Submitted by:

Farhan Badar
BBA-FA08-123-LHR

Submitted to:
Sir Imran Ali
Submission date:
May 5th, 2011

Batch and section:

10 B
The WTO was born out of negotiations;

Everything the WTO does is the result of negotiations

What is the World Trade Organization?

Simply put: the World Trade Organization (WTO) deals with the rules of trade
Between nations at a global or near-global level. But there is more to it than that.
Is it a bird, is it a plane?
There are a number of ways of looking at the WTO. It’s an organization for liberalizing
trade. It’s a forum for governments to negotiate trade agreements. It’s a place
for them to settle trade disputes. It operates a system of trade rules. (But it’s not
Superman, just in case anyone thought it could solve — or cause — all the world’s
Problems!)
Above all, it’s a negotiating forum … Essentially, the WTO is a place where member
Governments go, to try to sort out the trade problems they face with each other. The
first
step is to talk. The WTO was born out of negotiations, and everything the WTO does
is the result of negotiations. The bulk of the WTO’s current work comes from the
1986–94 negotiations called the Uruguay Round and earlier negotiations under the
General Agreement on Tariffs and Trade (GATT). The WTO is currently the host to
new negotiations, under the “Doha Development Agenda” launched in 2001.
Where countries have faced trade barriers and wanted them lowered, the negotiations
have helped to liberalize trade. But the WTO is not just about liberalizing
Trade, and in some circumstances its rules support maintaining trade barriers — for
Example to protect consumers or prevent the spread of disease.
It’s a set of rules … At its heart are the WTO agreements, negotiated and signed
by the bulk of the world’s trading nations. These documents provide the legal
Ground-rules for international commerce. They are essentially contracts, binding
governments to keep their trade policies within agreed limits. Although negotiated
And signed by governments, the goal is to help producers of goods and services,
Exporters, and importers conduct their business, while allowing governments to
Meet social and environmental objectives. The system’s overriding purpose is to help
trade flow as freely as possible — so long
as there are no undesirable side-effects — because this is important for economic
development and well-being. That partly means removing obstacles. It also means
ensuring that individuals, companies and governments know what the trade rules are
around the world, and giving them the confidence that there will be no sudden
changes of policy. In other words, the rules have to be “transparent” and predictable.
And it helps to settle disputes … This is a third important side to the WTO’s work.
Trade relations often involve conflicting interests. Agreements, including those
painstakingly negotiated in the WTO system, often need interpreting. The most
harmonious way to settle these differences is through some neutral procedure based on
an agreed legal foundation. That is the purpose behind the dispute settlement
process written into the WTO agreements.
History

Born in 1995, but not so young

The WTO began life on 1 January 1995, but its trading system is half a century older.
Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the
Rules for the system. (The second WTO ministerial meeting, held in Geneva in May
1998 included a celebration of the 50th anniversary of the system.)
It did not take long for the General Agreement to give birth to an unofficial, de facto
International organization, also known informally as GATT. Over the years GATT
Evolved through several rounds of negotiations.
The last and largest GATT round, was the Uruguay Round which lasted from 1986
to 1994 and led to the WTO’s creation. Whereas GATT had mainly dealt with trade
in goods, the WTO and its agreements now cover trade in services, and in traded
Inventions, creations and designs (intellectual property).

WHAT WTO DOES?

The WTO is run by its member governments. All major decisions are made by
the membership as a whole, either by ministers (who usually meet at least once every
two years) or by their ambassadors or delegates (who meet regularly in Geneva).

While the WTO is driven by its member states, it could not function without its
Secretariat to coordinate the activities. The Secretariat employs over 600 staff and its
experts — lawyers, economists, statisticians and communications experts — assist
WTO members on a daily basis to ensure, among other things, that negotiations
progress smoothly, and that the rules of international trade are correctly applied and
enforced.

