WORLD TRADE ORGANISATION

INTRODUCTION-

The WTO is a 164-member international organization that was created to oversee and
administer global trade rules, serve as a forum for trade liberalization negotiations,
and resolve disputes. The United States was a major force behind the establishment of
the WTO in 1995, and the rules and agreements resulting from multilateral trade
negotiations since 1947. The WTO is a consensus and member-driven organization.
Its core principles include nondiscrimination (most-favored nation treatment and
national treatment), freer trade, fair competition, transparency, and encouraging
development. The WTO dispute settlement (DS) mechanism provides an enforceable
means for members to resolve disputes over WTO commitments and obligations. The
WTO has processed more than 600 disputes, and the United States has been an active
user of the system.

WTO DURING PANDEMIC N POST PANDEMIC-

Another potential deliverable involves a framework to better equip the WTO to

support efforts against the COVID-19 pandemic. In August 2021, the WTO reported
a sustained rebound in global merchandise trade, after a sharp decline in global trade
growth in 2020 in the aftermath of the pandemic. The WTO has committed to work to
minimize disruptions to trade and global supply chains, and encouraged WTO
members to notify trade restrictions and measures taken in response to COVID 19,
which surged in the beginning of 2020, causing concern for many observers. Some
members have called on the WTO to address the trade policy challenges that emerged
from COVID-19, such as through a dedicated “health and trade” initiative. Others are
seeking an agreement among members to waive IPR related to vaccines and other
medical products. Meanwhile, WTO members continue to explore broader aspects of
reform and future negotiations. Potential reforms concern the administration of the
organization, its procedures and practices, dispute settlement, and attempts to address
the inability of WTO members to conclude new agreements.

Background

Following World War II, countries throughout the world, led by the United States
and several other developed countries, sought to establish a more transparent and
nondiscriminatory trading system with the goal of raising the economic well-being of
all countries. Aware of the role of tit for-tat trade barriers resulting from the U.S.
Smoot-Hawley tariffs in exacerbating the economic depression in the 1930s,
including severe drops in world trade, global production, and employment, the
countries that met to discuss the new trading system considered more open trade as
essential for peace and economic stability.6 The intent of these negotiators was to
establish an International Trade Organization (ITO) to address not only trade barriers
but other issues indirectly related to trade, including employment, investment,
restrictive business practices, and commodity agreements. Unable to secure approval
for such a comprehensive agreement, however, they reached a provisional agreement
on tariffs and trade rules, known as the GATT, which went into effect in 1948.7 This
provisional agreement, subject to several rounds of trade liberalization negotiations,
became the principal set of rules governing international trade for the next 47 years,
until the establishment of the WTO.

General Agreement on Tariffs and Trade (GATT)

The GATT was neither a formal treaty nor an international organization, but an
agreement between governments, to which they were contracting parties. The GATT
parties established a secretariat based in Geneva, but it remained relatively small,
especially compared to the staffs of international economic institutions created by the
postwar Bretton Woods conference—the International Monetary Fund and World
Bank. Based on a mission to promote trade liberalization, the GATT became the
principal set of rules and disciplines governing international trade.
The General Agreement on Trade and Tarrifs developed from the ashes of the
‘Havana Charter’ The core principles and articles of the GATT (which were carried
over to the WTO) committed the original 23 members, including the United States, to
lower tariffs on a range of industrial goods and to apply tariffs in a nondiscriminatory
manner—the so-called most-favored nation or MFN principle . By having to extend
the same benefits and concessions to members, the economic gains from trade
liberalization were magnified. Exceptions to the MFN principle were allowed,
however, including for preferential trade agreements outside the GATT/WTO
covering “substantially” all trade among members and for nonreciprocal preferences
for developing countries.8 GATT members also agreed to provide “national
treatment” for imports from other members. For example, countries could not
establish one set of health and safety regulations on domestic products while
imposing more stringent regulations on imports.
Although the GATT mechanism for the enforcement of these rules or principles was
generally viewed as largely ineffective, the agreement nonetheless brought about a
substantial reduction of tariffs and other trade barriers. The eight “negotiating
rounds” of the GATT succeeded in reducing average tariffs on industrial products
from between 20%-30% to just below 4%, and later establishing agreements to
address certain non-tariff barriers, facilitating a 14-fold increase in world trade over
its 47-year history .10 When the first round concluded in 1947, 23 countries had
participated, which accounted for a majority of global trade at the time. When the
Uruguay Round establishing the WTO concluded in 1994, 123 countries had
participated and the amount of trade affected was nearly $3.7 trillion. There are
currently 164 WTO members and trade flows totaled $22 trillion in [Link] the
most part, the Uruguay Round agreements were accepted as a single package or
single undertaking, meaning that all participants and future WTO members were
required to subscribe to all the multilateral agreements.

