The world trade organization and its impact on India

Abstract

GATT to WTO: High Expectations from the Organization The last two decades have witnessed a number of important changes in economic policies adopted in most developing countries. Many of these measures fall under the common definition of globalization. Trade liberalization is considered one of the main components of globalization. Widespread trade liberalization adopted during the last two decades has resulted in a sharp increase in the volume of trade among nations. To supervise and monitor this growing volume of trade, a trade regulatory body was formed in 1994. This organization is called the World Trade Organization (WTO). The formation of this organization is having an important bearing on the growth of international trade. The WTO is the successor of the original GATT (General Agreement on Tariff and Trade), which supervised international trade from 1947 until the inception of the WTO. However, the WTO is a much bigger organization than GATT – in terms of both membership and coverage of rules. WTO rules are not only a revised, enhanced and updated version of the original GATT, but they also include additional agreements on key areas where clarifications or amplifications were felt necessary. Also, unlike GATT, the WTO covers trade in services (under General Agreement on Trade in Services – GATS) and Trade Related Intellectual Property Rights (TRIPS). Another big advantage of the WTO is that as an organization, it is allowed to take legal action if a country violates its trade rules. The WTO also contains provisions to legally settle trade-related disputes among countries. There were no such legal provisions in GATT. © 2013 Sudipta Bhattacharyya editorial matter and selection.