Description
The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.
A PRESENTATION ON WTO
INTRODUCTION TO GATT
• The general agreement on tariffs and trade (GATT), the predecessor of WTO, was born in 1948 as result of the international desire to liberalise the trade. ?The growing acceptance of GATT ,despite its shortcomings, is evinced by the increase in the number of the signatories. When the GATT was signed in 1947 , only 23 nations were party to it .It increased to 99 by the time of the seventh round and 117 countries participated in the next, i.e., the Uruguay round . In April 2008, there were 151 members with several more countries formally seeking accession to the WTO. The signatory countries account for 90 per cent of the international trade indicating the potential of the WTO in bringing about an orderly development of the international trade. ?The primary objective of GATT , the forerunner of WTO ,was to expand international trade by liberalizing trade so as to bring about all-round economic prosperity.
LIMITATIONS OF GATT
• GATT achieved substantial trade liberalization .But sectors which would have significantly benefited developing countries ,like agriculture and textile ,were not liberalized. Besides agriculture and textiles ,two exceptions to the general trade of trade liberalization have been trade of developing countries and economic integration. Developing countries with balance of payment problems have been generally exempted from liberalization. Increase of protectionism of developed countries when developing countries are liberalized. The traditional concerns of GATT were limited to international trade in goods only GATT was ad hoc and provisional. GATT system allowed existing domestic violated a GATT agreement. legislation to continue even if it
•
• • • • • •
GATT was less powerful, dispute settlement system was slow and less efficient , its ruling could be easily blocked .
INTRODUCTION TO WTO
• • •
Location: Geneva, Switzerland Established: 1st January 1995 Created by: Uruguay Round negotiations (1986–94)
•
• •
Membership: 153 countries
Budget: 175 million Swiss francs for 2006 Secretariat staff: 635
•
Head: Pascal Lamy (director-general)
•
The UR Agreement seeks to liberalise trade in manufactures by enlarging tariff bindings ,reducing tariffs and removing tariffs.
Following the UR Agreement , GATT was converted from a provisional agreement into a formal international organization called WTO with effect from January 1,1995 .
•
•
WTO now serves as a single institution framework encompassing GATT and all the results of the Uruguay round . It is directed by a Ministerial Conference that will meet at least once every two years and its regular business is over seen by a general Council.
Under the old system , there two GATTs GATT the agreement GATT the organisation As a part of the WTO alongside two new agreements viz , General Agreement on Trade in Services(GATs) and General Agreement on the Trade Related Aspects of Intellectual Property Rights(TRIPs) .
• 1. 2.
?
The global business environment is very significantly influenced by the World Trade Organisation (WTO)principles and agreements . They also affect the domestic environment. For example, India has had to substantially liberalise imports, including almost complete removal of quantitative import restriction. Domestic firms face increasing competition from foreign goods. Liberalization of foreign investment. The liberalisation also enables to seek foreign equity participation and technology. foreign
? ? ?
?
Liberalization facilitates global sourcing by Indian firms so that they can improve their competitiveness.
EVALUATION OF URUGUAY ROUND
• Uruguay round (UR) is the by which the eighth round of the multilateral trade negotiation (MTNs) held under the auspices of the GATT is popularly known because it was launched in Punta del este in Uruguay ,a developing country ,in September 1986. UR was the most complex and controversial one. It took more than seven years to complete the negotiations as against the originally contemplated more than four years indicates the complexities involved. It includes the new areas like TRIPs, TRIMs, SERVICES and attempts to liberalisation agricultural trade and elimination of NTBs.The tarification of trade barriers was claimed to be significant success of UR . According to some estimates in UR the real world income increase by between $212bn and $274bn in2005. According to estimates of increase in real income will be roughly 1.6 percent of GDP for the EU 0.2 percent in US 0.9 percent in JAPAN. 2.5percent of the GDP for china 0.5 percent for india ,0.6 percent for southafrica ,0.3 percent of brazil. Largest gain in absolute term will accrue to US Some developing countries in the category of LDCs and net food importers are expected to lose because of UR package. In constant 1992 US dollar , this reperesent an increase of 745 bn export value increase by around 10 percent.
• • •
• •
• • •
•
Some of the largest projected increase in world trade are in areas that are of interest to developing countries . World bank ,OECD and the GATT secrateriate the income effects of the implementation of the ur package will be added between $213 to $274bn annually to the world income . The largest increase will be in the areas of clothing,agriculture , forestry and fishery products(20 percent) and processed food and beverages (19percent). It was estimate cuts in protection on total merchandise trade will be increase real incomes in developing countries by $55 to $90 bn (or 1.2 to 2 percent of their GDP in 1992) while the gains to the world as a whole will be in the order of $200 bn.
•
•
•
FUNCTION OF UR
• Facilitates implementation, administration and operation and further objectives of MTA Provide forum for negotiation among members. Administer understanding of rules and procedures governing the setelment of issues and trade Review Mechanise. Co operate with IMF and IBRD
• •
•
General council functions.
• • • • Supervise regular basis operartion on goods, services and TRIPS Act as Disputes Settelment body Serve as a trade review mechanise Establish goods services , TRIPS council as subsidiary body.
4th Session of Ministerial Conference
• • • • • • • • • Held at – Doha (Capital of Qatar) During 9-13 November, 2001 Participation – 142 member countries China and Taiwan admitted as member country Point of Attraction – Conflict of interest of developed countries and developing countries Developed countries – A new round of multilateral trade negotiations covering “Singapore Issues” What is Singapore Issues? The "Singapore issues" refers to four working groups set up during the World Trade Organization Ministerial Conference of 1996 in Singapore. These groups are tasked with these issues:
– transparency in government procurement, – trade facilitation (customs issues), – trade and investment, and – trade and competition Developing Issues – Implementation Issues Developed countries Vs. Developing Countries India fought almost single handedly Developed countries as expected won but India’s bold statements had a commendable impact India’s refusal to approve the agenda unless it was modified to include implementation issues Effect – Chairman announced an explicit consensus required at 5th Ministerial Conference in 2003 for discussion of highly controversial Singapore Issues Established – Power of single developing country, inspired for collective action by developing countries.
• • • • • • •
Developed Countries
A new round of multilateral trade negotiations
> > > > > > > > > > > > Agriculture Services Market access for non-agricultural products Trade-related aspects of intellectual property rights (TRIPS) Relationship between trade and investment Interaction between trade and competition policy Transparency in Government Procurement Trade facilitation WTO Rules : Anti dumping and subsidies WTO Rules: Regional Trade Agreements Dispute Settlement Understanding Trade and Environment
>
>
E-Commerce
Trade, debt and Finance
Developing Countries
Implementation Issues
1> 2> 3> 4> 5> 6> 7> 8> 9> 10> 11> 12> General Agreement on Tariffs and Trade (GATT) Agriculture Sanitary measures Textiles and clothing Technical barriers to trade Trade-related investment measures (TRIMs) Anti-dumping (GATT Article VI) Customs valuation (GATT Article VII) Subsidies and countervailing measures Trade-related aspects of intellectual property rights (TRIPS) Cross-cutting issues Other Implementation Issues and Final Provisions
•
3 Major Declarations – On the negotiating agenda for the new WTO round – On some 40 implementation concerns of the developing countries – Political statement dealing with patents and public health Remarkable achievement for developing country – In case of TRIPs and public health, waiver of patent law to face a national emergency – Intellectual property rights were subservient to public health concerns Important outcomes/findings – In agriculture, subsidies need to be reduced and should be ultimately phased out. – An exception is available for food security concerns – Success or failure of developing countries depends on support for their common cause. The Declarations adopted by WTO Members at the Conference constitute a work programme of trade negotiations to be concluded no later than 1 January 2005. The only exceptions are the negotiation on improving and clarifying the Dispute Settlement understanding, which is to conclude by the end of May 2003 The negotiations on a registration system for geographical indications, to conclude by the Fifth Ministerial Conference in 2003. The declaration included all the points raised by developing country and developed country. Finally, the Doha meet concluded by drawing up the “Doha Development Agenda” for new trade liberalization talks.
•
•
• • •
•
CLAUSES
• Tariff Reduction on Manufacturers • Tariff on Agriculture • Liberalisation of Services
• Social Clause
• Environmental Concerns • TRIPS and TRIMS
Tariff Reduction on Manufacturers
?Multilateral trade negotiation of several rounds have resulted in considerable reduction of tariff on manufacturers especially in developed countries.
?In developing countries although the share of exports has increased greatly in recent years, tariff levied by developed countries on imports from developing countries are still high.
