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BankersAdda:WTOanditsPredecessor
WTOanditsPredecessor
Dearreaders,
We are presenting you a a brief article on WTO (World Trade Organization)
and its Predecessor. Article is useful for various bank exams, insurance
exams&SSCCGLexam.
The WTO's predecessor, the GATT, was established on a provisional basis
aftertheSecondWorldWarinthewakeofothernewmultilateralinstitutions
dedicated to international economic cooperation notably the "Bretton
Woods" institutions now known as the World Bank and the International
MonetaryFund.
The original 23 GATT countries were among over 50 which agreed a draft
Charter for an International Trade Organization (ITO) a new specialized
agencyoftheUnitedNations.TheCharterwasintendedtoprovidenotonly
world trade disciplines but also contained rules relating to employment,
commodityagreements,restrictivebusinesspractices.
TheobjectivesofGATTareasfollows:
1. To encourage full employment and large and steadily growing volume of
realincomeandeffectivedemand.
2.Toimprovetheworldproductionandexchangeofgoods.
3.Toensurethefulluseofworldresources.
4. To ensure a steady improvement in the living standards of people in
membercountries.
5. To settle the disputes through consultation within the framework of
GATT.nationalinvestmentandservices.
GATTRounds:
Between 1947 and 1995 there were 8 rounds of negotiations between the
participatingcountries.Thefirst6roundswererelatedtocurtailingtariffrates,
7throundincludedthenontariffobstacles.
The 8th round was entirely different from the previous rounds because it
included a number of new subjects for consideration. This 8th round known
as Uruguay Round became most controversial. The discussions at this
roundonlygavebirthtoWorldTradeOrganization(WTO).
ThemajordefectsofGATTareasfollows:
1.NoEnforcementAuthority:
TheGATThasattemptedtoprescribeaninternationalcodeofconductinthe
sphere of trade. But there was no enforcement authority to oversee the
compliance of GATT regulations by contracting parties and to settle their
tradedisputes.
2.ProblemsintheFormulationofGeneralRules:
The members of GATT are much diversify in nature, they had varied in
economic and political motives and they were also at different stages of
development. These reasons created difficulty in framing and implementing
uniformgeneralrulesofconductconcerningtrade,tariffsandpayment.
3.LessBenefitsfortheLDCs:
The most of the members of GATT were in the category of the LDCs. The
GATT had provided less benefit to these countries. At present, there are
more restrictive trade arrangements in the world. The Commodityto
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