From GATT to WTO GATT was an international

Transcript:From GATT to WTO GATT was an international:
From GATT to WTO GATT was an international organization, created in 1947 with its headquarter in Geneva. Its motive was to promote free trade through multilateral trade negotiations. Three important principles were: Non-discrimination: It meant Most-favoured –nation principle; Elimination of Non-tariff barriers, except for agri-products and for nations in balance of payments difficulties; and Consultation among member nations in solving trade disputes. From GATT to WTO (contd.) Until the Uruguay Round, however, no progress was made on agriculture or on textiles and clothing. The deal that finally allowed these sectors to be subjected to multilateral disciplines included the establishment of rules for trade in services and enforcement of intellectual property rights (IPRs), as well as the creation of the WTO. WTO operates by consensus it is member-driven. The coverage of the WTO is much wider. A change of great importance is that in contrast to the GATT, the WTO agreement is a “single undertaking”- all its provisions apply to all members. Under the GATT there was great flexibility for countries to “opt out” of new disciplines, and in practice many developing countries did not sign specific agreements on issues such as customs valuation or subsidies. From GATT to WTO (contd.) Also important were changes in the area of dispute settlement, which became much more “automatic” with the adoption of a “negative consensus” rule. All members must oppose the findings in a dispute settlement to block adoption of reports). Finally, the secretariat acquired much greater transparency and surveillance functions through the creation of the Trade Policy Review Mechanism. Functions of WTO The WTO was established in 1995 to administer the trade agreements negotiated by its members ( 144 countries by the end of 2001) in particular the General Agreement on Tariffs and Trade (GATT). The WTO deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. To attain this objective WTO engages in the following functions: The WTO is a forum for international cooperation on trade-related policies-the creation of Codes of Conduct for member governments; Reduction in import duties is the dominant function of the WTO; Functions of WTO (contd.) iii. Elimination of discrimination (through most-favoured-nation treatment and the national treatment principles); iv. Elimination of quantitative and other trade barriers (through regular monitoring of trade policies of its members); v. Providing a forum for dealing with