Test: World Trade Organisation - UGC NET MCQ

• The assertion is false because the Centre William Rappard building serves as the main administrative hub for the WTO, not solely for hosting trade negotiations.
• The reason is true as the building was indeed named after a Swiss politician who contributed significantly to the establishment of GATT.
• The reason is not the correct explanation of the assertion as the primary function of the building goes beyond just hosting trade negotiations.

Key Points
World Trade Organisation (WTO):

• The World Trade Organisation (WTO) is the only global international organisation dealing with the rules of trade between nations.
• At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.
• The goal is to help producers of goods and services, exporters, and importers conduct their business.
• It officially commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus replacing the General Agreement on Tariffs and Trade (GATT) that had been established in 1948.

Important Points
Principles of the World Trade Organisations:

• Reciprocity: It involves reducing the potential for free riding caused by the MFN rule. It makes it possible to obtain trade liberalisation in exchange for something. A fair exchange of concessions is necessary for MTN (Multilateral Trade Negotiations) to be effective.
• Non-discriminatory: The W.T.O.'s main clause is non-discrimination. This provision grants all members MFN (Most Favoured Nation) status, which mandates that goods made in the other Member Country must be treated equally. If a specific country offers a product at a 5 percent tariff, then the identical product from all other member countries must also be subject to the same tariff.
• Binding and enforceable commitments: A list of agreements includes the tariff pledges made by WTO members during a multilateral trade negotiation and upon membership. Only after negotiations with its economic partners, which may entail paying them for lost commerce, can a country renegotiate its promises.
• Transparent: WTO members are required to publish their trade regulations, to maintain institutions charged with review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO.

• The Assertion is correct as the Ministerial Conference indeed holds the highest decision-making authority within the WTO.
• The Reason is also correct as the Ministerial Conference convenes every two years to make decisions on various trade agreement matters.
• The Reason is the correct explanation of the Assertion because the Ministerial Conference's role as the highest decision-making body aligns with its responsibility to make decisions on trade agreements, thereby justifying Option A.

The main goals of the WTO include formulating and enforcing rules for international trade. This involves setting standards and regulations to govern how countries trade goods and services globally. By establishing these rules, the WTO aims to create a more predictable and stable trading environment for all its member countries. Additionally, the organization works towards resolving trade disputes and enhancing transparency in decision-making processes to ensure fair and equitable trade practices on a global scale.

The General Agreement on Tariffs and Trade (GATT):
It was signed on October 30, 1947.
It was signed by 23 countries.
In 1995 the GATT was absorbed into the World Trade Organization (WTO), which came into effect
on 1 January 1955 which extended it.
The council chair is Swedish Ambassador Mikael Anzén. 
The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.
India has been a WTO member since 1 January 1995 and a member of GATT since 8 July 1948.
The GATT was intended to boost economic recovery after World War II through reconstructing and liberalizing global trade.
The GATT went into effect on January 1, 1948. 

The primary purpose behind the establishment of the World Trade Organization (WTO) was to create a rule-based trading system and prevent countries from imposing unreasonable trade restrictions. By doing so, the WTO aims to ensure fair opportunities for all nations in global trade and promote the smooth flow of goods and services across borders. This helps in fostering global economic growth and cooperation among member countries.

The primary objective behind the establishment of the World Trade Organization (WTO) in 1995 was to facilitate fair opportunities for all nations in global trade. By creating a rule-based trading system, the WTO aimed to prevent countries from imposing unreasonable trade restrictions, thereby promoting a more open and equitable international trading environment.

India plays a crucial role in shaping global trade rules, regulations, and safeguards as a significant member of the WTO. By actively participating in WTO negotiations and discussions, India advocates for the interests of the developing world while also contributing to the formulation of fair and equitable trade policies on a global scale. This involvement underscores India's commitment to fostering inclusive and sustainable international trade practices.

• The assertion is correct as the Centre William Rappard building indeed houses the main administrative functions of the WTO.
• The reason is also accurate since the headquarters play a critical role in various operations of the WTO.
• The reason is the correct explanation of the assertion as the administrative hub facilitates the organization's crucial functions such as trade negotiations and policy coordination.

Functions of the World Trade Organisation:

At the heart of the Organisation are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. The goal is to help producers of goods and services, exporters, and importers conduct their business. The WTO’s overriding objective is to help trade flow smoothly, frets, fairly, and predictably.

Key Points:

With these objectives in mind, we can state the following six specific functions:

1. It shall facilitate the implementation, administration, and operation of the WTO trade agreements, such as multilateral trade agreements, plurilateral trade agreements.
2. It shall provide a forum for negotiations among its members concerning their multilateral trade relations.
3. It shall administer the ‘Understanding on Rules and Procedures’ so as to handle trade disputes.
4. It shall monitor national trade policies.
5. It shall provide technical assistance and training for members of the developing countries.
6.  It shall cooperate with various international organizations like the IMF and the WB with the aim of achieving greater coherence in global economic policy-making.

The WTO was founded on certain guiding principles—non-discrimination, free trade, open, fair and undistorted competition, etc. In addition, it has special concern for developing countries.