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This article provides information about the historical background of WTO:
The World Trade Organisation (WTO) has taken concrete shape in 1995 after successful operation of the General Agreements in Tariffs and Trade (GAIT) for around five decades. GATT again, had emerged out of some other experimentation on trade negotiations. Indeed GATT owes its origin to the pre- World War II American endeavour to secure mutual tariff reductions from 29 countries through bilateral means.
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The concept of a multilateral institution emerged after World War II especially with the initiative of America and Britain and formed the basis of the formation of GATT in 1947 as a transient arrangement. The original intention was to create the third institution to handle the trade side of international economic cooperation, joining the two Bretton Woods institutions, the World Bank and IMF. Over 50 countries participated in negotiations to create an International Trade Organisation (ITO) as a specialised agency of the United Nations.
The draft ITO Charter extended beyond world trade disciplines to include rules on employment, commodity agreements, restrictive business practices, international investment and services. Even before the tasks concluded 23 of the 50 participants decided in 1946 to negotiate to reduce and bind customs tariffs. These 23 nations ratified through negotiations a combined package of trade rules and tariff concessions which later known as General Agreements on Tariffs and Trade. It entered into force in January 1948, while ITO Charter still was being negotiated. The 23 became the founding GATT members. India was also a signatory.
Although the ITO Charter was finally agreed at a UN Conference on Trade and Employment in 1948, due to the opposition by some national legislatures, especially U.S. Congress which refused to ratify it apprehending ITO’s interference in its sovereignty, ITO was effectively dead. So, GATT continued until January 1995 when the World Trade Organisation came into being after the Uruguay Round Final Act signed at Marrakesh on 15th April, 1994.
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It has emerged as a super sovereign global agency for framing rules for international trade, investment, intellectual property rights, economic and social agenda for nations with adjudicating authority over member States. The Governments of all the sovereign national states have to comply with the provisions and pronouncements of WTO. India is a signatory of WTO also.