covered virtuallyevery outstanding trade policy issue. The talks "ere going to extend the trading system into

http://en.wikipedia.org/wiki/Multilateral_trade_negotiationshttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/GATThttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Textileshttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Investment_policyhttp://en.wikipedia.org/wiki/Uruguay_Round#cite_note-1http://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Uruguay_Round#cite_note-UR-2http://en.wikipedia.org/wiki/Doha_Development_Roundhttp://en.wikipedia.org/wiki/Multilateral_trade_negotiationshttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/GATThttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Textileshttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Investment_policyhttp://en.wikipedia.org/wiki/Uruguay_Round#cite_note-1http://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Uruguay_Round#cite_note-UR-2http://en.wikipedia.org/wiki/Doha_Development_Round

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several ne" areas, notably trade in services and intellectual property, and to reform trade in thesensitive sectors of agriculture and textiles. &ll the original 5&TT articles "ere up for revie". It"as the biggest negotiating mandate on trade ever agreed, and the ministers gave themselvesfour years to complete it.

T"o years later, in 3ecember '(44, ministers met again in ontreal, anada, for "hat "assupposed to be an assessment of progress at the round@s half-"ay point. The purpose "as toclarify the agenda for the remaining t"o years, but the talks ended in a deadlock that "as notresolved until officials met more quietly in 5eneva the follo"ing &pril.

3espite the difficulty, during the ontreal meeting, ministers did agree a package of earlyresults. These included some concessions on market access for tropical products aimed atassisting developing countries as "ell as a streamlineddispute settlement system, and theTrade Aolicy 2evie" echanism"hich provided for the first comprehensive, systematic andregular revie"s of national trade policies and practices of 5&TT members. The round "assupposed to end "hen ministers met once more in *russels, in 3ecember '(( participating governments at a meeting inarrakesh, orocco.

The delay had some merits. It allo"ed some negotiations to progress further than "ould havebeen possible in '((

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package containing almost the entire range of current trade issues led some to conclude that anegotiation on this scale "ould never again be possible. Het, the ruguay 2ound agreementscontain timetables for ne" negotiations on a number of topics. &nd by '((B, some countries"ere openly calling for a ne" round early in the next century. The response "as mixed but thearrakesh agreement did already include commitments to reopen negotiations on agriculture and

services at the turn of the century. These began in early 0< items in the original built-in agenda. This is a selection of highlightsF

There "ere "ell over >< items in the original built-in agenda. This is a selection of highlightsF

&''(

aritime servicesF market access negotiations to end $>< /une '((B, suspended to 0< 3ecember%

Intellectual property, creating a multilateral system of notification and registration of

geographical indications for "inesF negotiations start, no" part of 3oha 3evelopment&genda

&''*

Textiles and clothingF ne" phase begins ' /anuary

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#ervices $emergency safeguards%F results of negotiations on emergency safeguards to take

effect $by ' /anuary '((4, deadline no" arch 0

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World Trade Organisation (WTO):

,sta$lishment:

WTO ,as estabished on 1st "anuar# 199%. In A&ri 1994$ the ina Act ,as signed at

a meeting in 8arra*esh$ 8orocco. The 8arra*esh ecaration of 1%th A&ri 1994 ,as

formed to strengthen the ,ord econom# that ,oud ead to better in0estment$

trade$ income gro,th and em&o#ment throughout the ,ord. The WTO is the

successor to the Genera Agreement of Tariffs and Trade (GATT). India is one of the

founder members of WTO. WTO re&resents the atest attem&ts to create an

organisationa foca &oint for ibera trade management and to consoidate a goba

organisationa structure to go0ern ,ord affairs. WTO has attem&ted to create

0arious organisationa attentions for reguation of internationa trade. WTO created

a Duaitati0e change in internationa trade. It is the on# internationa bod# that

deas ,ith the rues of trades bet,een nations.