WTO=
The Structure of World Trade Organization:
1. Ministerial Conference: The highest decision-making body of the WTO, which
meets at least once every two years to discuss and negotiate various trade-related
issues.
2. General Council: This is the main policy-making body of the WTO, responsible for
overseeing the implementation and administration of WTO agreements and decisions.
It meets regularly throughout the year.
3. Councils and Committees: The WTO has a number of councils and committees
that deal with specific areas of trade, such as goods, services, and intellectual
property. These bodies are responsible for monitoring the implementation of WTO
agreements and facilitating negotiations among member countrieS
4. Dispute Settlement Body: This body is responsible for resolving disputes that may
arise between member countries regarding their compliance with WTO rules and
regulations.
5. Secretariat: The WTO Secretariat, based in Geneva, Switzerland, provides
administrative and technical support to the various bodies of the WTO, as well as to
member countries.

The United States and the WTO

The statutory basis for U.S. membership in the WTO is the Uruguay Round
Agreements Act , which approved the trade agreements resulting from the Uruguay
Round. The legislation contained general provisions on:
approval and entry into force of the Uruguay Round Agreements, and the
relationship of the agreements to U.S. laws ;
authorities to implement the results of current and future tariff negotiations
oversight of activities of the WTO
procedures regarding implementation of DS proceedings affecting the United
States ;
objectives regarding extended Uruguay Round negotiations;
statutory modifications to implement specific agreements, including:
Antidumping Agreement;
Agreement on Subsidies and Countervailing Measures (ASCM);
Safeguards Agreement;
Agreement on Government Procurement (GPA);
Technical Barriers to Trade (TBT) (product standards);
Agreement on Agriculture; and
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The function of World Trade Organization -

1. Administering and enforcing multilateral trade agreements: The WTO administers
various multilateral trade agreements negotiated by member countries, such as the
General Agreement on Tariffs and Trade (GATT) and the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS).
2. Providing a forum for negotiations: The WTO provides a platform for member
countries to negotiate new trade agreements and resolve trade-related disputes.
providing a predictable and stable trade environment. Opportunities.
3. Promoting and facilitating trade: The WTO works to promote and facilitate
international trade by reducing trade barriers, such as tariffs and quotas, and by
4. Providing technical assistance and capacity building: The WTO provides technical
assistance and capacity building support to developing countries, in order to help
them integrate into the global trading system and to take advantage of trade
5. Monitoring national trade policies: The WTO monitors national trade policies to
ensure that member countries are complying with WTO agreements and that their
trade policies are not creating unfair barriers to trade.
6. Resolving trade disputes: The WTO provides a forum for member countries to
resolve disputes related to international trade, through its dispute settlement
mechanism.

Objectives of World Trade Organization

1. To promote free trade by minimizing the barriers of world trade.
2. Effectively increase the standard of living of the whole world.
3. Increase in employment opportunities all over the world.
4. Encourage trade in goods internationally.
5. Encourage trade in services.
6. Strengthen the concept of sustainable development.

Marrakesh Agreement Establishing the World Trade Organization -The

Marrakesh Agreement is the umbrella agreement under which the various
agreements, annexes, commitment schedules, and understandings reside. The
Marrakesh Agreement itself created the WTO as a legal international organization
and sets forth its functions, structure, secretariat, budget procedures, decision making,
accession, entry-into-force, withdrawal, and other provisions. The Agreement
contains four annexes. The three major substantive areas of commitments undertaken
by the members are contained in Annex 1.
MULTILATERAL AGREEMENT ON TRADE IN GOODS
AGREEMENT ON AGRICULTURE
TRADE RELATED INVESTMENT MEASURES
GENERAL AGREEMENT ON TRADE IN SERVICES
AGREEMENT ON TRADE RELATED ASPECTS OF INTELLECTUAL
PROPERTY RIGHTS

Conclusion

The World Trade Organization plays a crucial role in regulating and promoting
international trade. While it has its strengths and weaknesses, the WTO remains
an important platform for negotiating and enforcing international trade
agreements, and for facilitating economic development and growth around the
world.

China’s State Capitalism: The nature of China’s economic system, combined with the size and
growth of its economy, has created tensions in the global trading system.
China’s state-owned enterprises present a major challenge to the free-market global trading system.

However, a critical part of the problem is that the rulebook of the WTO is inadequate for addressing the challenges
that China presents in respect of intellectual property, state-owned enterprises and industrial subsidies.

 It is due to this US-China are engaged in Trade war.

 Institutional Issues: The Appellate Body’s operations have effectively been suspended since December 2019, as
the US’s blocking of appointments has left the body without a quorum of adjudicators needed to hear appeals.

The crisis with the dispute settlement function of the WTO is closely linked to the breakdown in its negotiation
function.

