WTO and FII

[jatinsharma]

Economics > World Trade Organisation
-By Kartik Raichura .
Related to this project :


WTO : World Trade Organisation

The multilateral trading system—past, present and future :
The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.
So while the WTO is still young, the multilateral trading system that was originally set up under GATT is well over 50 years old.
The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew on average by 6% annually. Total trade in 2000 was 22-times the level of 1950. GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth.
The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The last round — the 1986-94 Uruguay Round — led to the WTO’s creation.
The negotiations did not end there. Some continued after the end of the Uruguay Round. In February 1997 agreement was reached on telecommunications services, with 69 governments agreeing to wide-ranging liberalization measures that went beyond those agreed in the Uruguay Round.
In the same year 40 governments successfully concluded negotiations for tariff-free trade in information technology products, and 70 members concluded a financial services deal covering more than 95% of trade in banking, insurance, securities and financial information.
In 2000, new talks started on agriculture and services. These have now been incorporated into a broader agenda launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001.
The work programme, the Doha Development Agenda (DDA), adds negotiations and other work on non-agricultural tariffs, trade and environment, WTO rules such as anti-dumping and subsidies, investment, competition policy, trade facilitation, transparency in government procurement, intellectual property, and a range of issues raised by developing countries as difficulties they face in implementing the present WTO agreements.

Difference Between WTO & GATT

The WTO is not a simple extension of GATT. There are a few differences between the tow bodies. They are as follows:
• The GATT was a set of rules, a multilateral agreement, with no institutional foundation, only a small associated secretariat which had its origins in the attempts to establish an international trade organization in the 1940’s. the WTO is a permanent institution with its own secretariat.
• The GATT was applied on a ‘provisional basis’ even if, after more than 40 years, governments chose to treat it as a permanent commitment. The WTO commitments are full and permanent.
• The GATT rules applied to trade in merchandise goods. In addition to goals, the WTO covers trade in services and trade- related aspects of intellectual property.
• While GATT was a multi-lateral instrument, by the 1980s, many new agreements had been added of a plurilateral, and therefore, selective nature. The agreements which constitute the WTO are almost all multilateral and thus, involve commitments for the entire membership.
• The WTO dispute settlement system is faster, more automatic and thus much less susceptible to blockages, than the old GATT system. The implementation of WTO dispute findings will also be more easily assured.

‘GATT 1947’ continued to exist until end of 1995, thereby allowing time for all GATT members to accede to the WTO and permitting an overlap of activity in areas like dispute settlement. Moreover, GATT lives on as ‘GATT 1994’, the amended and updated version of GATT 1947, which is an integral part of the WTO agreement and which continues to provide the key disciplines affecting international trade in goods.


The organization

The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably. It is done by:

• Administering trade agreements
• Acting as a forum for trade negotiations
• Settling trade disputes
• Reviewing national trade policies
• Assisting developing countries in trade policy issues, through technical assistance and training programmes
• Cooperating with other international organizations
Structure
The WTO has nearly 150 members, accounting for over 97% of world trade. Around 30 others are negotiating membership.
Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments.
The WTO’s top level decision-making body is the Ministerial Conference which meets at least once every two years.
Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.
At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council.
Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements.
Secretariat
The WTO Secretariat, based in Geneva, has around 600 staff and is headed by a director-general. Its annual budget is roughly 160 million Swiss francs. It does not have branch offices outside Geneva. Since decisions are taken by the members themselves, the Secretariat does not have the decision-making role that other international bureaucracies are given.
The Secretariat’s main duties are to supply technical support for the various councils and committees and the ministerial conferences, to provide technical assistance for developing
countries, to analyze world trade, and to explain WTO affairs to the public and media.
The Secretariat also provides some forms of legal assistance in the dispute settlement process and advises governments wishing to become members of the WTO.


The WTO’s rules — the agreements — are the result of negotiations between the members. The current set were the outcome of the 1986–94 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATT).
GATT is now the WTO’s principal rule-book for trade in goods. The Uruguay Round also created new rules for dealing with trade in services, relevant aspects of intellectual property, dispute settlement, and trade policy reviews. The complete set runs to some 30,000 pages consisting of about 30 agreements and separate commitments (called schedules) made by individual members in specific areas such as lower customs duty rates and services market-opening.
Through these agreements, WTO members operate a non-discriminatory trading system that spells out their rights and their obligations. Each country receives guarantees that its exports will be treated fairly and consistently in other countries’ markets. Each promises to do the same for imports into its own market. The system also gives developing countries some flexibility in implementing their commitments.
Goods
It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating lower customs duty rates and other trade barriers; the text of the General Agreement spelt out important rules, particularly non-discrimination.
Since 1995, the updated GATT has become the WTO’s umbrella agreement for trade in goods. It has annexes dealing with specific sectors such as agriculture and textiles, and with specific issues such as state trading, product standards, subsidies and actions taken against dumping.

Services
Banks, insurance firms, telecommunications companies, tour operators, hotel chains and transport companies looking to do business abroad can now enjoy the same principles of freer and fairer trade that originally only applied to trade in goods.
These principles appear in the new General Agreement on Trade in Services (GATS). WTO
members have also made individual commitments under GATS stating which of their services sectors they are willing to open to foreign competition, and how open those markets are.

Intellectual property

The WTO’s intellectual property agreement amounts to rules for trade and investment in ideas and creativity. The rules state how copyrights, patents, trademarks, geographical names used to identify products, industrial designs, integrated circuit layout-designs and undisclosed information such as trade secrets — “intellectual property” — should be protected when trade is involved.
Dispute settlement
The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgements by specially-appointed independent experts are based on interpretations of the agreements and individual countries’ commitments.
The system encourages countries to settle their differences through consultation. Failing that, they can follow a carefully mapped out, stage-by-stage procedure that includes the possibility of a ruling by a panel of experts, and the chance to appeal the ruling on legal grounds. Confidence in the system is borne out by the number of cases brought to the WTO — around 300 cases in eight years compared to the 300 disputes dealt with during the entire life of GATT (1947–94).
Policy review
The Trade Policy Review Mechanism’s purpose is to improve transparency, to create a greater understanding of the policies that countries are adopting, and to assess their impact. Many members also see the reviews as constructive feedback on their policies.
All WTO members must undergo periodic scrutiny, each review containing reports by the country concerned and the WTO Secretariat.