"cope of World Trade Organisation:

In order to analyses at "hat extent +T: is contributing to the facilitation of the internationaltrade it is necessary to establish the scope of the organi7ation. urrently +T: has ';> membersand >< observers, most of "hom are striving to be members $embers and :bservers, online0

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(b in the territory of one Member to the service consumer of any other Member!

(c by a service supplier of one Member, through commercial presence in the territory of anyother Member!

(d by a service supplier of one Member, through presence of natural persons of a Member in

the territory of any other Member.

". For the purposes of this Agreement:

(a #measures by Members$ means measures ta%en by:

(i central, regional or local governments and authorities! and

(iinon&governmental bodies in the e'ercise of poers delegated by central, regional or localgovernments or authorities!

)n fulfilling its obligations and commitments under the Agreement, each Member shall ta%e

such reasonable measures as may be available to it to ensure their observance by regional andlocal governments and authorities and non&governmental bodies ithin its territory!

(b #services$ includes any service in any sector e'cept services supplied in the e'ercise ofgovernmental authority!

(c #a service supplied in the e'ercise of governmental authority$ means any service hich issupplied neither on a commercial basis, nor in competition ith one or more service suppliers.

.unctions o World Trade Or#anisation:

.unctions o WTO

The former 5&TT "as not really an organisation it "as merely a legal arrangement. :nthe other hand, the +T: is a ne" international organisation set up as a permanent body.It is designed to play the role of a "atchdog in the spheres of trade in goods, trade inservices, foreign investment, intellectual property rights, etc. &rticle III has set out thefollo"ing five functions of +T:

$i% The +T: shall facilitate the implementation, administration and operation and furtherthe ob1ectives of this &greement and of the ultilateral Trade &greements, and shall alsoprovide the frame "ork for the implementation, administration and operation of theplurilateral Trade &greements.

$ii% The +T: shall provide the forum for negotiations among its members concerningtheir multilateral trade relations in matters dealt "ith under the &greement in the&nnexes to this &greement.

$iii% The +T: shall administer the nderstanding on 2ules and Arocedures 5overningthe #ettlement of 3isputes.

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$iv% The +T: shall administer Trade Aolicy 2evie" echanism.

$v% +ith a vie" to achieving greater coherence in global economic policy making, the+T: shall cooperate, as appropriate, "ith the international onetary !und $I!% and"ith the International *ank for 2econstruction and 3evelopment $I*23% and its

affiliated agencies.

Objectives o WTO

Important ob1ectives of +T: are mentioned belo"F

$i% to implement the ne" "orld trade system as visualised in the &greement

$ii% to promote +orld Trade in a manner that benefits every country

$iii% to ensure that developing countries secure a better balance in the sharing of the

advantages resulting from the expansion of international trade corresponding to theirdevelopmental needs

$iv% to demolish all hurdles to an open "orld trading system and usher in internationaleconomic renaissance because the "orld trade is an effective instrument to fostereconomic gro"th

$v% to enhance competitiveness among all trading partners so as to benefit consumers andhelp in global integration

$vi% to increase the level of production and productivity "ith a vie" to ensuring level of

employment in the "orld

$vii% to expand and utili7e "orld resources to the best

$viii% to improve the level of living for the global population and speed up economicdevelopment of the member nations.

"tructure of World Trade Organisation:

The +orld Trade :rgani7ation came into force on /anuary ', '((;, fullyreplacing the previous 5&TT #ecretariat as the organi7ation responsible foradministering the international trade regime. The basic structure of the +T:includes the follo"ing bodies

The Ministerial Conference$ ,hich is com&osed ofinternationa trade ministers from a member countries. This

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is the go0erning bod# of the WTO$ res&onsibe for setting thestrategic direction of the organization and ma*ing a finadecisions on agreements under its ,ings. The 8inisteriaonference meets at east once e0er# t,o #ears. Athough0oting can ta*e &ace$ decisions are genera# ta*en b#consensus$ a &rocess that can at times be difficut$

&articuar# in a bod# com&osed of 1'@ 0er# differentmembers.