 Lack of Transparency: There is a problem in WTO negotiations as there is no agreed definition of what
constitutes a developed or developing country at the WTO.

Members can currently self-designate as developing countries to receive ‘special and differential treatment’ – a
practice that is the subject of much contention.

 E-commerce & Digital Trade: While the global trade landscape has changed significantly over the past 25 years,
WTO rules have not kept pace.

 In 1998, realizing that e-commerce would play a growing role in the global economy, WTO members established
a WTO e-commerce moratorium to examine all trade-related issues relating to global electronic commerce.

Recently, however, the moratorium has been called into question by developing countries because of its
implications for collecting revenue.

Moreover, as the Covid-19 pandemic accelerates the shift to e-commerce, rules to regulate online trade will be
more important than ever. But in contrast to trade in goods and services, few international rules govern cross-border e-
commerce.

 Agriculture and Development: The WTO Agreement on Agriculture, which came into force in 1995, was an
important milestone.

Agreement on Agriculture targets reform of subsidies and high trade barriers, which distort agricultural trade.

However, agreement on agriculture is facing issues due to food security and development requirements for
developing countries like India.
Principles of WTO
Following principles of WTO are of particular importance:

(i) Nondiscrimination: Nondiscrimination has two major components: the most-

favored-nation (MFN) rule, and the national treatment principle. Non discrimination
in the form of national treatment and most favoured nation (MFN) treatment to our
exports in the markets of other WTO members. National treatment ensures that our
exports to other member countries would not be discriminated vis-a-vis their
domestic products. MFN treatment likewise ensures non-discrimination among
various members in their tariff regimes and also other rules and regulations.
(ii) Reciprocity: The principle of reciprocity refers to the ideal of mutual changes in
international trade policy. The granting of mutual concessions in tariff rates, quotas,
or other commercial restrictions. Reciprocity implies that these concessions are
neither intended nor expected to be generalized to other countries with which the
contracting parties have commercial treaties. Reciprocity agreements may be made
between individual countries or groups of countries. Reciprocity is a fundamental
element of the negotiating process. Reciprocal concessions ensure that gains will
materialize.
(iii) Binding and Enforceable Commitments: Liberalization commitments and
agreements to abide by certain rules of the game have little value if they cannot be
enforced. Once tariff commitments are bound, it is important that there be no resort to
other, nontariff, measures that have the effect of nullifying or impairing the value of
the tariff concession. World Trade Organization (WTO)
(iv) Transparency: Transparency is a basic pillar of the WTO. Enforcement of
commitments requires access to information on the trade regimes that are maintained
by members. Transparency has a number of important benefits. With stability and
predictability, investment is encouraged, jobs are created and consumers can fully
enjoy the benefits of competition — choice and lower prices.
(v) Safety Valves: A final principle embodied in the WTO is that, in specific
circumstances governments should be able to restrict trade.
(vi) Freer Trade: Lowering trade barriers is one of the most obvious means of
encouraging trade gradually through negotiations more accurately. It is a system of
rules dedicated to open, fair and undistorted competition

WTO and Intellectual Property Rights (IPRS)

Intellectual Property Rights (IPRs): Intellectual property rights are knowledge that
belongs to the citizens or firms of one country in the form of patents, copyrights,
trademarks, industrial designs or geographical indications. If these are copied by
firms in another country without the permission of the owner and without making a
payment to the owner for use of the know-how, the property rights of the owners are
infringed. According to the WTO, intellectual property rights are the rights given to
persons over the creations of their minds. They usually give the creator an exclusive
right over the use of his/her creation for a certain period of time. In relation to
intellectual property the Uruguay settlement provides for the following:
(a) Patent protection for 20 years regardless of where an item is invented or whether
it is imported or locally produced.
(b) Limitations on the use of compulsory licensing for patented products (licences are
easily obtained in some underdeveloped countries).
(c) Copyright protection for at least 50 years from the creator’s death. This is to
include computer software and compiled databases.
(d) All countries will have to introduce laws to prevent the unauthorized disclosure of
trade secrets.
(e) Provision of equal treatment for domestic and foreign intellectual property
holders. Protection of intellectual property rights has become an issue of wide and
serious discussion. As a member of the WTO, India is obliged to comply with the
standards of the TRIPs. Indian laws are substantially in accordance with the TRIPs
standards on copyright and related rights, trademarks, geographical design and
undisclosed information. The greatest challenge, however, is posed by patents. TRIPs
agreement goes against the Patent Act of India, 1970 in almost all important areas.
Patents in all the three fields (agriculture, pharmaceuticals and industrial
biotechnology) linked to microorganisms are either already with the multinational
companies or are likely to be acquired at a much faster rate vis-à-vis the developing
countries.
Patent rights in respect of trade relates to: (a) copyrights; (b) designs; (c) trade marks;
(d) trade-secrets; or any other species of intellectual property. The Government of
India enacted a new law, the Patents (Amendment) Act, 2005, wherein product patent
was extended to all fields of technology including food, drugs, chemicals and micro-
organisms to take advantage of the provisions of TRIPs agreement in respect of plant
varieties. A decision has been taken to put in place a sui generis (special) system as it
is perceived to be in India’s national interest. A major area of concern for India is the
protection of the biodiversity. It is pertinent to note that economists of repute who
otherwise are fully supportive of the free trade theory and the WTO (Jagdish
Bhagwati, Dani Rodrik, Michael Finger) have, of late, recognized the inequity of the
TRIPS agreement from the point of view of developing countries.
WTO and Agreement on Agriculture (AOA)

