Check sibling questions

What is International Trade or Multilateral Trade?

What is International Trade - Teachoo.JPG

How is Multilateral trade between 2 countries monitored?

It is monitored with the help of WTO since 1995

Before that, it was administered by General Agreement of Trade and Tariff (GATT)

 

Difference between GATT AND WTO

Difference between GATT AND WTO - Teachoo.JPG

  GATT WTO
Full form General Agreement of Trade and Tariff World Trade Organisation
Established in 1948 1995
Nature It was an agreement between different countries It is an organisation which monitors international trade
Scope It covers only trade in goods It covers trade in goods as well as trade in services
Pariticipating Countries These are called contracting parties These are called member nations
Domestic Legislation It allows domestic Legislation to continue It does not permit domestic Legislation

 

 

Functions and Role of WTO

Functions and Role of WTO - Teachoo.JPG

 

What is India's role in WTO?

India is an important member of WTO and have always safeguarded the interests of a developing world

India has kept its commitments made to WTO Like:

1 Removing quantitative restrictons on import

2 Reducing Tariff Rates

Indias Role in WTO - Teachoo.JPG

 

What are Drawbacks/Crticisims of WTO

Majority of Trade is between developed countries (and not developing countries)

WTO favours developed countries more than developing countries

Example

Developed countries give a lot of subsidies especially to Agriculture Sector

 

Hence, these goods are cheaper

But Developing countries like India are forced to allow import of such subsidised goods due to WTO restrictions

Exports of INDIA

Criticisms of WTO 2 - Teachoo.JPG

Criticisms of WTO 3 - Teachoo.JPG

 

NCERT Questions

Q2

Why is it necessary to became a member of WTO?

View Answer

 

Q6

Distinguish between the following\

(i) Strategic and Minority sale

(ii) Bilateral and Multi-lateral trade

(iii) Tariff and Non-tariff barriers.

View Answer

 

Q7

Why are tariffs imposed?

View Answer

 

MCQ Other BOOKS

Q3

 ____ was the predecesor organisation to WTO.

A International Bank for Reconstruction and Development (IBRD)

B International Monetary Fund (IMF)

C General Agreement on Tariffs and Trade (GATT)

D Reserve Bank of India (RBI)

View Answer

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Transcript

What is International Trade? It is the Exchange of Goods and Services between Countries Example Import Computers China Export Softwares USA Who Monitors this International Trade? Earlier(From 1948-1995) GATT Now (1995 onwards) WTO Note- International Trade is also Called Multilateral Trade Difference between GATT AND WTO PARTICULARS Full Form Established in Nature Scope Participating Countries Domestic Legislation General Agreement of Trade and Tariff 1948 It was an agreement between different countries It covers only trade in goods These are called contracting parties It allows domestic Legislation to continue World Trade Organisation 1995 It is an organization which monitors International Trade It covers trade in goods as well as trade in services These are called member nations It does not permit domestic Legislation Functions and Role of WTO To establish rule-based trading system To ensure nations do not put arbitrary restrictions on trade To ensure optimum utilization of world resources To protect environment To provide greater market access to different countries To remove quantitative restrictions on import To reduce tariff on imports (To ensure there are rules in international trade) (Countries cannot say that they will not allow import from a particular country) (WTO monitors trade of not only goods but also services and ensure that countries get optimum value for their resources) (Ensure that member countries are not doing activities which cause pollution or damage environment) (Member nations can sell their products to different places) (Member Nations cant put Restrictions on Max quantities which can be imported) (Member nations can't charge very high import duties) India's Role in WTO Positive Points India an Important Member of WTO It always followed WTO guidelines like WTO Guidelines Removing quantitative restrictions on Import Reducing Tariff Rates Earlier Now Earlier there was max. Quantity of goods which could be imported) Custom Duty on Imports was very high Earlier Now Now there is no Maximum Quantity Custom Duty on Imports Reduced Criticisms of WTO Criticism 1-WTO Favors Developed Countries rather than Developing Countries Exports of INDIA Exports of USA 2528 Billion Dollars India, a Developing Country Had Less International Trade USA, a Developed Country Has More Trade Criticism of WTO WTO favours Developed Countries rather than Developing Countries Criticisms of WTO Criticism 2- WTO Does not object to Subsidy on Agriculture Goods by Developed Countries Subsidy of Agriculture Price of product 1000 Less Subsidy 200 Net Price 800 Price of product 1000 Less Subsidy 600 Net Price 400 India, a Developing Country with less funds Provides Less Subsidy to Agriculture So Agricultural Products expensive USA, a Developed Country with more funds Provides More Subsidy to Agriculture So Agricultural Products Cheaper Criticism of WTO WTO Does not object to more Subsidy on Agriculture Goods by Developed Countries Criticisms of WTO Criticism 3- Developing Countries are forced to open their markets for developed countries But are not allowed access to the markets of developed countries. "We will Stop Products from India by Charging Higher Import Duty" "We will Charge higher custom duty on imports to Boost local economy As per WTO This is allowed As per WTO This is not allowed (India has to Open its Economy)

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