GATT and WTO

Question 1

Objectives of GATT

Answer 1

• Promote free trade through lowering tariff barriers
• Develop necessary ground rules for a non-discriminatory free trade environment
• Establish procedures for settlement of trade disputes
• Encourage participation of less developed countries in world trade
• In all, reduce protectionism. Works on negotiation rather than regulations.

Question 2

Exceptions to MFN Status

Answer 2

1. Generalised system of preferences
   Allows lower tariffs to less developed countries without lowering them to more developed countries
2. Regional Arrangements
   Economically integrated groupngs like EU, NAFTA and AFTA which extend special trade concessions to their members only.
3. Voluntary Restraint Agreement
   Exporter agrees to restrain exports to certain countries

Question 3

Why WTO was formed

Answer 3

GATT has no ultimate authority and does not enforce its position.
WTO was formed to implement agreements set out in GATT.
World’s advocate and monitor of open and free international trade in goods, services and technology.

Question 4

What is WTO

Answer 4

• Legal institutionalised foundation of multilateral trading system.
• Determines how governments frame and implement domestic trade laws.
• Key role in world economy, improving climate for investment and job creation, contributing to economic growth and development.
• Meet once every 2 years

Question 5

WTO Basic Principles

Answer 5

• No discrrimination
• National treatment
• -Foreign goods and companies should be given same treatment as national ones
• Bound tariffs
• -Cannot increase tariffs once lowered
• Fair competition