WTO, India, and China: Analyzing Trade Dynamics and Global Impact

This report provides a detailed analysis of the World Trade Organization (WTO) and its impact on two major global economies: India and China. It explores the roles of both India and China within the WTO, examining their participation in trade negotiations, implementation of agreements, and contributions to the organization's objectives. The report contrasts their relationships with the WTO, highlighting differences in their approaches and priorities. Furthermore, it assesses the impact of WTO membership on each country, considering factors such as trade liberalization, economic growth, and industrial development. The analysis covers both the benefits and challenges faced by India and China as members of the WTO, offering insights into the evolving dynamics of global trade and the role of developing nations in the international arena. Desklib offers a wealth of resources, including past papers and solved assignments, to aid students in their understanding of global business environments.

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Contents
1. Introduction..............................................................................................................................2
2. World trade organization..........................................................................................................4
2.1 Role within WTO..............................................................................................................4
India.........................................................................................................................................4
China........................................................................................................................................5
2.2 Relationship with the WTO..............................................................................................7
India.........................................................................................................................................7
China........................................................................................................................................8
2.3 Impact of WTO.................................................................................................................9
India.........................................................................................................................................9
China......................................................................................................................................11
3. Conclusion.............................................................................................................................13
4. References..............................................................................................................................14

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1. Introduction
WTO, world trade organization is an organization that is global or international, focused over
nation’s trade and its rules. Center of this organization is “world trade organization agreements,”
which is signed and negotiated by various trading nations globally and ratified in their respective
parliaments. The major object of this organization is to help producers of service and goods,
importers, and exporters to conduct the business effectively (wto, 2018).
The organization was established on 1 January 1995 and it is located at Geneva. Moreover, it
concluded 164 members across the world that is around ninety-eight percent of trade globally.
Consider the function of the organization; it is responsible for administering trade agreements. It
provides a forum negotiation related to trade and trade disputes handling. It is also held
responsible to monitor national trade policy and provide training to the developing nations and
technical assistance. The organization is cooperative with a various international organization as
well (wto, 2018).
The world trade organization is working for the mutual benefit of its members, and work for all
the nations related to this. In the report, the discussion would include two nations that are India,
and China, their roles within this organization, relationship with WTO, and the impact on these
countries. Considering the history, this organization builds from the previous organization that
was GATT (General agreement on trade and tariffs). This organization was created in
negotiations held in Uruguay round in 1986 to 1994. Director General that is head of this
organization is Roberto Azevedo (wto, 2018). India and China are two very different nations,
and both are members of WTO. Nevertheless, both have different relations with WTO and have

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been differently impacted by the organization, which will be compared and contrasted in the
report further.
2. World trade organization
2.1 Role within WTO
India
As WTO is working for the benefit of the nation, India also plays role in WTO. India has
continuously taken the position that launch of the entire round that covers depending upon the
full merging of viewpoint within all the membership of WTO on the framework and scope for
negotiations. While implementing Uruguay round agreements, the task for the organization was
to resolve developing nation’s concern (Gowa, 2015).
Incorporation of livelihood section: ensuring livelihood and food security is critical especially for
a developing and large economy, such as India. In the negotiation, the nation proposal included
the suggestion in the favor of developing nations to maintain accurate tariff building levels,
initiating with the prevailing distortion and developmental needs in the international market.
Moreover, the nation requested to include a safeguard mechanism separately, which would
consider imposition for restrictions, related to quantity under particular situations or
circumstances. Especially, in decline in process or import surge; exemptions from the duty to
provide least market accessibility for developing nations; indemnities of measures that
developing nation took for rural development, poverty alleviation, and rural employment
(bagwell & Staiger, 2018).
India’s immediate role consist of reaching an agreement earlier with the developing nations that
must be executed, so that that the inherent imbalance corrects in the Uruguay round. Meaningful

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and sincere implementation of differential and special treatment sections for developing nations
in different agreements was made. Moreover, the nation was in favor of extending the level of
protection higher to the geographical aspects of goods such as Darjeeling tea, Alphonso
mangoes, and basmati rice. While considering TRIMS that is agreement on trade-related
investment measures, the proposal included the need for flexibility in adopting a proper domestic
policy for developing nations while foreign investment to be permitted (insightsonindia, 2018).
China
According to Lamy (Director General of WTO), provided the light on the relevance of
membership with the country on its tenth anniversary with WTO. It was observed that the
exports of China increased to more than six times, that is around $1.57 trillion, although imports
had also increased to an average of $1,39 trillion, an initial ten years of the membership
(chinabusinessreview, 2018).
China undertook various reforms as a part of accession procedure, which has enhanced economic
efficiency and growth booster being a member to WTO, foreign investors were provided, which
assure that nation is a section of the system of disciplines and international rules. Moreover,
foreign investors had an opportunity of domestic availability of market, in order to offer services
and goods. FDI inflows were hype to a large extent from almost nil to $108 billion, from the
1990s to 2009 (chinabusinessreview, 2018). This is relevant as more than fifty percent export of
China came from foreign company’s branches or subsidiaries in China. The influence of WTO
accession of China was quite difficult; nevertheless, a significant growth was contributed.
China’s accession has contributed for a stronger organization in the nation. Moreover, it has
contributed to make the nation, largest exporter worldwide, and importing these goods at a
second largest position (Telo & Ponjaert, 2015). The influence of the nation’s entry to WTO has

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been on trade between developing nations, that is South-South trade. This trade is now
comprised of more than twenty percent of trade globally, which was the result of a rapid rise. For
illustration, the overall trade by developing nations was enlarged approx. seventeen percent,
which was thirteen percent of developed nations, on a contrary. In 2011, economist forecast of
WTO, total expansion of trade was 6.5%, along with general trade by developing nations to all
working collaborates expansion by approx. 9.5%, that was quite large than the expected rate,
which was 4.5 % for the developed world. Therefore, considering trade flow shifting and trade
expansion, China’s accession had played a very vital and dramatic role. Another such developing
countries like India, Indonesia, South Africa, and Brazil are also increasing rapidly, and execute
high influence in the arena of WTO. The expansion of developing nations, with the center as
China, has transformed the power balance among WTO. China was considered to be a 3rd most
active member in the organization, which influence the dispute settlement process, first, two
were European Union and the United States (Lester, 2016).
Considering the commitments, the nation has undertaken, was implemented, like the tariff
schedule, where the tariff average on manufactured products was nine percent and the tariff
average on imports of agriculture was fifteen percent, which was observed be quite down before
WTO accession, and was very significant. Moreover, it considering the bid offered by the nation
to join the Gap, that is Government procurement agreement of WTO, which was taken into
account, and said to be better than the first one which was in 2007, although some issues still
remained. The act of join GPA was beneficial for both China and the world trade organization as
well (chinabusinessreview, 2018).

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2.2 Relationship with the WTO
India
The relationship of WTO and India initiated when it becomes a member of WTO and member of
GATT before WTO creation. From 8 July 1948, the country was GATT member and WTO
member from 1995, 1 July. Considering the history, India has participated actively in GATT
rounds. Moreover, the country continues to contribute as a significant voice in new round
discussions of negotiations related to multilateral trade. The thrust of India's function has been to
confirm a fair dissemination of privileges and responsibilities between evolved and growing
nations and to deal with the developmental issues of underdeveloped nations. Its negotiating
method has nevertheless, developed with its ordinary change and development approach and
coverage orientation. Its prior approach become was large part defensive, in reference with its
import substitution rules (Wilkinson, 2015).
Considering Uruguay negotiation rounds, negotiations brought agriculture and textile in addition
to numerous new problems like services, trade-related investment, and intellectual property right
measures into the multilateral trading tool. India, in conjunction with Brazil, led a set of growing
international locations in opposition to the inclusion of these new issues. It feared that
industrialized nations might make commitments in agriculture and textile substance to
developing a nation of a concession in such regions. Conversely, India subsequently had to agree
to negotiate on those new issues as the portion of the Uruguay round (Braithwaite & Drahos,
2017).
Considering Indian industries and world trade organization, Indian industry had to face more
competition inside the rouse of globalization. However, it has correctly finished, as may be
inferred from the reality that there has been no precise surge in imports. In fact, as consistent