Developing countries

Over three quarters of WTO members are developing or least-developed countries. All WTO agreements contain special provision for them, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities and support to help them build the infrastructure for WTO work, handle disputes, and implement technical standards.
The 2001 Ministerial Conference in Doha set out tasks, including negotiations, for a wide range of issues concerning developing countries. Some people call the new negotiations the Doha Development Round.
Before that, in 1997, a high-level meeting on trade initiatives and technical assistance for least-developed countries resulted in an “integrated framework” involving six intergovernmental agencies, to help least-developed countries increase their ability to trade, and some additional preferential market access agreements.
A WTO committee on trade and development, assisted by a sub-committee on least-developed countries, looks at developing countries’ special needs. Its responsibility includes implementation of the agreements, technical cooperation, and the increased participation of developing countries in the global trading system

Technical assistance and training

The WTO organizes around 100 technical cooperation missions to developing countries annually. It holds on average three trade policy courses each year in Geneva for government officials. Regional seminars are held regularly in all regions of the world with a special emphasis on African countries. Training courses are also organized in Geneva for officials from countries in transition from central planning to market economies.
The WTO set up reference centres in over 100 trade ministries and regional organizations in capitals of developing and least-developed countries, providing computers and internet access to enable ministry officials to keep abreast of events in the WTO in Geneva through online access to the WTO’s immense database of official documents and other material. Efforts are also being made to help countries that do not have permanent representatives in Geneva.



10 benefits of the WTO trading system

1. The system helps promote peace
2. Disputes are handled constructively
3. Rules make life easier for all
4. Freer trade cuts the costs of living
5. It provides more choice of products and qualities
6. Trade raises incomes
7. Trade stimulates economic growth
8. The basic principles make life more efficient
9. Governments are shielded from lobbying
10. The system encourages good government

WTO AGREEMENT ON TEXTILES AND CLOTHING
IMPACT ON INDIAN TEXTILE & CLOTHING INDUSTRY


Besides agriculture, textile and clothing is the only industry, which has a separate and
independent agreement, multilaterally negotiated, under the aegis of WTO. This is
hardly surprising considering the significant share of textiles and clothing in the
international trade basket of several, specially developing, countries.
Indian textile and clothing industry contributes almost 4% of national GDP, and 20% of
manufacturing value added. It also earns one-third of India's foreign exchange, and
employs over 6.5 million persons directly as well as indirectly. It is the most important
Indian industry, after agriculture.
The international trade in textile and clothing is being transformed significantly owing to
the phasing out of the Multifibre Arrangement (MFA) era, and ushering in of the era of
quota-free trade. This has jolted the entire pattern of global trade in textile and clothing
from years of stupor, and each country/region has suddenly become busy preparing its
own national/ regional strategy for competitiveness in the new scheme of global trade.
The Agreement in Textiles and Clothing (ATC) remains the principal driver of such a
mammoth economic earthquake in this sector.

BRIEF HISTORICAL BACKDROP

International trade in textiles and clothing is a classic exception to the objective of
GATT1 - favouring liberalisation of world trade - all along its history. After the end of Second World War, restrictions on cotton textiles began to be applied under Voluntary Export Restraints. At a GATT Ministerial meeting in November 1959, US Secretary of Treasury pointed out that sharp increases in imports over a brief period of time could have serious economic, social and political repercussions in the importing country. With commendable celerity, the Short Term Cotton Arrangement (STA) was soon concluded at the behest of US, in 1961, for a year. Textiles came to be acknowledged by GATT as a "special case". The STA was followed by Long Term Arrangement (LTA) which was in force from 1962 to 1973, which, in turn, was followed by the Arrangement Regarding International Trade in Textiles, better known as Multifibre Arrangement (MFA). This was in force from 1 Jan. 1974 to 31 Dec 19942. These arrangements set aside, for the sector, the rules and disciplines of Articles XI (General Elimination of
Quantitative Restrictions), XIII (Non-discriminatory Administration of Quantitative Restrictions) and XIX (Emergency Action on Imports of Particular products); the principle of Most Favoured Nation (MFN) treatment was thrown out of the window.

While the arrangements began by restricting only cotton goods, they spread their
tentacles to wool as well as man-made fibres, and in 1986, to practically every fibre in existence. Simultaneously, several countries subjected to quotas became 'addicted' to them, and quota traders emerged as a lobby often more powerful than the manufacturers themselves. Indian textile and clothing industry is a case in point. Thus, if meaningful liberalisation of trade was to be achieved at the UR3, the MFA (acknowledged as a derogation from GATT) had to disappear, and the rules applying to industrial goods had to be extended to textiles and clothing. It is against this backdrop that the Agreement in Textiles and Clothing (ATC) assumes significance.

Specifically, ATC presents some definitive advantages over the MFA era, viz.,
• It puts an end to the long life of MFA.
• It brings textiles and clothing at par with all other industrial products, and the
sector ceases to be a "special case".
• It is self-destructive, since it definitively extinguishes on 31 Dec. 2004.
3.00 QUOTA PHASE-OUT SCHEDULE IN ATC
Quotas are being phased out using two mechanisms:
• At the start of each phase/ stage, a proportion of quotas is integrated4
immediately (column 3 in table I below)
• Remaining quotas, meanwhile, are increased each year at a faster rate of
growth than applied in the previous phase (column 4 in table I below).

Table I: Schedule of Quota Integration under ATC


Stage
Timing
% of 1990 import volume
integrated
% uplift on growth rates
for remaining quotas

I
Day 1 (1 Jan 1995)
16 16
II
37th month (1 Jan 1998)
17 25
III
85th month (1 Jan 2002)
18 27
IV (End of Transition)
121st month (1 Jan 2005)
49
TOTAL
100





Schedule of Quota Integration and Growth Uplift under the WTO Transition Phase The quota imposing member countries are therefore obliged to integrate at least 16% of their total volume of 1990 import of all textiles and clothing5 as on 1 Jan 1995, another at least 17% on 1 Jan 1998, 18% on 1 Jan 2002, and finally the remaining 49% on 1 Jan 2005. The only other condition is that the surrendered products must include at least one category selected from each of the following four groups, viz., tops and yarn, fabrics, made-up textile products, and clothing.









