Title : WORLD TRADE ORGANIZATION
Date : Dec 20, 2021
Based on a News Article published in the ‘The Hindu’ on 17th December 2021 on Page Number 6
Useful for UPSC CSE Prelims and Mains (GS Paper II)
- The World Trade Organization (WTO) succeeded the General Agreement on Tariffs and Trade (GATT), which was established in 1947.
- The Uruguay Round of the GATT (1986-1994) resulted in the establishment of the WTO. The World Trade Organization (WTO) began operations on January 1, 1995.
- The World Trade Organization (WTO) Agreement, sometimes known as the "Marrakesh Agreement," was signed in Marrakesh, Morocco, in 1994.
- The World Trade Organization (WTO) is an international organisation that regulates international trade rules.
- The main distinction between GATT and WTO was that whereas GATT primarily dealt with goods trade, the WTO and its agreements could encompass not just items but also services trade and other intellectual assets such as trade creations, designs, and innovations.
- Geneva, Switzerland is the headquarters.
Members of WTO:
- The World Trade Organization (WTO) has 164 members (including the European Union) and 23 observer countries (like Iran, Iraq, Bhutan, Libya etc).
- India is a founding member of the GATT and its successor, the WTO, which was established in 1947.
Structure of WTO:
- Ministerial Conference: The WTO's highest authority, the Ministerial Conference, is made up of delegates from all WTO members and is mandated to meet at least every two years. It has the authority to make decisions on all topics under any multilateral trade agreement.
- The General Council, made up of all WTO members, is responsible for reporting to the Ministerial Conference.
- General Council meets in two ways: as a Dispute Settlement Body and as a Trade Policy Review Body.
- The Dispute Settlement Body is in charge of overseeing the procedures for resolving disputes.
- Trade Policy Review Body: To conduct regular reviews of individual WTO members' trade policies.
Objectives of WTO:
- To establish and enforce international trade rules.
- To create a venue for further trade liberalisation negotiations and monitoring.
- To settle commercial conflicts.
- To make decision-making processes more transparent.
- To work with other important international economic institutions that are active in global economic management.
- To assist developing countries in taking full advantage of the global trading system.
WTO accomplishments include:
- Trade Facilitation on a Global Scale:
- WTO has fostered rapid development in cross-border commercial activity by establishing binding regulations for worldwide commerce in products and services.
- The WTO has aided in the removal of trade and non-trade barriers, as well as increasing the value and quantity of trade.
- Improved Economic Growth:
- The value of global commerce has nearly quadrupled since 1995, while the real volume of global trade has increased by 2.7 times.
- Domestic reforms and vows to open markets have resulted in a long-term increase in national income.
- Increased Global Value Chains:
- The WTO's stable market conditions, combined with enhanced communications, have enabled the emergence of global value chains, with commerce inside these value chains accounting for about 70%
of worldwide goods trade today.
- Poor Countries' Uplift:
- The WTO pays special attention to the least-developed countries. All WTO accords understand that they must have the maximum possible flexibility, and that better-off members must go above and beyond to lower import barriers on exports from least-developed nations.
- China's State Capitalism: China's state-owned firms pose a significant threat to the global free-market trade system, and the WTO's rulebook is insufficient to solve these issues.
- As a result, the United States and China are locked in a trade war.
- Institutional Issues: The Appellate Body's functions have been essentially halted since December 2019, due to the United States' refusal to appoint adjudicators, leaving the body without a quorum of adjudicators required to hear appeals.
- The WTO's dispute-resolution crisis is inextricably related to the organization's negotiation function failing.
- Lack of Transparency: In WTO discussions, there is a dilemma because there is no agreed-upon definition of what comprises a developed or developing country.
- Members can now self-identify as underdeveloped countries in order to receive'special and differential treatment,' a procedure that has sparked controversy.
- E-commerce and Digital Trade: The global trade scene has altered dramatically in the last 25 years, but WTO laws have not kept up.
- In 1998, WTO members formed a WTO e-commerce moratorium to investigate all trade-related issues linked to global electronic commerce, understanding that e-commerce would play a growing role in the global economy.
- However, poor countries have recently questioned the embargo because of its consequences for income collection.
- Agriculture and Development: Food security and development requirements for emerging countries like India are causing problems with the agreement on agriculture.
- The establishment of a new set of regulations for dealing with digital trade and e-commerce will be required as part of modernising the WTO.
- Members of the WTO will also have to deal more effectively with China's trade policies and practises, such as how to handle state-owned businesses and industrial subsidies.
- Increased efforts to integrate trade with environmental sustainability, given the severe challenges surrounding climate change, could assist both combat climate change and re-energize the WTO.
Tags : E-commerce and Digital Trade