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evolution of WTO from GATT
- 1. GROUP-3 PRESENTATION GATT / WTO
- 2. AGENDA • INTRODUCTION OF GATT • ORIGIN • OBJECTIVES • PRINCIPLES • SUCCESS • PROBLEMS • INTRODUCTION OF WTO • OBJECTIVE • FUNCTIONS • PRINCIPLE • STRUCTURE • GATT VS WTO • CONCLUSION
- 4. INTRODUCTION • The General Agreement on Tariffs and Trade was a free trade agreement between 23 countries that eliminated tariffs and increased international trade. • It was the first worldwide multilateral free trade agreement. • Signed-30/october/1947,location-geneva • Formed in 1947 and transformed to World Trade Organization (WTO) in 1995
- 5. ORIGIN It was first discussed during the united nations conference on trade and employment and was the outcome of the failure of negotiating governments to create the international trade organization(ITO). It was not translated into practice due to various difficulties and lack of common agreements. The participants were anxious to begin the process of trade liberalization as soon as possible. The result was incorporated general agreements in 1947.
- 6. GATT'S MAIN OBJECTIVE • The purpose of GATT was to eliminate harmful trade protectionism. • Expansion of international trade • Increase of world production by ensuring full employment in the participating nation. • Development and full utilization of resources • Promote international trade and raising standard of living of the world.
- 7. THREE PROVISIONS GATT had three main provisions. 1.The’ most favored nation’ clause 2. GATT prohibited restriction on the number of imports and exports. (quantitative restriction). 3.Tariff negotiation and tariff reduction
- 8. MEMBER COUNTRIES • The original 23 GATT members were Australia; Belgium; Brazil; Burma, now called Myanmar; Canada; Ceylon, now Sri Lanka; Chile; China; Cuba; Czechoslovakia, now Czech Republic and Slovakia; France; India; Lebanon; Luxembourg; Netherlands; New Zealand; Norway; Pakistan; Southern Rhodesia, now Zimbabwe; Syria; South Africa; the United Kingdom and the United States. The membership increased to more than 100 countries by 1993.
- 10. Continual reductions in tariffs helped very high rates of world trade growth during the 1950s and 1960s — around 8% a year on average Trade growth consistently out-paced production growth The rush of new members during the Uruguay Round demonstrated recognition of multilateral trading system as the anchor for development and an instrument of economic and trade reform.
- 11. BUT…… • GATT’s success in reducing tariffs to a low level, with a series of economic recessions 1970-80’s drove governments to devise other forms of protection for sectors facing increased foreign competition • High rates of unemployment and constant factor closures led governments in Western Europe and North America to seek bilateral market-sharing arrangements with competitors and to embark on a subsidies race to maintain their holds on agricultural trade • Both these changes undermined GATT’s credibility and effectiveness. • The problem was not just a deteriorating trade policy environment.
- 12. • By the early 1980s the General Agreement was clearly no longer as relevant to the realities of world trade as it had been in the 1940s • World trade had become far more complex and important than 40 years before • The globalization of the world economy was underway • Trade in services — not covered by GATT rules • Ever increasing international investments
- 13. • Factors convinced GATT members that a new effort to reinforce and extend the multilateral system should be attempted. • That effort resulted in the Uruguay Round, the Marrakesh Declaration, and the creation of the WTO.
- 14. WTO
- 15. WORLD TRADE ORGANIZATION • Location :- Geneva, Switzerland • Established: 1 January 1995 • Created by : Uruguay Round negotiations (1986- 94) • Membership :153 countries (on 23 July 2008) • Budget : 185 million Swiss francs for 2008 • 2007 Secretariat Staff : 625 • Head : Director-General, Pascal Lamy
- 16. OBJECTIVE • The Raising standard of living and income • reiterates the objectives of GATT • Introduce sustainable development • Taking positive steps to ensure that developing countries
- 17. FUNCTION OF WTO • provide the framework for the implementation, administration and operation of the multilateral Trade Agreements. • The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. • The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. • The WTO shall administer Trade Policy Review Mechanism.
- 21. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO: 1.NON-DISCRIMINATION. 2.RECIPROCITY. 3.BINDING AND ENFORCEABLE COMMITMENTS. 4.TRANSPARENCY. 5.SAFETY VALUES
- 22. PROVISIONS There are three types of provision in this direction: 1.articles allowing for the use of trade measures to attain non-economic objectives; 2.articles aimed at ensuring "fair competition"; members must not use environmental protection measures as a means of disguising protectionist policies. 3.provisions permitting intervention in trade for economic reasons.
- 23. GATT VS WTO GATT • It is a set of rules and multilateral agreements. • It is designed with an attempt to establish international trade org. • It had contracting parties. • It has no provisions for creating an organization • Gatt is adhoc and provisional. WTO • It is a permanent institution. • It is established to serve its own purpose. • It has members. • Has legal basis bcz member nation have verified the WTO agreement. • WTO commitments are full and permanent.
- 24. CONCLUSION Decision-making • The WTO describes itself as "a rules-based, member-driven organization—all decisions are made by the member governments, and the rules are the outcome of negotiations among members". • The WTO Agreement foresees votes where consensus cannot be reached, but the practice of consensus dominates the process of decision-making.
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