The setting up of WTO in 1995, which concluded the Uruguay Round of trade talks under GATT and the signing of the Final Agreement at Marrakesh, is one of the most significant developments in international trade. It is certain to have wide-ranging impacts on the economies of the 144 member-countries, including India. These countries account for more than 95 per cent of world trade.
The aim of the WTO is to promote more liberalised multilateral trade by curbing market-distorting trade practices for goods, services and intellectual property rights. The main thrust is on the phased removal of all non-tariff barriers, reduction in tariffs, promoting increased market access through removal of quantitative restrictions on imports, and reduction of certain specified subsidies on production and exports.
The expected outcome of all these measures is an expansion in world trade and more rapid economic growth in trading countries as a result of improved resource- use efficiency. However, the new trade regime is operating in a sharply divided world where all its member countries are not equal partners in terms of levels of economic development and degree of dependence on foreign trade.
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The USA, EU and Japan together account for more than two-thirds of world trade in goods and services. There are sharp divisions between them on the issue of trade liberalization, especially between the USA and EU. There are also conflicts between regional trading blocs (which are rapidly increasing in number), as well as within the group of developing countries with similar commodity-baskets of exports but dissimilar cost structures.
These conflicts are likely to increase in future as countries shift to new technologies to reduce costs to face intense competition in global commodity markets. Further, fluctuations in international commodity prices and recession in any trading country will now have far-reaching effects in a closely integrated global economy.
The WTO framework includes a whole set of Agreements affecting different issues in cross-border trade. Some of the Agreements which are likely to affect SSI sector are the following:
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a. Agreement on Textiles and Clothing
b. Agreement on Anti-Dumping Measures
c. Agreement on Subsidies and Countervailing Measures
d. Agreement on Safeguard Measures
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e. Agreement on Government Procurement
f. Agreement on Import Licensing Procedures
g. Agreement on Technical Barriers to Trade (TBT)
h. Agreement on Sanitary and Phyto-Sanitary Measures (SPS)
i. Agreement on Trade Related Intellectual Property Rights (TRIPs)
j. Agreement on Trade Related Investment Measures (TRIMs)