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with the provisional information for 2000-01, our non-oil imports dropped with the aid of 14%,
while the nation’s exports expanded by over 20 % in the same era. A close by observation has
also been held to make certain that Indian enterprise ought not to face unfair opposition from
dumped or subsidized imports of different other nations. In order to consider prices of drugs,
various safeguards were available that were providing price control, parallel imports, and
compulsory licensing, that must have been helpful in addressing that concern for the nation.
Moreover, it was observed that medicinal prices were influenced by various factors like
purchasing capacity and level of competition (Cabral & Mathiason, 2015).
China
China became the member of WTO in 2001, 11 December. Until the Seventies, China’s
economy turned into managed with the aid of the communist government and became stored
closed from further economies. Collectively with political modifications, China inside the early
Eighties started out to open its financial system and signed some of the local exchange
agreements. China won observer popularity with GATT and from 1986, started out working
towards linking that organization. China directed to be included as founding member of WTO
(which might validate it as a global economic strength) however this attempt become thwarted
due to the fact united states of America, European international locations, and Japan asked that
China first reform diverse tariff guidelines, which include tariff reductions, industrial regulations,
and open markets (Teh & Beverelli, 2015).
The United States played a vital role and acted as a power of dominance in the global economy,
and supported an open system strongly. They were quite interested in China due as this nation
was U.S fastest growing market for services and goods. The import from China was doubled for
the US from 1996 to 2001 (Ponte & Flento, 2017).

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China is a big nation, with various decisions in the pointers of the municipal and provincial
government. It is consequently not tough to assume the challenges of IPR enforcement. It was
observed that China has improved its IPR safety and enforcement, however, WTO additionally
agrees with that more can be accomplished. WTO accept as true with that is a sentiment shared
by means of the Chinese authorities itself—an important purpose for that is the fact that
protective IPR is likewise in China’s interest. China is hastily growing patents, copyrights, and
trademarks of its very own. As a way of encouraging invention, incentives and innovation are
required. This indicates the inventor wishes the assurance that they will be able to preserve
ownership rights and that, if it is far a success, the benefit is of the inventor (Bayham, 2016).
China evaded the usage of trade remedies that is exchanged treatments in the initial few years of
its WTO accession. Nevertheless, visible frequency growth was observed. China is amongst
those nations that began the maximum antidumping investigations. In 2009, China rated 5th
amongst WTO participants at the beginning of antidumping movements. In 2010, China graded
6th, however, the range of beginnings in 2010, changed into plenty lower than in 2009. Of path,
there is a distinction between instances started and final processes implemented. It was quite
specific that China has emerged as a common consumer of trade remedy tools (Das, 2018).
2.3 Impact of WTO
India
After the discussion over the role, and relations of the organization and India, now the discussion
will include the impact of a world trade organization and its activities on the economy of India.
Considering Indian agriculture, the impact of world trade organization included import duties
imposition, the sooner, GATT had an endowment of trading in agricultural harvest additionally;
however, it did no enabled in imparting free trade regime across the globe. It became allowed to

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charge import quotas and import obligations for import restriction and export subsidies as
inducements to enhance conventional exports and shield the domestic doings. Fishery, rubber,
forestry, jute, coir, sisal, and abaca have been now not covered below the conventional
agricultural exports (wto.org, 2018).
The impact of QR’s withdrawal, via the quilt of March 2001, India turned into expected to
withdraw the QRs put on 1429 goods, and a whole ban on QRs before 31 December 2001. As a
fragment of its first section policy, India was predictable to withdraw the QRs on 715 goods via
the March 2000 end. Another phase of withdrawal of QRs on 714 items becomes anticipated by
the giving up of March 2001. However, in all the QRs had been inhibited for 772 items in which
208 agricultural items were included. Due to the withdrawal of QRs, import is estimated to move
up by means of 8.7%, whose value is projected as $ 3029 billion. India is maintaining QRs due
to its adverse BOP. Due to upgrades within the BOP, the QRs were not valid to India from April
2001, as an alternative of which India can simply impose certain tariffs (wto, 2018).
Considering the economic impact, the benefits to INDIA were an increment in earnings through
exports, the World Bank estimated WTO secretariat and international monetary fund, which
indicates that the effect of income of Bali round implementation would be an increment in
merchandise products traded. It was further expected that share of India in exports worldwide
would be enhanced. Another such benefit was in agricultural exports, the trade barriers were
reduced and national subsidies were likely to raise for agriculture’s international prices. The
nation was expecting to get higher earnings from exports through agriculture because the
development of major agriculture in the country would be exempted from the WTO agreement
provisions (Altbach, 2015).