IMPLICATIONS FOR INDIAN TEXTILE AND CLOTHING INDUSTRY

Very few industries are as ubiquitous as textile and clothing industry. As such, the intentions of the primarily importing countries of the developed world are still- as historically- protectionist. However, one big difference between yesteryears (MFA era) and the era of ATC is the explicit implementation of the "General Elimination of Quantitative Restrictions" (Art XI) that is enshrined in GATT 1994 through ATC. The protectionist tools, thus, of the WTO era has now changed, even though the intentions remain unchanged. This is evident in the scores of issues that have arisen during the actual implementation of the ATC by developed countries, notably the US and EU.
They have followed the ATC in letter but not necessarily in spirit6.

Market Access Commitments

Aside from quantitative restrictions (QRs), WTO members have offered greater and more predictable domestic market access through tariff bindings and reduction commitmets. Table 4 and 5 below illustrates the no. of HS lines that have been now 'bound' and the tariff-reduction commitments as a result of UR.

Table 4: Tariff Binding on HS Lines

Pre-UR Post-UR
Developed countries 78% 99%
Developing countries 21% 73%
Transition economies 73% 98%

Percentage of Tariff Lines bound pre- and post- UR Compared to 78% HS tariff lines that were bound in developed countries before UR, 99% have been bound following the UR. Post-UR bindings are 78% (up from 21%) in the case of developing countries. This is no mean achievement. India too has bound 67% of its 5113 tariff lines, up from 6% before UR9.
Table 5: Tariff Reduction Commitments by Developed Countries



Industrial Pre -U R Post-U R % Reduction
products
All Source s 6 .3 3 .8 4 0
Devg E con.
(other than 6.8 4.3 37
LD C s)
LD C s 6 .8 5 .1 2 5

However, such prceived benefits flowing from the WTO is partially illusory, specially in the context of the textile and clothing sector. Averages conceal peaks. Sector-wise tariffs- applied as well as bound- reflects the peak tariffs that textile and clothing sector attracts in developed countries.
Textile and clothing remains to attract the highest set of bound duties in developed countries- 11% against an average of 3.7% on all merchandise. Developing countries are no exception either. The tariff peaks in textile and clothing is more clearly reflected in table 7 below.

Table 7: Import Tariff Peaks for textile and Clothing Sector

Developed Countries Pre-WTO Post-WTO
All Industrial products avg. 6.3% 3.8%
Textiles and clothing 15.5% 12.1%
USA
Average for garments 18.3%
Tariff on Cotton Trousers 22.5%

Larger World Market for Textiles and Clothing

The world trade in textiles and clothing has grown 55 times between 1955 and 1995, whereas Indian exports has grown only by 15 times in the same period. That is corroborated in falling share of Indian textile and clothing export in the global sectoral trade. However, it is interesting to note that the global trade in clothing has increased at a much faster rate since 1980s, and overtaken that in textiles in 1990. This trend has continued ever since. Consequently, the global trade in clothing in 1998 was US$ 179.64 billion against US$ 150.95 billion trade in textiles. It is estimated that the total trade in textiles and clothing in 2005, when all QRs are phased out, would be of the order of US$ 550 billion, out of which clothing would comprise US$ 350 billion. Garment indeed is the engine of growth in this sector in the foreseeable future.


Growing Threat from Imports

That import of textile has grown remarkably in the last couple of years is a well-known fact. However, what is perhaps not as well-known is that the growth rate of import of textiles into India has been more rapid before WTO came into existence (1 Jan 1995) than after India's commitments to reduce its import tariffs came into effect! It is not correct to blame WTO for such import surges in textiles in recent times.

Table 8: Compound Average Annual Growth of Textile Imports into India

1991-94 1994-97 1991-97
Textiles, yarn, fab,
made-up articles 32.3% 9.6% 23.6%
Textiles, Jute - 4.9%
Textiles, Silk 22.0% -9.1% 6.1%
Textiles, Wool 15.4% 14.0% 17.0%
Import of textiles (Category-wise), Rs Lakhs

Indubitably, the exchange rate devaluation in 1991, and the depreciation of the Indian Rupee subsequently has played a role in increased import value reported in Rupee terms in table 8 above. However, the data on total textile imports in US$ terms also reflect the same conclusion (table 9 below). Unfortunately, no disaggregated data on import of textiles is readily available in order to arrive at a reasoned judgement.

Table 9: Total Textile Imports into India, US$ million

Value of Imports
1990 240
1991 135
1992 166
1993 228
1994 325
1997-98 408
1998-99 436
CAGR
1990-99 6.9%
1994-99 6.1%

Source: WTO, 1995 & ICMF Annual Reports

Perhaps this hue and cry is being raised by the domestic industry because they
perceive that India's commitments to WTO, and its bilateral agreements with USA and EU relating to removal of QRs and reduction in bound and applied tariff rates is the chief culprit for the rising import values. That, certainly is not the case13.
Having mentioned that, it is anybody's case that India has been losing competitiveness in textiles and clothing globally. And with the emerging trade patterns, the pressure to become globally competitive is stronger than ever before, while the time to attain such global competitiveness is increasingly shorter now14.

4.60 Emergence of Non-Tariff Barriers

While some of the "grey measures" like Voluntary Export Restraints are outright
prohibited under the GATT 1994, some other forms of Non-Tariff measures (NTMs), which are sanctioned by the WTO, have assumed importance in the context of global trade in general, and that in textile and clothing in particular. These include administrative measures like customs valuation, extensive documentation, inspection requirements, blacklisting of companies and attempts to link trade with social and environmental issues, and national record of Human Rights15.