The General Council$ com&osed of senior re&resentati0es(usua# ambassador e0e) of a members. It is res&onsibefor o0erseeing the da#2to2da# business and management ofthe WTO$ and is based at the WTO headDuarters in Gene0a.In &ractice$ this is the *e# decision2ma*ing arm of the WTOfor most issues. Ce0era of the bodies described beo, re&ortdirect# to the Genera ounci.

The Trade Policy Reie! "odyis aso com&osed of a theWTO members$ and o0ersees the Trade +oic# e0ie,

8echanism$ a &roduct of the -rugua# ound. It &eriodica#re0ie,s the trade &oicies and &ractices of a member states.

These re0ie,s are intended to &ro0ide a genera indication ofho, states are im&ementing their obigations$ and tocontribute to im&ro0ed adherence b# the WTO &arties to theirobigations.

The #ispute $ettle%ent "odyis aso com&osed of a theWTO members. It o0ersees the im&ementation andeffecti0eness of the dis&ute resoution &rocess for a WTOagreements$ and the im&ementation of the decisions onWTO dis&utes. is&utes are heard and rued on b# dis&ute

resoution &anes chosen indi0idua# for each case$ and the&ermanent A&&eate /od# that ,as estabished in 1994.is&ute resoution is mandator# and binding on a members.A fina decision of the A&&eate /od# can on# be re0ersed b#a fu consensus of the is&ute Cettement /od#.

The Councils on Trade in Goods and Trade in $ericeso&erate under the mandate of the Genera ounci and arecom&osed of a members. The# &ro0ide a mechanism too0ersee the detais of the genera and s&ecific agreements ontrade in goods (such as those on te!ties and agricuture) andtrade in ser0ices. There is aso a ounci for the Agreement

on Trade2eated As&ects of Inteectua +ro&ert# ights$deaing ,ith ust that agreement and subect area.

The $ecretariat and #irector Generalof the WTO residein Gene0a$ in the od home of GATT. The Cecretariat no,numbers ust under %% &eo&e$ and underta*es theadministrati0e functions of running a as&ects of theorganization. The Cecretariat has no ega decision2ma*ing&o,ers but &ro0ides 0ita ser0ices$ and often ad0ice$ to those

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,ho do. The Cecretariat is headed b# the irector Genera$,ho is eected b# the members.

The Co%%ittee on Trade and #eelop%ent andCo%%itteeon Trade and

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"ecretariat of World Trade Organisation:

The *T+ ecretariat is organi-ed into divisions. These are normally headed by a director ho

reports to a eputy irector&/eneral or directly to the irector&/eneral. The Appellate 0ody

has its on ecretariat.The WTO Cecretariat is headed b# a irector2Genera. i0isions

come direct# under the irector2Genera or one of his de&uties. This is the structure

as of 1 October 1'.

WTO Secretariat

Accessions Division

The or% of the division is to facilitate the negotiations beteen *T+ members and states and entitiesreuesting accession to the *T+ by encouraging their integration into the multilateral trading systemthrough the effective liberali-ation of their trade regimes in goods and services! and to act as a focal

point in idening the scope and geographical coverage of the *T+. There are at present nearly "accession or%ing parties in operation.

Administration and General Services Division

The Administration and /eneral ervices ivision is responsible for providing administrative and generalservices geared to meet the needs of the ecretariat and *T+ members. )ts responsibilities encompassbudgetary, financial, travel, procurement, facility and pension management. )n addition, the divisionensures the safety and security of the staff and buildings occupied by the ecretariat. The division alsoservices the needs of *T+ members by supporting the or% of the 3ommittee on 0udget, Finance andAdministration.

Agriculture and Commodities Division

The division handles all matters related to the ongoing negotiations on agriculture. !urthermore, the divisionprovides support in the implementation of the existing +T: rules and commitments on agriculture, including byensuring that the process for multilaterally revie"ing these commitments by the ommittee on &griculture isorgani7ed and conducted in an efficient manner. The "ork of the division encompasses to facilitate implementationof the &greement on the &pplication of #anitary and Ahytosanitary easures, including by servicing the #A#ommittee. :ther activities of the division include support for the implementation of the inisterial 3ecision oneasures oncerning the Aossible Negative =ffects of the 2eform Arogramme on Jeast-3eveloped and Net !ood-Importing 3eveloping ountries dealing "ith matters related to trade in fisheries and forestry products as "ell asnatural resource-based products providing services for dispute settlement in the area of agriculture and #A#providing technical assistance in all areas under its purvie" and cooperation "ith other international organi7ationsand the private sector.

Council and Trade Negotiations Committee Division

The ouncil and Trade Negotiations ommittee 3ivision provides support to the inisterial onference, the5eneral ouncil, the Trade Negotiations ommittee and the 3ispute #ettlement *ody. It is responsible for ensuringthe efficient management of all formal, informal and other consultative meetings of these bodies and coordinating

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follo"-up activities. It provides advice and support to the 3irector-5eneral and chairs of these bodies $and othermembers of senior management% in connection "ith their responsibilities in these areas, and prepares and circulatesthe +T: publication *asic Instruments and #elected 3ocuments. The division also coordinates "ork of the +T:onference :ffice in the scheduling of formal, informal and consultative meetings of +T: bodies, symposia,"orkshops and seminars organi7ed under the auspices of +T: bodies and operational divisions of the +T:#ecretariat.

Development Division

The evelopment ivision is the focal point for all policy issues related to trade and development. Thedivision monitors and provides input to senior management and the *T+ ecretariat as a hole onissues relating to trade and development, including the participation of developing countries 4especially least&developed countries (53s 4 in the multilateral trading system.

The division services the 3ommittee on Trade and evelopment in regular session as ell as itsdedicated session on small and vulnerable economies, and its special sessions on special anddifferential treatment. The division services the ub&3ommittee on 53s. )t also serves the *or%ing/roup on Trade and Transfer of Technology. )n addition, it facilitates the meetings of the African

/roup, the 53 /roup and the )nformal /roup of eveloping 3ountries.

The division is also responsible for coordinating the Aid for Trade initiative, hich aims to helpdeveloping countries, particularly 53s, build trade&related s%ills and the infrastructure needed toe'pand their trading opportunities. The aim of the initiative is to create closer cooperation in nationalcapitals beteen trade, finance and development officials and to engage international and regionalinter&governmental organi-ations and donors active in building trade capacity to address national andregional Aid for Trade needs.

The evelopment ivision also serves as the focal point for the *T+6s participation in the enhanced)ntegrated Frameor% (7)F, including in its governing bodies, the 7)F 0oard and the 7)F teering3ommittee. The *T+ is one of the core 7)F agencies and or%s ith other international agencies,donors and other development partners to respond to the trade development needs of 53s.

Economic esearc! and Statistics Division

The =conomic 2esearch and #tatistics 3ivision provides economic analysis and research in support of the +T:@soperational activities, including monitoring and reporting on current economic ne"s and developments. It carries outeconomic research on broader policy-related topics in connection "ith the +T:@s "ork programme, as "ell as onother +T:-related topics of interest to delegations arising from the on-going integration of the "orld economy, thespread of market-oriented reforms, and the increased importance of economic issues in relations bet"een countries.The division prepares the 8+orld Trade 2eport9, an annual publication that aims to deepen understanding abouttrends in trade, trade policy issues and the multilateral trading system. The division cooperates "ith other

international organi7ations and the academic community through conferences, seminars and courses preparesspecial research pro1ects on policy-related topics in the area of international trade and prepares briefings to seniormanagement. It is responsible for the 8coherence9 mandate "ith other international organi7ations, including inrelation to linkages bet"een trade and finance, and for the +orking 5roup on Trade, 3ebt and !inance

:n the statistics side, the division supports +T: members and the #ecretariat "ith quantitative information inrelation to economic and trade policy issues. The division is the principal supplier of +T: trade statistics throughthe annual 8International Trade #tatistics9 and via the Internet and Intranet. The division is responsible for themaintenance and development of the Integrated 3ata *ase $I3*% and the onsolidated Tariff #chedules $T#%

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"hich supports the arket &ccess ommittee@s information requirements in relation to tariffs. The division@sstatisticians also provide members "ith technical assistance in relation to the I3*-T# databases. The divisionplays an active role in strengthening cooperation and collaboration bet"een international organi7ations in the fieldof merchandise and services trade statistics, ensuring that +T: requirements "ith respect to the concepts andstandards underpinning the international statistical system are met.

0uman Resources Division

The uman 2esources 3ivision is responsible for the human resources management of over 6

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organi-ations and regional bodies, such as the advice more generally. )t also maintains and develops lines of communication ith otherintergovernmental organi-ations, non&governmental organi-ations, intellectual property practitionersand the academic community. )n the area of government procurement, the ivision services the3ommittee established under the plurilateral Agreement on /overnment ;rocurement and disputesettlement panels that may arise, in addition to providing technical cooperation andinformation>advice more generally to *T+ members. )n the area of competition policy, the ivisionmonitors developments at the international level and ould be responsible for any further or% in the*T+ *or%ing /roup on the )nteraction beteen Trade and 3ompetition ;olicy, in the event that thatbody should resume its or%.

4an#ua#es5 Documentation and 1normation 6ana#ement Division

The Janguages, 3ocumentation and Information anagement 3ivision $J3I3% provides t"otypes of complementary servicesF

services such as translation, printing, dissemination of documentation, and interpretationfor meetings

information management services, "hich include the +T: library, correspondence, the

registration of notifications, archiving and preservation of materials, and documentresearch.

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any of these services, such as the entral 2egistry of Notifications and the 83ocuments:nline9 database of official +T: documents, are provided to +T: members, observers and thepublic through the Internet. J3I3 ensures that +T: documents, publications and othermaterials are available in the +T:Ks three "orking languages =nglish, !rench and #panish both in hard copy and in electronic form.

The +T: library supports +T: activities and research through its print and electroniccollection of documents, including an online catalogue and bibliographic reference services. Thelibrary is the depository of 5&TTL+T: official documents and publications dating back to theavana harter, and has a comprehensive collection of national statistics from +T: membersand observers.

$egal Affairs Division

The principal mission of the 5egal Affairs ivision is to provide legal advice and information to *T+

dispute settlement panels, other *T+ bodies, *T+ members and the *T+ ecretariat. The division?sresponsibilities include assisting members in the composition of dispute settlement panels, providingtimely secretarial and technical support and legal assistance to *T+ dispute settlement panels,providing legal advice to the ispute ettlement 0ody and its 3hairman on the operation of the isputeettlement

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ules Division

The role of the division is to ensure the smooth functioning of all +T: bodies serviced by the division. Thisincludes facilitating ne" and on-going negotiations and consultations, monitoring and actively assisting in theimplementation of +T: agreements in the areas of anti-dumping, subsidies and countervailing measures,safeguards, trade-related investment measures, state-trading and civil aircraft. It also includes providing all

necessary implementation assistance, counselling and expert advice to +T: members concerning the aboveagreements, providing secretaries and legal officers to +T: dispute settlement panels involving these agreementsand participating in the +T: technical assistance programme.

The bodies serviced by the 2ules 3ivision include the Negotiating 5roup on 2ules, the ommittee on &nti-3umping Aractices, the ommittee on #ubsidies and ountervailing easures, the ommittee on #afeguards, theommittee on Trade-2elated Investment easures, the ommittee on Trade in ivil &ircraft, the +orking Aarty on#tate-Trading =nterprises, the Aermanent 5roup of =xperts of the #ubsidies &greement as "ell as the Informal5roup on &nti-ircumvention and the +orking 5roup on Implementation, both concerning the &greement on &nti-3umping.