?Developing countries consists to a great extend of products like textiles and sugar which attract relatively high tariffs. ?India?s duty rate were very high before 1990s. In some cases they were upto 300% but after 1990s it reduced drastically and settled around 20%
Tariff on Agriculture
?Tariff on agriculture are still high as compare to tariff on manufacturers. ?The rates on an average are: Particular Developed countries Developing countries Rate 15.6% 20.1%
?But expansion of agricultural exports has not been satisfactory because of strict hygiene, product standardization and quality assurance.
Liberalisation of Services
?In UR agreement negotiation as per provisions of GATS(General agreement on Trade and Services), there are new proposals in respect of services like Banking, Education, Telecom etc…. GATS covers four modes of international delivery of services: 1. Cross border supply ( trasportation services) 2. Commercial presence (provision of services through representative offices) 3. Consumption abroad (tourism) 4. Movement of personnel(entry and temporary stay of foreign consultants)
?Banking services
?Under this agreement foreign banks were allowed to establish branches of their banks in other countries. ?Which lead to improvement in efficiency and better quality services in developing countries. ?Developing countries facing problems:
? ? ?
difference in lending policy of foreign banks loss of credit worthy borrowers local banks getting marginalised
? Educational Services
?Under GATS education system has come to be treated as tradable services. Which lead to improvement in educational standards in developing countries.
Limitation:
• Effort to preserve what is good in own system • Educational institutions getting marginalised
Social clause
• Adoption of countries labour standards by developing
• It includes standards for wages, employment protection and protection of women and children
Environmental concerns
• It includes environmental concern which the developed countries want to include in the negotiation.
TRIPS (Trade Related Intellectual Property Rights)
• Anti dumping measures
It can be employed only if dumped imports are shown to cause serious damage to domestic industry
• Safeguard actions
Country’s import restrictions for the protection of domestic market from import is called safeguard actions.
TRIMS (Trade related Investment Measures)
• The agreement on TRIMs provides list of TRIMs which they termed as inconsistent.
1. Local content requirement 2. Trade balancing requirement 3. Domestic sales requirements
WTO – Developed country
and
Developing
• Do developing countries lose out in the WTO system? – It is true that the Uruguay Round mostly benefits the developed countries. – That does not mean that developing countries like India are losing, but their gain is limited as compared to developed countries.
• Effect of WTO on developing countries.
– – – – – – Special consideration Agriculture Trade Liberalisation Textiles Trade Liberalisation Dissimilar effects Unequal Participation Implementation Issues
• Special Consideration:
– As discussed in Uruguay Round, the developing countries, will have to lower the protection against competition from the unequal developed economies. – Earlier also special consideration are given to developing countries, particularly to the least developed countries and to those who had balance of payment problems. – The agreement lay down that member countries imposing trade restriction for should do in a way that causes minimum disruption to international trade and quantitative restriction should be avoided as far as possible .
• Agriculture Trade liberalization:
– The developed countries would have to suffer the most by liberalization of the agriculture sector.
– The developed countries should completely liberalize agriculture without any reciprocity on part of the developing countries. ( is clearly illegal)
– The UR give special consideration to the developing countries in respect of agriculture and developed countries will be hit hard. – For example: Agriculture subsidies in European countries have been of the order of 30 to 50%
• So that exporters benifited and importers were adversley affected because of increase in price due to cut in subsidies.
• Textile trade Liberalization:
– International trade in textile was estimated to be worth $240 billion a year. – Estimates are that after the phasing out of MFA(Multifiber Agreement), world exports of textile may go up by $25 billion a year. – India?s share in world textile trade is 2.2% i.e. $0.55 billion.
– But real gain will depend on the country?s ability to compete with countries like China, Hongkong, Taiwan, South Korea etc. which are leaders in the textile trade.
• Dissimilar effects:
• – The effect of the UR is not the same on all countries. For example, a measure which favourably affect one developed country may unfavourabley affect another developed country. Latin American Countries were not very interested in leberalising the trade in textile because if they could gain a direct entry to the NAFTA through some regional agreement. They will not have to compete with India and Pakistan. Some countries will be poorer as a result of the UR Agreement. Ex. Saharan Africa, Indonesia, Caribbean island etc. So we can say that no country is entirely pleased with UR proposals.
•
•
•
• Unequal participation:
– The developing countries are disadvantage in the WTO system because of their inability to effectively participate in the negotiation process. – They suffer from lack of intellectual and financial capability to meaningfully participate in the discussion. – Lack of seriousness on the part of the government is also responsible for the suffering of developing countries.
• Implementation issues:
? Developed countries give more subsidies to their farmers .
? Rich countries have not taken steps to share their technology in the interest of reducing poverty.