The AOA aims at removing the distortions in world trade in agriculture arising from
excessive protection and subsidization of agriculture. AOA is highly complicated and
controversial; it is often criticized as a tool in hands of developed countries to exploit
weak countries.
Agreement on agriculture stands on 3 pillars:
1. Domestic Support – It refers to subsidies like minimum price or input subsidies
which are direct and product specific. Under this, subsidies are categorized into 3
boxes a) Green Box – Subsidies which are no or least market distorting. b) Blue Box
– Only ‘Production limiting Subsidies’ under this are allowed. They cover payments
based on acreage, yield, or number of livestock in a base year. c) Amber Box – Those
subsidies which are trade distorting and need to be curbed. The Amber Box contains
category of domestic support that is scheduled for reduction based on a formula
called the “Aggregate Measure of Support” (AMS). The AMS is the amount of
money spent by governments on agricultural production, except for those contained
in the Blue Box, Green Box and ‘de minimis’.
Existing non-tariff barriers in agriculture, which are considered trade-distorting, are
to be abolished and converted into tariffs so as to provide the same level of protection
and subsequently the tariffs are to be progressively reduced. It must be recognised
that globally the policy environment is becoming increasingly complex. The dilemma
most governments face, whether of developed or developing countries, is how to
reconcile the conflict arising out of their international commitment under the WTO
and domestic compulsions, economic, political and social. Agriculture holds the key
to progress in future trade negotiations. And these issues affect different countries
differently, depending on the competitiveness of their agriculture. Market access is
viewed as the most important issue.

WTO and General Agreements on Trade in Services (GATS)

General Agreement on Trade in Services (GATS): The growing role of international
services and their implications have come to be recognized in the General Agreement
on Trade in Services (GATS). The WTO rules on services trade, as embodied in the
GATS are the first ever set of multilateral, legally enforceable rules covering
international trade in services. The economic significance of services has increased
substantially since the GATS entered into force in 1995. A WTO council of services
oversees the operation of agreement. The GATS did not directly remove any
important barriers to trade in services. It did, however, set up a legal framework under
which future negotiations to liberalize service trade could proceed. Modes of supply
of services:
There are four different ways in which services can be provided internationally are:
(i) Cross-border supply is when the service is provided from one country to another
(like international phone calls. Business Process Outsourcing, KPO or LPO
services).(ii) Consumption abroad this mode covers supply of a service of one
country to the service consumer of any other country, e.g. telecommunication,
tourism.
(iii) Commercial presence is when a firm sets up a subsidiary/branch in an export
market, e. g branch of a foreign bank, subsidiary of a telecom f irm and the like. This
opens door of relevant sector in one country to investments from another country.
Accordingly, it is in west’s interest to push for liberalization in India. There has been
sustained pressure to open up higher education sector, insurance sector, medical
sector etc. through this mode.
(iv) Movement of Natural Persons which covers services provided by a service
supplier of one country through the presence of natural persons in the territory of any
other country. e. g. Infosys or TCS sending its engineers for onsite work in
US/Europe or Australia. Here again, it’s in India’s interest to push for liberalization.
Negotiations in services under GATS are classified in these 4 modes, interests of
different countries depend upon this classification.

Critics of the World Trade Organization argue that there is considerable bias within
decision-making structures that systematically favour the developed countries
bypassing the interests of developing countries. They generally emphasize
‘consensus’ decision making. Such a situation is detrimental to developing countries,
as they do not have stable representation at the World Trade Organization’s Geneva
headquarters. Their delegation is much smaller than the developed countries or they
are excluded from the meetings, in which the dominance of the developed countries
usually prevails. Similarly, developed countries are more likely to serve as ‘Third
Parties’ capable of bringing issues before the Dispute Settlement Panel and
influencing the Dispute Settlement process. Such unfair trade practices are done with
developing countries. Due to such biased and general lack of transparency and
accountability in decision-making processes, the World Trade Organization is called
the ‘rich man’s club’25. However, the economic rise of China and its becoming a
member of the World Trade Organization in the year 2001, as well as the growing
influence of the fast-emerging economies of countries like India, Brazil, Egypt and
South Africa, affected the balance within the World Trade Organization and the
organization has started changing. This was particularly demonstrated by the halting
of the Doha Round of Talks, which began in 2001but it was suspended in 2009
largely due to disagreements over agriculture and clothing, as the United States and
the European Union were unwilling to give up ‘protectionism’26. Nevertheless, the
main ideological debate focuses on its benefits and the philosophy of free trade.
Some argue that free trade brings prosperity to all and in the process the chances of
war are reduced. On the other hand, other critics view ‘fair trade’ as clearly unfair and
a reason for structural inequality.

