Description
It also explains Trade Related Intellectual Property Rights (TRIPs). It also explains General Agreement on Trade in Services (GATS), agreement on agriculture (AOA), non agricultural market access (NAMA)
Understanding WTO Issues
Modules
I. WTO Issues II. Hong Kong Ministerial – The Road Ahead
2
?
Bretton Woods System, 1944
- IMF, 1945 - World Bank, 1946 - ITO-GATT, 1948-94 - WTO, 1995
?
Evaluation of International Trade
- “Adversarially Competitive” Operating Environment
3
WTO: What is it?
?
WTO is the only global organisation dealing with the rules of trade (in goods, services and trade related issues) between the nations based on the WTO agreements as have already been negotiated and signed by the member countries and ratified by their parliaments.
4
WTO: Perception
? ?
?
?
?
? ?
Theoretically, there is no alternative other than being within the WTO WTO will Impact Every Business and Every Aspect of the Value Chain of Every Business There is an Advantage of Time to initiate reform measures to be globally competitive Post Doha - Road Map for Globalization Failure of Cancun - Breakdown of Multilateral Trade Agenda? Growth of FTAs - Over 43% of world trade, could rise to 55% in the near future Hope for healthy growth of multilateral trade in the mid-term
5
WTO: Reality
?153 Members, 28 Observers, 76 Institutional
Observers to the General Council as on January 2007 (as on May 16th ?08)
? ?
Over 90% of World Exports 38 Agreements Signed, all of which are Binding on all the Members Decision by Consensus - One Member One Vote
- Reality is Different - The Quads Dominate - Failure of WTO will create more Problems
?
6
WTO: Objectives
?
?
? ? ?
To Establish a Fair, Equitable, RuleBased, Transparent and Multilateral Trading System Progressive Liberalisation and Elimination of Tariff & Non-Tariff Barriers to Trade in Goods and Services Rejection of Protectionism Elimination of Discrimination Integration of Developing Countries in the Multilateral System
7
? 16 Articles - Scope, Functions, Structure, Relations …, Decision Making
? Increasing Market Access through - Reduction & of Tariff Rates Binding - Elimination of Quantitative Restrictions (QRs) & Non-Tariff Barriers (NTBs) ? Practising Non-Discrimination through - Most Favoured Nations (MFNs) & - National Treatment ? Improve Multilateral Trading System ? Wider Coverage of World Trade under Agreed, Effective & Enforceable Multilateral Disciplines ? Enhancing Relations with International organisations (UNCTAD, ILO, IMF-WB)
8
?URUGUAY ROUND
? National - International Co-operation ? Coherent Economic & Trade Policies
WTO: Mechanisms
?
Increasing Market Access Through: ? Reduction of Tariff Rates ? Binding of Tariff Rates
?
Elimination of Quantitative Restrictions & Non-Tariff Barriers Practicing Non-Discrimination: ? Most Favored Nations (MFN) ? National Treatment
?
9
-
Trade in Goods & Services
? WTO Covers …
General Agreement on Trade in Services (GATs) Agreement on Agriculture (AoA) Trade Related Investment Measures (TRIMS) Trade Related Intellectual Property Rights (TRIPS)
-
Dispute Settlement Mechanisms
Non-Tariff Barriers (NTBs) and Technical Barriers to Trade (TBT) Dumping/Anti-Dumping Measures Safeguards, Subsidies and Countervailing Measures, etc.
-
10
Increasing Number of New Issues
?
New (Singapore) Issues
?
?
Trade & Investment
Trade & Competition Policy
?
?
Transparency in Government Procurement
Trade Facilitation
?
? ?
Trade & Environment
E-Commerce Trade & Labour Standards, (with ILO)
---------------------------------* Explicit consensus on establishing the modalities for 11 negotiations - Doha; delayed after Cancun breakdown ...
WTO: Ministerial Meet
? ? ?
Policy Making Body, Meets Once in Two Yrs. Singapore - Dec. 1996, Geneva - 1998, Seattle - Nov. 1999 (Suspended) The Fourth Ministerial, Doha, November 9-14, 2001
- Doha Development Agenda
? Fifth Ministerial - Cancun, Mexico, Sept. 2003 - a
failure ? Sixth Ministerial in Hong Kong – December 13 –18, 2005
12
Trade Related Intellectual Property Rights (TRIPs)
? Intellectual Property (IP) refers to “a Creation of Human Mind that is
of Value to the Society, while Intellectual Property Rights (IPRs) are Rights Granted by the State to Persons Over Creation of Their Mind.”
