WORLD TRADE ORGANIZATION (WTO)

Brief History
Formation-January

1, 1995 Headquarters-Centre William Rappard, Geneva, Switzerland Membership-159 member states Official languages-English, French, Spanish Director-General-Pascal Lamy Budget-196 million Swiss francs (approx. 209 million USD) in 2011. Staff-640

ABOUT

The WORLD TRADE ORGANISATION(WTO) came into effect on janurary 1,1995 with the support of 85 founder members. India was one of them. It is the third pillar of worldwide economic dimensions along with the IMF and The World Bank. Now the membership has increased to 128 by 2001. GATT replaced by the WTO. The WTO has taken charge of monitoring and administering the new global trade rules agreed in the Uruguay Round. The WTO is an international trade organisation, having set of rules and principles which were mutually designed and agreed upon to promote international trade in general and to reduce tariff

Cont.
Barriers and to remove import restrictions in particular It is a new trade organisation with global recognition and succeeded GATT on renewed agreements

GATT replaced by the WTO

While the GATT functioned well enough, the leading members wished to replace it with a world-wide trade-regulating body like the WTO for a number of reasons. The GATT rules applied to trade only in merchandise goods. In addition to goods, the WTO covers trade in services and trade-related aspects of intellectual property (through the agreement on Trade-related Aspects of Intellectual Property Rights-TRIPs). While GATT was a multilateral instrument, by the 1980s many new agreements of a plurilateral, and therefore selective nature had been added. The agreements which constitute the WTO are almost all multilateral and, thus, involve commitments for the entire membership.

Cont
The

WTO dispute settlement system is faster, more automatic, and thus much less susceptible to blockages, than the old GATT system.

Structure

OBJECTIVES

International Economic Relations should be conducted with a view to raise standards of living, ensure full employment and a large and steadily growing volume of real income and effective demand Expanding the production of trade in goods and services While allowing for the optimal use of the worlds resources in accordance with the objectives of sustainable development, seeking both to preserve the environment and to enhance the means of doing so in a manner consistent with the respective needs and concerns at different levels of economic development

Cont

There is recognition of the less advantageous position of less developing and least developed countries in international trade and economic welfare There is a need for positive efforts by the international community so as to ensure that they secure a share in the growth of international trade as per their developmental needs The objectives are to be secured by means of reciprocal and mutually beneficial agreements which will be directed towards the substantial reduction of tariff and non-tariff barriers and elimination of discriminatory treatment in international trade relations.

FUNCTION
WTO

may provide a forum for further negotiations concerning multilateral trade relations as may be decided by the WTO Ministerial Conference In case such negotiation takes place than WTO can also provide the framework for putting the results into operation WTO are to administer the arrangements in Annexure II and III for the settlement of disputes that may arise between members and for the review of trade polices

cont
WTO

is to coordinate with IMF and IBRD for achieving greater coherence in global policy making WTO is a forum for trade negotiation and liberalisation on a rule based system having the power to assess the trade policies of its members in accordance with the terms of commitments under WTO It has the power to review negotiations, examine world trade developments and address the challenges to world economy

SCOPE
Scope

of WTO is to provide a common institutional framework for conduct of trade relations within its members in matters related to the Agreement and associated legal instruments referred as MTAs, Plurilateral Trade Agreements and GATT 1994 Regarding environmental issues the preamble recognises a link between trade and environment but only to the extent as recognised in various Agreements covered under WTO or GATT

cont
The

members have autonomy in regard to environment but they need to respect the requirements of WTO and other agreements having bearing on issues regarding environment The cases brought before the Dispute Settlement Mechanisms of WTO in which the preamble was subject to interpretations has reaffirmed the importance of the coherent, universal and international character of WTO to facilitate, administer and operate and further the objectives of Agreements concluded under the WTO and GATT 1994.

Uruguay Round
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. 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".