Tec!nical Cooperation Audit Division

The Technical ooperation &udit $T&% 3ivision is responsible for ensuring ongoing monitoring and evaluation ofall forms of technical assistance provided by the +T:. The division conducts on-site and ex-post evaluations andprepares an &nnual 2eport for discussion at the ommittee on Trade and 3evelopment.

Trade and Environment Division

The division provides service and support to *T+ committees dealing ith trade and environment andtechnical barriers to trade. For Trade and 7nvironment, it supports the or% of the 3ommittee onTrade and 7nvironment (3T7 by providing technical assistance to *T+ members! reporting to seniormanagement and *T+ members on discussions in other intergovernmental organi-ations ()/+s,

including negotiation and implementation of trade&related measures in multilateral environmentalagreements. The division maintains contacts and dialogue ith /+s and the private sector on issues ofmutual interest in the area of trade and environment.

)ts or% in the area of technical barriers to trade includes providing service to the *or%ing /roup onTechnical 0arriers to trade (*/T0T, if the T0T 3ommittee so decides! providing technical assistanceto *T+ members! providing ecretariat support to dispute panels and accessions e'amining aspects ofthe T0T Agreement. The division follos and reports on matters related to the T0T Agreement, andmaintains contacts ith the private sector on issues of mutual interest in this area.

Trade in Services Division

The Trade in #ervices 3ivision provides support and technical advice to +T: members on the implementation ofthe 5eneral &greement on Trade in #ervices $5&T#% and on further negotiations mandated by the &greement. Itperforms this role by supporting the ouncil for Trade in #ervices $both in regular and special session% as "ell asother bodies established under the 5&T#. These include the ommittee on !inancial #ervices, the ommittee on#pecific ommitments, the +orking Aarty on 3omestic 2egulation, and the +orking Aarty on 5&T# 2ules. +ithinthe +T: #ecretariat, the division provides information and advice to the 3irector-5eneral and senior managementon trade in services as "ell as support to relevant dispute settlement panels.

:ther "ork includes providing technical cooperation to +T: members, undertaking research on trade in services,

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cooperating "ith other international organi7ations on services-related pro1ects, participating in public outreachactivities and providing public information on the 5&T# through various forms of media. The division also assistsother bodies in the +T: on matters relating to services, such as the ommittee on 2egional Trade &greements $inits "ork relating to &rticle M of the 5&T# and the 2T& transparency mechanism%, the Trade Aolicy 2evie" *odyand various accession "orking parties.

Trade "olicies evie' Division

The Trade Aolicies 2evie" 3ivision has several areas of responsibility. :ne is to support the "ork of the 3irector-5eneral and +T: members under the Trade Aolicy 2evie" echanism $&nnex > of the +T: &greement %, "hichincludes preparing periodic reports on membersK trade policies, servicing meetings of the Trade Aolicy 2evie" *odyat "hich revie"s of membersK policies are carried out, and preparing an &nnual :vervie" of trade policydevelopments on behalf of the 3irector-5eneral. The division is responsible for providing #ecretariat support to theommittee on 2egional Trade &greements and the ommittee on *alance-of-Aayments 2estrictions, and forservicing the 3oha 2ound Negotiating 5roup on 2ules related to regional trade agreements. It is also responsible forservicing the 3oha 2ound Negotiating 5roup on Trade !acilitation and for managing and delivering the technicalassistance programme that supports the participation of developing and least-developed countries in that negotiation.

&ppellate *ody #ecretariat

The &ppellate *ody #ecretariat provides legal and administrative support to the &ppellate *ody.The #ecretariatis located "ithin the headquarters of the +T:. The director of the #ecretariat heads a team of ten la"yers and foursupport staff. &ppellate *ody #ecretariat staff members are bound by the 2ules of onduct of the 3ispute#ettlement nderstanding, "hich seek to ensure independence, impartiality, the avoidance of conflicts of interest,and the confidentiality of the proceedings. #ecretariat staff also participate in technical cooperation activities carriedout by the +T: #ecretariat, especially those related to dispute settlement.