? Developing countries have submitted a large number of formal proposal for rectifying them.
WTO AND INDIA
Impact on India
? India Became founder member of WTO By ratifying the WTO agreement on December 30,1994. ? By Being part of WTO India enjoys the most favoured nation status with all other members of WTO.
? By entering in to bilateral negotiation with each and every trading partner which would amount to “having one „s arm twisted bilateral by the us and Japan on everything like intellectual property right, human rights and environmentally clean technologies for packing.
4-Jul-13
WTO & INDIA
Effect on India s’ trade
? India s „ market share in world exports improves from 0.5 % to 1%. ? By taking advantage of the opportunities created 2.7 billion extra export per year. ? After joining WTO in 1995 India followed policies of globalization. ? As result of policy of globalization India have following effect in India?s export.
1994-95
Increase in Export $ 4.1 billion
1995-96
$ 5.5 billion
4-Jul-13
WTO & INDIA
What are the polices and laws as WTO compliant in India
1. 2. Copy right act in India meets the requirements of the trips agreement A sui generis legislation indication act 1999 viz the geographical
3.
4.
Protection of plant varieties and farmers right 2001
Protection and enforcement for different intellectual property
5.
6.
4-Jul-13
Amended patent law for mandatory disclosure
Connection on biological diversity came in force in December 1993.
WTO & INDIA
1.Copy right act in India meets the requirements of the trips agreement
? Copy rights and related rights requires compliance with the provision of bern convention to which India is a signatory authority and also meets compliance with provision of trips agreement.
? Trade and merchandise mark act 1958 was replaced by new act the trade mark act 1999.
4-Jul-13
WTO & INDIA
2. A sui generis legislation viz the geographical indication act 1999
? A sui generis legislation has been enacted in order to comply with requirement of the TRIPS agreement and to protect product if Indian origin as well. ? The protection under the act is available only to the geographical indication registered under the act and authorized users.
4-Jul-13
WTO & INDIA
3. Protection of plant varities and farmers right 2001.
? The Indian parliament passed this act with main objective of giving significant thrust to agriculture growth and effective system for the protection of farmer plant varieties and farmers right. ? As result of this it is expected to stimulate investment for research and both public and private sector for development of new plant varieties and appropriate returns on this.
4-Jul-13
WTO & INDIA
4. Protection and enforcement for different intellectual property
• India provides protection for and enforcement of different intellectual property through national legislation as well as the code of civil procedure and code of criminal procedure.
4-Jul-13
WTO & INDIA
5. Amended patent mandatory disclosure
law
for
? The amended patent law of contains provision for mandatory disclosure of source and geographical origin of the biological material used in the invention while applying for patents. ? Also provision for the wrong disclosure or non disclosure same as ground for opposition and for revocation of the patents.
4-Jul-13
WTO & INDIA
6. Connection on biological diversity came in force in December 1993.
? India is party to connection on biological diversity come in force in December 1993. ? It offers opportunities to India to realize the benefit of this resources. ? The proposed legislation addresses the basic concerns of access to collection and utilization of biological an knowledge by foreigners and sharing of benefits arising out of such success.
4-Jul-13
WTO & INDIA
Benefits of WTO
1. Significant barriers. achievements in reducing tariff and non-tariff
2. Economic growth. 3. Increase in competition, improvement in quality and productivity. 4. Multilateral discussion of economic relations. 5. System for settlement of trade disputes. 6. Mechanism to deal with violation of trade agreements 7. Research related to trade global trade.
• Criticisms of WTO.
• • Negotiations and decision making the developed countries. in the WTO are dominated by Many developing countries do not have the financial and knowledge resources to efficiently participate in the WTO discussions and negations. because of the dependence of developing countries on the developed ones, the developed countries are able to resort to armtwisting tactics. Many of the policy liberalizations are done without considering the vulnerability of the developing countries and the possible adverse effect on them. The WTO has not been successful in imposing the organization?s on the developed countries. the developing countries have, in general, been getting a raw deal from the WTO.
•
•
• •
THE WTO IMPACTS
GATT/ GATS Liberalisation of trade in goods and service. -Increase competition from foreign goods and services. -Threat to domestic firm. -Benefits consumers. -Increase competitiveness of domestic firms. -Opportunities for Indian firms to exports.
•
• • • • •
TRIMS
• -Liberalisation of international investments. • -Increase foreign investments and competitiveness from foreign firms. • -Facilitates joint ventures and technology acquisition. • -Facilitates foreign investment by Indian firms. • TRIPS • -Provides monopoly power to owners of intellectual property.
doc_662760300.pptx
The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.
