MCOM 2nd Year Wto’s Contribution To Trade Study Material Notes
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WTO’S CONTRIBUTION TO TRADE
A. WTO ministerial meetings in 1996 and 1998. WTO framework, provided for ministerial meeting every two years to oversee its performance and to set its future work programmes. The first such meeting took place in Singapore in December 1996, to take stock of the progress made in the implementation of the Uruguay Round Commitment in the areas of agriculture, MFA, emergence of new forms of non-tariff barriers, excessive use of anti dumping duties, etc.
The second ministerial conference was held in May 1998 when the member. states committed not to impose customs duties on transactions conducted through electronic commerce till 1999.
B. Trade policy development during the 1980s and early 1990s :
(i) Many developing countries have undergone radical trade, exchange and domestic reforms which have improved the efficiency of resource use, opened new investment opportunities and, thus, promoted
(ii) The built in agenda from the Uruguay Round envisages further negotiations in various areas, such as agriculture and services, with specific time tables.
(iii) The agreement on textiles and clothing has established a clear time table for phasing out distortive quota regimes.
(iv) Tariff based protection has become the rule, rather than the exception.
(v) Bilateralism has been placed under control by the extension of WTO provisions to services, TRIPs and TRIMs, and by the unified dispute settlement mechanism, in which the possibility of unilaterally blocking the adoption of panel decisions no longer exists.
(vi) Services trade has been brought into multilateral system. Many countries are opening their markets for trade and investment either
unilaterally or through regional or multilateral negotiations.
(vii) The mechanism, completed by the Appellate Body, is being actively used by WTO members at all levels of development, and the consultation provisions are helping to resolve many disputes before they come formally to the panel stage.
(viii) All members of the WTO are equally committed to all the panel stage. Trade Agreements, although with time based phasing provisions for developing countries in many areas.
(ix) The use of restrictive measures for balance of payments reasons has. declined markedly.
(x) All non-tariff restrictions on agriculture, unless otherwise justified
are required to be eliminated or converted to tariffs (tariffied) und the WTO agreement.
PRINCIPLES OF THE TRADING SYSTEM UNDER WTO
1. Trade Without Discrimination. In this organisation, no country given special trading advantage to another or to discriminate against, all are on an equal basis and all share the benefits of any moves towards lower trade barriers.
2. Predictable and Growing Access to Market. The multilateral trading system is an attempt by government to provide investors, employers, employees and consumers with a business environment which encourages trade, investment and job creation as well as choice and low price in market place, such an environment needs to be stable and predictable, particularly if business are to invest and thrive.
3. Promoting Fair Competition. The WTO is a system of rules dedicated to open, fair and understored competition rules, are designed to secure fair conditions of trade.
4. Encouraging Development and Economic Reforms. The developing countries shows themselves prepared to take on most of the obligations that are required for developed countries. WTO agreement calls for an acceleration in the implementation of market access concessions affecting goods of export interest to those countries and seek increased technical assistance for them.
INDIA AND THE WTO
The establishment of the World Trade Organisation is a forward step towards establishing a globalised set up dedicated to promote free exchange of goods and services. Within the framework of WTO, efforts have been made to remove prohibitive restriction of various kinds in the area of international trade. India, being a signatory to the WTO declaration has to pay need to its obligations in shaping its future marco-economic policies. While the withdrawal of tariffs on imports will provide India access to cheaper inputs of production, produces of domestically produced identical goods will face tougher competition. Such industries which do not have appropriate technology to match the product quality of their foreign counterparts will suffer from adverse fall out of foreign competition.
This apart, the phasing out of subsidies on exports will render India exports internationally more expensive. Since subsidies are levied mostly on those exports which do not have an inbuilt cost advantage, withdrawal of export subsidies will amount to taking away the existing cost advantage.
With quotes on their way out, exports can no longer find their, way unhindered into any country. In a couple of years, the low wage advantage which India has at present will also be nullified. India’s interests at present rest in adopting a go slow policy and before pledging itself to a decision. India should take stock of the situation in the immediate short and medium terms because if industrial growth, export performance and other indigenous marcoeconomic variables perform well in the coming few years, consequences of a contemplated phase out of restrictions would become more transparent.