? The TRIPs Agreement of WTO covers Nine Categories of IPs:
Copy Rights and Related Rights Trademarks including Service Marks Geographical Indications Industrial Designs Layout Designs of Integrated Circuits Trade Secrets Patents Patenting of Micro-Organisms and New Plant Varieties (i.e. seeds, and other propagating materials incl. Bio-Diversity)
? Minimum Levels of Substantive Norms and Standards to be followed
by Member Countries for the Protection of the IPRs as well as their Enforcement.
13
(Contd.)
? India has Agreed to Accept Applications from January 1, 1995
Onwards. The Applications will be Received in the „Mailbox? and will be Examined only with Effect from January 1, 2005. Further, the TRIPs Agreement also makes it Obligatory for India to Grant Exclusive Marketing Rights (EMRs) to Pharmaceuticals and Agro-Chemicals, which have been given Product Patents and Marketing Approval in another Member Country of the WTO. ? India?s Concern w.r.t. TRIPs :
Granting of Product Patents to Pharma and Agro Chemicals; Patenting of Micro-Organisms or Life Forms, including Patenting of Products Based on our Bio-Diversity and Traditional Knowledge in other parts of the World; Establishing an Effective sui-generis system for the Protection of New Plant Varieties, Plant Breeders? Rights, which Recognises and Rewards the Traditional Contribution of Rural Communities to the Conservation of Bio-Diversity;
-
14
Trade Related Intellectual Property Rights (TRIPs)
?Indian Patent Act 1970
-
First Amendment 1999
Second Amendment 2002 Third Amendment, March 2005
?WTO Compatible Product Patent Regime
Chemicals, Drugs, Medicines and Food Products
-
Implications
?Doha Development Agenda on TRIPs
15
Trade Related Investment Measures (TRIMs)
? India has to Remove all Trade Related Investment Measures, w.e.f.
January 1, 2000. TRIMs Seeks to Regulated National Investment Policies having a bearing on Trade; Members can apply TRIMs Consistent with National Treatment (Article III), an Obligation on Elimination of QRs (Article XI). National Policy should accordingly be framed considering the withdrawal of:
Local Content Requirement Foreign Exchange Control Requirement Trade Balancing and Export and Import and Export Restrictions
? HK Ministerial : Trade & Investment Issues : certain key issues to
be worked out in „06
16
Non-Tariff Barriers (NTB) and Dispute Settlement Mechanism
? Most Industrial Countries as well as a Number of Developing
Countries use Many Forms of NTBs (Eg. Import/Export Control), Certifications, Standards, Subsidies, Anti-Dumping Measures/Duties, etc.
? 1995-2000: Total 3,551 TBT Notifications ? As a Result, India?s Exports of a Number of Items Have Been
Denied Market Access in Many Countries like USA, EU, Japan, Canada, Saudi Arabia, etc.
? Often times, NTB Measures are used as a Protectionist Measure,
which goes against the Spirit of the WTO Mandates.
? However, a Country can take these issues up with the WTO Dispute
Settlement Understanding for which Clear-Cut Rules have been laid down. In fact, India has taken USA, EU and Several Others to the Dispute Settlement Panel of the WTO and Won the Case.
? HK Ministerial :details being streamlined in 06
17
Anti-Dumping Measures
? ?
USA, EU, India & China are frequent users As on 30th June,07: 1,274; - US: 229 (1st), India 162 (2nd), EU: 149 (3rd), China 103 (4th). HK Ministerial: Negotiations to continue - Several issues to be streamlined Spate of anti dumping measures in the recent months as a fall out of global meltdown / recession.
?
?
18
WTO: Agreement on Agriculture (AoA)
* Applies to: - Market Access “Tariffs Only” - Aggregate Measurement of Support (AMS) - Export Subsidies - Limits on Spending and Quantities - Regulations for Animal & Plant Products * AMS: - Product Specific (Market Prices Support) - Non-Product Specific (eg. Fertilisers, Irrigation, Electricity, Credit Seeds, etc.) - Exemptions: Direct Payments - Green Box (eg. R & D, Pest & Disease Control, Extension, Domestic Food, Environment Assistance, Disaster Relief, etc.) - Blue Box: (eg. Income Support to Producers, Structural Adjustment Assistance, Safety Net, …)
(Contd.)
19
WTO: Agreement on Agriculture (AoA)
? AMS should Not Exceed 10% of the Total Value of Agricultural Production in Case of Developing Countries and 5% for Developed Countries
Exceeding Such Limits, a 20% cut In Support Price in 6 Years for Developed Countries and 13.3% in 10 yrs. for Developing Countries In India: Product Specific AMS is “Negative”: - 23% of Value of Agricultural Product in the early 1990s - Non-Product Specific AMS is Positive: 5.5% - Total AMS is Negative: -17.5%
? AMS is Negative Due to the Fixing of Support Prices Lower
?
?
Total
than International Prices - Many Issues
? HK Ministerial : several key decisions towards reducing
agri subsidies by DCs.Details being worked out.