A PRESENTATION ON WTO
INTRODUCTION TO GATT
• The general agreement on tariffs and trade (GATT), the predecessor of WTO, was born in 1948 as result of the international desire to liberalise the trade. ?The growing acceptance of GATT ,despite its shortcomings, is evinced by the increase in the number of the signatories. When the GATT was signed in 1947 , only 23 nations were party to it .It increased to 99 by the time of the seventh round and 117 countries participated in the next, i.e., the Uruguay round . In April 2008, there were 151 members with several more countries formally seeking accession to the WTO. The signatory countries account for 90 per cent of the international trade indicating the potential of the WTO in bringing about an orderly development of the international trade. ?The primary objective of GATT , the forerunner of WTO ,was to expand international trade by liberalizing trade so as to bring about all-round economic prosperity.
LIMITATIONS OF GATT
• GATT achieved substantial trade liberalization .But sectors which would have significantly benefited developing countries ,like agriculture and textile ,were not liberalized. Besides agriculture and textiles ,two exceptions to the general trade of trade liberalization have been trade of developing countries and economic integration. Developing countries with balance of payment problems have been generally exempted from liberalization. Increase of protectionism of developed countries when developing countries are liberalized. The traditional concerns of GATT were limited to international trade in goods only GATT was ad hoc and provisional. GATT system allowed existing domestic violated a GATT agreement. legislation to continue even if it
•
• • • • • •
GATT was less powerful, dispute settlement system was slow and less efficient , its ruling could be easily blocked .
INTRODUCTION TO WTO
• • •
Location: Geneva, Switzerland Established: 1st January 1995 Created by: Uruguay Round negotiations (1986–94)
•
• •
Membership: 153 countries
Budget: 175 million Swiss francs for 2006 Secretariat staff: 635
•
Head: Pascal Lamy (director-general)
•
The UR Agreement seeks to liberalise trade in manufactures by enlarging tariff bindings ,reducing tariffs and removing tariffs.
Following the UR Agreement , GATT was converted from a provisional agreement into a formal international organization called WTO with effect from January 1,1995 .
•
•
WTO now serves as a single institution framework encompassing GATT and all the results of the Uruguay round . It is directed by a Ministerial Conference that will meet at least once every two years and its regular business is over seen by a general Council.
Under the old system , there two GATTs GATT the agreement GATT the organisation As a part of the WTO alongside two new agreements viz , General Agreement on Trade in Services(GATs) and General Agreement on the Trade Related Aspects of Intellectual Property Rights(TRIPs) .
• 1. 2.
?
The global business environment is very significantly influenced by the World Trade Organisation (WTO)principles and agreements . They also affect the domestic environment. For example, India has had to substantially liberalise imports, including almost complete removal of quantitative import restriction. Domestic firms face increasing competition from foreign goods. Liberalization of foreign investment. The liberalisation also enables to seek foreign equity participation and technology. foreign
? ? ?
?
Liberalization facilitates global sourcing by Indian firms so that they can improve their competitiveness.
EVALUATION OF URUGUAY ROUND
• Uruguay round (UR) is the by which the eighth round of the multilateral trade negotiation (MTNs) held under the auspices of the GATT is popularly known because it was launched in Punta del este in Uruguay ,a developing country ,in September 1986. UR was the most complex and controversial one. It took more than seven years to complete the negotiations as against the originally contemplated more than four years indicates the complexities involved. It includes the new areas like TRIPs, TRIMs, SERVICES and attempts to liberalisation agricultural trade and elimination of NTBs.The tarification of trade barriers was claimed to be significant success of UR . According to some estimates in UR the real world income increase by between $212bn and $274bn in2005. According to estimates of increase in real income will be roughly 1.6 percent of GDP for the EU 0.2 percent in US 0.9 percent in JAPAN. 2.5percent of the GDP for china 0.5 percent for india ,0.6 percent for southafrica ,0.3 percent of brazil. Largest gain in absolute term will accrue to US Some developing countries in the category of LDCs and net food importers are expected to lose because of UR package. In constant 1992 US dollar , this reperesent an increase of 745 bn export value increase by around 10 percent.
