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International Trade and Finance

Notes understanding of the new opportunities and challenges of the multilateral trading system under
the WTO.
• Formally all of these councils and committees consist of the full membership of the WTO. But that
does not mean they are the same, or that the distinctions are purely bureaucratic. In practice, the
people participating in the various councils and committees are different because different levels
of seniority and different areas of expertise are needed. Heads of missions in Geneva (usually
ambassadors) normally represent their countries at the General Council level. Some of the
committees can be highly specialized and sometimes governments send expert officials from
their countries to participate in these meetings. Even at the level of the Goods, Services, and
TRIPS councils, many delegations assign different officials to cover different meetings. All WTO
members may participate in all councils, etc., except the Appellate Body, dispute settlement panels,
textile monitoring body, and plurilateral committees.
• The WTO is sometimes described as a ‘free trade’ institution, but that is not entirely accurate.
The system does allow tariffs and, in limited circumstances, other forms of protection. More
accurately, it is a system of rules dedicated to open, fair, and undistorted competition.
• The WTO agreements cover two basic areas—goods and services in addition to intellectual
property. The agreements for goods under GATT deal with the following sector-specific issues,
such as agriculture, health regulations for farm products (SPS), textiles and clothing, product
standards, investment measures, anti-dumping measures, customs valuation methods, pre-
shipment inspection, rules of origin, import licensing, subsidies and counter-measures, and
safeguards.
24.6 Key-Words

1. GATT : General Agreement on Tariffs and Trade, an international treaty (1948-94) to promote
trade and economic development by reducing.
2. WTO : The World Trade Organization (WTO) deals with the global rules of trade between nations.
Its main function is to ensure that trade flows as smoothly, predictably and freely as
possible.
24.7 Review Questions

1. What is multilateralism? Discuss.
2. What are the functions of WTO? Discuss.
3. Discuss the principles of the Multilateral trading system.
Answers: Self-Assessment

1. (i)(b) (ii)(d) (iii)(b) (iv)(d)
24.8 Further Readings

1. Krimawati, Wawat. (?) NAFTA: North America Free Trade Agreement. [Accessed
18 May 2009]
2. Vogel, David. (2009) North American Free Trade Agreement. [Accessed 18 May
2009] 2009. North American Free Trade Agreement (NAFTA).
3. United States Department of Agriculture, Foreign Agricultural Service. [Accessed
June 8, 2009]

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