Introduction To WTO GATT Lecture 2 Salman Alam

Introduction To WTO & GATT Lecture : 2 Salman Alam Khan

General Agreement on Tariffs and Trade (GATT) � It was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). � GATT was signed in 1947 and lasted until 1993, when it was replaced by the World Trade Organization in 1995. � GATT is a multilateral agreement regulating trade among 153 countries

GATT stands for: � The “General Agreement on Tariffs and Trade” (GATT) covers international trade in goods. � The workings of the GATT agreement are the responsibility of the Council for Trade in Goods(goods council). � The Goods Council has 10 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures and so on).

Purpose of GATT: According to its preamble, the purpose of the GATT is the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis. "

WHY was GATT Replaced By WTO? �GATT rules applied to trade only in merchandise goods. �GATT dispute settlement system was slow. �GATT was just provisional agreement.

Introduction of WTO � World Trade Organization (WTO) was established on 1 st January 1995. � It is the only global international organization dealing with the rules of trade between nations. � The WTO (World Trade Organization) is an association of 146 member countries, of the 190 countries in the world today. There another 30 countries that have observer status, a step that precedes becoming a full-fledged member. � So almost all the countries in the world are members. There all types of countries in the WTO, capitalist, socialist, rich and poor countries, very industrialized and also developing countries.

Structure: �Ministerial Conference The topmost decision-making body of the WTO is the Ministerial Conference, which has to meet at least every two years. �It brings together all member of the WTO, all of which are countries or separate customs territories.

Councils for Trade �The Councils for Trade work under the General Council. �There are three councils-Council for Trade in Goods, Council for Trade-Related Aspects of Intellectual Property Rights, and Council for Trade in Services.

Members � 152 countries are the members of WTO. �The green sections are WTO member countries. �Ukraine became the newest member on May 16, 2008.

System: �Every membership countries can join hearing of an appeal, Dispute-Solution organization. �There are six formal Structures in WTO. �Every council opens every two years.

Objective of WTO �Raising standard of living & income. � Promoting full employment �Expanding production & trade, and optimum utilization of resources. �Introduce sustainable development �Promoting trade flows. �Establish procedures for solving trade dispute among members.

Basic principles of WTO: 1. Non – discrimination: ü This principle is based on the concept of normal trade relations-previously called most favored nation(MFN). ü This rule required that het WTO members extend the same favorable terms of trade to all the member that they will extend to any single member.

Basic Principles: 2. Transparency : ü It is the pillar of WTO. All members are required to publish their trade regulations , -To establish & maintain administrative decisions affecting trade. -To respond to the information by other members and to notify changes in trade policies to WTO.

Basic Principles: 3. Binding & Enforceable Commitments: In WTO, when countries agree to open their market for goods and services, they bind their commitments. 4. Reciprocity : It operates during negotiations with the objective of obtaining mutually beneficial arrangements through reciprocal reduction in tariffs binding.

Functions of WTO: �Administrating & implementing the multilateral & plurilateral trade agreements which make up the WTO; �Acting as a forum for multilateral trade negotiation; �Seeking to resolve dispute; �Overseeing national trade policies; �Cooperating with other institutions involved in global economic policy-making.

Thank You!