Presenting

World Trade Organization

Course Coordinator

Prof. Dr. A.H.M. Ziaul Haq

Course

Finance-206, Global Trade

Dept. of FinanceRajshahi University

We Are Group 7

• 13 077 683 Muhammad Tahan Abdullah (GL)

• 13 237 611 Salma Sultana

• 13 207 613 Prapti Saha

• 13 087 631 Md. Nazmul Hossain

• 13 107 681 Anas Bin Rais

• 13 077 682 Md. Habibullah

• 13 237 699 Mst. Tanjila Akhter

• 12 227 602 Rojina Khatun

• 12 117 715 Md. Nazmul Hasan

• 12 217 726 Mst. Monira Binte Ahsan

Flow of Contents Introduction

WTO at a Glance

History of WTO

Formation of the WTO

Members of the WTO

Structure of WTO

Functions of the WTO

Principles of WTO

The WTO Agreements and Policies

GATS, TRIPS, TRIMS, SPS, AOA, ADP

Pros and Cons of the WTO

WTO in Developing Nation

End Note

The design is adapted from the logo originally commissioned by the Government of Singapore for the WTO's first Ministerial Conference which was hosted by Singapore in December 1996. In April 1997, the WTO General Council accepted Singapore's offer to transfer to the WTO the logo and its copyright. The original logo was created by Su Yeang Design, a Singapore-based graphic arts company, and selected from over 200 entries in a competition held by the Government of Singapore. "A hint of the globe is suggested by the six graphic arcs symbolizing world trade with member nations meeting to forge strategic alliances," according to Ms Su Yeang. "Dynamism and optimism prevail as the swirls integrate, encapsulating WTO's united spirit of promoting fair and open trade."

Introduction

The World Trade Organization (WTO) is the only global international organization that intends to supervise and liberalize international trade.

The WTO is a rules-based, member-driven organization. All decisions are made by the member governments and the rules are the outcome of negotiations among members.

WTO at a GlanceEstablished: 1st January 1995.

Created By: Uruguay Round negotiations of GATT (1986-1994)

Headquarter: Geneva, Switzerland

Membership: 160 member states, 24 observer nations, 14 neither member nor observer nations (till 2014)

Secretariat Staff: 640 (till 2014)

Head: Roberto Azevêdo (Director-General 2013-till now)

Budget: 196 million Swiss francs (approx)

In the 1940s, working with the British government, the United States developed two innovations to expand and govern trade among nations.

These mechanisms were called the General Agreement on Tariffs and Trade (GATT) and the ITO (International Trade Organization).

ITO>GATT WTO History…...

ITO’s architects were greatly influenced by John Maynard Keynes, the British economist. The ITO represented an internationalization of the view that governments could play a positive role in encouraging international economic growth. But ITO never became popular. The US Congress never brought membership in the ITO to a vote, and when the president announced that he would not seek ratification of the Havana Charter, the ITO effectively died.

ITO>GATT WTO History…...

History…...

GATT was simply a temporary multilateral agreement designed to provide a framework of rules and a forum to negotiate trade barrier reductions among nations. From 1948 until 1993, GATT’s membership grew dramatically. During this period, GATT sponsored eight trade rounds where member nations, agreed to mutually reduce trade barriers.

ITO>GATT WTO

By the late 1980s, a growing number of nations decided that GATT could better serve global trade expansion if it became a formal international organization. The result was the World Trade Organization, (WTO), which was established during the Uruguay Round (1986-1993).

GATT Rounds

FormationAfter Seven rounds of negotiations occurred under the GATT in The Tokyo round during the 70s was the first major attempt to tackle trade barriers that do not take the form of tariffs and to improve the system but the agreements were not accepted by all the member nations of GATT.

These agreements and policies were amended in URUGUAY ROUND leading to acceptance by the member nations and formation of WTO.

This final act concluding the Uruguay round and officially establishing the WTO regime was signed in 1994 at Marrakesh, Morroco and hence known as Marrakesh Agreement.

Members & Observers

The WTO is composed of 160 countries which represents 96.4% of world trade & 96.7% of global GDP. Of these, 123 were signed during the Uruguay roundWTO members do not have to be full-sovereign nation members. Instead, they must be a custom territory with full autonomy in their external relations. Over 3/4th of WTO members are developing or least developed countries. There are 24 countries that are not members known as Observers. These countries are currently negotiating membership. The biggest of these is Iran. There are 14 non-member countries, ex. North Korea. Yemen became the newest member on June 26, 2014

Members & Observers

WTO Structure

Functions of WTO Acting as a forum for multilateral trade

negotiations.

Seeking to resolve trade disputes.

Acting as a watchdog of international trade.

Maintaining trade related database.

Cooperating with other international institutions involved in global economic policy making.

Acting as a management consultant for world trade.

Technical assistance and training for developing countries.

Principles of WTO

Agreements & Policies

The WTO’s agreements are the result of negotiations between the members. The current set were the outcome of the 1986–94 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATT). The WTO oversees about 60 different agreements which have the status of international legal texts. They deal with: agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards, product safety and many more.

Agreement: GATS

General Agreement on Trade in Services or GATS is the first and the only comprehensive multilateral discipline covering international trade in Services.

According to GATS, WTO services are divided into 12 areas and sub divided into 164 areas.

Agreement: TRIPSIt is the GATT Uruguay Round Agreementon Trade Related Intellectual Property.It deals with the protection & enforcementof “Trade-Related” intellectual property“rights".Intellectual property comprises 2 distinctforms:

1. Literary & Artistic Works- Books,paintings, musical compositions, plays,operas, movies, radio/ TV programs,performances, & other artistic works

2. Industrial Property- Patented objects,trade secrets, geographical indications.

Agreement: TRIMSTrade related Investment Measures does not provide any new language, but It concentrates on 2 major articles. Article III & Article IX which talks about National Treatment and Trade Restrictions respectively.

ARTICLE III●National treatment of imported product, unless specified in other agreements.●Subjects the purchase or use by an enterprise of imported products to less favorable conditions than the purchase or use of domestic products.

ARTICLE IX●Prohibition of quantitative restrictions on imports and exports.●Part of the general trend in textiles and agriculture to phase out the use of quantitative restrictions.

Agreement: SPSSanitary and Phyto-Sanitary (SPS) agreement was negotiated during the Uruguay Round, and entered into force with the establishment of the WTO in1995.

The WTO sets constraints on member-states policies relating to food safety (bacterial contaminants, pesticides, inspection and labeling) as well as animal and plant health (imported pests and diseases).

Agreement: AOAThe most important agreement follows. The Agreement on Agriculture came into effect with the establishment of the WTO at the beginning of 1995

The AoA has three central concepts, or "PILLARS":

1. Domestic support

2. Market access

3. Export subsidies

Agreement: ADP

A product is considered to be dumped if the export price is less than the price charged for the same product in the exporting country, or it is sold for less than its cost of production.

The WTO agreement on anti-dumping allows governments to act against dumping where there is genuine (‘material’) injury to the competing domestic industry.

PROS

• Promotes free-er trade

• Raises world output levels via specialization

• Establishes a standard rule by law and terms of trade for greater efficiency

• Updates all participating countries and banks to international standards and efficiency in terms of trade and commerce.

CONS

• Industrialized countries benefit more than poor countries

• Don’t allow the participation of developing countries.

Developing nations & WTO Rich countries are able to maintain high import duties and quotas

in certain products, blocking imports from developing countries (e.g. clothing).

The increase in non-tariff barriers such as anti-dumping measures allowed against developing countries.

The maintenance of high protection of agriculture in developed countries while developing ones are pressed to open their markets.

Many developing countries do not have the capacity to follow the negotiations and participate actively in the Uruguay Round.

The TRIPs agreement which limits developing countries from utilizing some technology that originates from abroad in their local systems (including medicines and agricultural products).

End Note

Although the stated aim of the WTO is to promote free trade and stimulate economic growth, some believe that globally free trade results in rich (both people and countries) becoming richer awhile the poor getting poorer.

It will be able to help weak and poor countries if it frames rules accordingly.

THANKYOU