This article is written by Shyam Gupta of IPEM Group of Institute. 

World Trade Organisation

INTRODUCTION

The world Trade organizations WTO the only Organization that is caused to maintain Trading rules and regulations between different nations. In 1995 January 1 World Trade Organization was built. It headquarters is Switzerland. World Trade Organization is intergovernmental Organization means non- private organization but an international organization which rule is mandatory to follow in every country that is dealing with other country. 

Main motive of this Organization is to maintain smooth, faire and hassle-free Trade between nations. World Trade organizations has set their budget roughly 220 million Doller in 2022, which is contribute by their members. There are 164 member nations in this organization. The last country was Afghanistan who joined this Organization. Some popular countries involved in World Trade Organization is Canada, Hong Kong, India, Indonesia, Poland, Russia, Spain, etc. 

IMPROTANCE

Every single dispute arises while trading between two or more nations will be taken care by World Trade Organizations. The countries who nominate them as a member of World Trade Organization will get benefits such as reduction in trade tariff, advantage over import, reduction on bans, opportunity over defend trade, expect good response, transparency of international trade and many more. Sometimes this organization provide legal protection to promote national interest.  World Trade organizations bind all their members as per international commitments and their terms and conditions to make trading flexible among all. All the rules and regulations of World Trade Organization is mentioned in GATT (General Agreement on Tariffs and Trade), it was revised in 1994. GATT 1994 contains GATT 1947 with little changes. It is a fact that all the rule are agreement that government negotiated.

POWERS

 The world Trade organizations has power to stimulate employment, economic Growth and rise in standard of living. World trade organization has boosted the trade between nations. In the absence of World Trade Organization tariff on export was rapidly increasing. Globalization policy is adopted in almost every country to arise their economic growth therefore to protect weak country from well powerful country certain guidelines World Trade organization made. The more and more trade volume is increasing issues are also increasing. The aim of world Trade organizations is not only maintained country for unfair practice but also motivate many other countries in globe to allow their people to do trading among different nations. The world Trade organizations has right to cut the un necessary cost of good this can come under trade tension reduction strategy, not only goods but also minimize cost of doing business internationally. This is the platform where weaker section gets a strong voice against unfair or illegal.

Import and Export in different commodities has made significant growth in economy of their nation so government is also promoting, mostly developing countries are encouraging other countries to trade with themselves. Government has reduced the tariff rate for products to welcome other countries to import their goods. World trade Organization encourage countries’ government to remove red cross on different companies that is ban. World trade organization provide flexibility between two or more countries to trade with their own conditions that doesn’t harm other people in any way. 

The WTO agreement says that the subsidy cannot exceed 10% of the production value. In 2021 India broke this agreement, crossed the limit and subsidised her farmers. India smartly defended herself using another WTO agreement. But WTO now wants India to stop subsidising the fishing industry! Fun fact: India was a founding member of WTO, right now controlled only by the developed countries (mainly USA).

There are different sectors in world Trade organizations that significantly plays vital role. General research says that there are Twenty-three countries who have signed the original act of the General Agreement on Tariffs and Trade (GATT) on 30 October 1947. The General Agreement on Tariffs and Trade (GATT) and goods council. All international trade in goods is generally handled The General Agreement on Tariffs and Trade (GATT), they act like representative from all world Trade organizations country member. Ten country forms a committee forms a specific goods council that deal with specific subject or goods such as market assets, agricultural products, etc. World Trade Organization maintains tariffs and other restrictions also helps other countries to remove unnecessary barriers for trading with other countries. World Trade Origination is also involved with World Bank, IMF i.e., International Monetary Fund and with International Bank for Reconstruction and development IBRD to smooth global economic policymaking. 

Position in India 

Here are some of the key events happened in the history of Indian trade.

India was a country focusing on trade of manufactured goods like textiles, jute, cotton etc instead of agriculture and was the top exporter of cotton textiles. The major center for the production of cotton was Malabar, Gujarat, Bengal and Coromandel.

Indian ocean was a zone of relatively free trade & East, South, West Asian traders participated in trades. But the arrival of Europeans changed this.

India was having a great trade with Roman Empire. Later the collapse of Roman empire led to rise of Islam, at the same time Europeans lost the direct access to India because of the rise of Islam.
Europeans approched India in two ways.

1. Columbus tried Western route to India – but ended up in finding a new coordinate called ” America”

2. Rounding of Cape of Good Hope – an initiative taken by Portugeese

After a time India was taken by Portugeese. They were not peaceful traders. They introduced Cartaze system (paying permit to trade) in India. But the decline of Portugeese was happened by 2 big multi national corporations;

1. Dutch East India
2. English East India

Later both of them joined by French. This tripartite participation led to increase in international trade.
Gradually India started losing all exports by 19^th century due to high tariff and transit duties on Indian cotton textiles. Europeans forced India to specialise in agriculture and Europeans specialised in manufatured goods.

1750-1860 deindustrialization happened India.

1860 onwards deindustrialization slowed down and reindustrialization happened by the rise of jute industry.

1885- the import of manufactured goods in India was around 62%.
1913- it increased to 79%.
It shows that India was a deficient country during these periods.


1944- IMF formation
1944- World bank formation
1945-48 International trade organisation (ITO) formation
1948- GATT formation

Later 5 year plans introduced in India.
1^st FYP 1951-56:- didn’t place much emphasis on export policies.
2^nd FYP 1956-61:- It was about growth prospects of traditional agriculture exports. Export promotion didn’t get much emphasis.
3^rd FYP 1961-66:-A shift happened in Export policy of India.
4^th FYP 1969-74:- reintroduced some of export promotion measures.

1995- WTO formation
1994- India joined in WTO (India was one of the founding members)

This is how India’s international trade policy changed faced by countries like India in the present global trade regime.

In Pakistan PET case the WTO (world Trade organization) rule in favors of Pakistan rejecting the European Union EU in PET Polyethylene Terephthalate Countervailing duty case in Geneva. PET also called Resin. It is bottle-grade polyester PET bottles for mineral water beverages. The European Union claim on export of PET a chemical used in manufacturing of mineral water bottles is against rules created by World Trade Organization. Pakistani PET were inconsistent with Subsidies and countervailing Measures Agreement SCM of World Trade Organization. When hearing was going on it was considered that unfair trade was imposed by EU to Pakistani chemical industry. Later Pakistan file case against European Union for conducting the unfair trade in 2015. USA and China joined the case as third party observers. In the proceeding EU imposed countervailing duty and challenges Pakistan’s manufacturer Bond Scheme MBS. In the conclusion of the case, both the parties presented their evidences and Court declare case in favor of Pakistan and asked to removed restriction on trade against Pakistan. Pakistan has always met with World Trade Organization obligations.                                                                 

World Trade Organization has given fair chance to every trading person to raise their concern and encourage everyone to participate, they act as middle men to maintain peace among all nations. From the above case everyone has fear that Pakistan is well known for terror and might be guilty but World trade organization keep every rumor aside and give fair chance to both the countries to keep their evidences and hence in the end Pakistan win. 

Another case of WTO, in 2022 European Union and China dispute in anti-suit injunctions ASI. EU accused China for violating the international Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In this dispute Japan, Canada and US also join this dispute. Case is still continued. 

References 

• European Union and China dispute
• GATT 1994 
• GATT 1947
• Pakistan PET case
• International Monetary Fund