Table 10: NTB Coverage Ratio for Imports into OECD- Textile and Clothing
Sector
EU USA Japan Norway Mexico
1989 74.9% 84.1% 28.8% 34.1% 0.5%
1996 75.4% 68.3% 28.7% 24.6% 70.6%
.
Around 75% of all textile and clothing imports into EU region faced NTBs of somenature after the coming into force of WTO in 1996. Interestingly, Mexico has rapidly resorted to use of NTBs for textile and clothing imports. This could be in order to divert the benefits of trading under NAFTA regime to its domestic manufacturers alone, and at the cost of more competitive counterparts from the rest of the world, chiefly Asia.
The developing countries believe that the developed countries could create trade
barriers by using trade sanctions for the non-compliance with non-trade objectives.
Therefore, there are legitimate concerns whether a trading system in which trade
barriers were generally declining for the last fifty years, would again experience higher barriers in the garb of non-trade issues16. The experience of the ATC implementation over the last quinquennium since 1995 does indicate that such concerns may be very real.


Integration of textile and clothing into GATT 1994, according to the plan laid out in ATC would definitely increase the magnitude of global textile and clothing trade. That clothing would be the engine of growth of such massive trade also appears to be quite clear. Market access to WTO member countries would become more predictable (withbound tariffs) and transparent (owing to Trade Policy Review Mechanism of GATT 1994). Moreover, with progressive reduction in tariffs themselves, the world is likely to see its massive price-effect on trading volumes.
However, all this would come along with greater, more ruthless, and global nature of competition. Internationalisation of operations in order to realise most cost-effective overall operations would lead to a borderless world. No firm would remain unaffected by globalisation that is well under way. And all firms would have to match their operational effectiveness to that of best global competitor. In the emerging world of unfettered capitalism, firms would have to run in order to stand still. Textile and clothing is no exception.
Notwithstanding the winds of globalisation that is sweeping the international trading landscape, the counter force of protectionism is already rearing its head among developed countries in textile and clothing. For, in this sector, comparative advantage particularly in clothing, certainly lies with the relatively low labour cost Asian countries.
With most overt protectionist weapons having been prohibited under the WTO regime, newer forms of protectionism under the umbrella term of NTBs are emerging. And the developing countries need to guard against such tendencies.
Indian textile and clothing industry contributes to almost 4% of national product, earns 35% of national foreign exchange, and supports over 6.5 million persons directly and indirectly. It is, therefore, of paramount importance that the vectors of change in the global trading system are studied carefully, and industry competitiveness bolstered urgently. It is time for the industry to understand the nuances of WTO agreements, and widen their horizon to reach global frontiers of knowledge if the industry is to survive and compete. For, "competitive dvantage ultimately results from an effective combination of national circumstances and company strategy. Conditions in a nation may create and environment in which firms attain international competitive advantage,
but it is up to the company to seize the opportunity"17.
For long the Indian textile and clothing industry has admonished the developed
countries- spearheaded by USA- for following the ATC in letter and not in spirit. It istime the Indian industry ceased censuring the developed countries for doing theirhomework on WTO better, and, for a change instead, sit down to do their homework assiduously.





Implications Of WTO for Indian Agriculture:
The Case Of Intellectual Property Rights And Emerging Biosafety Protocol [1][1]



Abstract

The conflict between chemical intensive agriculture (despite declining productivity of inputs) and the non-chemical sustainable technological innovations generated by farmers as well as firms (national or international) will pose second challenge. The increasing trend towards larger areas under fewer varieties and the need for food security through diversified biological systems will be the third source of conflicts. Production, protection, commercialisation and incorporation of intellectual property in development of national developmental strategies, will be crucial in defining the role India will play in world markets on one hand and overcoming deprivation and hunger with in the country on the other.

The strategy proposed is aimed at making Indian agriculture not only globally more competitive but also domestically more progressive by using knowledge as a strategic resource so that agriculture sustains livelihoods of millions of households dependent upon it in an environmentally sustainable manner. The major contention is that India should not view the challenges posed by WTO as if it will remain always an importing country and that it has no substantive intellectual property to offer to world market. There must be a registration system for encouraging protection of local land races and incentive system must be generated for in situ conservation. The provision of TRIPs need to be strengthened to include

(a) micro organisms but exclude life forms,
b) registration system of grassroots innovations(unlike utility patent system, this registration system should be like product patent for ten years just as proposed in Australian Innovation patent system)
(c) widespread patent search facility for educational and entrepreneurial networks and centres so that quality of research and education can be competitive,
(d) just as a global registry has been proposed for wines under TRIPS, India must insist that similar global registry must exist for green small innovations too. This will help link innovation, investment and enterprise each vector of which may be in different parts of the world.

The global trade regime has to deal with several related issues in regard to biosafety such as ability of the importing country to assess the risks and deal with them, regulations for labelling or GMO products so that consumers can make informed choice, restrict GMOs which may pose hazard to the very viability of the food security, for example, through terminator gene technology, etc. Prior informed consent of farmers must be ensured while pursuing on farm trials on transgenics. The reciprocity in effective protection must exist i.e.,
(a) those who access farmers varieties must disclose, acknowledge and undertake to provide reasonable share of their revenue with germplasm providers/conservators through appropriate institutions, and
(b) PVP/patent claimant should unambiguously prove that the materials in which improvements have been made, had been obtained lawfully and rightfully.

Context

The sue generis system created for protection of new varieties of plants by International Convention for Protection of New Varieties of Plants (UPOV) was a response to basically three factors (UPOV 1998),
a) reluctance in fifties to the application of patent systems to agriculture and to the plant breeding in particular,
(b) realisation that a system was needed to protect plant varieties somehow to also safeguard the interests of the breeders. And
(c) the conditions of patentability might not be appropriate for the plant varieties. Subsequently, the 1961 Act was modified in the 1978 which was further modified in 1991. After ratification of 1991 Act by more than six countries, it has come into force now.

While TRIPS (Trade-related Aspects of Intellectual Property Rights agreement) does not explicitly state that sui generis system should be compatible with provisions of International Union of Plant Variety (UPOV), it is implied that such should be the case. Earlier, the option for the countries joining UPOV was to have their national laws compatible with UPOV 1978. However, after coming into force of UPOV 91, such an option does not exist for countries, which have not sent their draft bill to UPOV for reference. Although, this is a contentious issue. Many countries including India have argued that providing “effective” plant variety protection through ‘sue generis’ system need to mean parity with upov 91. Increasing use of biotechnology in producing transgenic crop varieties and genetically modified organisms (GMOS) also requires development of biosafety norms to regulate trade in such crops, animals and products. As much as sixty per cent of the marketed products in some commodities have biotechnological inputs in some of the developed countries. A significant part of it involves transgenic crops particularly in USA.

