The World Trade Organisation (WTO) was created in the early 1990s as a component of the Uruguay Round negotiation. However, it could have been negotiated as part of the Tokyo Round of the 1970s, since the negotiation was an attempt at a ‘constitutional reform’ of the General Agreement on Tariffs and Trade (GATT). Or it could have been put off to the future, as the US government wanted. What factors led to the creation of the WTO in the early 1990s?
One factor was the pattern of multilateral bargaining that developed late in the Uruguay Round. Like all complex international agreements, the WTO was a product of a series of trade-offs between principal actors and groups. For the United States, which did not want a new organisation, the dispute settlement part of the WTO package achieved its longstanding goal of a more effective and more legalistic settlement system. For the Europeans, who by the 1990s had come to view GATT dispute settlement less in political terms and more as a regime of legal obligations, the WTO package was acceptable as a means to discipline the resort to unilateral measures by the United States. Countries like Canada and other middle and smaller trading partners were attracted by the expansion of a rules-based system and by the symbolic value of a trade organisation, both of which inherently support the weak against the strong. The developing countries were attracted due to the provisions banning unilateral measures. Finally, and perhaps most important, many countries at the Uruguay Round came to put a higher priority on the export gains than on the import losses that the negotiation would produce, and they came to associate the WTO and a rules-based system with those gains. This reasoning- replicated in many countries- was contained in U.S. Ambassador Kantor’s defence of the WTO, and it amounted to a recognition that international trade and its benefits cannot be enjoyed unless trading nations accept the discipline of a negotiated rules-based environment.
A second factor in the creation of the WTO was pressure from lawyers and the legal process. The dispute settlement system of the WTO was seen as a victory of legalists over pragmatists but the matter went deeper than that. The GATT, and the WTO, are contract organisations based on rules, and it is inevitable that an organisation created to further rules will in turn be influenced by the legal process. Robert Hude has written of the ‘momentum of legal development’, but what is this precisely? Legal development can be defined as promotion of the technical legal values of consistency, clarity (or, certainty) and effectiveness; these are THE values that those responsible for administering any legal system will seek to maximize. As it played out in the WTO, consistency meant integrating under one roof the whole lot of separate agreements signed under GATT auspices; clarity meant removing ambiguities about the powers of contracting parties to make certain decisions or to undertake new views; and effectiveness meant eliminating exceptions arising out of grandfather-rights and resolving defects in dispute settlement procedures and institutional provisions. Concern for these values is inherent in any rules-based system of co-operation, since without these values rules would be meaningless in the first place. Rules, therefore, create their own incentive for fulfillment.
The momentum of legal development has occurred in other institutions besides the GATT, most notably in the European Union (EU). Over the past two decades the European Court of Justice (ECJ) has consistently rendered decisions that have expanded incrementally the EU’s internal market, in which the doctrine of ‘mutual recognition’ handed down in the case Cassis de Dijon in 1979 was a key turning point. The Court is now widely recognised as a major player in European integration, even though arguably such a strong role was not originally envisaged in the Treaty of Rome, which initiated the current European Union. One means the Court used to expand integration was the ‘teleological method of interpretation’, whereby the actions of member states were evaluated against ‘the accomplishment of the most elementary community goals set forth in the Preamble to the [Rome] treaty’. The teleological method represents an effort to keep current policies consistent with stated goals, and it is analogous to the effort in GATT to keep contracting party trade practices consistent with stated rules. In both cases legal concerns and procedures are an independent force for further co-operation.
In large part the WTO was an exercise in consolidation. In the context of a trade negotiation that created a near-revolutionary expansion of international trade rules, the formation of the WTOwasadeeply conservative act needed to ensure that the benefits of the new rules would not be lost. The WTO was all about institutional structure and dispute settlement: these are the concerns of conservatives and not revolutionaries, which is why lawyers and legalists took the lead on these issues. The WTO codified the GATT institutional practice that had developed by custom over three decades, and it incorporated a new dispute settlement system that was necessary to keep both old and new rules from becoming a sham. Both the international structure and the dispute settlement system that was necessary to preserve and enhance the integrity of the multilateral trade regime that had been built incrementally from 80 the 1940s to the 1990s.
What could be the closest reason why the WTO was not formed in the 1970s?
Show Hint
- The US government did not like it.
- Important players did not find it in their best interest to do so.
- Lawyers did not work for the dispute settlement system.
- The Tokyo Round negotiation was an attempt at constitutional reform.
The Correct Option is A
Solution and Explanation
The most likely reason for the acceptance of the WTO package by nations was that:
Show Hint
- It had the means to prevent the US from taking unilateral measures.
- They recognized the need for a rule-based environment to protect the benefits of increased trade.
- It settles disputes more legally and more effectively.
- Its rule-based system leads to export gains.
The Correct Option is B
Solution and Explanation
According to the passage, WTO promoted the technical legal values partly through:
Show Hint
- Integrating under one roof the agreements signed under GATT.
- Rules that create their own incentive for fulfilment.
- Grandfather-rights exceptions and defects in dispute settlement procedures.
- Ambiguities about the powers of contracting parties to make certain decisions.