EVALUATION OF WTO-
WTO has been in operation for about a decade and a half now. During this short time,
the WTO has proved that it is very different from its predecessor, GATT. For
instance:
l While GATT was toothless, WTO with its DSM is able to bring to book even the
mighty US in several cases.
l GATT’s negotiating rounds took place once in a decade or so. But, at Singapore,
just two years after the conclusion of the Uruguay round, the WTO virtually
concluded an Information Technology Agreement, and launched studies on
investment, competition policy, transparency in government procurement and trade
facilitation. There is enormous pressure to compress into next five years what used to
take decades to complete before.
l WTO is democratic in the sense that one country-one vote principle is adopted;
l For enforcing trade liberalisation, WTO has brought into its framework, many new
areas, such as agriculture, textiles, technology and investment; and
l Induction of services, in the agenda of liberalisation, has been an extremely
important feature of WTO.

ACHIEVEMENTS OF WTO-
In the short period the WTO has been in existence it is being credited with the
following achievements:
i) Greater market orientation has become the general rule;
ii) Tariff-based protection has become the norm rather than the exception;
iii) Use of restrictive measures for BOP problems has declined markedly;
iv) Services trade has been brought into the multilateral system and many countries,
as in goods, are opening their markets for trade and investment either unilaterally or
through regional or multilateral negotiations;
v) Many UDCs have undertaken radical trade, exchange and domestic reforms which
have improved the efficiency of resource use, opened up new investment
opportunities, and, thus, promoted economic growth;
vi) Bilateralism has been, to a great extent, placed under control by the extension of
WTO provisions to services, TRIPs and TRIMs. Further, under the unified DSM, the
possibility of any country unilaterally blocking the adoption of panel decisions no
longer exists;
vii) The trade policy review mechanism has created a process of continuous
monitoring of trade policy developments. Also, by promoting greater transparency, it
has assisted the process of liberalisation and reform;
viii) It has been agreed to reduce import tariffs on industrial goods, based on Swiss
Formula. A Swiss formula is a non-linear formula where tariff-cuts are proportionally
higher for tariff which are initially higher. For instance, a country which has an initial
tariff of 30% on a product will have to undertake proportionally higher cuts than a
country which has an initial tariff of 20% on the same product.

LIMITATIONS-
The WTO, however, has still to make any progress or become more sensitive on the
following issues:
i) The trade reform process is incomplete in many countries. For instance, some high
tariffs still remain on which negotiations are still proceeding at various levels, notably
in the areas of basic telecommunications and financial services;
ii) There appears to have been at least some reversals in the overall liberalisation
process in some developing countries. Examples are of increasing anti-dumping
measures, selective tariff increases and investment related measures. The developed
countries are also blocking the process of liberalisation by adopting many
neoprotectionist measures;
iii) Concerns have been raised that the combination of globalisation and technological
change creates a premium on high-skill as against low-skill with growing social
divisions;
iv) The major share of the benefits of the WTO has gone to the countries of the
North. The WTO has opened up the world economy more rapidly in areas that benefit
the developed world. Where the benefits of free trade accrue primarily to the UDCs,
progress has been much slower;
v) The WTO has also not been sensitive enough to the development of non-tariff
barriers to imports from the UDCs, such as anti-dumping duties;
vi) The multilateral trade rules are increasingly becoming a codification of the
policies, perceptions, laws and regulations of the industrialised countries. The
policies and rules appropriate or advantageous to the industrialised world are getting
established as common rules to be obeyed by the developing world as well. As a
result a ‘one size fits all’ approach is increasingly getting embedded in the WTO rules
and disciplines;
vii) The interests of international trade, which are primarily the intrests of
transnational corporations, take precedence over local concerns and policies even if
such a course exposes the local population to serious health and security risks;
viii) The implementation-related issues are becoming a source of serious concern.
These issues cover a whole range of demand to correct while asymmetries in TRIPS,
TRIMS, anti-dumping, movement of people, etc. Remain.