20
? ?
12 Categories of Services, with 161 Sub-Groups Mandated Renegotiation is on ... New Commitments to be Made ? Multilateral Agreement to Provide Legally Enforceable Rights to Trade in Services ? No Tariff or Generalised Protection Mechanism ? Four Principle Modes: Cross Border Supply Consumption Abroad Commercial Presence Presence of Natural Persons ? Market Access & National Treatment ? One Time MFN Exemptions for 10 Years … ? HK Ministerial : several key decisions towards reducing agri subsidies by DCs.Details being worked out.
General Agreement on Trade in Services (GATS)
21
GATS: India to Open Services under UR
?
Cabinet Committee on WTO has put in place (on June 5, ?03) a roadmap for services negotiations ? Opening of services: - Business Services (engineering, R & D, technical testing and analysis services) financial services, construction & engineering, computer & related services, architecture, telecom, health, accounting, tourism, & maritime services. ? Not to be opened now: - Audit, legal, postal & courier services, retail & wholesale trading ? Commerce Ministry to work out the details ? 25 Requests received and 62 made by India -----------------22 * India’s Commitments are skewed and not
?WTO Dynamics ...
•
WTO will impact every business and every aspect of the value chain of every business
NEO - Darwinism ? Globalise or Perish
•
The Crucial Issue : Making Indian Economy / Industry / Firm Efficient and Globally Competitive ? WTO Compatible
23
?
Indian Industry/Firms will have to Play the Global Game by the Global Rules in an “Adversarially Competitive” Environment The Imperative: Recognition & Acceptance of the Liberal (Market) Economic Philosophy
- Excelling in Competition is the Name of
the Game
?
24
Domestic Industry - Comparative Disadvantages in Being Globally Competitive
-
High Input Cost - 30% higher than China?s
Infra. Bottlenecks Technology and R & D Gap Lack of Economies of Scale Absence of Right Product Quality Deficiency Delivery Problems Historical Baggage
-
System Rigidities
Old World Mind-Set
* Some of them getting removed, a number of industries are becoming 25 competitive
II. Hong Kong Ministerial Declaration The Road Ahead
26
From Seattle to Doha to Cancun
? Seattle failed due to uncompromising negotiating
? ? ?
?
position of the Quads, particularly US vs. developing countries. US made it a failure for its political interest ! Doha – Morasali Maron, former Commerce Minister, India stood firm Doha Development Agenda was compromised largely based on India voicing the points of interest for all developing countries. Voice of developing countries were also heard, but in isolation.
27
HK Ministerial Declaration
“We renew our resolve to complete the Doha Work programme fully and to conclude the negotiations launched at Doha successfully in 2006.” _________________________________
* Difficult path ahead- multilateraism marches on in micro steps
Hong Kong Declaration
? Limited success – “Micro steps” ? ?
?
?
- No specific group won or lost Successful negotiating stance by 115 developing countries. Doha to Hong Kong : consolidation of 2/3rd of the world population in 115 developing countries ( G-20, G-33, ACP) No longer signing on the dotted line In principal approval of July 31, 2004 Framework.
29
HK Ministerial Declaration
? HK Ministerial could have been a failure if
both developed &developing countries could not have negotiated properly ? The failure would have led to adding problems particularly for developing countries. _______________________________
? Loss of rule based multilateral framework -were
problem for developing countries.
30
HK Ministerial to protect their position but ? The Quads first tried Declaration
they finally accepted developing countries? demand in various areas. ? More collective & cooperative strength will be needed to work by the first half of 2006 ? Tough negotiations ahead.
31
Agreement on Agriculture(AOA)
? Removal of Export Subsidy by 2013 ? Reducing Domestic Subsidy
? Market Access – 4 Bands of tariff cuts
? But no agreement on the threshold of the cuts
32
in the bounds. ? Face saving clause: „substantial part? of the cuts will be during the first half of the agreed implementation deadline 2013 ? Front loading : EU pushed for 20% ; Brazil 80% Compromise on “substantial part”… as above.
Agreement on Agriculture (AOA)
? Agreement on the reduction of Domestic Support ? ? ?
?
?
& Product Specific Support Review of the criteria for the Green box support ( R&D, food aid for the poor, etc), But no clear roadmaps. Inclusion of Special Products ( food, livelihood security) where tariff could be high. Special Safeguard Measures – protecting developing countries? farmers from uncertainties of agriculture mkt like sudden import surge & drop of price Price based triggers to work
33
AOA
? Domestic Support – 3 Bands for reduction in Final
Bound Total AMS & trade distorting domestic support with linear cuts in the higher band. ________________________
?Details with numbers to be worked out –
tough negotiations ahead
34
Non Agricultural Market Access (NAMA)
? July, 2004 framework -flexibility
? Swiss Formula: Certain tariff cuts will be stiffer,
while certain tariff lines to be kept unbound. ? Countries with higher tariff will have stiffer cuts – improved mkt access for developing countries? exports , ? But the“coefficient” ( = the no. determining the tariff cuts to be finalized) ? Developing counties? demand : coefficients to be 10 implying a 77% tariff cut by developing countries , FICCI desired coefficient to be 30%, means a cut by 53%.