"tatus of World Trade Organisation:

The purpose of observer status for international intergovernmental organi7ations in the +T: isto enable these organi7ations to follo" discussions therein on matters of direct interest to them.

The guidelines on observer status for international organi7ations $+TLJL'B', &nnex >% providethat requests for observer status from organi7ations shall not be considered for meetings of theommittee on *udget, !inance and &dministration or the 3ispute #ettlement *ody, thereforethese bodies are not included in this list. &lso not included are the Textiles onitoring *ody,"hich has no international intergovernmental organi7ation observers, and &ccession +orkingAarties.The International Trade entre NT&3L+T:, as a 1oint subsidiary organ of the +T:and NT&3, is not required to formally submit a request for observer status in the +T:

bodies and is invited as appropriate to attend meetings of those +T: bodies it "ishes to attend$+TL5LL0;, item '%.

The I! and +orld *ank have observer status in +T: bodies as provided for in their respective&greements "ith the +T: $+TLJL'(;%.

Decision 6akin# o the World Trade Or#anisation

http://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htmhttp://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htmhttp://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/L/161.WPFhttp://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/GC/M25.DOChttp://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/L/195.WPFhttp://www.wto.org/english/tratop_e/dispu_e/appellate_body_e.htmhttp://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/L/161.WPFhttp://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/GC/M25.DOChttp://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/L/195.WPF

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ecision ma*ing in the WTO has become e0er more difficut as the number of

members increases and the range of issues tac*ed broadens.his &a&er oo*s at

reasons ,h# as&ects of decision2ma*ing might be changed and discusses a number

of &otentia &itfas that change ,oud ha0e to a0oid$ such as a diution of

commitments and fragmentation of the mutiatera trading s#stem. It then ta*es a

detaied oo* at the notion of critica mass> decision2ma*ing. It argues for thisa&&roach under certain conditions$ as it ,oud

i) ao, for the emergence of a more &rogressi0e and res&onsi0e WTO agenda

ii) bunt the di0ersion of trade coo&eration initiati0es to TAs

iii) ao, more efficient differentiation in the e0es of rights and obigations among a

communit# of high# di0erse economies and

i0) &romote greater efficienc# in mutiatera#2based negotiations on trade rues$

and &erha&s$ sectora mar*et access agreements.

The o&eration of the (WTO) dis&ute settement &rocess in0o0es the &arties and

third &arties to a case$ the C/ &anes$ the A&&eate /od#$ the WTO Cecretariat$arbitrators$ inde&endent e!&erts and se0era s&eciaized institutions. This cha&tergi0es an introduction to the WTObodies in0o0ed in the dis&ute settement s#stem.

The in0o0ement of the &arties and third &arties$ the &rimar# &artici&ants in adis&ute settement &roceeding$ has aread# been outined here. The &recise tas*sand roes of each of the actors in0o0ed in the dis&ute settement &rocess ,ibecome cear in the ater cha&ter on the stages of the dis&ute settement &rocess.

Among the WTO bodies in0o0ed in dis&ute settement$ one can distinguish bet,eena &oitica institution$ the C/$ and inde&endent$ Duasi2udicia institutions such as&anes$ the A&&eate /od# and arbitrators.

!unctions and composition

The 5eneral ouncil discharges its responsibilities under the C-through the C/ (ArticeI3'of the WTO Agreement). :i*e the Genera ounci$ the C/ is com&osed ofre&resentati0es of a WTO 8embers. These are go0ernmenta re&resentati0es$ inmost cases di&omatic deegates ,ho reside in Gene0a (,here the WTO is based)and ,ho beong to either the trade or the foreign affairs ministr# of the WTO8ember the# re&resent. As ci0i ser0ants$ the# recei0e instructions from theirca&itas on the &ositions to ta*e and the statements to ma*e in the C/. As such$the C/ is a &oitica bod#.

