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SAI INTERNATIONAL SCHOOL
                                                SESSION 2020-21
                                                     CLASS-X

               ECONOMICS- Ch-4- GLOBALISATION AND THE INDIAN ECONOMY
                                                 LESSON NOTES
                                                  SUB-TOPIC- 6
                                          World Trade Organisation

             World Trade Organisation

                  World Trade Organisation (WTO) is an organisation whose aim is to liberalise
                    international trade.
                  At present, 164 countries of the world are currently members of the WTO.
                   It has established rules for developed countries regarding international trade so
                    that these countries can allow free trade for all.
                  Started at the initiative of the developed countries, WTO establishes rules
                    regarding international trade, and sees that these rules are obeyed.


             Debate against WTO
                  Though WTO is supposed to allow free trade for all, in practice, it is seen that the
                    developed countries have unfairly retained trade barriers.
                  On the other hand, WTO rules have forced the developing countries to remove
                    trade barriers.
                  An example of this is the current debate on trade in agricultural products.

             Debate on trade practices

                  Agriculture sector provides the bulk of employment and a significant portion of the
                    GDP in India.
                  Compare this to a developed country such as the US with the share of agriculture
                    in GDP at 1% and its share in total employment a tiny 0.5%!
                  yet this very small percentage of people who are engaged in agriculture in the US
                    receive massive sums of money from the US government for production and for
                    exports to other countries.
                  Due to this massive money that they receive, US farmers can sell the farm
                    products at abnormally low prices.
                  The surplus farm products are sold in other country markets at low prices,
                    adversely affecting farmers in the developing countries.
             Developing country’s demand from WTO

                  Developing countries are, therefore, asking the developed country governments,
                    “We have reduced trade barriers as per WTO rules.
                  But you have ignored the rules of WTO and have continued to pay your farmers
                    vast sums of money.
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