INTRODUCTION:International trade is the exchange of capital, goods, and services across international borders or territories.

[1] In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.

Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across countries. Thus international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production. Trade in goods and services can serve as a substitute for trade in factors of production.

What is the Role of WTO

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.[5] The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments[6]:fol.910 and ratified by their parliaments.[7] Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994). The organization is attempting to complete negotiations on the Doha Development Round, which was launched in
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2001 with an explicit focus on addressing the needs of developing countries. As of June 2012, the future of the Doha Round remains uncertain: the work programme lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still incomplete.[8] The conflict between free trade on industrial goods and services but retention of protectionism on farm subsidies to domestic agricultural sector (requested by developed countries) and the substantiation of the international liberalization of fair trade on agricultural products (requested by developing countries) remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiations beyond the Doha Development Round. As a result of this impasse, there has been an increasing number of bilateral free trade agreements signed.[9] As of July 2012, there are various negotiation groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate.[10] WTO's current Director-General is Roberto Azevdo, who leads a staff of over 600 people in Geneva, Switzerland.

History

Roman trade with India according to the Periplus Maris Erythraei, 1st century CE. Main article: Timeline of international trade The history of international trade chronicles notable events that have affected the trade between various countries. In the era before the rise of the nation state, the term 'international' trade cannot be literally applied, but simply means trade over long distances; the sort of movement in goods which would represent international trade in the modern world.

Models
The following are noted models of international trade.
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Adam Smith's model

Adam Smith displays trade taking place on the basis of countries exercising absolute advantage over one another.[3][4] Ricardian model

The law of comparative advantage was first proposed by David Ricardo. The Ricardian model focuses on comparative advantage, which arises due to differences in technology or natural resources. The Ricardian model does not directly consider factor endowments, such as the relative amounts of labor and capital within a country. The Ricardian model makes the following assumptions: 1. Labor is the only primary input to production
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2. The relative ratios of labor at which the production of one good can be traded off for another differ between countries and governments .

New Trade Theory

Main article: New Trade Theory New Trade Theory tries to explain empirical elements of trade that comparative advantage-based models above have difficulty with. These include the fact that most trade is between countries with similar factor endowment and productivity levels, and the large amount of multinational production (i.e. foreign direct investment) that exists. New Trade theories are often based on assumptions such as monopolistic competition and increasing returns to scale. One result of these theories is the home-market effect, which asserts that, if an industry tends to cluster in one location because of returns to scale and if that industry faces high transportation costs, the industry will be located in the country with most of its demand, in order to minimize cost. Although new trade theory can explain the growing trend of trade volumes of intermediate goods, Krugman's explanation depends too much on the strict assumption that all firms are symmetrical, meaning that they all have
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the same production coefficients. Shiozawa, based on much more general model, succeeded in giving a new explanation on why the traded volume increases for intermediate goods when the transport cost decreases.[12] The Doha Development Round or Doha Development Agenda (DDA) is the current trade-negotiation round of the World Trade Organization (WTO) which commenced in November 2001. Its objective is to lower trade barriers around the world, which will help facilitate the increase of global trade. As of 2008, talks have stalled over a divide on major issues, such as agriculture, industrial tariffs and nontariff barriers, services, and trade remedies.[1] The most significant differences are between developed nations led by the European Union (EU), the United States (USA), and Japan and the major developing countries led and represented mainly by India, Brazil, China, South Korea, and South Africa. There is also considerable contention against and between the EU and the USA over their maintenance of agricultural subsidiesseen to operate effectively as trade barriers.[2] The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001. Subsequent ministerial meetings took place in Cancn, Mexico (2003), and Hong Kong (2005). Related negotiations took place in Paris, France (2005), Potsdam, Germany (2007), and Geneva, Switzerland (2004, 2006, 2008);
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The July 2008 negotiations broke down after failing to reach a compromise on agricultural import rules.[3] After the breakdown, major negotiations were not expected to resume until 2009.[4] Nevertheless, intense negotiations, mostly between the USA, China, and India, were held in the end of 2008 in order to agree on negotiation modalities. The impasse was not resolved and, in April 2011, director-general Pascal Lamy "asked members to think hard about 'the consequences of throwing away ten years of solid multilateral work'."[5] Though no significant progress has eventuated from the negotiations, the WTO seems determined to persist with them. As of May 2012, the future of the Doha Round remains uncertain. A report to the WTO General Council by Lamy in May 2012 advocated "small steps, gradually moving forward the parts of the Doha Round which were mature, and re-thinking those where greater differences remained."[6]

Negotiations
Doha Round talks are overseen by the Trade Negotiations Committee (TNC), whose chair is the WTOs directorgeneral, currently Pascal Lamy. The negotiations are being held in five working groups and in other existing bodies of the WTO. Selected topics under negotiation are discussed below in five groups: market access, development issues, WTO rules, trade facilitation and other issues.[1]

