World Trade Organization (WTO)
This is one of the important international organization, that must be clear to the commerce students. India is a member of The World Trade Organization (WTO) and currently, it has 164 countries as its member. In this post I will provide a brief on the World Trade Organization, I would also be explaining the meaning of terms related to trades. But before discussing the World Trade Organisation (WTO), we will see what GATT is? Because they are related to each other as predecessors and successors. Okay, let’s learn.
What Is GATT?
WTO came from GATT, which stands for General Agreement on trade and tariff. Now, first, we will see what GATT is? GATT shows the legal agreement between many countries whose overall purpose was to promote international trade by reducing trade barriers like tariffs and quotas.
GATT came in 1947(The same year when India got independence), and it took effect in 1948 with 23 countries as the global trade organization to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purpose.
What Is WTO?
WTO is a global organization, that encourages and facilitates inter-country trade and it also helps in resolving trade disputes. WTO was founded in 1995 as the successor of GATT. The WTO agreements cover the trade in goods as well as services to facilitate international trade(Bilateral and multilateral) through the removal of the tariff as well as non-tariff barriers and providing greater market access to all member countries.
Types of Trade agreements
There are two types of trade agreements covered under WTO:
- Bilateral Trade Agreement: The trade agreements are done between two nations for the exchange of goods and services for mutual benefits of both the countries.
- Multilateral Trade agreements: The trade agreements are done between two or more countries by exchanging goods and services among them.
Note: Non-tariff barrier is a way to restrict trade using trade barriers like quotas.
India commitment with WTO
India has been an important member of WTO and has been at the forefront of framing fair global regulations, safeguards, advocates, the interest of the developing world. India has also kept its commitments towards the liberalization of trade, by removing quantitative restrictions on imports and reducing tariff rates.
Check out this slideshow below on WTO: