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World Trade Organization (WTO)
Context:
India plans to use South Africa’s case against European Union’s (EU) strict food safety regulations on citrus fruit to call for relaxations in standards affecting Indian food exports, including chilies, tea, and chemicals.
More on News:
- India intends to support South Africa in contesting stringent food safety norms imposed by the EU, aiming to address broader trade concerns.
- South Africa challenges EU phytosanitary regulations on citrus fruits, citing unfair restrictions that hinder export potential.
- India’s Basmati rice dispute with Pakistan over EU GI registration adds strain to relations.
- The EU emphasises strict SPS import rules, maintaining food safety standards regardless of FTAs, while South Africa challenges EU measures at the WTO.
WTO:
- Established in 1995, the World Trade Organisation (WTO) is an international institution regulating global trade rules, succeeding the 1947 General Agreement on Tariffs and Trade (GATT).
- It operates based on agreements ratified by a majority of the world’s trading nations, aiming to facilitate trade among nations.
- The WTO’s primary role is to assist producers, exporters, and importers in safeguarding and managing their businesses.
- Currently, the WTO comprises 164 member countries, with Liberia and Afghanistan being the latest additions in July 2016. Additionally, there are 25 “observer” countries and governments.
Objectives of WTO:
- The WTO’s overarching aim is to assist its members in utilizing trade to enhance living standards, generate employment, and enhance quality of life.
- By overseeing the global trade framework, the WTO aids developing economies in enhancing their trade capabilities.
- The establishment of universal trade regulations ensures confidence and stability in international trade relations.
Importance:
- Serves as a dispute resolution and mediation body.
- Offers a platform for member governments to negotiate and address trade issues with each other.
- Facilitates communication and cooperation on trade matters among its members.
- Spearheads role in reducing trade barriers and fostering increased trade between member countries.
Agreement on Agriculture:
- The WTO categorises trade subsidies using traffic light colors: green (permitted), amber (to be reduced), and blue (production-limiting).
- The Agriculture Agreement, unlike other sectors, lacks a red box, but prohibits domestic support exceeding reduction commitments in the amber box.
- The agreement aims to eliminate trade barriers, ensure transparent market access, and integrate global markets.
