International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
The WTO, which has its headquarters in Geneva, Switzerland, has a
membership of 150 countries. More than 98% of the global trade is
transacted among the members.
As the only regulatory body of world trade, the WTO’s objective is to ensure
a freer, more transparent and more predictable trading regime in the world.
The WTO is based on a sound legal system and its agreements are ratified
by the parliaments of member countries. No one country controls the WTO;
wherein the top decision makers are the designated ministers of member
countries.
The WTO agreements cover:
• Goods, e.g., all industrial products, FMCGs etc.
• Services, e.g., banking, insurance, consultancy etc.
• Intellectual property, e.g., patents, copyrights, designs and trademarks
etc.
Two important principles that underline most agreements are:
a) Most Favoured Nation Clause: No discrimination among member
countries.
b) National Treatment Clause: Equal treatment to imported and domestic
products.
These agreements broadly address three concerns:
Same rule for all: It restricts governments or organisations from ‘distorting’
normal trade by way of subsidising, dumping or discriminatory licensing
policies. Government policies are framed to eliminate distorting effects. The
WTO allows exports to be relieved of all indirect taxes such as excise, sales
tax etc. since they have a cascading effect on the cost of the product.
Administration of agreements: It has detailed guidelines as to how the
agreements should be administered at a national level. These apply to antidumping
proceedings, standardization, sanitary and phytosanitary measures,
or settlement of disputes.
Fair deal to businesses: It ensures rights for the business community e.g.,
the right to information, the right to present evidence etc. For example, the
Agreement on Customs Valuation allows the importer to justify the value of
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