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Thursday, December 24, 2015

World Trade Organization (WTO) - Nairobi Ministerial (2015)

If one has been reading newspaper regularly and still has not come across any news article on WTO then maybe one needs to change the sections one is reading from the newspaper or change the newspaper itself. Jokes apart, WTO has been in news recently because of the WTO Ministerial meeting (which happens once in every two years) at Nairobi and even otherwise it is one of the more important international organizations about which one should be knowing. I have listed below some of the important points covering its origin, mandate and current issues. For more such informative articles you can browse through the archives section of my blog www.civilservicessynopsis.in and also leave your comments/queries in the comments section. Happy reading!

 Background of WTO

  • It was established on 1st January 1995 under the Marrakesh Agreement signed by 123 nations replacing GATT (General Agreement on Tariffs & Trade) which had commenced in 1948
  • WTO has at present 162 members and it is basically an international trade organization and its purpose is to regulate international trade
  • Head Quarter of WTO is at Geneva (Switzerland)
  • Director General of WTO at present is Roberto Azvedo (Brazilian Diplomat)  
  • Highest decision-making body of WTO is Ministerial which happens once every two years 
  • First WTO Ministerial conference was held in Singapore in 1996 and established permanent working groups on four issues: (1) transparency in government procurement (2) trade facilitation (customs issues) (3) trade and investment (4) trade and competition ---- These issues came to be known as Singapore Issues
  • Developed Vs Developing Countries - The most significant differences in WTO are between developed nations led by the European Union (EU), the United States (USA), and Japan and the major developing countries led and represented mainly by India, Brazil, China, and South Africa. There is also considerable contention against and between the EU and the USA over their maintenance of agricultural subsidies which operate effectively as trade barriers.
  • SSM (Special Safeguard Mechanism) - It is a trade remedy that would allow developing countries to temporarily hike import duties on farm products to counter sudden import surges and price falls thereby protecting interests of poor farmers
  • G-33 - A coalition of 48 developing nations including Indonesia, India and China that coordinate on trade and economic issues at WTO negotiations, like allowing them to continue to restrict access to their agricultural markets
    Mandate of WTO
    • WTO provides a framework for negotiating trade agreements and a dispute resolution process
    • Most of the issues WTO focuses on derives from previous trade negotiations especially from Uruguay Round (1986-94) 
    • Uruguay Round was multilateral trade negotiation conducted within framework of GATT and it led eventually to creation of WTO
    • Doha Development Round (2001) - The Doha round committed all countries to negotiations opening agricultural and manufacturing markets, as well as trade-in-services (GATS - General Agreement on Trade in Services) negotiations and expanded intellectual property regulation (TRIPS -Trade Related Aspects of Intellectual Property Rights). The intent of the round was to make trade rules fairer for developing countries. Doha Round has missed its official deadline of 2005 and the continuing impasse has made it difficult to launch new WTO negotiations beyond Doha Development Round. This has resulted in increasing number of bilateral FTAs (Free Trade Agreements) being signed between governments.
    • Doha Development Round Issues - (1) Agriculture has become the lynchpin of the agenda for both developing and developed countries (2)The second, now resolved, pertained to compulsory licensing of medicines and patent protection (3) A review of provisions giving special and differential treatment (S&DT) to developing countries (4) Problems that developing countries are having in implementing current trade obligations
    • Bali Package (Trade Facilitation Agreement) 2013 - Trade agreement aimed at lowering global trade barriers and is the first agreement reached through WTO that is approved by all its members. It forms part of Doha Development Round. 
    WTO Nairobi Ministerial (December 2015)
    • It was the 10th Ministerial of WTO
    • The key takeaways from Nairobi Ministerial are the decisions to end all farm export subsidies and liberalize global trade in information technology products.
    • From India’s perspective, the Nairobi declaration has been disappointing on multiple fronts - There is no concrete agreement on a special safeguards mechanism (SSM) to protect farmers in the developing countries against sudden import surges, and no short deadline for a permanent solution on public stockholding for food security purposes. Also there has been no unambiguous reaffirmation of the Doha Development Agenda which means that new issues of interest to developed countries, including competition policy, government procurement and investment are now open for negotiations.

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