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Unit 29 : Functions of WTO/GATT

Some of the important functions and objectives of WTO are : Notes
Functions of WTO
The former GATT was not really an organisation; it was merely a legal arrangement. On the other
hand, the WTO is a new international organisation set up as a permanent body. It is designed to play
the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual
property rights, etc. Article III has set out the following five functions of WTO;
(i) The WTO shall facilitate the implementation, administration and operation and further the
objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide
the frame work for the implementation, administration and operation of the plurilateral Trade
Agreements.
(ii) The WTO shall provide the forum for negotiations among its members concerning their
multilateral trade relations in matters dealt with under the Agreement in the Annexes to this
Agreement.
(iii) The WTO shall administer the Understanding on Rules and Procedures Governing the
Settlement of Disputes.
(iv) The WTO shall administer Trade Policy Review Mechanism.
(v) With a view to achieving greater coherence in global economic policy making, the WTO shall
cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International
Bank for Reconstruction and Development (IBRD) and its affiliated agencies.
Objectives of WTO

Important objectives of WTO are mentioned below:
(i) to implement the new world trade system as visualised in the Agreement;
(ii) to promote World Trade in a manner that benefits every country;
(iii) to ensure that developing countries secure a better balance in the sharing of the advantages
resulting from the expansion of international trade corresponding to their developmental needs;
(iv) to demolish all hurdles to an open world trading system and usher in international economic
renaissance because the world trade is an effective instrument to foster economic growth;
(v) to enhance competitiveness among all trading partners so as to benefit consumers and help in
global integration;
(vi) to increase the level of production and productivity with a view to ensuring level of employment
in the world;
(vii) to expand and utilize world resources to the best;
(viii) to improve the level of living for the global population and speed up economic development of
the member nations.
29.4 Uruguay Round Final Act and Its Implications for India

A big offensive was launched by the Left Parties, the Janata Dal and the Bharatiya Janata Party
against the acceptance of Dunkel Proposals. The basic thrust of the attack was that the Government
has surrendered its sovereignty under pressure from the US Government and the multinationals.
There is no doubt that some of the criticisms were politically motivated and value-loaded, and it
would be correct to say that to some extent, they were misleading. On the other hand, there is no
doubt that the claim of the Government of India, that as a consequence of UR agreement, Indian
exports would rise at the rate of $ 2 billion per year is exaggerated.
It would be appropriate to study the implications of GATT agreement in various areas :

A. Reduction in basic duty and export subsidies
On tariffs, India has promised to reduce the basic duty by 30%. This duty reduction was to be effected
over a period of 6 years and was to cover raw materials, intermediates and capital goods. This,

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