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Impact on the export of clothing and textile, while MFA phasing out, the exports of clothing and
textile increased to a large extent and the nation was beneficial out of it. In Uruguay round, the
demand for MFA phasing out was accepted for the developing countries, this is because the
quota regime major portion was diminished or nullify in the 10th year that was 2005. The quota
removal tends to result in benefit to India. Impact on multilateral disciplines and rules, these
have been strengthened a lot and majorly related to subsidies, anti-dumping, disputes settlement,
safeguards, and countervailing measures. The act was to assure that the security is a great level
and the expectations of the international trading system would create an environment that is most
favorable for the nation, as per recent world economic order (shodhganga.inflibnet.ac.in, 2018).
China
The major three impacts of the world trade organization on China were import tariffs were
reduced, and foreign firms were permitted to directly sell their products to the domestic market
of China, and third are financed sector and telecommunications opening to more competitive
globally. The country was ready to lower its tariff on goods of agriculture from around 31.5 to
14.5 percent by the beginning of 2004. The industrial goods tariff would reduce from thirty-five
percent to seventeen. Various manufacturers from other countries including companies of the
automobile were allowed to trade their goods directly to the market without the interference of
Chinese trade organizations. As a result of this act, the foreign investors were able to increase the
shares to forty percent of commercial banks in the country, additionally, for telecommunication
firs, it was up to forty-eight percent (siteresources.worldbank.org, 2018)
Lower tariff lists might boom in the imports of both commercial products and agricultural goods.
Competition from overseas imports will pressure Chinese producers to reduce their prices and
enhance the class in their merchandise, each to the gain of Chinese purchasers. The firms unable

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to compete will regulate, some in all likelihood going bankrupt. Overseas producers working in
China may also be responsible for competition. Local foreign manufacturers have the benefits
over importers by being capable of using the low-fee exertions in China while keeping the price
of transporting at lasting products to China. Financial companies and telecommunication
companies in China ought to elevate their products to sustain overseas opposition (princeton,
2018).

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3. Conclusion
The discussion in the report conducted, concluded that world trade organization is working
internationally, it is an organization which consists of a maximum number of nations as its
member, and the organization is working for the trading rules for these members. It is an
association, which agrees upon the mutual benefit to all its members, and consists of a procedure
to settle any disputes among the members. The authority work for the betterment of the nations,
including the rules related to tariffs, intellectual property right, and many more such decisions,
especially in benefit of developing nations.
In the report, the two countries taken for the comparison, of the role, relation and impact of the
world trade organization. While considering the role of India, it was observed that India is a
member of GATT and automatically became the WTO member since 1995, as the creation of
WTO, through negotiations in Uruguay rounds. On the contrary, China became the member of
the organization later than India, in 2011. Considering the role and relationship, India has been
always an active participant in negotiation and has played a role in all the rounds of Uruguay.
While China has played an important role too, it was considered the influencer for the South-
south trade, which is trade between developing countries.
World trade organization had a positive impact on both countries. For India, the major impact
was on agriculture and economic reforms like the impact of QR’s withdrawal, increment in
earnings through exports. For China, there were three major impacts, import tariffs were
reduced, and foreign firms were permitted to directly sell their products to the domestic market
of China, and third are finance sector and telecommunications opening to more competitive
globally.

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4. References
Altbach, P., 2015. Higher education and the WTO: Globalization run amok. International
Higher Education, Volume 23.
bagwell, K. & Staiger, R., 2018. Quantitative Analysis of Multi-Party Tariff Negotiations (No.
w24273). National Bureau of Economic Research, 1(1), p. 1.
Bayham, A., 2016. A Measurement of Annual GDP Performance of the 162 WTO Members
between 1989-2001 and 2002-2014. Economy, 3(2), p. 51.
Braithwaite, J. & Drahos, P., 2017. Information feudalism: Who owns the knowledge economy.
London: Routledge.
Cabral, A. & Mathiason, T., 2015. Symposium: Managing the global environment through trade:
WTO, TPP, and TTIP negotiations, and bilateral investment treaties versus regional trade
agreements: Introduction. American University International Law Review, 30(3), p. 1.
chinabusinessreview, 2018. China’s Role in the WTO. [Online]
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insightsonindia, 2018. India and WTO – Detailed Analysis of All Related Issues and Concepts.
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globalized world. s.l.:Ashgate Publishing, Ltd.

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Wilkinson, R., 2015. Changing power relations in the WTO–why the India–US trade agreement
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