Indian government has not yet enacted either a sui generis system or a Plant Variety Act which is in conformity with WTO provisions. However, author has had access to the new Plant Variety and Farmers’ Rights Bill which is quite unique in many respects and has been summarised in third part.

It is author’s contention that we cannot hope to make our agriculture self-reliant if the public sector agricultural research remains totally under the stranglehold of government. It should have autonomy and be much more accountable to various user groups. Such will continue to be the case till R&D institutions primarily rely on government for funds. It is obvious that public sector R&D has played a very crucial role in agricultural growth in the country. The tragedy is that even well off beneficiaries of this growth did not share any part of their economic gains with the R&D institutions. So much so that Central and state seed corporations never paid any revenue to the research institutes and universities. WTO implications will force agricultural R&D and trade sectors to become more efficient and competitive. Intellectual property rights protection for public and private sector scientists as well as institutions is likely to contribute to this process.

This paper deals with the experience of different countries which have enacted plant variety protection Acts and have tried to cope with biosafety norms as a consequence of increasing role of biotechnology in development and transfer of agricultural products, seeds, animal breeds. The lessons for Indian policy and options for future negotiations are mentioned in the end.

Introduction

The contribution of knowledge as a factor of production is beginning to acquire dominant role in future trade, investment and technological change in agriculture as well as other sectors of economy. The management of knowledge not just in farms and firms but also in non-farm sector will, thus, become crucial. But the production and reproduction of knowledge will no more be governed by the conventional norms of public space, scrutiny and substantive needs. It is the tension between public need and private control that will mount the first challenge. The conflict between chemical intensive agriculture (despite declining productivity of inputs) and the non-chemical sustainable technological innovations generated by farmers as well as firms (national or international) will pose second challenge. The increasing trend towards larger areas under fewer varieties and the need for food security through diversified biological systems will be the third source of conflicts.

The strategy proposed is aimed at making Indian agriculture not only globally more competitive but also domestically more progressive by using knowledge as a strategic resource so that agriculture sustains livelihoods of millions of households dependent upon it in an environmentally sustainable manner. The major contention is that India should not view the challenges posed by WTO as if it will remain always an importing country and that it has no substantive intellectual property to offer to world market. The critical NGOs and other colleagues who criticise the concept of intellectual property rights have perhaps not been exposed to the inventive potential of Indian society. Honey Bee network has demonstrated over last ten years through its data base having about ten thousand entries of innovations and outstanding examples of traditional knowledge, innovations and practices, the immense contribution that grassroots innovators can make towards this cause. Add to this the potential that Indian scientists have and one would know why TRIPs under WTO can indeed make R and D in formal and informal sector as the pivot of socio-economic transformation of our society. It is true that India must negotiate changes in TRIPs to suit our requirements. But we can lobby for these changes because we are part of WTO.


Trade-related Aspects of Intellectual Property Rights System (TRIPS)

The Indian patent law is under review for bringing it in conformity with WTO provisions. A particular part of Article 27 mentioned below has direct implications for agriculture. Even the product patent aspect will have implications for agriculture by way of protection to the inventors of new agricultural products. Since processes are easy to copy, product patents are necessary.

The provision of TRIPs need to be strengthened to include (a) micro organisms but exclude life forms, b) registration system of grassroots innovations (unlike utility patent system, this registration system should be like product patent for ten years just as Australian innovation system has been proposed, (c) widespread patent search facility for educational and entrepreneurial networks and centres so that quality of research and education can be competitive, (d) just as a global registry has been proposed for wines under TRIPS, India must insist that similar global registry must exist for green small innovations too. This will help link innovation, investment and enterprise each vector of which may be in different parts of the world. More on that later.

A review of clause (b) of para 3 of Article 27 of the TRIPS Agreement is due in the year 1999. This part of the Article states as under: -

“Members may also exclude from patentability:

(b) Plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the entry into force of the WTO Agreement.”

Three permissible exceptions to the basic rule on patentability. :

i. Inventions contrary to ordre public or morality. This explicitly includes inventions dangerous to human, animal or plant life or health or seriously prejudicial to the environment. The use of this exception is subject to the condition that the commercial exploitation of the invention must also be prevented and this prevention must be necessary for the protection of ordre public or morality.

ii. diagnostic, therapeutic and surgical methods for the treatment of humans or animals.

ii. plants and animals other than microorganisms and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, any country excluding plant varieties from patent protection must provide an effective sui generis system of protection.

The knowledge and activity of breeders is sought to be protected more vigorously. It has to do so by protecting the public sector research and development (much of which unfortunately has become weak over the years) but also create environment for promoting (a) farmer led research, (b) farmer and scientist partnership in research, and (c) private and public sector collaboration in research.

Basic purpose of UPOV is to ensure national treatment for any breeder of the world at par with domestic breeders. The UPOV 1991 as the UPOV documents show (Jan, 1999), tries to achieve the following:

Article 14(1)(a) of the 1991 act made the breeders' rights more precise. There is a view that inclusion of "conditioning for the purpose of propagation" does not extend the breeder's domain (since conditioning is just one step in the chain of developing propagation material) but instead makes his rights enforceable.

By extending the breeder's right under article 14(2) OF 1991 ACT, UPOV 1991 act to harvested material where 'breeder has not had enough opportunity to exercise his right in relation to the propagating material'(1999). Infringement in some cases may become apparent only when the harvested produce comes into market though one has to prevent absence of diligence in prior scrutiny and objection. It also means that import of harvested material can also be protected both by way of collection of royalty and safeguarding the interests of national licensed producers.

The provision of compulsory licensing can of course be invoked in the event of special national interests.

Farmers' Privileges can be protected in terms of rights to save seed, exchange it for non commercial purposes.

The issue here is that Indian breeders will need all these protections in other countries. The mind set where we evaluate every thing from an importers' perspective must change.