• • •
• •
• • •
•
Some of the largest projected increase in world trade are in areas that are of interest to developing countries . World bank ,OECD and the GATT secrateriate the income effects of the implementation of the ur package will be added between $213 to $274bn annually to the world income . The largest increase will be in the areas of clothing,agriculture , forestry and fishery products(20 percent) and processed food and beverages (19percent). It was estimate cuts in protection on total merchandise trade will be increase real incomes in developing countries by $55 to $90 bn (or 1.2 to 2 percent of their GDP in 1992) while the gains to the world as a whole will be in the order of $200 bn.
•
•
•
FUNCTION OF UR
• Facilitates implementation, administration and operation and further objectives of MTA Provide forum for negotiation among members. Administer understanding of rules and procedures governing the setelment of issues and trade Review Mechanise. Co operate with IMF and IBRD
• •
•
General council functions.
• • • • Supervise regular basis operartion on goods, services and TRIPS Act as Disputes Settelment body Serve as a trade review mechanise Establish goods services , TRIPS council as subsidiary body.
4th Session of Ministerial Conference
• • • • • • • • • Held at – Doha (Capital of Qatar) During 9-13 November, 2001 Participation – 142 member countries China and Taiwan admitted as member country Point of Attraction – Conflict of interest of developed countries and developing countries Developed countries – A new round of multilateral trade negotiations covering “Singapore Issues” What is Singapore Issues? The "Singapore issues" refers to four working groups set up during the World Trade Organization Ministerial Conference of 1996 in Singapore. These groups are tasked with these issues:
– transparency in government procurement, – trade facilitation (customs issues), – trade and investment, and – trade and competition Developing Issues – Implementation Issues Developed countries Vs. Developing Countries India fought almost single handedly Developed countries as expected won but India’s bold statements had a commendable impact India’s refusal to approve the agenda unless it was modified to include implementation issues Effect – Chairman announced an explicit consensus required at 5th Ministerial Conference in 2003 for discussion of highly controversial Singapore Issues Established – Power of single developing country, inspired for collective action by developing countries.
• • • • • • •
Developed Countries
A new round of multilateral trade negotiations
> > > > > > > > > > > > Agriculture Services Market access for non-agricultural products Trade-related aspects of intellectual property rights (TRIPS) Relationship between trade and investment Interaction between trade and competition policy Transparency in Government Procurement Trade facilitation WTO Rules : Anti dumping and subsidies WTO Rules: Regional Trade Agreements Dispute Settlement Understanding Trade and Environment
>
>
E-Commerce
Trade, debt and Finance
Developing Countries
Implementation Issues
1> 2> 3> 4> 5> 6> 7> 8> 9> 10> 11> 12> General Agreement on Tariffs and Trade (GATT) Agriculture Sanitary measures Textiles and clothing Technical barriers to trade Trade-related investment measures (TRIMs) Anti-dumping (GATT Article VI) Customs valuation (GATT Article VII) Subsidies and countervailing measures Trade-related aspects of intellectual property rights (TRIPS) Cross-cutting issues Other Implementation Issues and Final Provisions
•
3 Major Declarations – On the negotiating agenda for the new WTO round – On some 40 implementation concerns of the developing countries – Political statement dealing with patents and public health Remarkable achievement for developing country – In case of TRIPs and public health, waiver of patent law to face a national emergency – Intellectual property rights were subservient to public health concerns Important outcomes/findings – In agriculture, subsidies need to be reduced and should be ultimately phased out. – An exception is available for food security concerns – Success or failure of developing countries depends on support for their common cause. The Declarations adopted by WTO Members at the Conference constitute a work programme of trade negotiations to be concluded no later than 1 January 2005. The only exceptions are the negotiation on improving and clarifying the Dispute Settlement understanding, which is to conclude by the end of May 2003 The negotiations on a registration system for geographical indications, to conclude by the Fifth Ministerial Conference in 2003. The declaration included all the points raised by developing country and developed country. Finally, the Doha meet concluded by drawing up the “Doha Development Agenda” for new trade liberalization talks.
•
•
• • •
•
CLAUSES
• Tariff Reduction on Manufacturers • Tariff on Agriculture • Liberalisation of Services
• Social Clause
• Environmental Concerns • TRIPS and TRIMS
Tariff Reduction on Manufacturers
?Multilateral trade negotiation of several rounds have resulted in considerable reduction of tariff on manufacturers especially in developed countries.
?In developing countries although the share of exports has increased greatly in recent years, tariff levied by developed countries on imports from developing countries are still high.
?Developing countries consists to a great extend of products like textiles and sugar which attract relatively high tariffs. ?India?s duty rate were very high before 1990s. In some cases they were upto 300% but after 1990s it reduced drastically and settled around 20%
Tariff on Agriculture
?Tariff on agriculture are still high as compare to tariff on manufacturers. ?The rates on an average are: Particular Developed countries Developing countries Rate 15.6% 20.1%
?But expansion of agricultural exports has not been satisfactory because of strict hygiene, product standardization and quality assurance.
Liberalisation of Services
?In UR agreement negotiation as per provisions of GATS(General agreement on Trade and Services), there are new proposals in respect of services like Banking, Education, Telecom etc…. GATS covers four modes of international delivery of services: 1. Cross border supply ( trasportation services) 2. Commercial presence (provision of services through representative offices) 3. Consumption abroad (tourism) 4. Movement of personnel(entry and temporary stay of foreign consultants)
?Banking services
?Under this agreement foreign banks were allowed to establish branches of their banks in other countries. ?Which lead to improvement in efficiency and better quality services in developing countries. ?Developing countries facing problems:
? ? ?
difference in lending policy of foreign banks loss of credit worthy borrowers local banks getting marginalised
? Educational Services
?Under GATS education system has come to be treated as tradable services. Which lead to improvement in educational standards in developing countries.
Limitation:
• Effort to preserve what is good in own system • Educational institutions getting marginalised
Social clause
• Adoption of countries labour standards by developing
• It includes standards for wages, employment protection and protection of women and children
Environmental concerns
• It includes environmental concern which the developed countries want to include in the negotiation.
TRIPS (Trade Related Intellectual Property Rights)
• Anti dumping measures
It can be employed only if dumped imports are shown to cause serious damage to domestic industry
• Safeguard actions
Country’s import restrictions for the protection of domestic market from import is called safeguard actions.
TRIMS (Trade related Investment Measures)
• The agreement on TRIMs provides list of TRIMs which they termed as inconsistent.
1. Local content requirement 2. Trade balancing requirement 3. Domestic sales requirements
WTO – Developed country
and
Developing
• Do developing countries lose out in the WTO system? – It is true that the Uruguay Round mostly benefits the developed countries. – That does not mean that developing countries like India are losing, but their gain is limited as compared to developed countries.
• Effect of WTO on developing countries.
– – – – – – Special consideration Agriculture Trade Liberalisation Textiles Trade Liberalisation Dissimilar effects Unequal Participation Implementation Issues
• Special Consideration:
– As discussed in Uruguay Round, the developing countries, will have to lower the protection against competition from the unequal developed economies. – Earlier also special consideration are given to developing countries, particularly to the least developed countries and to those who had balance of payment problems. – The agreement lay down that member countries imposing trade restriction for should do in a way that causes minimum disruption to international trade and quantitative restriction should be avoided as far as possible .
• Agriculture Trade liberalization:
– The developed countries would have to suffer the most by liberalization of the agriculture sector.
– The developed countries should completely liberalize agriculture without any reciprocity on part of the developing countries. ( is clearly illegal)
– The UR give special consideration to the developing countries in respect of agriculture and developed countries will be hit hard. – For example: Agriculture subsidies in European countries have been of the order of 30 to 50%
• So that exporters benifited and importers were adversley affected because of increase in price due to cut in subsidies.
• Textile trade Liberalization:
– International trade in textile was estimated to be worth $240 billion a year. – Estimates are that after the phasing out of MFA(Multifiber Agreement), world exports of textile may go up by $25 billion a year. – India?s share in world textile trade is 2.2% i.e. $0.55 billion.
– But real gain will depend on the country?s ability to compete with countries like China, Hongkong, Taiwan, South Korea etc. which are leaders in the textile trade.
• Dissimilar effects:
• – The effect of the UR is not the same on all countries. For example, a measure which favourably affect one developed country may unfavourabley affect another developed country. Latin American Countries were not very interested in leberalising the trade in textile because if they could gain a direct entry to the NAFTA through some regional agreement. They will not have to compete with India and Pakistan. Some countries will be poorer as a result of the UR Agreement. Ex. Saharan Africa, Indonesia, Caribbean island etc. So we can say that no country is entirely pleased with UR proposals.
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• Unequal participation:
– The developing countries are disadvantage in the WTO system because of their inability to effectively participate in the negotiation process. – They suffer from lack of intellectual and financial capability to meaningfully participate in the discussion. – Lack of seriousness on the part of the government is also responsible for the suffering of developing countries.
• Implementation issues:
? Developed countries give more subsidies to their farmers .
