World Trade Organization

World Trade Organization (WTO)

Introduction:
In modern days, the trade has become a global phenomenon. The main cause of expansion of foreign trade is free flow of goods and services, people, capital, information and technology. In such a situation, it was felt necessary to have an organization that deals with the global trade issues. The World Trade Organization (WTO) came into existence to fulfill this. It is an international organization dealing with the global rules of trade between nations. The main aim objectives of WTO is to reduce the difficulties in trade and investment. The main function of WTO is to ensure that trade flows as smoothly and freely as possible. It aims at integrating the world economy by cutting down the barriers in trade and investment. If there is any dispute between the member countries, the decision is taken by consensus. Decisions in WTO is typically taken by consensus among all member countries and they are approved by members' parliaments.
WTO is the output of different multilateral treaties and agreements signed between 1986 to 1994. The concept of WTO was first created in Uruguay Conference held in 1986 and the eighth round table conference held in Marrakech, Morocco formally decided to establish it.
The world trade organization came in to practice in 1^st January 1995. It is the successor of General Agreements on Tariffs and Trade (GATT). GATT was established as an international forum in 1948. The main purpose of GATT was to ensure non-discrimination, transparent procedures, settlement of disputes and participation of less developed countries in international trade. WTO has helped to create a strong and prosperous trading system contributing to unprecedented growth.

WTO has 160 members accounting for 97% of world trade. Nepal got its membership in 23^rd April 2004 as 147^th member. The head-quarter of WTO is in Geneva, Switzerland.

Function of WTO:

1. To act as a management consultant for international trade.
2. To maintain trade related database.
3. To solve the trade dispute between different countries.
4. To oversee national trade policies.
5. To act as a forum for multilateral level trade negotiations.
6. To administrate and implement the trade agreements.
7. To provide technical assistance and training for developing countries.
8. To act as a watch dog of international trade by examining the trade rules of member countries.
9. To cooperate with other international institutions involved in making global economic policy.

South Asian Free Trade Area (SAFTA)

Introduction:

In December 1991, the Sixth Summit of South Asian Association for Regional Cooperation (SAARC) held in Colombo approved the establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish South Asian Preferential Trade Arrangement (SAPTA) by 1997. The agreement on SAPTA was signed on 11^th April 1993. The agreements on SAPTA reflected the desire of the members states to promote ans sustain mutual trade and economic co-operation with in the SAARC region through the exchange of concessions. It was the first step towards the South Asian Free Trade.
The agreement on the South Asian Free Trade Area (SAFTA) is an agreement reached at the 12^th SAARC summit at Islamabad, capital of Pakistan on 6^th January, 2004. SAPTA creates a frame work for the creation of a free trade area between India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives. The foreign ministers of these seven countries signed a framework agreement of SAFTA with in zero custom duty on the trade of practically all products in the foreign by end of 2016. The SAFTA came into use on 1^st January 2006 and will be operated following the ratification of the agreements by the seven governments.

Objectives of SAFTA::

1. To establish a free trade in south Asia through the eliminations of tariffs.
2. To provide technical support to the least developed member countries to promote export competitiveness.
3. To form and implement the rules of origin to ensure that the product is manufactured by the country whihc is desirous to export.
4. To allow member countries to prepare a list of products which are to be restricted to import for the protection of national interest.
5. To form compensation scheme for the losses of revenue to the least developed member countries due to the arrangement of free trade area.
6. To review the effectiveness of the implementation of the agreement.
7. To develop consolation mechanism for ensuring the smooth implementations of the agreement.
8. To promote free competition in the trade area.

Billateral Investment Promotion and Protection Agreement (BIPPA)

Introduction:
This agreement was made between India and Nepal in October 22, 2011 for the promotion and protection of bilateral investment. This agreement is expected to be a milestone in attracting Foreign Direct Investment (FDI). It desires to create favourable conditions for promoting greater investments by investors of one country in the territory. 

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