The C/ is res&onsibe for administering the C-$ i.e. for o0erseeing the entiredis&ute settement &rocess.

The C/ has the authorit# to estabish &anes$ ado&t &ane and A&&eate /od#re&orts$ maintain sur0eiance of im&ementation of ruings and recommendationsand authorize the sus&ension of obigations under the co0ered agreements (Artice.1of the C-). A ater cha&ter on the stages of the dis&ute settement &rocedure,i e!&ain e!act# ,hat a these actions mean. In ess technica terms$ the C/ isres&onsibe for the referra of a dis&ute to adudication (estabishing a &ane) for

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ma*ing the adudicati0e decision binding (ado&ting the re&orts) genera#$ forsu&er0ising the im&ementation of the ruing and for authorizing Fretaiation ,hena 8ember does not com ,ith the ruing.

The C/ meets as often as is necessar# to adhere to the time2frames &ro0ided forin the C- (Artice .'of the C-). In &ractice$ the C/ usua# has one reguar

meeting &er month. When a 8ember so reDuests$ the irector2Genera con0enesadditiona s&ecia meetings. The staff of the WTO Cecretariat &ro0idesadministrati0e su&&ort for the C/ (Artice 7.1of the C-).

Decision-ma%ing in the D"

The general rule is for the 3#* to take decisions by consensus $&rticle 0.)of the 3#%.!ootnote ' to &rticle 0.)of the 3# defines consensus as being achieved if no +T: ember,present at the meeting "hen the decision is taken, formally ob1ects to the proposed decision. Thismeans that the chairperson does not actively ask every delegation "hether it supports theproposed decision, nor is there a vote. :n the contrary, the chairperson merely asks, for example,

"hether the decision can be adopted and if no one raises their voice in opposition, thechairperson "ill announce that the decision has been taken or adopted. In other "ords, adelegation "ishing to block a decision is obliged to be present and alert at the meeting, and "henthe moment comes, it must raise its flag and voice opposition. &ny ember that does so, evenalone, is able to prevent the decision.

o"ever, "hen the 3#* establishes panels, "hen it adopts panel and &ppellate *ody reportsand "hen it authori7es retaliation, the 3#* must approve the decision unless there is a consensusagainst it $&rticles B.', 'B.), '6.')and 00.Bof the 3#%. This special decision-makingprocedure is commonly referred to as 8negative9 or 8reverse9 consensus. &t the three mentionedimportant stages of the dispute settlement process $establishment, adoption and retaliation%, the

3#* must automatically decide to take the action ahead, unless there is a consensus not to do so.This means that one sole ember can al"ays prevent this reverse consensus, i.e. it can avoid theblocking of the decision $being taken%. To do so that ember merely needs to insist on thedecision to be approved.

No ember $including the affected or interested parties% is excluded from participation in thedecision-making process. This means that the ember requesting the establishment of a panel,the adoption of the report or the authori7ation of the suspension of concessions can ensure that itsrequest is approved by merely placing it on the agenda of the 3#*. In the case of the adoption ofpanel and &ppellate *ody reports, there is at least one party "hich, having prevailed in thedispute, has a strong interest in the adoption of the report$s%. In other "ords, any ember

intending to block the decision to adopt the report$s% has to persuade all other +T: embers$including the adversarial party in the case% to 1oin its opposition or at least to stay passive.Therefore, a negative consensus is largely a theoretical possibility and, to date, has neveroccurred. !or this reason, one speaks of the quasi-automaticity of these decisions in the 3#*.This contrasts sharply "ith the situation that prevailed under 5&TT '()6 "hen panels could beestablished, their reports adopted and retaliation authori7ed only on the basis of a positiveconsensus. nlike under 5&TT '()6, the 3# thus provides no opportunity for blockage byindividual embers in decision-making on these important matters. Negative consensus applies

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