World Trade Organization and India

Date: April 17, 2015


WTO: The Organisation's Working and its impact on India

The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.So while the WTO is still young, the multilateral trading system that was originally set up under GATT(founded in 1948) is well over 50 years old.The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The last round — the 1986-94 Uruguay Round — led to the WTO’s creation.

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The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does this by:
Administering trade agreements
Acting as a forum for trade negotiations
Settling trade disputes
Reviewing national trade policies
Assisting developing countries in trade policy issues, through technical assistance and training programmes
Cooperating with other international organizations


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The WTO has 160 members (26 June 2014) , accounting for about 95% of world trade. Around 30 others are negotiating membership.
Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments.
The WTO’s top level decision-making body is the Ministerial Conference which meets at least once every two years.
Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.
At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council.
Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements.

1. The system helps promote peace
2. Disputes are handled constructively
3. Rules make life easier for all
4. Freer trade cuts the costs of living
5. It provides more choice of products and qualities
6. Trade raises incomes
7. Trade stimulates economic growth
8. The basic principles make life more efficient
9. Governments are shielded from lobbying
10. The system encourages good government

The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.
The inaugural ministerial conference was held in Singapore in 1996. Disagreements between largely developed and developing economies emerged during this conference over four issues initiated by this conference, which led to them being collectively referred to as the "Singapore issues".
The second ministerial conference was held in Geneva in Switzerland.
The third conference in Seattle, Washington ended in failure, with massive demonstrations and police and National Guard crowd control efforts drawing worldwide attention.
The fourth ministerial conference was held in Doha in the Persian Gulf nation of Qatar. The Doha Development Round was launched at the conference. The conference also approved the joining of China, which became the 143rd member to join.
The fifth ministerial conference was held in Cancún, Mexico, aiming at forging agreement on the Doha round. An alliance of 22 southern states, the G20 developing nations (led by India, China, Brazil, ASEAN led by the Philippines), resisted demands from the North for agreements on the so-called "Singapore issues" and called for an end to agricultural subsidies within the EU and the US. The talks broke down without progress.
The sixth WTO ministerial conference was held in Hong Kong in December 2005. It was considered vital if the four-year-old Doha Development Round negotiations were to move forward sufficiently to conclude the round in 2006. In this meeting, countries agreed to phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. Further concessions to developing countries included an agreement to introduce duty free, tariff free access for goods from the Least Developed Countries.

The Doha Development Round started in 2001 and continues till today.
The WTO launched the current round of negotiations, the Doha Development Round, at the fourth ministerial conference in Doha, Qatar in November 2001. This was to be an ambitious effort to make globalization more inclusive and help the world's poor, particularly by slashing barriers and subsidies in farming.
The initial agenda comprised both further trade liberalization and new rule-making, underpinned by commitments to strengthen substantial assistance to developing countries.
The negotiations have been highly contentious. Disagreements still continue over several key areas including agriculture subsidies, which emerged as critical in July 2006.
According to a European Union statement, "The 2008 Ministerial meeting broke down over a disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers from surges in imports." The position of the European Commission is that "The successful conclusion of the Doha negotiations would confirm the central role of multilateral liberalisation and rule-making. It would confirm the WTO as a powerful shield against protectionist backsliding."
An impasse remains and as of June 2012, agreement has not been reached, despite intense negotiations at several ministerial conferences and at other sessions.


WTO is receiving the deepest indulgence of everyone, as it is affecting the major sectors of Indian economy and agriculture in particular now, and more intensively in the coming years.
A major concern growing with the increasing impact of WTO is, as to how the small and marginal farmers’ who dominate the Indian agriculture, depend heavily on agriculture for their livelihood, have small marketable surplus and operate under heavy constraints to be competitive in a subsidized agriculture production and trade regime, could benefit from WTO. The concern more often swings to the other side that the spreading tentacle of WTO with reduced tariff regime and increased access to Indian market for the products from subsidized agriculture could severally damage the agriculture based livelihood of majority of Indian farmers.
The challenge to policy makers is how to protect Indian agriculture from the impending WTO threat, enhance the competitiveness of Indian farming and make farming a viable and self sustaining enterprise to improve and ensure livelihood security of the farmers.
A strategy to address this challenge shall necessarily involve re-orientation and injection of market linked dynamism in Indian agricultural R&D, strengthening of supportive institutions to serve the resource poor farmers, and steering fast the change with appropriate policies and trained human ware.

The deliberations of the workshop suggested the following policy initiatives and action points:
India needs to devise appropriate domestic policies (extensive domestic market reforms, heavy investment in building and maintaining infrastructure, etc.) to improve efficiency and competitiveness of domestic produce.
It should continue to play leadership role in negotiating agreements with sound analytical basis and support of other developing countries with similar interest. A dedicated group of about 100 experts, on full time basis, should work on the WTO issues to provide analytical basis for negotiations and to help in planning appropriate strategies to strengthen Indian agriculture to face increasing trade liberalization and globalization.
Export of high value products, horticulture products, processed products, marine products and rice should be promoted.
India has to counter the challenges in the export of traditional items from the developing countries. In this regard, prioritization, enhancing production and processing efficiency, marketing and transport infrastructure, maintaining quality, stable supply etc. need immediate attention.