Methodology:

The Plant Variety Acts of thirty five countries excluding India, both developing and developed have been reviewed. In addition various debates have been covered to (a) identify the unique features evolved by different countries to protect the intellectual property produced in their own country, (b) mobilise the useful technologies from abroad and (c) protect their rights in other countries. While biosafety is only one sub set of environmental regulations, a very brief review of some of the environmentally induced disputes in international trade in agriculture is presented so as to draw lessons for trade policy in agriculture. However, the detailed implications are drawn only for biosafety which has the potential to influence biodiversity and genetic wealth adversely if not regulated adequately. To the extent WTO requires national treatment for global trading partners, it is important to recognise that regulations for international exporters of transgenic crop or animal technologies to India will have to be applied to domestic biotechnological companies and research groups also. Labelling of food or food products based on output of transgenic crops is becoming a very serious issue in Europe and USA is also likely to accept this demand of EU. The import of unlabelled transgenic crop based food items is either completely baned or strongly restricted in EU as well as Japan. US Secretary of Agriculture, The possibility of bridging the gap in global and national domestic technological competence is smallest in case of biotechnology compared to all other fields of industrial technologies.


Some of the issues that need to be addressed in future are:

a) a) The rights of local communities and farmer breeders in land races as well as recent improvements in these land races, could be a major source of stability in food supply in the wake of fluctuating climate and other environmental conditions. The incentives for decentralized breeding by farmers on their own, with or without partnership of scientists will help make the goal of generating diversity in genetic base a realizable goal. A registration system of land races will have to be developed to recognise the community rights in these races. Indian Plant Variety and Farmers’ Right Bill (henceforth, Indian PFRB), makes a very bold attempt in this direction which has not been tried by any other country whose PVP bills has been reviewed here.

b) b) Monetary as well as non-monetary incentives for individuals as well as Communities as advocated by Honey Bee network and SRISTI for last ten years are essential if the asymmetry in the rights of institutional and informal breeders has to be reduced and eventually eliminated. Without wider participation in production of intellectual property such as plant varieties, a diverse country of India's size can not grow in a sustainable manner in future. France offers an interesting model in which small farmers' co-operatives dominate the seed industry instead of large multinational corporations. The preference for taste by consumers can be harnessed for promoting decentralized co-operative and small scale entrepreneur based seed industry. The public sector research institutions will have to provide hand holding support to such co-operatives and entrepreneurs. There is no policy for encouraging small scale breeders. Recently when a farmer bred variety of groundnut , 'morla' (developed by Thakarshee bhai) was taken up by ICAR's AICRIP on ground nut, the NGO SRISTI had to arrange the seed required for multi location trials. Despite good intentions, the scientists concerned had no provision to pay for seeds of such small farmer breeders. This incidentally was the first time in last fifty years, that a farmer bred variety had been taken up for All India trials. Such cases must multiply and soon.

c) c) There must be a registration system for encouraging protection of local land races and incentive system must be generated for in situ conservation. ten per cent of area under threatened land races may receive incentive price computed by productivity multiplied by price to equal similar productivity price equivalent of modern variety in that area. Thus a farmer selected through random lottery will be eligible for such an incentive only if he/she had grown land race. A national register must also be developed for other herbal innovations. The Indian PFRB provides for registeration of not only extant varieties but also farmers’ land races by communities or NGOs.

d) d) National database on local varieties with systematic documentation of local knowledge of women and men is very necessary. For making our breeding system responsive to global demands, we must know which land races can offer genes for which kind of characters. Only agronomic evaluation is not sufficient. The local knowledge of farmers’ families is very valuable but almost completely absent from pass port sheets of ex situ gene banks. This is a task, which will pay dividend quickly if given high level attention.

e) e) We have to create a Knowledge Network, which will connect creative farmers, scientists and policy makers in real time so that macro policy can be responsive to micro level innovations, and other urges.

f) Sustainable Technologies: The Honey Bee data base demonstrates that productivity can be increased without impairing the environment and quality of outputs. Our exports are getting affected in some of the sectors by pesticides residues. National technology mission on non chemical technology development is must and this should not restrict its scope to innovations by formal centres of research alone. Informal innovations should also get the same attention.

g) Demand for organic food and spices is increasing world over but we still do not have decentralized arrangements for certification by NGOs, and public sector research organisations (exceptions apart).

h) We have to strengthen phytosanitory control systems to prevent import of diseases, pests, weeds etc., in the wake of liberalised import of seeds material from abroad. Training of customs officials in this regard is necessary. They should also be trained to prevent clandestine export of restricted seed material out of the country. The export of soils samples without proper authorisation should also be prevented since patents already exist on microorganisms taken from soil from Gujarat and many other regions of the country.


Biosafety Protocol (BP), Bioethics and Environmental implications of Trade in transgenics and forest products

It is true that a proper BP may take some time to evolve as a consequence of debate in CBD (Convention on Biological Diversity). But there is an urgent need for constituting Ethics committees for overseeing the test on transgenics by domestic as well as international producers at the level of each research institute where such research is being done in the country.

The trade in GMOs (Genetically Modified Organisms) will need to be strictly regulated and for that capacities need to be created urgently. This will ensure that we attract investment in this sector with responsible regulatory system. Prior informed consent of farmers must also be ensured while pursuing on-farm trials on transgenics. Public notice must be given for all such trials and informed debate should take place on these issues rather than exposing people to only populist propaganda, as has been often the case.

There have been widespread protests in developed as well as developing countries about alleged insensitivity of WTO to the environmental and bioethical considerations. Some developing countries fear that developed countries may use environmental standards as protective barriers to import from developing countries. For instance, “International forest protection leaders from western countries have announced a global campaign to derail World Trade Organisation (WTO) plans to write trade agreements that they believe will threaten the world's forests at the upcoming WTO Ministerial meeting this November” (ENS, July 1, 1999). The coalition seems to have, “support within the U.S. Congress for its forest protectionist stance. Congressman George Miller, a California Democrat and Congressman Merill Cook, a Utah Republican, circulated a letter to their congressional colleagues in May that stated the threat to forests this way. The World Trade Organisation (WTO) is currently negotiating a new agreement on forest products. The agreement would eliminate tariffs on forest products in developed countries by the year 2000 and developing countries by 2003. In addition, negotiators are discussing the reduction of non-tariff barriers to trade. The agreement would expand the market for forest products without protecting domestic laws or encouraging sustainable logging practices or protecting endangered forests, ecosystems or biodiversity, the two lawmakers wrote. Miller and Cook want the Clinton administration to stop negotiating for trade liberalisation in forest products, at least and until a comprehensive assessment is conducted”. Impact of reduction in tariff on wood consumption could be enormous. It could “increase by between three and four percent if tariffs came down world-wide, said Maureen Smith, vice president international of the American Forest & Paper Association”. While in this case, I would support this coalition because of its obvious concern for conservation, the policy makers may not see the situation in the same light. In the famous case of Tuna - Dolphin dispute between Mexico and US and, European Union and US, the WTO decision was also considered anti-environment by many NGOs and other policy makers in USA.