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The Round transformed the GATT into the World Trade Organization. The Round came into effect in 1995 and has been implemented over the period to 2000 (2004 in the case of developing country contracting parties) under the administrative direction of the newly created World Trade Organization (WTO). The Uruguay Round Agreement on Agriculture, administered by the WTO, brings agricultural trade more fully under the GATT. 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.

The Doha Round

The Doha Round is the latest round of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The work programme covers about 20 areas of trade. The Round is also known semi-officially as the Doha Development Agenda as a fundamental objective is to improve the trading prospects of developing countries. The Round was officially launched at the WTOs Fourth Ministerial Conference in Doha, Qatar, in November 2001.

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The Doha Ministerial Declaration provided the mandate for the negotiations, including on agriculture, services and an intellectual property topic, which began earlier.
In

Doha, ministers also approved a decision on how to address the problems developing countries face in implementing the current WTO agreements.

WTO Agreement
Multilateral

Agreements on trade in goods General Agreement on trade in services. Agreement on trade-related Aspects of intellectual Property Rights. Understandings on rules and Procedures governing the settlement of disputes. Plurilateral Trade Agreements. Trade Policy Review Mechanism.

Tariffs and Non-Tariffs Barriers

TARIFF BARRIERS:Its mainly refer to barriers on imports through high import duty. Non-tariff barriers:Nontariff barriers generally refer to quota-barriers, implying quantitative restrictions on imports (or restrictions on the quantum of imports).

Bilateral and Multilateral Trade Agreements

BILATERAL TRADE AGREEMENTS:It refer to trade agreements of one country with the other or these are trade agreements between any two countries of the world. MULTILATERAL TRADE AGREEMENTS:It refer to trade agreements of one country with many countries of the world or these are trade agreements among many countries

EXIM POLICY
Its

contains policies in the sphere of foreign trade i.e. with respect to export and import from the country and more especially export promotion measures , policies and procedure related there to. Export means selling abroad and import as bringing into India , any goods and services.

Objectives
Accelerate

the countrys transition to a globally oriented vibrant economy with a view to derive maximum benefit from the expanding global market opportunities. Stimulating sustained economic growth. Enhancing the technological strength and efficiency. Encouraging the attainment of internationally accepted standards of quality. Providing consumers with good quality products at reasonable prices.

WORLD BANK

Brief History
Type-International Legal

organization

status-Treaty Purpose/focus-Crediting Location-Washington, D.C., U.S. Membership-188 countries (IBRD) 172 countries (IDA) President-Jim Yong Kim Main organ-Board of Directors Parent organization-World Bank Group

ABOUT
Established-1945

under the Bretton Woods Agreement of 1944. Main purpose of the conference was finalisation of the Article of Association of IMF and establishment of an institution for the reconstruction of the war shattered world economies. The conference has given birth to World Bank and IBRD. The World Bank or IBRD was established to provide long term assistance for the reconstruction and development of the economies of the member

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countries, while IMF was established to provide short term assistance to correct the balance of payment disequilibrium.

Organisation Structure
Board of governors Executive directors Activities estimationDirector general estimates the utilities of the loans granted Directorgeneral reports to the president

President Acts as Chairman of the Executive Directors

Finan ce deptt

Opera tion deptt

Staff deptt

Law deptt

secret ariat

Foreign affairs deptt

Economi c research deptt

Functions
To

assist in the reconstruction and development of territories of its members by facilitating the investment of capital for productive purpose and the encouragement of the development of productive facilities and resources in developing countries. To promote private foreign investment by means of guarantees on participation in loans and other investment made by private investment through providing finance for productive purpose out of its own resources or from borrowed funds.

Cont
To

promote the long-range balanced growth of international trade and the maintenance of equilibrium in BOP(balance of payment) of member countries by encouraging international investment for the development of their productive resources, thereby assisting in raising productivity , the standard of living and conditions of workers in their territories. To arrange the loans or guarantees by it in relation to international loans through other channel, so that more useful and urgent small and large product are dealt with firmly.

