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Unit 10: GATT, WTO and Indian Economy

of stalemate. WTO’s current Director-General is Roberto Azevêdo who leads a staff of over 600 Notes
people in Geneva, Switzerland. A trade assistance agreement known as the Bali Package was
touched by all members on December 7, 2013, the first complete agreement in the organisation’s
history.
10.2.1 Objectives of WTO

It is important for you to keep in mind the following objectives of WTO:

To increase the standard of living of individuals in the member countries.
To safeguard full employment and broad rise in effective demand.
To increase production and trade of goods.

To increase production and trade of services.
To safeguard optimal utilization of world resources.
To receive the idea of maintainable growth.
To safeguard environment.

10.2.2 Basic Principles of WTO

It is important for you to note the basic principles of WTO. These are as follows:
1. Most-Favoured-Nation (MFN) or Non-discrimination between Members: Every participant
has to be treated correspondingly without any discernment. If a member gives another
member a special favour, such as a lower customs duty rate for a product, the similar
lower duty has to be appropriate for all other WTO members. Therefore, non-discrimination
among supporters is the heart of the MFN attitude.

The prominence that is assumed to the MFN principle is obvious from the detail that it is
the first article of the GATT that oversees trade in goods and it also seems under Article 2
of the General Agreement on Trade in Services (GATS) and under Article 4 of the Agreement
on Trade-related Aspects of Intellectual Property Rights (TRIPS).

The WTO permits some exemptions to the MFN principle. For instance, countries can set
up a Free Trade Agreement (FTA) that put on only to goods traded within the collection
and therefore differentiate against goods from countries that are not members of the FTA.
On the other hand, it should be celebrated that the development of an FTA should not
effect in higher tariffs for non-members.
Members can also contribute emerging and least industrialized countries singular access
to their marketplaces (Generalized System of Preferences) or raise barriers against products
that are measured to be traded unethically (Dumping and Subsidies) from definite countries.
But, overall, members have to follow firm circumstances if they suggest deviating from
the MFN principle.
2. National Treatment or Non-discrimination between Goods: Under this attitude, introduced
goods that has arrived the domestic market should be provided the same treatment as that
given to nearby manufactured goods. This principle of nationwide (or same) handling is
appropriate to external and domestic services, and to foreign and local symbols, patents
and government grant.
It is important to note that the significance given to this principle of “national treatment”
can be evaluated from the fact that it is also originate in all the three main WTO agreements,
seeming as it does under Article 3 of GATT, Article 17 of GATS and Article 3 of TRIPS.

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