[Economy] WTO: Bali Summit, Trade Facilitation Agreement (TFA), De-minimus level, 10% Subsidy Limit, Why Modi Opposed?Devendra Vishwakarma
- WTO: Structure and functions
- Tariff and Non-Tariff Barriers to Trade
- WTO agreements
- Agreement on Agriculture (AoA)
- Green. Blue and Amber subsidies
- Amber box: De Minimus limits
- What is Bali summit and Peace clause?
- What is Trade Facilitation Agreement?
- Why Modi opposed Trade Facilitation Agreement
Consider this a “Fork” of the Economic Survey chapter 9 on Agriculture and food production.
WTO: Structure and functions
Q. Write a note on origin, structure and functions of WTO? 200 words
1944: Bretton Woods summit leads to birth of three institutions
|World bank||Cheap loans for development projects in third world|
|IMF||Balance of payment and Exchange rates|
has two bodies, with separate chairmen
- Ensure the developing countries benefit from world trade, especially the least Developed countries.
- Reduce barriers to international trade – both tariff barriers and non-tariff barriers.
- Get the members Enter into multilateral trade agreements to achieve above objectives.
- Provide forum for negotiation and dispute settlement for the members, if the agreements are violated.
- Cooperate with UN, World and IMF for a global economic policy that improves livelihood, protects environment and promotes sustainable Development.
Tariff and Non-Tariff Barriers to Trade
All countries want to protect domestic industries and prevent entry of foreign players. So, they create two types of barriers to International trade:
|Tariff Barrier||If US President Obama imposes 56% custom duty on Indian Cars.|
|Non-Tariff Barrier||If Obama tries to restrict entry of Indian cars without imposing heavy taxes on Indian cars, for example
- World Trade organization (WTO) aims to reduce such tariff and non-tariff barriers to international trade.
- But what if China starts manufacturing cheap cars with poor breaks, bad steering and carcinogenic paint. Can Obama ban such dangerous foreign products? Does WTO permit that?
- Yes, WTO made two special agreements for “safety”:
|Non-food products||Technical Barriers to Trade Agreement (TBT)|
Q. Write a note on WTO agreements 200 words
Five categories of agreements (or 6, depending on which book you refer!)
- General Agreement on Tariffs and Trade (GATT)
- Agreements on
- Safety / quality checks related
- Sanitary and phytosanitary agreement (SPS)
- Technical barriers to trade (TBT)
- Trade related investment measures (TRIMS)
- Subsidies and countervailing measures (SCM)
- General Agreement on Trade in Services (GATS)
- To ensure that services’ import/export enjoys the same principles of free and fair trade, just like the trade in goods.
- Trade related intellectual property rights (TRIPS)
- Protects seven categories of IPR viz.
T4: Dispute settlement
- to enforce the trade agreements and commitments made by individual member country
- once a complaint is filed, first, the parties are allowed to sort the issue through mutual consultation
- If that fails, formal adjudication by an expert panel.
|T5: Policy review||T6: plurilateral agreements|
|Periodically, WTO carries out audit/inspection/review of the trade policy of member states and gives them constructive feedback.||Not signed by all countries: