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

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International Business- Dr. R. Chandran
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the value disclosed.
DIFFERENCE BETWEEN GATT AND THE WTO
• GATT signifies two aspects – GATT as a body and GATT as a
formulator of agreements.
• GATT – the body no longer exists; it was merged with the WTO on
1 st Jan, 1995.
• GATT – the agreement rests in the WTO along with other
agreements.
• The WTO now includes GATT, GATS, TRIPS and the Dispute
Settlement body. GATT covered trade in goods only, whereas the
WTO covers trade in goods, services, and intellectual property rights
as well.
• Throughout its duration, from 1948 to 1994, GATT was ad hoc and
provisional; WTO and its agreements are permanent.
• GATT has contracting parties, whereas the WTO has member nations.
• The WTO is an inherently superior system as compared to GATT, as
it has a sound legal basis; even its agreements are ratified in the
members parliament.
• WTO has two significant functions, which GATT did not have. These
are:
(i) Trade Policy Review Mechanism – a periodic process to examine
a country’s trade policies and to note changes and (ii) an in-built
mechanism to settle disputes, which cannot be overlooked by anyone.
• The WTO is more democratic in character. If decisions cannot be
reached by consensus, the matter is decided by putting it to vote; each
WTO member having one vote. In the case of GATT, it was
controlled by a power lobby.
WTO: THE ORGANISATION
The World Trade Organisation (WTO) monitors global trade. Its decisions
are absolute and every member must abide by its rulings. Extra powers given
to the WTO are supposed to ensure that disputes are settled in harmony with
international trade principles. It is located in Geneva, Switzerland. At its
head is the Director General, who serves a term of four years. Its staff is
made up of 500 persons of varying nationalities.
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