LOANS
The

prime objective of the bank is to grant loans by the bank for overall and integrated development of the members countries. The purpose of providing loans is reconstruction of the bank. Bank has also taken steps to ensure that the amount of loan is spent for its actual purpose. The bank grants loans as follows: 1. Power sector - 30% of the total loans 2. Transport sector - 30% of the total loans 3. Agriculture, forestry sector etc- 40% of the total loans

MEMBERSHIP

All member of the IMF are also the members of the WORLD BANK. Any country can join as a member of the IBRD by signing in the charter of the bank as it subscriber. It had 185 members in 2007. Bank has the authority to suspend any member, if the country concerned fails to discharge its responsibilities to the IBRD. Similarly, every member is free to resign from the membership but it has to pay back all loans with interest on due dates. The member is also required to pay back all loans with interest on due dates. The member is also required to pay its share of the loss on demand if the bank incurs a financial loss in the year in which a member resigns.

CAPITAL STRUCTURE
The

world bank or IBRD started with an authorised capital of US $ 10 billion divided into 100000 shares of us $ 100000 each. The member countries contribute their share capital to the bank as follows: 1. 2% of the share in the form of gold and US dollars. 2. 18%of the share capital in the own of own currency. 3. 80% of the share capital is payable at the request to the bank.

ACTIVITIES

To provide the external financing required for all meritorious projects of reconstruction and development To provide a catalyst by which production may be generally stimulated and private investment encouraged. The bank should encourage necessary action by the member governments to ensure that the banks loans will actually prove productive. Bank must play an active rather than a passive role to initiate and develop plans to the end that the banks resources are used not only prudently from the stand

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point of its investors but wisely from the standpoint of the world.

Other activities
Training Technical

Assistance 1. Engineering-related 2. Institution-related Inter-organisational co-operation Economic and social research Operation Evaluation Settlement of investment Dispute

India And The World Bank

India is the founder member of the bank. India is one of the largest receiver of assistance since 1949 Total sanctioned loans received by india-13.8billion till march 2008 The bank disbursed US$ 2.7 billion to India during the fiscal year India is helped by the World Bank in its planned economic development through granting loans, conducting field surveys etc. India development forum has replaced the Aid India consortium of 12 developed countries at the instance

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Of the World Bank since 1995. India has gained much more as a member of the World Bank but lesser support from IDA

Affiliates to the World Bank

The Bank has 4 affiliate: International Development Association (IDA) International Finance Corporation(IFC) The Multinational Investment guarantee Agency(MIGA) The International Centre for Settlement of Investment Disputes(ICSID)

IDA
Established-1960

as an affiliate of the World Bank. President of the World bank-Head of the IDA Members-All the members of the World bank are the members of the IDA. It had 167 members in June, 2007 Objectives-1- to provide finance on a soft loan basis to less developed countries. 2-assistance for poverty alleviation in the poor countries 3-development finance on easy terms to underdeveloped and developing countries.

IFC
Established-

July 1956 in order to provide finance to private sector of developing countries. Members-The member of the World Bank are eligible to become the members of the IFC. Purpose-further economic development by encouraging the growth of the productive private enterprises. Objective-1-seeking to bring together investment which is not available on reasonable terms. 2-to help in creating conditions conducive to the flow of private capital, domestic and foreign, into productive investment.

MIGA
Established-1988. It

is a joint venture of the World Bank and IFC. Authorised capital-$1.08 billion Objective:-1-To encourage the flow of direct foreign investment 2-To provide insurance cover against political risks to investors, promotional and advisory services. 3-to establish credibility among investors. 4-to insure only few investments, expansions of existing investment, privatisation and financial restructuring.

ICSID
Established:-1966 Members:-155

till date Its helps in encouraging foreign investment by providing international facilities for conciliation and arbitration of investment disputes. It also conduct research and publishing activities in the areas of arbitration law foreign investment law.

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