globalisation impact of wto and over india

2. • Established: 1st January 1995.
Created by: Uruguay Round negotiations (1986-94).
Budget: 185 million Swiss francs for 2008.
Secretariat staff: 625.
Head: Pascal Lamy (Director-General).
Membership: Countries on map. 153 countries (on 23
July 2008).
New member: Ukraine
• The main purpose of the World Trade Organization is
to regulate and liberalize world trade. The WTO very is
important since more than 95% of the world trade is
processed between member states.
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3. The World Trade Organization (WTO) is the
only global international organization dealing
with the rules of trade between nations.
WTO agreements are negotiated and signed
by the trading nations and ratified in their
parliaments.
They deal with: agriculture, textiles and
clothing, banking, telecommunications,
government purchases, industrial standards
and product safety, food sanitation regulations,
intellectual property, and much more.
The WTO agreements are lengthy and
complex because they are legal texts covering
a wide range of activities
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4. • In the year 1947 were the international trade
relations regulated by the General Agreement on
Tariffs and Trade(GATT). 23 countries signed this
agreement in 1948, but three of them didn’t
ratify it.
• To the GATT belonged 128 countries in 1994 and
was at the beginning of 1995 replaced by the
World Trade Organization. Today are 160
countries member states of the WTO and 24
governments have observer status
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5. STRUCTURE
• The WTO has 160 members, accounting for over 97% of world
trade. Around 30 others are negotiating membership.
• Decisions are made by the entire membership. This is typically by
consensus. A majority vote is also possible but it has never been
used in the WTO, and was extremely rare under the WTO’s
predecessor, GATT. The WTO’s agreements have been ratified in all
members’ parliaments.
• The WTO’s top level decision-making body is the Ministerial
Conference which meets at least once every two years.
• The responsibility of the WTO Secretariat is to provide top-quality,
independent support to WTO member governments on all of the
activities that are carried out by the Organization, and to serve the
WTO with professionalism, impartiality and integrity.
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6. 6

7. Dispute Settlement Body (DSB)
• The Budget of the World Trade Organization is
also used for the so called Dispute Settlement
Body (DSB), which handles trade disputes.
• Such a dispute existed for example between
the Unites Statesand the European Union. The
European Union complained about the U.S.
subsidies for the aircraft company Boeing. In
January 2011 declared the World Trade
Organization those subsidies illegal and allowed
the EU to react with reasonable trade sanctions.
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8. Dispute about agricultural subsidies
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Agriculture is still an important topic in the WTO, especially because of the differences
between the north and south countries. The emerging markets in the south make the
majority in the World Trade Organization, but they suffer under the industry nations,
which support their agriculture with subsidies.
Because of this tried the WTO to establish a new basis of trust with the so-called “Doha
Development Round”, but, unfortunately, couldn’t they make any agreements until
today.
One of the last economic sectors which isn’t completely liberalized.
Here can you see the development of the grain prices.