TRADE NEGOTIATIONS

The WTO agreements cover goods, services and intellectual property. They spell
out the principles of liberalization, and the permitted exceptions. They include individual
countries’ commitments to lower customs tariffs and other trade barriers, and to open
and keep open services markets. They set procedures for settling disputes. These
agreements are not static; they are renegotiated from time to time and new agreements
can be added to the package. Many are now being negotiated under the Doha
Development Agenda, launched by WTO trade ministers in Doha, Qatar, in November
2001.
 IMPLEMENTATION AND MONITORING

WTO agreements require governments to make their trade policies transparent

by notifying the WTO about laws in force and measures adopted. Various WTO councils
and committees seek to ensure that these requirements are being followed and that
WTO agreements are being properly implemented. All WTO members must undergo
periodic scrutiny of their trade policies and practices, each review containing reports by
the country concerned and the WTO Secretariat.

DISPUTE SETTLEMENT

The WTO’s procedure for resolving trade quarrels under the Dispute Settlement
Understanding is vital for enforcing the rules and therefore for ensuring that trade flows
smoothly. Countries bring disputes to the WTO if they think their rights under the
agreements are being infringed. Judgments by specially appointed independent experts
are based on interpretations of the agreements and individual countries’ commitments.

BUILDING TRADE CAPACITY

WTO agreements contain special provision for developing countries, including

longer time periods to implement agreements and commitments, measures to increase
their trading opportunities, and support to help them build their trade capacity, to handle
disputes and to implement technical standards. The WTO organizes hundreds of
technical cooperation missions to developing countries annually. It also holds numerous
courses each year in Geneva for government officials. Aid for Trade aims to help
developing countries develop the skills and infrastructure needed to expand their trade.

OUTREACH

The WTO maintains regular dialogue with non-governmental organizations,

parliamentarians, other international organizations, the media and the general public on
various aspects of the WTO and the ongoing Doha negotiations, with the aim of
enhancing cooperation and increasing awareness of WTO activities.
ORGANIZATIONAL STRUCTURE

The General Council has multiple bodies which oversee committees in different areas,
are the following:

Council for Trade in Goods

There are 11 committees under the jurisdiction of the Goods Council each with a
specific task. All members of the WTO participate in the committees. The Textiles
Monitoring Body is separate from the other committees but still under the jurisdiction of
Goods Council. The body has its own chairman and only 10 members. The body also
has several groups relating to textiles.

Council for Trade-Related Aspects of Intellectual Property Rights

Information on intellectual property in the WTO, news and official records of the
activities of the TRIPS Council, and details of the WTO’s work with other international
organizations in the field.

Council for Trade in Services

The Council for Trade in Services operates under the guidance of the General Council
and is responsible for overseeing the functioning of the General Agreement on Trade in
Services (GATS). It is open to all WTO members, and can create subsidiary bodies as
required.

Trade Negotiations Committee

The Trade Negotiations Committee (TNC) is the committee that deals with the current
trade talks round. The chair is WTO’s director-general. The committee is currently
tasked with the Doha Development Round.

MEMBERS AND OBSERVERS

The WTO has 153 members (almost all of the 123 nations participating in the Uruguay
Round signed on at its foundation, and the rest had to get membership). The 27 states
of the European Union are represented also as the European Communities. WTO
members do not have to be full sovereign nation-members. Instead, they must be a
customs territory with full autonomy in the conduct of their external commercial
relations. Thus Hong Kong (as "Hong Kong, China" since 1997) became a GATT
contracting party, and the Republic of China (ROC) (commonly known as Taiwan,
whose sovereignty has been disputed by the People's Republic of China or PRC)
acceded to the WTO in 2002 under the name of "Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu" (Chinese Taipei).

A number of non-members (30) are observers at WTO proceedings and are currently
negotiating their membership.

AGREEMENTS

The WTO oversees about 60 different agreements which have the status of
international legal texts. Member countries must sign and ratify all WTO agreements on
accession. A discussion of some of the most important agreements follows. The
Agreement on Agriculture came into effect with the establishment of the WTO at the
beginning of 1995. The AoA has three central concepts, or "pillars": domestic support,
market access and export subsidies. The General Agreement on Trade in Services was
created to extend the multilateral trading system to service sector, in the same way the
General Agreement on Tariffs and Trade (GATT) provides such a system for
merchandise trade. The Agreement entered into force in January 1995. The Agreement
on Trade-Related Aspects of Intellectual Property Rights sets down minimum standards
for many forms of intellectual property (IP) regulation. It was negotiated at the end of the
Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

The Agreement on the Application of Sanitary and Phytosanitary Measures — also

known as the SPS Agreement was negotiated during the Uruguay Round of the
General Agreement on Tariffs and Trade, and entered into force with the establishment
of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets
constraints on members' policies relating to food safety (bacterial contaminants,
pesticides, inspection and labeling) as well as animal and plant health (imported pests
and diseases). The Agreement on Technical Barriers to Trade is an international treaty
of the World Trade Organization. It was negotiated during the Uruguay Round of the
General Agreement on Tariffs and Trade, and entered into force with the establishment
of the WTO at the end of 1994. The object ensures that technical negotiations and
standards, as well as testing and certification procedures, do not create unnecessary
obstacles to trade". The Agreement on Customs Valuation, formally known as the
Agreement on Implementation of Article VII of GATT, prescribes methods of customs
valuation that Members are to follow. Chiefly, it adopts the "transaction value" approach.

WTO Members
  152 countries are the members of WTO.
 The green sections are WTO member countries.
 Ukraine became the newest member on May 16, 2008.

Implications of WTO in Pakistan

INTRODUCTION
Pakistan is one of the founder Members of the WTO since 1995, and its predecessor
organization the GATT set up in 1948. We are following an export led growth strategy
and as such market access is of vital importance for our businesses. The increase in
preferential arrangements and free trade areas between some members is also eroding
our market access. Therefore in order to maintain current markets and gain new ones
for our exportable goods and services we are dependent on the WTO to get tariff and
non tariff barriers lowered on an MFN basis. Such MFN liberalization effectively levels
the playing field for competitive suppliers.
The implications of WTO membership on employment relations in Pakistan over a wide
range of issues: the implementation of international labour standards; the role of trade
unions; working conditions; wage–price factors in relation to cost of production and
export competition in global markets; social protection and social inequality; ‘efficiency’
versus ‘fairness and justice’; power of multinational corporations (MNCs); global division
of labour versus Pakistani labour diversity; and ‘industrial democracy’ versus ‘power
control and corruption.

There has been no explicit blueprint of future developments in employment relations.

Pakistan’s accession to the WTO added an international dimension to the complicated
domestic employment relations system. There was increasing pressure from
international governing bodies, such as the ILO and WTO and other organizations like
the International Confederation of Free Trade Unions (ICFTU), with regard to the issues
of labour rights, the role of unions and labour standards involving the Therefore, it is
crucial for both the international community and the Pakistanis people to seek a more
informed perspective on the current situation and the future engagement of the
Pakistanis economy into the global economic system, as well as Pakistan’s future
economic and political reforms

Pakistan was one of the 23 founders of GATT in 1947. It actively participated in all the
subsequent GATT negotiations and was involved in the Uruguay Round that resulted in
the creation of the WTO. Pakistan was thus also one of the founding members of WTO
that was established in 1995. There is a considerable impact of WTO on all sectors of
Pakistan's economy, particularly, its industry, textile, agriculture and services. The
nature of impact is predictable for some sectors, whereas, it is difficult for others in view
of global developments in trade and degree of complexity involved.

Changing external and internal environments

WTO accession is the latest factor eroding Pakistanis economic and political isolation
and its employment relations system needs to respond to external pressures and
internal demands.

The impact on economic sectors

The impact of WTO entry is by no means uniform across economic sectors. It is

expected that the agriculture sector will experience strong overall consequences as a
result of the lowering of the average tariff. Resource reallocation, primarily of rural labor,
will flow toward other sectors such as urban labor-intensive industries. The
manufacturing sector may experience an unclear overall outcome from WTO entry.
Industries that have recently developed and have become capable of competing with
foreign firms are more likely to meet the challenge of increased Changing patterns of
HRM in Pakistan trade and undergo restructuring to consolidate their businesses and
become more competitive.

The impact on employment relations

WTO accession also means that international bodies, such as the WTO will closely
monitor Pakistan’s adherence to trade regulations and labor standards, according to
relevant international conventions and regulations. WTO accession, additionally, will
build up international pressure on ` to implement and follow international conventions.
On the one hand, labor issues will no longer be in the domestic domain but will be
linked to international trade and diplomatic relations. Western trade unions, consumer
groups, NGOs, and other countries’ governments and international bodies closely
monitor trade and labor standards within the WTO. Particular, to coincide with the
crucial time of WTO accession. Based on the previous research on Pakistan, we tested
the following six hypotheses:

1. Ownership—enterprises with different ownership have different HRM practices and

the greater the degree of foreign ownership, the more likely that formal HR practices will
be adopted with fewer in some organizations.
2. Size—the larger the number of workers employed in the enterprise, the more likely
that formal HR practices will be implemented.
3. Market—externally market-oriented enterprises are more likely to adopt formal HR
practices.
4. Sector—new economy-oriented or high-value-added enterprises are more likely to
carry out formal HR practices.
5. Region—coastally located enterprises are more likely to implement formal HR
practices.
6. History—recently established enterprises that have a weaker relationship with the
traditional State planning system are more likely to use formal HR practices.

Effects of WTO on HRM (Pakistan)

There has been no explicit blueprint of future developments in employment relations.

Pakistan’s accession to the WTO added an international dimension to the complicated
domestic employment relations system. There was increasing pressure from
international governing bodies, such as the ILO and WTO and other organizations like
the International Confederation of Free Trade Unions (ICFTU), with regard to the issues
of labor rights, the role of unions and labor standards involving the Therefore, it is
crucial for both the international community and the Pakistanis people to seek a more
informed perspective on the current situation and the future engagement of the
Pakistanis economy into the global economic system, as well as Pakistan’s future
economic and political reforms

THEORETICAL PERSPECTIVES

Pakistan’s accession to the WTO opened a new page in Pakistan’s reform and further
engagement in the process of globalization. So far, a clear division has emerged in the
theoretical debates about globalization between three major schools of thought: thefirst,
positive neo-liberal approach, claims that the current process of globalization will
encourage free trade and investment across countries and eventually create more
economic prosperity for everyone; the second, negative neo-Marxist approach, claims
that the outcome of globalization would be more inequality and disparity between the
north and the south and that international governing bodies such as the WTO,World
Bank and International Monetary Fund (IMF) are serving the interests of the powerful
north and its alliance of MNCs; and the third, relatively neutral approach, claims that
globalization is a ‘double-edged sword’ which might bring both benefits and
disadvantages to countries or communities, and the critical question is how well people
manage it . An important aspect of the impact of globalization on the division of labor
and human resources in the East Asian region. Several important issues need to be
considered here. The first issue is about the international division of labor. Since labor is
one of the major resources of developing countries in Asia, the labor market will be one
of the first to register the effect of economic changes. In addition, the competition
between developing countries to attract foreign investment by providing cheap labor
might eventually result in a ‘race to the bottom. Critics argue that the current agreement
within the WTO has further consolidated the developed countries’ already vested
monopolies in technology, knowledge and capital, and that it is now impossible for
developing countries to break through the existing international division of labor. In fact,
one may argue, it is more likely that developing countries will be confined to an arena of
competition in which they will be fighting among themselves for shares in the labor-
intensive sector of export-processing industries.

The second issue is about changes in employment/unemployment via the process of

globalization. Advocates of the WTO argue that liberalized international trade will
increase both employment and incomes among trading-partner nations. However, the
opposition believes that entry into the WTO is unwise, as the odds are stacked against
the new entrants whose domestic industries may be adversely affected once tariff and
non-tariff barriers come down. The consequence would be greater labor surpluses,
lower wages, more unemployment and economic stagnation. Other social problems
would also emerge, such as insufficient social protection, greater inequality and social
unrest.

Conclusion

Pakistan follow must follow the role of WTO. Before WTO agreement there was a
serious disconnect between the needs of the industry and the availability of special
skills suited to the needs of the industry. There was no data available so that the
industry could match the needs and the skills available in the domestic manpower
market. It was also pointed out that the existing number of technical and vocational
centers had been languishing for the past several years. These were usually run and
managed by the Provincial the Governments while the provincial the Governments do
not.