WTO - International organisations and arrangements, International Business Video Lecture | International Business - B Com

global organizations World Trade
Organization or WTO need for formation
of WTO failure of eight round of GATT
held in Uruguay at Punta del Este in
1986 known as uruguay round gave birth
to the new organization and a legal
entity called as World Trade
Organization or WTO
once again India became the founder
member of the World Trade Organization
also now let us see how WTO is
supporting foreign trade
unlike United Nations Organization or UN
oh all members of world trade
organization have equal voting and
negotiating rights it provides a
framework for operations implementation
and administration of multilateral trade
agreements objectives of WTO though the
objectives are World Trade Organization
are similar to get they have wider scope
and the powers to enforce its decisions
the objectives emphasize on creation of
global free trade environment among
member countries the World Trade
Organization enable members to enjoy
higher income through growing output
levels by sharing trade gains the
objectives of WTO are first to help to
remove or reduce barriers to
international trade agreement with the
member countries second to achieve
global economic development through
optimum utilization of world resources
third to increase market share of
developing countries through assistance
in their development efforts fourth to
follow a non-discriminatory policy for
all member countries
fifth to act as dispute settlement
machinery as and when disputes arise
between member countries functions of
WTO the WTO being a legal entity acts as
an advisory as well as regulatory body
it's performed several functions in
order to control the international
trading environment they are first to
guide the member countries in
multilateral trade second to handle
dispute settlement with approval rules
and procedures laid down by WTO third to
scrutinize regularly the National
trading policies of member countries
fourth to implement multilateral trade
agreements and legal instruments
approved at the uruguay round fifth to
participate in global policymaking by
seeking help from International Monetary
Fund or IMF and World Bank or IBRD as
and when necessary
WTO provisions related to international
trade are now similarly applicable to
agriculture which was brought within the
fold of GATT in the uruguay round 1986
to 1993 of multilateral trade
negotiations or MTN's
the World Trade organization's agreement
on agriculture AoE
the World Trade organization's or WTO
agreement on agriculture or ill II was
put into practice in 1995 after the
Uruguay Round of the general agreement
on tariffs and trade or G ATT the WTO
agreement focused on reducing trade
barriers and was the first codification
of global rules for agricultural trade
developed world agricultural subsidies
remain the largest point of contention
along with the resulting competitive
disadvantage faced by developing
countries WTO and Indian agriculture it
was expected that WTO would create a
free trade environment but it was not
100% successful Indian agricultural
produce could be exported in much larger
quantity because of two reasons first
reduce tariffs may reduce prices of farm
products and second India has low labor
cost advantage as compared to many
developed countries there were two major
obstacles in creation of free trade area
first high subsidies provided by EU or
European Union and us to their farmers
as domestic price support and second
developed countries also gave direct
export subsidies to their farmers these
two obstacles halted free trade
environment implementation in true sense
effect of WTO regime at a glance India
was exporting over three times of our
agricultural imports during pre WTO
period
India's imports and exports both
increased during post WTO period over
pre WTO period according to a study by
dr. SK Draghi during pre and post WTO
period India's imports grew faster than
exports due to liberalisation under WTO
the gap between the value of imports and
exports is narrowing
after the WTO regime started functioning
the exports of Indian agricultural
produce could not grow at expected rate
as developed countries were not ready to
reduce their subsidies they were not
ready to proceed further in trade
negotiations as well in order to fetch
full advantage of WTO Indian farmers
must be encouraged to reduce costs of
production and increase exportable
surplice India must adopt dynamic
policies for further improvement this
may be achieved through alliance of
developing nations which would
pressurize the developed world to reduce
their subsidies
application of WTO provisions on
agriculture involves many contentions
issues and is an area of serious concern
for developing countries which are
primarily agrarian economies more over
the world despite growing
interdependence and integration is
highly heterogeneous with regard to
levels of development this heterogeneity
is very much noticeable when we compare
the agricultural sector of developed and
developing countries
to summarize India is constantly
improving in global trade environment it
has contributed has found a member of
gantt as well as WTO failure of GATT
gave birth to WTO as a legal entity to
develop and regulate global free trade
environment implementation of WTO regime
was unable to bring about drastic
changes in Indian agricultural sector
which is the backbone for the Indian
economy but it has surely given a
helping hand to develop both Indian
agricultural imports and exports in a
quantitative manner