In Tuna-Dolphin case, the dispute arose from the trade sanctions that US proposed to impose on Mexico for import of Tuna fish into USA because Mexican vessels catching tuna fish were supposed to have made incidental catch of dolphins - a protected species beyond the permissible category. The case was decided in favour of Mexico (and also in favour of European Union which imported unprocessed tuna from Mexico and exported processed tuna to USA) because of two major reasons: (1) US laws requiring these sanctions cannot have extra jurisdictional application (the catch of fish was made in tropical pacific waters well outside the 200 miles zone of USA), (2) the application of US laws was discriminatory because it did not penalise US vessels catching dolphins along with tuna in other seas. The contention was that dolphin was not endangered only in pacific waters. The environmentalists felt that GATT was not green enough. On the other hand, developing countries saw this case as an example of fair treatment in the dispute settlement process of GATT/WTO because many developed countries intervened on behalf of Mexico.

The agricultural produce having pesticidal residues or other chemical residues have faced similar restrictions. The issue is that environmental considerations cannot work only one way. In this paper, I am dealing with primarily the implications of WTO on Indian agriculture from the point of view of TRIPS, UPOV, and biosafety measures. In the case of biosafety rules, the boot is on the other leg. Developed countries are complaining that the protocol being requested by developing countries under CBD is extremely restrictive, though on environmental grounds. India will have to develop its strategic position keeping in mind the arguments it wants to advance in the biosafety debate vis-a-vis its concern for non-tariff barriers in the form environmental standards being imposed by the developed countries.

More discussion on the environmental issues is beyond the scope of this paper. However, it is important to note that the Plant Variety Act providing for registration of transgenic crops would involve environmental, ethical and biosafety issues. It is in this context that the contentious nature of global opinion on the subject must be viewed.


Notwithstanding the claims about safety of food produced through transgenic crops, the protest movements around the world are calling for change. In USA last year, it is estimated that 40 per cent of Soya and 30 per cent of corn was genetically engineered. FDA’s claims that food produced through such crops was no different from the rest is being questioned through law suits in USA. It is extremely necessary that India takes up systematic research programs to assess these contentious issues. To see close connection that exists between biosafety, transgenics and intellectual property rights, a news from Nature will help. Gregory Aharonian, ([email protected], July 15, 1999) quotes a letter in Nature (June 5, 1999) providing concentration of plant DNA patents:

A group in London reports that from 1980 to 1996 about 600 plant DNA sequence patents were applied for, about half granted. About half were filed by multinationals, the largest number applied for by Monsanto with 69 applications, followed by Zeneca and Novartis. About fifteen percent were owned by the US government. Maize was the mostly heavily patented, and the genes involved dealt with nutrition (20%), pathogen resistance (20%) and gene regulation (18%).

A recent UNDP publication observes ( UNDP, 1999):

In biotechnology genetic engineering underlies the new direction of pharmaceuticals, food, chemicals, cosmetics, energy and seeds. This is blurring the boundaries between the sectors, creating mega "life sciences" corporations. Indeed, across all knowledge-intensive industries, a select group of corporations controls ever-growing shares of the global market. In 1998, how much of the global market did the top 10 corporations in each industry control? In commercial seed, 32% of a $23 billion industry; in pharmaceuticals, 35% of $297 billion; in veterinary medicine, 60% of $17 billion; in computers, almost 70% of $334 billion; in pesticides, 85% of $31 billion; and in telecommunications, more than 86% of $262 billion. The lesson is clear: privatisation does not automatically lead to competition.





It is obvious that transnationals hold sway in this field. To avoid dominance of transnationals in international trade, India will have to negotiate sufficient safeguards, flexibility on behalf of small innovators as distinct from local communities conserving land races-a rich resource for future plant breeding and biotechnological applications- and at the same time create good domestic examples. The greatest weakness of Indian position is that India has not created any concrete example in its domestic polices as yet which can be taken as evidence of its intentions and genuine interest in safeguarding the interest of local communities conserving land races or individual farmers developing new varieties. For instance, if could levy a small tax say, 50 paise per quintal at market yards in green revolution regions as mentioned herein later, and use it exclusively for improving livelihood options of tribal and other farmers pursuing in situ conservation of agro-biodiversity. Likewise, patent laws enabling small innovators to get limited duration, say 10-15 years, product patent protection at very low transaction cost will go a long way in creating constituency for stronger intellectual property in the country. Likewise invention promotion funds and incubators to convert innovations into products and services will have to be created al over the country. Many of the measures suggested in the draft National Biodiversity Bill (author was a member of the drafting working group which finalised a reasonably fair treatment of domestic and international bioprospectors) try to achieve this goal. Unless voluntary co-operatives of seed producers and farmer breeders are given encouragement by state, dominance of large corporations can not be avoided. Likewise scientists in public sector must be encouraged to participate in private sector so that two-way flow of knowledge, skills and perspectives takes place apart from marriage between the respective strengths. Tendency to see private sector always with suspicious eyes will affect adversely the growth of both.

As mentioned earlier, the Indian PVFRB has many unique features such as opportunity for registration of extant varieties, registration of farmer’s traditional varieties by communities of NGOs on their behalf, constitution of National Gene Fund though it aims to collect revenue mainly from seed companies only- a point that we will like to critique.

Favourable impact of WTO on Indian economy:-

1) Increase in exports.

2) Increase in exports of textile and clothing.

3) Increase in agricultural exports.

4) Benefits from multilateral rule and disciplines.


