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Gatt and wto

BRIEF INFORMATION ABOUT GATT AND WTO

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Gatt and wto

  1. 1. GATT AND WTO
  2. 2. GATT(GENERAL AGREEMENT ON TARIFFS AND TRADE)  BEGAN IN 1947 WITH 23 MEMBERS.  Location: Geneva  Purpose: “Substantial reduction of tariffs and other trade barriers and elimination of preferences, on reciprocal and mutually advantageous basis”.
  3. 3. The role of GATT  GATT sponsored rounds  GATT as monitor  Most Favorable Nation Clause(MFN)  Lack of legal status
  4. 4. Principles of GATT  Trade without Discrimination  Protection only through tariff  Stable basis of trade  consultation
  5. 5. Objectives of GATT  To provide equal opportunities to all countries in international market for trading.  To increase the effective demand for real income growth and goods.  To minimize tariffs on trade for ensuring mutual benefit.  To provide proper solution to the disputes related to international trade.  To ensure a better living standards in the world as a whole.
  6. 6. Early rounds of GATT  8Rounds:  Beginning : Geneva :1947  Annecy(France):1949  Torquay (UK):1950  Geneva :1956  Dillon:1960  Kennedy:1964  Tokya :1973  Uruguay:1986
  7. 7. Drawbacks of GATT  No enforcement authority  Problems in formulation of General rules  Less benefits for the LDC’s  Quantitative Trade Restrictions.
  8. 8. WTO(World Trade Organization)  Headquarters: Geneva, Switzerland  Purpose: Regulate international trade  Founded: 1 January 1995  Membership: 164 member states  Formation: 1 January 1995;  The current Director-General is Roberto Azevêdo of Brazil,
  9. 9. WTO(World Trade Organization)  The World Trade Organization (WTO) is an intergovernmental organization that regulates international trade.
  10. 10. Objectives  to set and enforce rules for international trade,  to provide a forum for negotiating and monitoring further trade liberalization,  to resolve trade disputes  to increase the transparency of decision-making processes.  to cooperate with other major international economic institutions involved in global economic management.  to help developing countries benefit fully from the global trading system.
  11. 11. Functions  Helping developing and transition economies.  Specialized help for export
  12. 12. THE RELEVANCE OF WTO • The system helps promote peace. • The system allows disputes to be handled constructively. • A system based on rules rather than power makes life easier for all. • Freer trade cuts the cost of living. • It gives consumers more choice and a broader range of qualities to choose from. • Trade raises incomes. • Trade stimulates economic growth and that can be good news for employment • The basic principles make the system economically more efficient, and they cut costs.
  13. 13. THE RELEVANCE OF WTO  Developing Countries How the WTO deals with the special needs of an increasingly important group.  In the agreements: more time, better terms  Legal assistance: a Secretariat service.  WTO technical cooperation  Participation in the system: opportunities and concerns  • Least-developed countries: special focus  • Committees -Trade and Development Committee
  14. 14. Importance
  15. 15. Difference between GATT & WTO
  16. 16. Difference between GATT & WTO GATT  The rules of GATT are only for trade in goods.  Contracting parties.  Not given much emphasis.  No permanent structure WTO  The rules of WTO includes services and aspects of intellectual property along with the goods.  Members.  Special emphasis.  Permanent structure BASIS FOR COMPARISON Scope Participant TRIPS AND TRIMS Structure
  17. 17. Trade block  Group of countries  Existence within a geographical region.  Motive is to protect themselves from the imports of non-members  A form of economic integration increasingly shaping the pattern of world trade.
  18. 18. Trade block
  19. 19. Objectives of Trading Blocs: i. To remove trade restrictions among member nations. ii. To improve social, political, economic and cultural relations among member nations. iii. To encourage free transfer of resources. iv. To establish collective bargaining. v. To promote economic growth.
  20. 20. TYPES OF TRADING BLOCS  Major Types of Trading Blocs:- 1.Preferential Trade Area (PTA’s) 2.Free Trade Area 3.Customs Union 4.Common Market
  21. 21. TYPES OF TRADING BLOCS
  22. 22. Major Regional Trade Blocks  European Union(EU)  North American Free Trade Agreement(NAFTA)  South Asian Association for Regional Cooperation(SAARC)  South Asian Free Trade Area(SAFTA)  Association of South-East Asian Nations(ASEAN)
  23. 23. Positive aspects/REASONS FOR JOINING UNIONS  Greater Bargaining Power
  24. 24. European Union(EU)  The world’s largest trading bloc.  The 2nd largest economy in the world.  Originally called the “Economic Community”. (Common Market or The Six)  Formed from the ‘Treaty of Rome’ in 1957.  It comprised of 6 members- Germany, France, Italy, Belgium, Netherlands and Luxemburg. At present it comprises of 27 member states.
  25. 25. North American Free Trade Agreement(NAFTA)  Initially bilateral trade between Canada & U.S.  NAFTA went into effect in January 1,1994 after the joining of Mexico, creating a trilateral trade bloc in North America.  World’s largest free trade area.  NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labour Cooperation (NAALC).
  26. 26. Association of Southeast Asian Nations (ASEAN)  Formed 8th August,1967 (Indonesia, Malaysia, Philippians, Singapore & Thailand)  Later joined by Brunei, Burma, Cambodia, Laos & Vietnam Established ASEAN Free Trade Area (AFTA)  Headquarter- Jakarta, Indonesia
  27. 27. South Asian Association for Regional Cooperation (SAARC)  Established on 8th December 1985  Member Countries- Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan & Sri Lanka  Headquarter- Kathmandu, Nepal
  28. 28. South Asian Free Area(SAFTA)  The council of ministers have signed the SAARC preferential trading arrangement agreement on April 11, 1993.  Objectives:-  To gradually liberalize the trade among members of SAARC  To eliminate trade barriers among SAARC countries & reduce or eliminate tariffs To promote and sustain mutual trade & economic cooperation among member countries
  29. 29. Association of South-East Asian Nations(ASEAN)

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