Economics · Ch 11 — Liberalisation, Privatisation and Globalisation: An Appraisal
World Trade Organisation (WTO)
World Trade Organisation (WTO)
The World Trade Organisation (WTO) is the central international institution that governs the rules of world trade, and it is an important feature of globalisation as it affects India.
Origins:
The WTO was founded in 1995 as the successor organisation to the General Agreement on Trade and Tariff (GATT). GATT itself had been established in 1948 with 23 countries as the global trade organisation, set up to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purposes. The WTO took over and extended this role.
Work These Out
- Many scholars argue that globalisation is a threat because it reduces the government's role in many sectors. Others counter that it is an opportunity because it opens up markets to compete in and capture. Debate this in class.
- Prepare a chart listing five companies that provide BPO services in India, along with their turnover.
- Did you attend online classes, or watch videos of your teachers or any other teacher on television, mobile phone or computer, during the Covid-19 pandemic? Share your experiences related to information technology.
- Is employment in call centres sustainable? What kinds of skills should people working in call centres acquire to get a regular income?
- If multinational companies outsource many services to countries like India because of cheap manpower, what will happen to people living in the countries where these companies are located? Discuss.
Purposes of the WTO:
The WTO is expected to establish a rule-based trading regime in which nations cannot place arbitrary restrictions on trade. Its purposes also include:
- Enlarging the production and trade of services
- Ensuring the optimum utilisation of the world's resources
- Protecting the environment
The WTO agreements cover trade in goods as well as services, and aim to facilitate international trade — both bilateral and multilateral — through the removal of tariff as well as non-tariff barriers and by providing greater market access to all member countries.
India's role in the WTO:
As an important member of the WTO, India has been in the forefront of framing fair global rules, regulations and safeguards, and of advocating the interests of the developing world. India has also kept its own commitments towards trade liberalisation made in the WTO, by removing quantitative restrictions on imports and reducing tariff rates.
Drawn by us to help you understand the concept clearly, and verified to make sure it's accurate. For exams, practice from your textbook's own diagram.
Own-drawn recreation of NCERT Fig. 3.2 (p.48) — not traced from the textbo …
The criticism of India's WTO membership:
Some scholars question how useful WTO membership really is for India. Their arguments are:
- A major volume of international trade takes place among the developed nations themselves, so the gains for developing countries may be limited. …