The Importance of World Trade Organisation (WTO) to Indian Economy



The Importance of World Trade Organisation (WTO) to Indian Economy !

The highest decision making body of the WTO is the Ministerial Conference, which has to meet at least every two years. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements. Since, the establishments of WTO in January 1995, so far six ministerial conferences have been held

a. Singapore (9-13 December, 1996)

b. Geneva (18-20 November, 1998)

c. Seattle (USA) (30 November-December 1999)

d. Doha (9-14 November, 2001)

e. Cancun (Mexico, September 2003)

f. Hong Kong (13-18 December, 2005)

Objectives of WTO:

a. To improve standard of living of people in the member countries.

b. To ensure full employment and broad increase in effective demand.

c. To enlarge production and trade of goods.

d. To enlarge production and trade of services.

e. To ensure optimum utilisation of world resources.

f. To accept the concept of sustainable development.

g. To protect environment.

The conclusion of the 1st conference made it clear that labour standards will not be used for restricting trade of developing countries. On the other hand, developed countries got success in correlating issues of investment and competition with international trade will be solved under TRIMs i.e., Trade Related Investment Measures, for which a working group will be constituted.

During the 4th conference, there were strong pressures to launch a comprehensive round of negotiations including multilateral regimes on investment, competition policy, trade facilitation, government procurement and environment, India was opposed to over burdening of multi-lateral trading system with non-trade or new issues on the agenda.

The important features of disagreement raised in 5th Cancun conference are as follows:

a. Practical disagreement on agenda items-disagreements regarding imbalance in agriculture trade, market access improvements of industrial goods.

b. Disagreement on Draft Ministerial Text proposed on 14 September, 2003 which ignores concerns of developing countries, like India, on agriculture. The draft circulated by the meet chairman little to cut farm subsidies by rich countries, even as it sought to open up the markets of the developing countries for farm produce.

The positive development was the role of G-20 in effectively placing the view points of the world community dependent on agricultural for livelihood, before the Cancun Ministerial Meeting.

The key outcomes of the 6th conference was

a. To establish modalities in agriculture and Non-Agriculture Market Access (NAMA) by April 30, 2006 to prepares draft schedules by 31st July.

b. Amendments to TRIPS agreement re-affirmed to address public health concerns of developing countries.

c. Duty free, quota-free market access for all LDC's products to all developed countries. Developing countries declaring itself to be in a position to do so, to also provide such access, though flexibility in coverage and in the phase of their commitments is provided.