Unfavourable impact of WTO on Indian economy:-

1) Adverse impact of TRIPs.

2) Adverse impact of TRIMs.

3) Adverse impact of GATS.

4) Adverse impact of trade and non-trade barriers on exports.

INTERNATIONAL TRADE, WTO AND INDIA: ISSUES AND CONCERNS

The world trade organization(WTO) replaced the General Agreement on Tariffs and Trade (GATT) in 1995. compared to GATT the WTO is much more powerful because of its institutional foundation and its dispute settlement system. Countries that do not abide by its trade rules are taken to court and can eventually face retaliation. The WTO agreement incorporates some 29 individual texts covering subjects ranging from agriculture to textiles and clothing; services, rules of origin and intellectual property rights. In addition, there are more than 25 ministerial declarations, decisions and commitments which spell out various obligations and commitments. WTO-related issues of current importance in India relate mainly to rights and obligations emanating from these agreement. The main function of wto is to ensure that trade flows smoothly, predictably and freely as possible. Governments still face the perennial dilemma of being ton between strengthening international rules and preserving national autonomy. Governments know only too well that the stability of the international trade regime, indeed of the global economic system, is in their own interests, given that international trade accounts for a higher share of GDP than ten years ago in most flows of capital, investment and knowledge. It is fairly obvious that international trade will flourish if government pledge to accept some basic rules. Despite the developed countries’ concessions on the new issues, developing countries have been disappointed as rich countries have not opened their markets in the ways they had promised. Consequently a number of developing nations ask why there should be a new round when some members have not implemented promises made in the last one. In addition, the costs of implementing the obligations undertaken have been substantial, raising the question of whether this is a wise way for a poor nation to spend its scarce resources.

Some institutional reforms that have been suggested are:

1) An executive committee should be established to enhance the flexibility and adaptability of the WTO.
2) Given the limited resources of its secretariat, the WTOs should establish a research network, which also help to form a consensus on the future path of liberalization.
3) The marginalization of poor countries must be stopped, which required more technical assistance from richer countries.
4) To avoid policy overload and conflicting objectives, labour and environmental issues should be dealt with the ILO and a still to be founded world environmental organizations not at the WTO.

The inclusion or not of competition provisions in the WTO has sparked a vigorous debate. Those against have basically advanced two broad arguments the first claims that there is no need to internationalise competition law and that the cost of doing so will be high.

TRADE AGENDA FOR INDIA AT THE WTO

In December 1997, the prolonged debate on ‘Agenda for India at the wto – need to be proactive’ took into account where the following issues were discussed.

1) general issues
2) market access and trade liberalization
3) TRIPs, biological diversity and biotechnology
4) Trade, investment and competition.
5) Trade and environment
6) Trade and labour standards.



GENERAL ISSUES:

1) India should be proactive in economical and political arguments. The success of India in this field was below average.
2) National trade policy council needed to be established. India has been highly successful on this front.
3) Taking stock of existing issues at the WTO. On this issue too we have been quite successful.
4) Taking stock of existing and emerging issues at the WTO to enhance India’s preparedness. This issue has also been categorized as highly successful.
5) India should define long term goals. Here India has been averagely successful.
6) To help least developed countries with better market access for their products. On this front, India has been successful.
7) To help small businesses especially small and medium enterprises. This action plan has been highly successful.
8) Indian journalists and media persons should be trained so that they write in an objective manner. We have been quite successful on this front.

MARKET ACCESS AND TRADE LIBERALISATION

Recommendations on textiles and agriculture, anti dumping measures, etc. were made. The government of India has been highly successful in this plan

TRIPs, BIOLOGICAL DIVERSITY AND BIOTECHNOLOGY

Recommendations on amendments to the Patent Act with appropriate safeguards. Here we have been highly successful.

TRADE, INVESTMENT AND COMPETITION

Recommendations were made on investment agreement, international competition, domestic policies, etc. here not much steps have been taken in this field. Here the plan has not been successful.

TRADE AND ENVIRONMENT

Recommendations were made to minimize adverse effects of environment related trade measures. We gave not been very successful here.

TRADE AND LABOUR STANDARDS

Recommendations were made to make efforts on labour welfare because India from the very beginning has been quite vocal in this front. Here we have been highly successful.

INDIA’S FOREIGN TRADE UNDER WTO: OUTLOOK FOR 21ST CENTURY.

The period from 1991 to 2003 has also been marked by rapid growth of India’s exports exceeding 11 percent per annum as against 8 percent growth in world exports during the same period. However, the share of India’s exports in world trade has declined since independence from 2.2 percent in 1948 to 1.0 percent in 1993 and was pegged at 0.7 percent in 2001. Previously, various kinds of rigid restrictions were imposed not only on imports but also on the entire range of transactions involving foreign exchange. Within the domestic market, the large scale private sector was subjected to highly restrictive system of licensing and a variety of other discretionary controls which involved case by case disposal.

Now India has submitted its comprehensive proposals with a view to safeguarding the food and livelihood security of large subsistence level farming community and maximizing export opportunities for Indian agricultural products by seeking a reduction in high tariffs and subsidies prevalent in developed countries. India has forwarded its request in respect of medical, dental and health services, audio-visual services, tourism services, architectural services, computer aided services and maritime services. Other services of interest to India and on which request are being formulated, include computers and related services, accountancy, auditing and book keeping services, urban planning and landscape services and construction of audio-visual services.

REFORMS PROCESS AND THE INDIAN EXPORTS

World exports are likely to cross 25000 billion dollars by 2020. India’s exports should therefore exceed 500 million dollars to accomplish this vision. There is great export potential for our agricultural sector. Our IT exports alone cross 150 billion dollar mark by year 2020. What is required is to formulate a high focused strategy and its rigorous implementation o achieve the desired export thrust.

The vision of export growth requires that the average rate of inflation over the next two decades is kept below 4 percent per annum which would help in restricting the average rate f currency depreciation to round 2 percent per annum and also maintaining a relatively stable interest rate regime. Fulfillment of our export vision will raise India’s export GDP ratio to round 20 percent over the next two decades. The vision of the 21st century sounds very ambitious but it is attainable if we can put our act together and pursue the goal relentlessly through well coordinated hard work, total commitment and complete dedication.