World Trade Organization Slides

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Faiza YaqoobRoll. No; 208

Musarat shaheenRoll. No; 235

Farah Virk

Roll. No; 234



World Trade Organization



Introduction of WTO

History of WTO

Structure of WTOObjectives of WTO

Principles of WTO

Implications of WTO in Pakistan



Faiza Yaqoob

Roll. No: 208



What Does WTO Mean?

The World Trade Organization (WTO) is an organization thatintends to supervise and liberalize international trade.



WTO is an internationalorganization dealing with

the global rules of tradebetween nations. Itsmain function is to

ensure that trade flowsas smoothly, predictably,and freely as possible.



History of WTO

The organization

officially commenced on January 1, 1995 underthe Marrakech

Agreement.

By replacing the GeneralA reement on Tariffs and



But the roots of the W.T.O. dateback to World War-II and the yearsthat followed.

In 1944, a meeting took place inBretton Woods, New Hampshire:

the International MonetaryConference.



There, negotiators agreed to create theInternational Monetary Fund and the World

Bank. But they could not agree on anorganization to deal with international trade.

3years later, in 1947, 23 nations approved GATT.

It was meant to be temporary. Tradenegotiations under GATT were carried out in aseries of talks called rounds.



The first round lowered import taxes

on one-fifth of world trade. Laterrounds produced additional cuts, andnegotiators added more issues.

The sixth round began in 1963. It wascalled the Kennedy Round after themurder of President John F. Kennedy.



The results included an agreement

against trade dumping. This is whenone country sells a product in anothercountry at an unfairly low price.

The eighth round of talks began inPunta del Este, Uruguay, in 1986. TheUruguay Round lasted almost twice aslong as planned.



In all, 123 nations took part in 7.5years of work. They set time limitsfor future negotiations. They alsoagreed to create a permanent

system to settle trade disputes.

In April 1994, most of those 123nations signed an agreement. Itreplaced GATT with the WorldTrade Organization.



Musarat ShaheenRoll. No; 235



WTO StructureWTO has 153 members representing more than 97% of total world trade.



The WTO is governed by :

a ministerial conference

meeting every 2years

a general council, whichimplements the conference'spolicy decisions and is responsible

for day-to-day administration.



The WTO's headquarters is at,Geneva, Switzerland. The WTO is runby its member governments.

All major decisions are made by themembership as a whole, either byministers (who meet at least once

every two years) or by theirambassadors or delegates (whomeet regularly in Geneva).



When WTO rules imposedisciplines on countries’ policiesthat is the outcome of negotiations among WTO

members.

The rules are enforced by themembers themselves underagreed procedures that theynegotiated, including the

possibility of trade sanctions.



OBJECTIVES OF WTO:

Administering World Trade Organization(WTO) trade agreement

Forum the trade negotiationHandling trade disputes

Monitoring national trade policy

Technical assistance and training fordeveloping countries



Co-operation with other international

organization (like help from World Bank andIMF).

To provide a forum for negotiations

To provide a dispute settlement mechanism.

Raising standards of living.

Ensuring full employment.



To increase the level of production

and productivity with a view toensuring level of employment in theworld.

To expand and utilize worldresources to the best.

To promote World Trade in a mannerthat benefits every country.



To improve the level of living for theglobal population and speed upeconomic development of the

member nations.

To ensure the conduct the

international trade on non-discrimination basis.



Farah Virk

Roll. No: 234



WTO Basic PrinciplesThe trading system should be:

without discrimination

a country should not discriminatebetween its trading partners (givingthem equally “most-favored-nation”or MFN status);



Predictable

foreign companies, investors

and governments should beconfident that trade barriers



More Competitive

discouraging “unfair”practices such as exportsubsidies and dumping

products at below cost togain market share.



More Beneficial for lessdeveloped countries

giving them more time to adjust, greater flexibility, and special privileges.



Implications of WTO inPakistan

There is a considerable impact of

WTO on all sectors of Pakistan'seconomy, particularly, its industry,textile, agriculture and services.



As far as the industrial sectoris concerned, Pakistan’s mainexports are textile and relatedproducts.

The non-textile exports of

Pakistan are very low but havea potential to growtremendously under the WTOregime.



On the import side, Pakistan has been

rationalizing its tariff structure to alarge extent under the tradeliberalization principle as envisagedby WTO.

The average tariff in Pakistan is

around 17 percent however, there is aneed to ensure that there are noadverse affects of trade liberalizationon the domestic producers.



The complete integration of all textileand clothing products into the freetrade environment under the

Agreement on Textile and Clothing(ATC) on 1st January 2005 was one of the most significant changes forPakistan under the world trade regime.



However, a quota-free trade era callsfor structural and operationaladjustments in the textile sector, to

enable Pakistan's exporters to beglobally competitive.

China is the biggest challenge toPakistan T&C exports in this post ATCregime.



As regards agriculture, Pakistan

being an agrarian economy is stilla net importer of food items.

The Agreement on Agriculture(AOA) of WTO has been significantin molding agricultural policies of

Pakistan.

The Agreement on Agriculture

provides rules regarding export



Apart from the major crops,Pakistan needs to exploit itscomparative advantage in the

production and exports of meat,dairy products, fruits, vegetablesetc.



Moreover, Pakistan has a comparativeadvantage in many primarycommodities. But in order to fullyutilize its comparative advantage, it

needs to focus on and solve theproblems in supply side (domesticrequirements).



Pertaining to the Agreement on trade related

aspects of intellectual property rights (TRIPS),Pakistan needs to ensure that the industry isencouraged to provide intellectual propertyprotection for its products.

and also make certain that there is effectiveprotection of the intellectual property rightsattached to imported products.



Services are the largest and most dynamiccomponent of both developed anddeveloping country.

It is impossible for any country to prospertoday under the burden of an inefficientand expensive services infrastructure.

In Pakistan, the services sectorcontributes more than half of the GDP.



Workers’ remittances account for thelargest component of services and thecountry has a large number of expatriatesthroughout the world.

Being a developing country, Pakistan hasadopted a cautious approach while makingcommitments in trade in services.



Pakistan’s domestic industry also

faces problems of increasedimports and unfair practices underthe global trade regime.

WTO Agreements have an in-builtmechanism providing for traderemedial measures to counteractthe effect of dumping, subsidies

and surge of imports.



Accordingly, Pakistan throughnational legislation has come upwith

anti-dumping laws againstdumping,

countervailing duties laws againstsubsidies and



In a nutshell, at present Pakistanmaintains a fairly liberal traderegime, where all quantitative

restrictions on imports have eitherbeen removed or converted intotariffs.



However, quality control is

integral to competitiveness of Pakistan's exports.

Low quality products fetch lowprice in the international market.

The obvious problems of qualityfor Pakistan are those of technical

precision, grading and



Proper support and prudentpolicies for the industry, along withintelligent balancing of imports andexports is vital for the

sustainability and growth of Pakistan's economy and is likely tolead towards a bright future andtrade enhancement under the WTOregime.

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