Before Doha
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Before the Doha ministerial, negotiations had already been under way on trade in agriculture and trade in services. These ongoing negotiations had been required under the last round of multilateral trade negotiations (the Uruguay Round, 19861994). However, some countries, including the United States, wanted to expand the agriculture and services talks to allow trade-offs and thus achieve greater trade liberalization.[1] The first WTO ministerial conference, which was held in Singapore in 1996, established permanent working groups on four issues: transparency in government procurement, trade facilitation (customs issues), trade and investment, and trade and competition. These became known as the Singapore issues. These issues were pushed at successive ministerials by the European Union, Japan and Korea, and opposed by most developing countries.[1] Since no agreement was reached, the developed nations pushed that any new trade negotiations must include these issues.[7] Just months before the Doha ministerial, the United States had been attacked by terrorists on 11 September 2001. Some government officials called for greater political cohesion and saw the trade negotiations as a means toward that end. Some officials thought that a new round of multilateral trade negotiations could help a world economy weakened by recession and terrorism-related uncertainty. According to the WTO, the year 2001 showed "...the
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lowest growth in output in more than two decades,"[9] and world trade contracted that year.[1]

Doha, 2001
Main article: WTO Ministerial Conference of 2001 Began in November 2001, committing all countries to negotiations opening agricultural and manufacturing markets, as well as trade-in-services (GATS) negotiations and expanded intellectual property regulation (TRIPS). The intent of the round, according to its proponents, was to make trade rules fairer for developing countries.[10] However, by 2008, critics were charging that the round would expand a system of trade rules that were bad for development and interfered excessively with countries' domestic "policy space".[11]

The Uruguay Round was the 8th round of multilateral trade negotiations (MTN) conducted within the framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986 to 1994 and embracing 123 countries as "contracting parties". The Round led to the creation of the World Trade Organization, with GATT remaining as an integral part of the WTO agreements. The broad mandate of the Round had been to extend GATT trade
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rules to areas previously exempted as too difficult to liberalize (agriculture textiles) and increasingly important new areas previously not included (trade in services, intellectual property, investment policy trade distortions).[1] The Round came into effect in 1995 with deadlines ending in 2000 (2004 in the case of developing country contracting parties) under the administrative direction of the newly created World Trade Organization (WTO).[2] The Doha Development Round is the next trade round, beginning in 2001 and still unresolved after missing its official deadline of 2005.[3]

History
The round was launched in Punta del Este, Uruguay in September 1986, followed by negotiations in Geneva, Brussels, Washington, D.C., and Tokyo, with the 20 agreements finally being signed in Marrakeshthe Marrakesh Agreementin April 1994.

Background
The 1982 Ministerial Declaration identified problems including structural deficiencies, spill-over impacts of certain countries' policies on world trade GATT could not manage. To address these issues, the eighth GATT round (known as the Uruguay Round) was launched in September 1986, in Punta del Este, Uruguay.[4] It was the
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biggest negotiating mandate on trade ever agreed: the talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT articles were up for review.[2] ment.[7]

Achievements
The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations (a distinction is made between GATT 1994, the updated parts of GATT, and GATT 1947, the original agreement which is still the heart of GATT 1994).[8] The GATT 1994 is not, however, the only legally binding agreement included in the Final Act; a long list of about 60 agreements, annexes, decisions and understandings was adopted. In fact, the agreements fall into a simple structure with six main parts:

an umbrella agreement (the Agreement Establishing the WTO); goods and investment (the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures (TRIMS)); services (General Agreement on Trade in Services (GATS));
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intellectual property (Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)); dispute settlement (DSU); reviews of governments' trade policies (TPRM).[9]

The agreements for the two largest areas under the WTO, goods and services, share a three-part outline:

broad principles (such as the General Agreement on Tariffs and Trade and General Agreement on Trade in Services); extra agreements and annexes; lengthy schedules (lists) of commitments made by individual countries.[2]

One of the achievements of the Uruguay round would be the Uruguay Round Agreement on Agriculture, administered by the WTO, which brings agricultural trade more fully under the GATT. Prior to the Uruguay Round, conditions for agricultural trade were deteriorating with increasing use of subsidies, build-up of stocks, declining world prices and escalating costs of support.[10] It provides for converting quantitative restrictions to tariffs and for a phased reduction of tariffs. The agreement also imposes rules and disciplines on agricultural export subsidies, domestic subsidies, and sanitary and phytosanitary (SPS) measures through the Agreement on the Application of Sanitary and Phytosanitary Measures
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According to the supporters of WTO, India is likely to derive a number of benefits from its membership of WTO. The expected main benefits are as follow:
1- Benefit from expantion in trade. World bank OECD and the GATT Secretarial have stimated that the income effected of the implementation of the uruguay round package will add between 213 and 274 billon U.s. dollars annnually to world income. 2-benefit fromphasing out of MFA. The phasing out of the MFA by 2005 will benefit india as the export of textile and clothing will increase. 3-improved prospect for agricultureal export. The third benefit that india expects relates to the impuved prospect for agriculture exports as a result of likely increase in the world prices of agricultural productsdue to reducton in domestic subsidies and barriers yto trade . 4- benefits from multilateral rules and descipline.The uruguay round agreement has strengthened multilateral rules and discplines.

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Trade Related Intellectual property rights (TRIPS)

Protecton of intellectual property right patents,copyright, trademarks etc.-has been made more stringent in the uruguay round

Trade Related Investment Measures (TRIMs

According to Muchkund Dubey . The developed countris achieved almost everythimg they wanted from the TRIMS Agreement. Competiton in service (GATS) There is a vast level of difference in the developed of services like banking, insuranse, telecommunication and has between the developed countries and the developing countries.

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