B.Com Ist Year World Trade Organisation Question Answer Notes Study Material Notes Sample Papers Unit Wise Topic Wise Syllabus Notes Inclusion of All The Questions Asked In Past Year Of Exams. Our post gives detailed information related to this topic.
World Trade Organisation
B.Com Ist Year World Trade Organisation Question Answer Notes | Index
B.Com Ist Year World Trade Organisation Question Answer Notes Page.1
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Q.37. Discuss the functions and objectives of World To Organisation (W.T.O.). What are the major achievement and failures of W.T.O.? (Meerut, 2006)
Or Write functions and objectives of World Trade organisation. (Meerut, 2012)
Ans. After the Second World War, many countries got down together to work on ways and means to promote international trade To promote multilateral trading system in an environment of free trade with least tarrif barriers, the General Agreement on Tariffs and Trade (GATT) was set up by 23 countries in 1947. Over the years the membership of GATT swelled and in 1994 touched 118 countries. GATT provided for reduction in tariffs and trade restrictions in a phased manner over a period of time. It laid down that this task would be accomplished in different rounds of trade negotiations to be held from time to time. The signing of the Final Act of the Uruguay Round by member nations of GATT in April, 1994 paved the way for setting up the World Trade Organisation. An agreement to this effect was signed by 104 members. The WTO Agreement came into force from January 1, 1995 and India has become a founder member of the WTO. One of the main feature of the WTO would be to deal with not only the disputes in the area of trade in goods, but a whole range of issues such as services and intellectual property.
The WTO agreement provides the legal ground rules for international commerce. The WTO agreement is a contract between nations which binds signatory governments to keep their trade policies within the boundaries set up by the government. WTO is an inter-governmental organisation with its headquarters at Geneva. Now WTO has 159 members.
OBJECTIVES OF THE W.T.O.
(1) To establish a fair, equitable, rule based and transparent Multi-lateral trading system.
(2) Elimination of tariff and other barriers to trade in goods well as in services.
(3) To eliminate the discriminatory treatment in Internationa Trade Relations.
(4) Raising the standard of living through continuous increase in real income and effective demand.
(5) To achieve the level of full imployment by increasing the world production.
(6) To make optimum utilization of the world’s available
(7) Promoting world trade in a manner that benefits member nations.
(8) Reduction of tariff and non-tariff barriers, increase in transparency, certainty and predictability.
(9) Linkages Trade Policies with Environment policies with sustainable growth and development.
(10) Integration of developing and least developing countries economies.
The salient features of this agreement are as follows:
(1) Multilateral Trading System : This agreement seeks to establish multilateral framework for trade in services. It has brought into focus the clause of most favoured nation to discourage bilateral trading and to encourage multilateral trading system.
(2) Reforms in Agriculture Trade: The long-term reform for trade in agricultural and domestic products with regard to subsidies, export competition and access to foreign agricultural products by removing quota restrictions in a phased manner. According to this, the developed member countries have to reduce their tariffs on agricultural commodities by 36 percent on an average over a period of 6 years. On the other hand, the developing countries should also reduce these tariffs by 24 percent over a period of 10 years.
(3) Reforms in Textile Trade : Under this arrangement, the developed countries would gradually abolish import quotas on textiles and clothing (which were in force since 1974 under the multi fibre arrangement), providing greater opportunities to the developing countries to export their cotton textile products.
(4) Market Access : This provides a framework for free trade among the member nations through substantial reduction in their riffs on industrial and agricultural products.
(5) Trade-Related Intellectual Property Rights (TRIPS): he Agreement on Trade Related Intellectual Property Rights (TRIPS) lays down norms and standards for safeguarding seven Types of intellectual property, viz., copyright, geographical Adications, trademarks, industrial design, patents, undisclosed
information and layout designs of integrated circuits. The member countries may have to change their patent and copyright act accordingly. A transition period of five years is available to all developing countries to give effect to the provisions of the TRIPS Agreement Countries which do not provide product patent in certain areas can delay the provisions of product patents for another five years.
(6) Trade-Relate Investment Measures (TRIMS) : agreement on Trade Relate Investment Measures calls for introducing national treatment of foreign investments and removal of quantitative restrictions on imports and exports. However exceptions are allowed if a country is suffering from balance of payments problems. Under TRIMS agreement, investment regulations have to accord same treatment to domestic products and imports.
(7) General Agreement on Trade in Services (GATS): The GATS provides a multilateral framework of principles and services which should govern trade in services under conditions of transparency and progressive liberalisation. The GATS requires that the countries would provide market access to foreign service suppliers. It allows countries to apply immigration laws to regulate the entry of persons into their territories.
(8) Disputes Settlement Body : The Disputes Settlement Body (DSB) set up under WTO to provide security and predictability to the multilateral trading system. It has not been made mandatory to settle a dispute within 18 months. The finding of the disputes settlement panels will be final and binding on all parties concerned.
Q.38. Describe the benefits obtained by India from W.T.O. Also state the bad impacts of W.T.O. (Meerut, 2006)
Or Write a detailed note on W.T.O. and India. (Meerut, 2014, 2013)
Ans. The WTO agreements evoked lot of controversy in Ino The Government of India highlighted its merits, whereas 12 opposition parties condemned it. Some economists have describ as a deal of selling out India to transnational corporation developed countries. The benefits and bad impacts of the new economic order can be discussed as follows:
BENEFITS TO INDIA FROM W.T.O..
- Increase in Income : It is estimated that on acco WTO, the income will increase between 213 to 274 billion U.S.
Dollars annually. The major increase will be in the area of clothing, oriculture, forestry, fishery products and processed foods.
(2) Increase in Exports: India can increase its exports by 1.5 20 billion dollars per annum due to general expansion of world Trade arising from substantial lowering of tariffs. According to the overnment of India, India’s market share in the world exports will improve from 0.5% to 1%. The dismantling of the quota system in the globaltextile trade would enable India to increase her exports of textiles.
(3) Beneficial for Indian Agricultural Exports: Reduction in export subsidies on agriculture by developed countries will make Indian agriculture exports more competitive in world market. The gradual reduction in the export subsidy by developed countries, would open new markets for India.
(4) Increase in Foreign Direct Investment: Being a member of WTO, the flow of foreign direct investment would be enhanced in India.
(5) Benefit to Service Sector: Due to abolition of barriers in service sector, India will gain in skilled services exports such as computer software, consultancy, medical services and films etc. The developed countries will also take interest in providing services such as banking, insurance, shipping, transport and telecommunications which prove helpful in the rapid development of our country.
(6) Availability of Foreign Goods : With the help of this agreement, consumers will get cheap and good quality foreign goods. It will prove helpful in increasing the standard of living of the people.
(7) Settlement of Disputes: Being a member of WTO, India can make complaint of the disputes regarding trade of goods and services in the organisation. It provides security to the multilateral trading.