The Correct Option is A
Solution and Explanation
In the method of interpretation of the European Court of Justice:
Show Hint
- Current policies needed to be consistent with stated goals.
- Contracting party trade practices needed to be consistent with stated rules.
- The enunciation of the most elementary community goals needed to be emphasized.
- Actions of member states needed to be evaluated against the stated community goals.
The Correct Option is A
Solution and Explanation
In the statement “…. it amounted to a recognition that international trade and its benefits cannot be enjoyed unless trading nations accept the discipline of a negotiated rules-based environment.” it refers to:
Show Hint
- Ambassador Kantor’s defense of the WTO.
- The higher priority on export gains by many countries at the Uruguay Round.
- The export gains many countries have come to associate with a rules-based system.
- The provision of a fairer global gains by the WTO.
The Correct Option is A
Solution and Explanation
The importance of Cassis de Dijon is that it:
The importance of Cassis de Dijon is that it:
Show Hint
- Gave a new impetus to the momentum of legal development at the European Court of Justice.
- Resulted in a decision that expanded incrementally the EU’s internal market.
- Strengthened the role of the court more than envisaged in the Treaty of Rome.
- Led to a doctrine that was a key turning point in European integration.
The Correct Option is B
Solution and Explanation
Top Questions on Reading Comprehension
- Shown below are letters ‘e’ taken from four popular logos, arranged in a sequence. Which of the options is the correct sequence?
- UCEED - 2026
- English Language Comprehension
- Reading Comprehension
- Shown below are four options, each showing consecutive frames representing the movement of a pendulum of an old-style wall clock for an animation movie. Which is the correct option?
- UCEED - 2026
- English Language Comprehension
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- Acrucial moderating factor in how people experience comparisons is self-esteem. Individuals with high self-esteem are more likely to interpret upward comparison as informative rather than threatening. They are more resilient in the face of others’ success and more likely to believe they can reach their own goals. In contrast, people with low self-esteem are more prone to interpret comparison as judgment, reinforcing negative self-views and triggering feelings of inadequacy.
This dynamic creates a self-reinforcing loop. People with high self-esteem are less vulnerable to upward comparison, which intensifies those doubts. Those with a secure sense of self are more likely to use comparison as a learning tool. The same external stimulus—a colleague’s achievements, a friend’s popularity—can have radically different effects depending on internal stability.
Self-esteem also influences how people choose their comparison targets. Research has found that individuals often engage in “selective comparison,” seeking out those who confirm their existing beliefs about themselves. This can become a subtle form of self-sabotage. Someone who feels unworthy may subconsciously seek out targets that reinforce that sense, perpetuating a narrative of inferiority. One of the most promising antidotes to social comparison is temporal comparison—evaluating oneself not against others, but against one’s own past. This method has been shown to increase motivation and satisfaction, especially when individuals can see concrete progress. Temporal comparison activates the same reward circuits as social comparison but avoids the threat systems associated with social ranking. It also reinforces agency: individuals focus on what they can control and improve rather than what others control. In therapeutic and coaching settings, temporal comparison is used to help clients build self-efficacy and track growth over time.
Moreover, people who focus on self-improvement rather than social dominance are less likely to fall into cycles of envy or self-pity. They can still use others as inspiration, but they do so without attaching their self-worth to the outcome. This is not to say they never compare—but that they focus on learning, rather than judgment. The most skilful approach to comparison may lie in eliminating it, but in reframing it as feedback. When we interpret comparison as information rather than a verdict, we can ask, “What can I learn from this?” This shift turns comparison into a growth tool. Teachers mentor their students, not as rivals. Psychologists emphasize that the key variable here is mindset.
A fixed mindset sees comparison as a threat. If someone else is better, it means we are worse. A growth mindset sees comparison as a map. If someone else has reached a certain level, it means the path exists. This reframing is not just a cognitive trick. It changes the emotional tone of comparison, making it more likely to inspire than to wound. Reframing also requires emotional regulation—the ability to notice an initial pang of envy or shame without reacting impulsively. With practice, individuals can learn to pause, reflect, and reinterpret their emotional responses. Over time, this builds resilience and self-trust, allowing comparison to become a learning tool rather than a cage.- XAT - 2026
- Verbal and Logical Ability
- Reading Comprehension
When people who are talking don’t share the same culture, knowledge, values, and assumptions, mutual understanding can be especially difficult. Such understanding is possible through the negotiation of meaning. To negotiate meaning with someone, you have to become aware of and respect both the differences in your backgrounds and when these differences are important. You need enough diversity of cultural and personal experience to be aware that divergent world views exist and what they might be like. You also need the flexibility in world view, and a generous tolerance for mistakes, as well as a talent for finding the right metaphor to communicate the relevant parts of unshared experiences or to highlight the shared experiences while demphasizing the others. Metaphorical imagination is a crucial skill in creating rapport and in communicating the nature of unshared experience. This skill consists, in large measure, of the ability to bend your world view and adjust the way you categorize your experiences. Problems of mutual understanding are not exotic; they arise in all extended conversations where understanding is important.
