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International Relations•International Institutions

WTO and Global Trade

WTO and Global Trade

The World Trade Organization (WTO) is the cornerstone of the contemporary global trading system. Born out of the General Agreement on Tariffs and Trade (GATT) in 1995, it now binds 166 members—accounting for more than 98 % of world trade and GDP. For a civil servant, understanding the WTO is indispensable because trade policy shapes India’s external sector, influences employment, price stability, and the nation’s strategic autonomy. Moreover, WTO rules intersect with key UPSC themes such as sustainable development, digital economy, intellectual property, and dispute settlement, making the subject a frequent source of both prelims facts and mains essays.

Constitutional / Legal foundation
India’s external trade competence is vested in the Union under Article 246 of the Constitution (Union List, Entry 46). International agreements, including WTO accords, are implemented through the Constitution’s “law‑making power of Parliament” (Article 73) and the “executive power of the President” (Article 78), subject to parliamentary ratification under Article 253.

Sub‑topics covered in this chapter

  1. Evolution of the WTO – From GATT (1947) to Marrakesh Agreement (1994).
  2. Structure & Organs – Ministerial Conference, General Council, DSU, TRIPS Council, etc.
  3. Core Principles – Most‑Favoured‑Nation (MFN), National Treatment, Transparency, Reciprocity, and Development‑oriented Flexibilities.
  4. Key Agreements –
    • Goods: GATT 1994, Safeguards, Anti‑Dumping, Subsidies.
    • Services: GATS.
    • Intellectual Property: TRIPS.
    • Agriculture, Fisheries, and Trade‑Related Investment Measures (TRIMs).
  5. Dispute Settlement Mechanism (DSM) – Stages, Appellate Body (or its current status), enforcement.
  6. WTO and Development – Special & Differential Treatment (S&D), Aid for Trade, Doha Development Agenda.
  7. India’s WTO Journey – Major cases (e.g., US–India Steel, EU–India Poultry), policy reforms, and negotiation priorities.
  8. Contemporary Challenges – E‑commerce, Digital Trade, Climate‑related trade measures, Reform debates, and the impact of protectionist trends.
  9. Linkages with other International Regimes – IMF, World Bank, UNCTAD, and regional trade agreements (RTA) like RCEP, USMCA.

Exam relevance

UPSC StageRelevanceTypical Question Types
PrelimsFactual recall & conceptual clarity– Year of WTO establishment, number of members, core principles, key agreements, India’s WTO membership year.
Mains – GS‑IIAnalytical & policy‑oriented answers– Evaluate WTO’s role in India’s export growth; discuss the impact of WTO’s dispute settlement on Indian industries; assess the relevance of S&D provisions for developing economies.
Mains – GS‑IIIInternational relations & economic governance– WTO reforms and their implications for global governance; India’s strategy in multilateral trade negotiations; WTO’s interface with climate change commitments.
Optional (Economics/International Relations)In‑depth theoretical and empirical analysis– Comparative study of GATT vs. WTO; critique of the Appellate Body crisis; role of WTO in shaping global value chains.

A solid grasp of WTO fundamentals not only equips aspirants to answer direct factual queries but also enables them to craft nuanced arguments on trade policy, development, and India’s strategic positioning in a rapidly changing global order.

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