? Rich countries have not taken steps to share their technology in the interest of reducing poverty.
? Developing countries have submitted a large number of formal proposal for rectifying them.
WTO AND INDIA
Impact on India
? India Became founder member of WTO By ratifying the WTO agreement on December 30,1994. ? By Being part of WTO India enjoys the most favoured nation status with all other members of WTO.
? By entering in to bilateral negotiation with each and every trading partner which would amount to “having one „s arm twisted bilateral by the us and Japan on everything like intellectual property right, human rights and environmentally clean technologies for packing.
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WTO & INDIA
Effect on India s’ trade
? India s „ market share in world exports improves from 0.5 % to 1%. ? By taking advantage of the opportunities created 2.7 billion extra export per year. ? After joining WTO in 1995 India followed policies of globalization. ? As result of policy of globalization India have following effect in India?s export.
1994-95
Increase in Export $ 4.1 billion
1995-96
$ 5.5 billion
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WTO & INDIA
What are the polices and laws as WTO compliant in India
1. 2. Copy right act in India meets the requirements of the trips agreement A sui generis legislation indication act 1999 viz the geographical
3.
4.
Protection of plant varieties and farmers right 2001
Protection and enforcement for different intellectual property
5.
6.
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Amended patent law for mandatory disclosure
Connection on biological diversity came in force in December 1993.
WTO & INDIA
1.Copy right act in India meets the requirements of the trips agreement
? Copy rights and related rights requires compliance with the provision of bern convention to which India is a signatory authority and also meets compliance with provision of trips agreement.
? Trade and merchandise mark act 1958 was replaced by new act the trade mark act 1999.
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WTO & INDIA
2. A sui generis legislation viz the geographical indication act 1999
? A sui generis legislation has been enacted in order to comply with requirement of the TRIPS agreement and to protect product if Indian origin as well. ? The protection under the act is available only to the geographical indication registered under the act and authorized users.
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WTO & INDIA
3. Protection of plant varities and farmers right 2001.
? The Indian parliament passed this act with main objective of giving significant thrust to agriculture growth and effective system for the protection of farmer plant varieties and farmers right. ? As result of this it is expected to stimulate investment for research and both public and private sector for development of new plant varieties and appropriate returns on this.
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WTO & INDIA
4. Protection and enforcement for different intellectual property
• India provides protection for and enforcement of different intellectual property through national legislation as well as the code of civil procedure and code of criminal procedure.
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WTO & INDIA
5. Amended patent mandatory disclosure
law
for
? The amended patent law of contains provision for mandatory disclosure of source and geographical origin of the biological material used in the invention while applying for patents. ? Also provision for the wrong disclosure or non disclosure same as ground for opposition and for revocation of the patents.
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WTO & INDIA
6. Connection on biological diversity came in force in December 1993.
? India is party to connection on biological diversity come in force in December 1993. ? It offers opportunities to India to realize the benefit of this resources. ? The proposed legislation addresses the basic concerns of access to collection and utilization of biological an knowledge by foreigners and sharing of benefits arising out of such success.
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WTO & INDIA
Benefits of WTO
1. Significant barriers. achievements in reducing tariff and non-tariff
2. Economic growth. 3. Increase in competition, improvement in quality and productivity. 4. Multilateral discussion of economic relations. 5. System for settlement of trade disputes. 6. Mechanism to deal with violation of trade agreements 7. Research related to trade global trade.
• Criticisms of WTO.
• • Negotiations and decision making the developed countries. in the WTO are dominated by Many developing countries do not have the financial and knowledge resources to efficiently participate in the WTO discussions and negations. because of the dependence of developing countries on the developed ones, the developed countries are able to resort to armtwisting tactics. Many of the policy liberalizations are done without considering the vulnerability of the developing countries and the possible adverse effect on them. The WTO has not been successful in imposing the organization?s on the developed countries. the developing countries have, in general, been getting a raw deal from the WTO.
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THE WTO IMPACTS
GATT/ GATS Liberalisation of trade in goods and service. -Increase competition from foreign goods and services. -Threat to domestic firm. -Benefits consumers. -Increase competitiveness of domestic firms. -Opportunities for Indian firms to exports.
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TRIMS
• -Liberalisation of international investments. • -Increase foreign investments and competitiveness from foreign firms. • -Facilitates joint ventures and technology acquisition. • -Facilitates foreign investment by Indian firms. • TRIPS • -Provides monopoly power to owners of intellectual property.
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