Global Institutions - WTO | Economy for UPSC 2024 (Pre & Mains) PDF Download

 Page 1


ECONOMY
GLOBAL 
INSTITUTIONS
WTO
Page 2


ECONOMY
GLOBAL 
INSTITUTIONS
WTO
WORLD TRADE 
ORGANIZATION 
(WTO)
Page 3


ECONOMY
GLOBAL 
INSTITUTIONS
WTO
WORLD TRADE 
ORGANIZATION 
(WTO)
WORLD TRADE ORGANIZATION 
(WTO)
It succeeded General Agreement on Trade and Tariffs (GATT) which was in 
place since 1946. 
It was established in Marrakesh, Morocco in 1995 as a result of Uruguay round
of discussions (1986-1994) of GATT. 
With WTO’s existence in 1995, GATT didn’t cease to exist – it continues as 
WTO’s umbrella treaty for trade in goods.
India has been member of GATT since 1948; hence it was party to Uruguay 
Round and a founding member of WTO. 
China joined WTO only in 2001 & Russia in 2012.
Page 4


ECONOMY
GLOBAL 
INSTITUTIONS
WTO
WORLD TRADE 
ORGANIZATION 
(WTO)
WORLD TRADE ORGANIZATION 
(WTO)
It succeeded General Agreement on Trade and Tariffs (GATT) which was in 
place since 1946. 
It was established in Marrakesh, Morocco in 1995 as a result of Uruguay round
of discussions (1986-1994) of GATT. 
With WTO’s existence in 1995, GATT didn’t cease to exist – it continues as 
WTO’s umbrella treaty for trade in goods.
India has been member of GATT since 1948; hence it was party to Uruguay 
Round and a founding member of WTO. 
China joined WTO only in 2001 & Russia in 2012.
THE UNIQUE CASE OF CHINA
In 2001, China acceded to the World Trade Organization (WTO)
Accession was a major undertaking for China, and appeared to indicate a 
policy shift toward a market economy
T o accede, many of China’s historical governmental policies and practices 
needed to be revised 
because they were inconsistent with WTO principles
WTO members recognized the great role that the government played in 
the Chinese economy, and were concerned that free enterprise would be 
disadvantaged.
Accordingly, in acceding to the WTO, China allowed WTO members to 
treat China as a non-market economy (NME) while it transitioned to a 
market economy.
Page 5


ECONOMY
GLOBAL 
INSTITUTIONS
WTO
WORLD TRADE 
ORGANIZATION 
(WTO)
WORLD TRADE ORGANIZATION 
(WTO)
It succeeded General Agreement on Trade and Tariffs (GATT) which was in 
place since 1946. 
It was established in Marrakesh, Morocco in 1995 as a result of Uruguay round
of discussions (1986-1994) of GATT. 
With WTO’s existence in 1995, GATT didn’t cease to exist – it continues as 
WTO’s umbrella treaty for trade in goods.
India has been member of GATT since 1948; hence it was party to Uruguay 
Round and a founding member of WTO. 
China joined WTO only in 2001 & Russia in 2012.
THE UNIQUE CASE OF CHINA
In 2001, China acceded to the World Trade Organization (WTO)
Accession was a major undertaking for China, and appeared to indicate a 
policy shift toward a market economy
T o accede, many of China’s historical governmental policies and practices 
needed to be revised 
because they were inconsistent with WTO principles
WTO members recognized the great role that the government played in 
the Chinese economy, and were concerned that free enterprise would be 
disadvantaged.
Accordingly, in acceding to the WTO, China allowed WTO members to 
treat China as a non-market economy (NME) while it transitioned to a 
market economy.
THE UNIQUE CASE OF CHINA
If a country is an NME
It is presumed that prices in that country do not reflect market 
principles.
The effect of this presumption is that rather than using the home 
country’s prices and costs for determining “normal value” in anti-
dumping investigations, 
the member countries of WTO will utilize alternative pricing 
methodologies