Other issues requiring WTO attention relate to agriculture, textiles, industrial tariffs
including peak tariffs, and services. In addition, there are what are described as
Singapore issues. These relate to: (i) rules to protect investments, (ii) competition
policy, (iii) transparency in government procurement, and (iv) trade facilitation. WTO
has now become a forum for perpetual negotiations on newer and newer subjects and
for using trade rules to establish standards and enforce compliance even in non-trade
areas.
Everything now seems to require the hand of WTO, be it foreign investment,
environmental or labour standards, child labour, good governance, or human rights.
However, a word of caution need to be sounded. WTO should not be expanded into a
sort of world government, covering every economic subject under the sun, and then
using the threat of trade sanctions to bring about a new world order.
What Challenges are Currently Undermining the WTO’s Effectiveness?
 Erosion of Multilateralism:

 There has been a noticeable erosion of multilateralism in recent years, with increasing trade disputes and the rise
of unilateral trade actions.

This trend undermines the effectiveness of the WTO as a forum for resolving trade conflicts and negotiating trade
agreements.

The MC13 also failed to make progress on key issues like fisheries subsidies, reflecting serious divisions among
166 member countries.

 Protectionism and Trade Wars:

The proliferation of tariffs, quotas, and other trade barriers undermines the principles of free trade and poses a
threat to the rules-based trading system.

 For instance, the trade dispute between the US and China has strained the multilateral trading system and
challenged the WTO's ability to mediate and resolve such conflicts.

 Dispute Settlement Mechanism Crisis:

The WTO's dispute settlement mechanism, often regarded as the crown jewel of the organisation, has faced a
crisis in recent years.

 The Appellate Body, responsible for adjudicating trade disputes, has been rendered dysfunctional due to the US’
blocking of new appointments to the body.

The absence of a functioning dispute settlement mechanism erodes confidence in the multilateral trading system
and encourages unilateralism.

 Development Divide and Special and Differential Treatment:

 Despite the principle of Special and Differential Treatment (S&D) aimed at providing flexibility and support to
developing nations, disparities persist in their capacity to participate effectively in trade negotiations and implement
trade-related reforms.

 Least-developed countries (LDCs) often lack the resources and technical assistance needed to capitalise on trade
opportunities, perpetuating their marginalisation in the global economy.

 Digital Trade and E-commerce:

 The rapid growth of digital trade and e-commerce presents both opportunities and challenges for the WTO. While
digital technologies have the potential to enhance trade efficiency and facilitate economic growth, they also raise
new regulatory and policy issues that fall outside the scope of traditional trade agreements.

The WTO faces the challenge of adapting its rules and agreements to accommodate the evolving nature of digital
trade while ensuring a level playing field for all member countries.

 Environmental and Sustainability Concerns:

  The WTO faces growing pressure to incorporate environmental and sustainability considerations into its
trade rules and agreements. Climate change, biodiversity loss, and other environmental challenges have significant
implications for global trade patterns and practices.

 Balancing environmental objectives with trade liberalisation goals requires innovative approaches and
cooperation among WTO members to develop rules that promote both economic growth and environmental
sustainability.

 Public Health and Access to Medicines:

 The Covid-19 pandemic has highlighted the importance of public health considerations in trade policy. Access to
affordable medicines and medical supplies has become a critical issue, particularly for developing countries facing
challenges in procuring essential healthcare products.

 The WTO faces the challenge of reconciling intellectual property rights with the need to ensure access to
medicines for all, particularly during public health emergencies.

 Agriculture and Food Security;

Although updating WTO disciplines on agriculture has been on the agenda of Members since 2000, little progress
has been made. At MC13, members failed again to reach a consensus on the scope, balance, and timeline of agriculture
negotiations.

 This failure resulted, in particular, from broad disagreement over the issue of “public stockholding for food
security purposes”.

Role and Function of WTO in Free International Trade

The protectionism that occurred in the international trade after the 2nd World War
paved the way to gradual liberalization, included both the unilateral rule-based
multilateral liberalization. Globalization is the product that occurred after the
countries started to participated in free or less restricted trading in goods, services,
technology and capital. Previously in the spear of international trade there were
various restrictions related to financial assistance, piracy and more importantly
intellectual property rights. This disputed were resolved after the introduction of an
international body of WTO and previously the GATT. WTO provided for a platform
for the member nations to participate in the trade more efficiently and opened a new
door for trade, which enabled the countries to negotiate and discuss the disputed in a
more prominent manner. The bilateral agreement on free trade of goods and service
was the major issue resolved by the WTO. WTO is the only international
organization with deals with the international rules of trade among the nations. The
WTO came into existence from 1st January 1995, after succeeding GATT (General
Agreements on Tariff and Trade) .
The main functions of WTO are:
1. To administer the agreements signed at the Uruguay Rounds by the nations.
2. To maintain oversight of the implementation of tariff reductions and non-tariff
measure reductions.
3. To assess the member countries' foreign trade policies and determine whether they
adhere to WTO rules.
4. To establish procedures for coming up with a peaceful resolution in the event of
trade disputes.
5. To offer the member countries the essential consulting regarding the state of the
global economy.
6. To offer a global forum where participating countries can continuously bargain the
exchange of trade concessions. At the core of the system are the WTOs agreements
which provide the ground rules for international commerce that are signed by the
participating nations.