When it really counts, meaning is almost never communicated according to the CONDUIT metaphor, that is, where one person transmits a fixed, clear proposition to another by means of expressions in a common language, where both parties have all the relevant common knowledge, assumptions, values, etc. When the chips are down, meaning is negotiated: you slowly figure out what you have in common, what it is safe to talk about, how you can communicate unshared experience or create a shared vision. With enough flexibility in bending your world view and with luck and charity, you may achieve some mutual understanding.
Communication theories based on the CONDUIT metaphor turn from the pathetic to the evil when they are applied indiscriminately on a large scale, say, in government surveillance or computerized files. There, what is most crucial for real understanding is almost never included, and it is assumed that the words in the file have meaning in themselves—disembodied, objective, understandable meaning. When a society lives by the CONDUITmetaphor on a large scale, misunderstanding, persecution, and much worse are the likely products.- XAT - 2026
- Verbal and Logical Ability
- Reading Comprehension
Later, I realized that reviewing the history of nuclear physics served another purpose as well: It gave the lie to the naive belief that the physicists could have come together when nuclear fission was discovered (in Nazi Germany!) and agreed to keep the discovery a secret, thereby sparing humanity such a burden. No. Given the development of nuclear physics up to 1938, development that physicists throughout the world pursued in all innocence of any intention of finding the engine of a new weapon of mass destruction—only one of them, the remarkable Hungarian physicist Leo Szilard, took that possibility seriously—the discovery of nuclear fission was inevitable. To stop it, you would have had to stop physics. If German scientists hadn’t made the discovery when they did, French, American, Russian, Italian, or Danish scientists would have done so, almost certainly within days or weeks. They were all working at the same cutting edge, trying to understand the strange results of a simple experiment bombarding uranium with neutrons. Here was no Faustian bargain, as movie directors and other naifs still find it intellectually challenging to imagine. Here was no evil machinery that the noble scientists might hide from the problems and the generals. To the contrary, there was a high insight into how the world works, an energetic reaction, older than the earth, that science had finally devised the instruments and arrangements to coart forth. “Make it seem inevitable,” Louis Pasteur used to advise his students when they prepared to write up their discoveries. But it was. To wish that it might have been ignored or suppressed is barbarous. “Knowledge,” Niels Bohr once noted, “is itself the basis for civilization.” You cannot have the one without the other; the one depends upon the other. Nor can you have only benevolent knowledge; the scientific method doesn’t filter for benevolence. Knowledge has consequences, not always intended, not always comfortable, but always welcome. The earth revolves around the sun, not the sun around the earth. “It is a profound and necessary truth,” Robert Oppenheimer would say, “that the deep things in science are not found because they are useful; they are found because it was possible to find them.”
...Bohr proposed once that the goal of science is not universal truth. Rather, he argued, the modest but relentless goal of science is “the gradual removal of prejudices.” The discovery that the earth revolves around the sun has gradually removed the prejudice that the earth is the center of the universe. The discovery of microbes is gradually removing the prejudice that disease is a punishment from God. The discovery of evolution is gradually removing the prejudice that Homo sapiens is a separate and special creation.- XAT - 2026
- Verbal and Logical Ability
- Reading Comprehension
Questions Asked in CAT exam
- The passage given below is followed by four summaries. Choose the option that best captures the essence of the passage.
In the dynamic realm of creativity, artists often find themselves at the crossroads between drawing inspiration from diverse cultures and inadvertently crossing into the territory of cultural appropriation. Inspiration is the lifeblood of creativity, driving artists to create works that resonate across borders. In a globalized era of the modern world, artists draw from a vast array of cultural influences. When approached respectfully, inspiration becomes a bridge, fostering understanding and appreciation of cultural diversity. However, the line between inspiration and cultural appropriation can be thin and easily blurred.
Cultural appropriation occurs when elements from a particular culture are borrowed without proper understanding, respect, or acknowledgment. This leads to the commodification of sacred symbols, the reinforcement of stereotypes, and the erasure of the cultural context from which these elements originated. It is essential to recognize that the impact of cultural appropriation extends beyond the realm of artistic expression, influencing societal perceptions and perpetuating power imbalances.- CAT - 2025
- Para Summary
- The number of distinct integers $n$ for which $\log_{\left(\frac14\right)}(n^2 - 7n + 11)>0$ is:
- CAT - 2025
- Linear Inequalities
- In the set of consecutive odd numbers $\{1, 3, 5, \ldots, 57\}$, there is a number $k$ such that the sum of all the elements less than $k$ is equal to the sum of all the elements greater than $k$. Then, $k$ equals?
- CAT - 2025
- Number Systems
- The number of distinct pairs of integers $(x, y)$ satisfying the inequalities $x>y \ge 3$ and $x + y<14$ is:
- CAT - 2025
- Number Systems
For any natural number $k$, let $a_k = 3^k$. The smallest natural number $m$ for which \[ (a_1)^1 \times (a_2)^2 \times \dots \times (a_{20})^{20} \;<\; a_{21} \times a_{22} \times \dots \times a_{20+m} \] is:
- CAT - 2025
- Linear Inequalities