9. Objective
• To improve the standard of living of people in the
member countries.
• To ensure full employment and broad increase in
effective demand.
• To enlarge production and trade of goods.
• To increase the trade of services.
• To ensure optimum utilization of world resources.
• To protect the environment.
• To accept the concept of sustainable
development
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10. Functions of WTO:
WTO is based in Geneva, Switzerland. Its functions are:
 Administering the multilateral trade agreements which together
make up the WTO
 Acting as a forum for multilateral trade negotiations
 Seeking to resolve trade disputes
 WTO is not a “Free trade” institution. It permits tariffs and other
forms of protection but only in limited circumstances.
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11. IMPACT OF WTO IN GLOBALIZATION
• WTO plays an important role in the principle of trade without
discrimination in the free market trade.
 Most-favoured-nation (MFN): treating other people equally.
 National treatment
 Free trade - gradually, through negotiation
 Predictability - through binding and transparency
 Promoting fair competition
 Encouraging development and economic reform
The main goal of WTO is to help the trading industry to become smooth, fair,
free and predictable. Multi-lateral agreements are always made between
several countries in the past. If there are unfair trade practices or dumping
and there is complain filed, the staff of WTO are expected to investigate
and check if there are violations based on the multi-lateral agreements
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12. India’s role in WTO
• Founder member - India is a founder member of the General Agreement on Tariffs and Trade
(GATT) 1947 and its successor, the World Trade Organization (WTO), which came into effect on
1.1.95 after the conclusion of the Uruguay Round (UR) of Multilateral Trade Negotiations.
• Stability and Predictability - India's participation in an increasingly rule based system in the
governance of international trade is to ensure more stability and predictability, which ultimately
would lead to more trade and prosperity for itself and the 149 other nations which now comprise the
WTO.
• MFN - India also automatically avails of MFN and national treatment for its exports to all WTO
members. According to the WTO Secretariat Report, along with the policy statement by the
Government of India, India is expected to snatch most of the business deals that are presently
catering the developed nations which includes major service based industries like telecom, financial
services, infrastructure services such as transport and power.
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13. The increase in availability and reduction in tariffs has prompted many
developed nations to go for business with India especially in IT industry. If
the trend continues then by 2025, India is expected to cater to the software
and services demands of major giants of the business world. Analyzing the
present relationship with the promising economic growth of India, one can
be sure that India is going to enjoy a very candid and bright relationship
with WTO and associated member nations by 2025
“India has also played an important part in the effective formulation of
major trade policies”
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14. The core principles
• The WTO aims to achieve its objectives by reducing existing barriers to
trade and by preventing new ones from developing. It seeks to ensure fair
and equal competitive conditions for market access, and predictability of
access for all traded goods and services.
• This approach is based on two fundamental principles: the national-
treatment and most-favoured nation principles. Together, they form the
critical "discipline" of non-discrimination at the core of trade law
• The principle of national treatment requires, in its simplest terms, that the
goods and services of other countries be treated in the same way as those
of your own country.
• The most-favoured nation principle requires that if special treatment is
given to the goods and services of one country, they must be given to all
WTO member countries. No one country should receive favours that
distort trade.
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15. GATS (General Agreement on Trade in
Services)The GATS agreement covers four modes of supply for the delivery of services in cross-
border trade:
Criteria Supplier Presence
Mode 1: Cross-
border supply
Service delivered within the territory of the
Member, from the territory of another Member.
Eg: transborder data flows
Mode 2:
Consumption
abroad
Service delivered outside the territory of the
Member, in the territory of another Member, to
a service consumer of the Member. Eg :
Tourism
Service supplier not
present within the
territory of the
member
Mode 3:
Commercial
presence
Service delivered within the territory of the
Member, through the commercial presence of
the supplier (provision of services abroad
through FDI or representative offices).
Mode 4: Presence
of a natural person
Service delivered within the territory of the
Member, with supplier present as a natural
person (entry and temporary stay of foreign
consultants)
Service supplier
present within the
territory of the
Member
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16. TRIPS (Trade Related Intellectual
Property Rights Agreement)
• The agreement requires member countries to provide patent protection to all
products or processes in all fields. The protection is granted subject to the following
three conditions:
– The product or process is a new one.
– It contains an inventive step.
– It is capable of industrial application for 20 years from the grant of the patent
TRIPS agreement covers the following seven intellectual properties :Patents,
Copyright and other related Rights, Geographical Indications, Industrial
Designs, Trade marks, Layout design of integrated circuits, Undisclosed
information including trade secrets
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17. TRIMS (Trade Related Investment
Measures)
• TRIMS refers to certain conditions or restrictions
imposed by a government in respect of foreign
investment in the country.
• In the late 1980's, there was a significant
increase in foreign direct investment throughout
the world.
• TRIMS are widely employed by developing
countries. The Agreement on TRIMs provides that
no contracting party shall apply any TRIM which
is inconsistent with the WTO articles
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18. Evaluation of WTO
• The WTO members now account for over 97% of the
international trade indicating the potential of bringing
about an orderly development of international trade.
Benefits of WTO:
• GATT / WTO has made significant achievements in
reducing tariff and non tariff barriers to trade.
Developing countries too have been benefiting
significantly.
• Liberalization of investments has been fostering
economic growth of a number of countries.
• It has a system in place to settle trade disputes
between nations.
• It has a mechanism to deal with violation of trade
agreements.
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19. Drawbacks:
• Negotiations and decision making in the WTO are
dominated by the developed countries.
• Many developing countries do not have the
financial and knowledge resources to effectively
participate in WTO discussions and negotiations.
• Due to the dependence of developing countries
on the developed ones, the developed countries
are able to resort to arms twisting tactics.
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20. WTO: Benefits for business
• Creation of a stable, rule based, multilateral trading regime
• Market access translates into market opportunities
• The rule based system creates certain rights of access
- Security of access
tariff bindings and disciplines on barriers to trade whether
tariff or non tariff. It also provides non discriminatory
treatment of products and services.
- Stability of access
the application of uniform rules in key areas of the trading
process e.g. customs valuation, import licenses etc.
- Rights against unfair trade practices for
– Domestic industry
– Export industry
– Import industry
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21. Cites adverse impact on poor farmers
of developing nations
World Trade Organisation (WTO) member countries to take up for discussion
on a priority basis at the Nairobi at Dec G33 meeting 21
New Delhi — at the G33 meeting — said there
could be no better tribute to the Ministerial
Conference (the WTO’s highest decision- making
body), taking place in Africa for the first time, than
to come up with measures to protect the poor
farmers and the right to food security of the
developing countries.
For this, India wanted an agreement on a Special
Safeguard Mechanism (SSM) and a permanent
solution on public stockholding for food security.
SSM is a trade remedy which is important for
developing countries as it will allow them to
temporarily hike duties to counter sudden import
surges and price fall due to the heavily subsidised
agricultural imports