The following are the main principles of the WTO: Non-discrimination: This
indicates that both domestic and international businesses receive the same treatment.
Therefore, in terms of commerce, all countries should be treated equally. Reciprocity:
Countries ought to endeavour to make comparable accommodations for one another.
Transparency: Rules must be equal for everyone in fair and open negotiations.
Special and different treatment: It says that due of historically unfair trade,
developing countries may need "positive discrimination."

Problems with the World Trade Organization

1. Free Trade is one of the core motive of the WTO and to promote global trade and
global peace. In practice, the international trade that occurs are largely dominated by
powerful nations and for the benefit of the rich individual, to achieve actual global
security, the main ingredient is the international agreements which protects the
individual’s right to democracy and trade system that helps in reaching global justice.

2. The WTO wants to coordinate vital government services including energy, water,
health care, and education. Privatization refers to the sale of public property for
commercial use rather than for the provision of public goods. The WTO's GATS, or
general agreement on trade in services, contains a list of around 160 services that are
endangered, including tourism, sewage, garbage, park maintenance,
telecommunications, banking, insurance, and elder and child care. Privatization has
already begun in certain nations. It shows that WTO regulations support privatization
even though doing so deprives the average person of crucial services.

3. A further exploitation of these natural resources will result from the WTO's efforts
to deregulate industries like forestry, fisheries, water utilities, and energy distribution.
Corporations are using the WTO to eliminate labor-intensive municipal and national
environmental protections, which are criticized for being "barriers to trade." The US
Clean Air Act's requirement that both domestic and foreign producers produce cleaner
gasoline was declared unlawful by the first WTO panel.

4. “The world's farmers produce enough food to feed everyone, yet corporate
domination over food distribution results in up to 800 million chronically
malnourished people globally. As many as four out of every five people in developing
nations depend on agriculture for their livelihood. However, the central tenet of the
WTO's Agreement on Agriculture is that market forces, rather than a national
commitment to guarantee food security and maintain respectable family farmer
incomes, should govern agricultural policies. Due to WTO policies, heavily
subsidized industrially produced food has been dumped into developing nations,
undermining domestic agriculture and causing a rise in world hunger.”

5 In reality, many important decisions are reached in a process where developing

country negotiators are not even invited to secret meetings, and then 'agreements' are
announced that developing countries weren't even aware were being considered.
Numerous countries lack the trade experts required to participate in all negotiations
or even to establish a permanent presence at the WTO. Because of this, poor
countries find it very challenging to advance their interests. Similarly, because they
cannot afford to defend themselves against WTO challenges from wealthy nations,
many countries change their laws rather than foot the bill for their own defense.

6. The WTO is Destroying the Environment: Corporations are using the WTO to
undermine hard-won national and municipal environmental laws, which are criticised
for being "barriers to trade." The US Clean Air Act's requirement that both domestic
and international producers create cleaner gasoline was declared unlawful by the first
WTO tribunal. The Endangered Species Act's requirement that shrimp sold in the US
be caught using a cheap technique that allows threatened sea turtles to escape was
found unlawful by the WTO.

7. The WTO is Increasing Inequality: For most of the world, free trade is ineffective.
Inequality grew both worldwide and within nations during the most recent era of
strong development in international commerce and investment (1960 to 1998)
According to the UN Development Program, only 14% of the world's resources are
used by the poorest 80% of people while 86% are used by the richest 20% of people.
By allowing for foreign investment and facilitating production in places where labor
is cheap, easily exploitable, and the cost of the environment is minimal, WTO rules
have accelerated these developments.

