Q.WTO is serving as the successor to which of the following organisations
a. General Agreement on Trade and Tariffs
b. General Arrangement on Trade and Tariffs
c. World Health Organisation
d. UN Development Programme
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Start your 14-day free trial to unlock the full solution →The World Trade Organization (WTO) serves as the successor to the General Agreement on Tariffs and Trade (GATT), building upon its principles to create a more comprehensive and institutionalized framework for global trade.
To understand the relationship between the World Trade Organization (WTO) and its predecessor, we must first delve into the origins and nature of the General Agreement on Tariffs and Trade (GATT). Following the devastation of World War II, there was a strong international consensus to prevent future conflicts by fostering economic cooperation and reducing trade barriers. This led to the Bretton Woods institutions (IMF and World Bank) and the proposed International Trade Organization (ITO). While the ITO never came into being due to lack of ratification, a provisional agreement, the General Agreement on Tariffs and Trade, was signed in 1947 and came into effect in 1948.
GATT was not an international organization in the formal sense, but rather a multilateral agreement that laid down a set of rules for international trade. Its primary objective was to reduce tariffs and other trade barriers, thereby promoting free and fair trade among member countries. It operated through a series of "rounds" of multilateral trade negotiations, where member countries would come together to negotiate reductions in tariffs and other trade restrictions.
Key characteristics and functions of GATT included:
- Tariff Reduction: Its central focus was on lowering customs duties on imported goods.
- Non-discrimination: It promoted the principle of Most-Favoured-Nation (MFN) treatment, meaning that trade concessions granted to one member had to be extended to all other members.
- Transparency: Members were required to publish their trade regulations.
- Consultation and Dispute Settlement: It provided a forum for members to discuss trade issues and resolve disputes, though its dispute settlement mechanism was relatively weak and could be blocked by any member.
- Provisional Nature: It was always intended to be a temporary arrangement until a full-fledged international trade organization could be established.
While GATT was highly successful in reducing tariffs on manufactured goods over its nearly five decades of existence, its provisional nature and limited scope became increasingly apparent as the global economy evolved. It primarily dealt with trade in goods and struggled to address new areas like services, intellectual property, and non-tariff barriers effectively.
The final and most ambitious round of GATT negotiations, known as the Uruguay Round, began in 1986 and concluded in 1994. This round was groundbreaking because it went far beyond traditional tariff reductions. It addressed new and complex areas such as trade in services (General Agreement on Trade in Services - GATS), intellectual property rights (Agreement on Trade-Related Aspects of Intellectual Property Rights - TRIPS), and agricultural subsidies, which GATT had largely failed to tackle. …
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