Globalization n WTO

The current globalization problem, which has manifested in the multilateral trading
system issue, is a growth crisis that developed during the restructuring of the global
economic system. The growth of transnational production, the strengthening of
economic interdependence, and the decline of the US as the global economic leader
all contribute to the necessity for such restructuring.2 The concept of the international
economic regime refers to a set of guidelines for conducting business on a global
scale, as well as the systems in place to ensure that these guidelines are established
and carried out. In the twenty-first century, the theory of hegemonic stability, which
provided an explanation for the evolution of the global economic order in the
previous century, is replaced by the theory of interdependence, particularly complex
interdependence. Not because China lacks readiness or capacity to do so, but rather
because the new economy requires a new regime that can satisfy the demands of the
global market, China will not succeed the United States as a guarantee of the stability
of the world economic system. In addition to feeling weaker than its rivals, the US is
stepping down from the position of stability guarantor since no nation can. The
stability of the international economic system will depend more and more on a
system of global governance as interconnectedness develops. The IMF, the World
Bank, and the entire global financial architecture will go through changes that are
already partially taking place in the primary components of this system that emerged
at the previous stage. It's also necessary to reform the [Link] of the most
obvious steps in the WTO's transformation include eliminating the consensus and
single undertaking principles in decision-making, enhancing the role of puni-lateral
agreements, revising the special and differential treatment provisions, expanding the
scope of issues beyond traditional trade, and aligning the WTO legal system with new
norms introduced by mega-regional [Link] interdependence becomes more
complex, there is an increasing need for coordination between nations, important
interest groups, and elements of the global governance system.3 It seems appropriate
to make sure that the transitions of the WTO, the IMF, and other parts of the system
of global governance are smooth and well-coordinated. The interests of multinational
corporations, wage earners, consumers, and other participants in the social contract
that will change as globalisation intensifies need to be represented by open
mechanisms.

WTO and the Developing Countries.

The WTO replaced the GATT in 1995. It was the more powerful institution than the GATT. The
WTO had the institutional foundation and recognition. Moreover, its dispute resolution system was
more effective in comparison to its predecessor. The fear of retaliation for non-compliance with the
findings of the panel compels the member nations to abide by its procedures and findings. The
WTO was also founded on the aims and objective of its predecessor, i.e., raising standards of living,
ensuring full employment and a large and steadily growing volume of real income through the trade
and economic endeavors.
However, since the year of its foundation, the developed countries have always made attempts to use the WTO as a forum for serving
their interests. Until the Uruguay Round, the trade negotiations were focused on the non-farm activities, as the US wanted to protect
its farm sector. In the subsequent years, the corporate interests of these developed countries have taken place in the WTO agenda.
Agriculture, services (financial, telecommunications, information technology, etc.), intellectual property rights and electronic
commerce are some of the subjects in the WTO agenda.
There are around 153 members in the WTO. Of these 150 members, over 75% are developing countries
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Like its predecessor GATT, the WTO also entails some provisions regarding the assistance of the
developing countries. There are a number of ways through which the WTO embraces the
development aspect of the developing countries. Some of the provisions and programmes that
provide for the assistance to the developing countries are as follows:
1. Trade Related Technical Assistance (TRTA). The Multilateral Trading System, as confirmed by Ministers at Doha
(December 2001), substantiates the provision of the technical assistance and enhancement of the trade capacity. This was further
underlined and strengthened at the Ministerial Conference in Hong Kong, China (December 2005). Within the WTO Secretariat, TRTA
is coordinated by the Institute for Training and Technical Cooperation (ITTC). The Committee on Trade and Development is the body
responsible for overseeing all TRTA activities.
2. Provisions under the DSU. The provisions of the DSU advocate for the special attention to the problems of the developing
countries[16]. Further, in a dispute involving the developing country member, one of the panelists can be appointed from the developing
country[17]. If a complaint is brought against a developing country, the time for consultations (before a panel is convened) may be
extended, and if the dispute goes to a panel, the deadlines for the developing country to make its submissions may be relaxed[18].
3. Advisory Centre on WTO Law. The membership based Advisory Centre on WTO Law, which has been set up in Geneva
provide legal assistance to developing countries[19].
4. The WTO Committee on Trade and Development. The A WTO Committee on Trade and Development, assisted by a Sub-
Committee on Least-Developed Countries, looks at developing countries’ special needs.
Apart from these provisions, the 2001 Ministerial Conference in Doha set out a range of issues concerning developing countries. Before
that, in 1997, a high-level meeting was called to look into the trade and technical assistance to the least developed countries.
Dispute resolution and problems faced by developing countries.
Most of the developing countries, partly because they are small and partly because they lack experience, find it difficult to cope with
new WTO dispute settlement mechanism. About two thirds of the Least Developed Countries (LDC) find no representation in the
WTO[20]. The developing countries face at least three major problems regarding the implementation of the decisions of the decision
of the DSP:
1. The time involved between the start of the dispute settlement process and the withdrawal of the offending measure may span
up to three years. These three years may cause hamper to the export opportunities for the developing country in the concerned developed
country. There is no retrospective relief to the developing country from the time incorrect measure was applied by the respondent
Member country. Thus, the period of three years may levy a heavy cost on the developing country.
2. The developing countries, during the dispute settlement period, face substantial export loss. But there is lack of remedy in
form of compensation, to them, even when the measures are found to be in contravention to the WTO rules.
3. Retaliation is the ultimate remedy for the complaining country to take action against the defending country. But in the case
of the developing countries, it is difficult to take retaliatory action against the developed countries. The reason being, apart from the
political considerations, the developing countries are dependent on the developed countries for their economic growth and development.

1.