35
NAMA
? One of the biggest gains - Elimination of Tariff
Peaks / Escalation. ? Possibility of linkage between tariff cuts in Agriculture & industrial goods. ? Culmination of Grand Alliance of developing countries ? Developed countries maintain high tariff peaks for export products from developing countries ( eg. Garments value added leather products, auto components etc.. from India ) although average tariff rate is very low (3.8%)
36
NAMA
? Some selected items to be exempted.
? Next round of negotiation will be tough
? Arithmetics of tariff peaks & escalation to be
agreed upon. _________________________
?Wait & Watch
37
General Agreement on Trade in Services (GATS)
? Mode 1 ( Cross Border Supply) &
? Mode 4 ( Movement of Natural Persons) ? Two other modes ( consumption abroad (Mode 2) &
commercial Presence( mode 3) to be taken up later. ? Kamal Nath, India?s Commerce Minister, pressed for the demand of developing countries – 2 (above) got accepted.
38
GATS
General agreement on : ? Mode I : better scope for supply of say; BPO & ITES from India ? Mode 4: Better prospects for supplying service providers to developed countries for temporary visa. ? Flexibility of Economic Needs test. ? Only assurance received from developed countries in opening modes 1 & 4 ? Further liberalization of services trade of developing countries will be demanded by developing countries.
39
Implementation & other Issues
General agreement on addressing issues regarding ? Anti dumping duties ? Non Tariff Barriers ? Dispute Settlement Negotiations ? E Commerce , Trade Facilitation etc… ? IPR – recognition of the need for a balance between private IPR and the rights of the communities over genetic materials & traditional knowledge, etc..etc…
40
Hong Kong Ministerial Declaration
? Pined down & number of rule based trading
norms ( gains for developing countries like India) but left open for detailed negotiations… ? Indian trade industry and govt. will have to sit together to work out the details ? Many vital numbers/ reduction schedule will have to be worked out soon, but at the same time based on a liberal economic share in a globlised world vis a vis the protection of economic interest. ___________________________
? Intense multilateralism, with up’s & downs will
determine int’l b/s env’t.
41
HK Ministerial Declaration
? All issues are presently being/ to be discussed at the level
of General Council / various committees, with the office of the Director General playing the role of a facilitator. ? Discussions to be completed by April/July 2006 ? But July ?06 meeting failed – no arithmetic on subsidy cut particularly by US was offered, while EU offered some reduction
? Not acceptable to developing countries ? Stalemate continue still date (February 2007)
“Talks broke down on July ’06 on US shallow offer on 42 cutting domestic support”
Developing countries like India are concerned because
•US, EU & Japan maintain high tariff on products of export interest to developing countries like India (eg. Japan: 140% on leather products, US: 35% on farm products etc.) •US incidence of subsidies for rice: 39%, cotton 48% •US has increased trade distorted farm subsidy further from $ 19 bn to $ 22 bn – post July ’05 summit •US strategizing to sift actionable subsidies (Blue & Amber Boxes) to Green Box, which is non actionable •G – 20 wants this subsidies to be cut to 12.8 bn $ “We are not averse to giving market access to US farm 43 products provided the subsidies are whittled down - India ”
Twilight of Doha Development Agenda ?
?
DDA Negotiations bogged over 8 years
• USA & EU unwilling to make political compromise • Rapid growth of Bilateralism & Regional Trade Groups • Mini-ministerial meet, July 08/Dec 08 • Global downturn – rising protectionism/ trade war • Will Multilateralism eventually “triumph” in a world facing climate change, financial crisis ,deep recession in DCs, rising protectionism, shrinking global trade & Invest, a divide between developed and developing countries ? Yet business/ competition is increasing fast… (Read links for details)
44
45
46
Thank You
47
doc_656802797.pptx
It also explains Trade Related Intellectual Property Rights (TRIPs). It also explains General Agreement on Trade in Services (GATS), agreement on agriculture (AOA), non agricultural market access (NAMA)
Understanding WTO Issues
Modules
I. WTO Issues II. Hong Kong Ministerial – The Road Ahead
2
?
Bretton Woods System, 1944
- IMF, 1945 - World Bank, 1946 - ITO-GATT, 1948-94 - WTO, 1995
?
Evaluation of International Trade
- “Adversarially Competitive” Operating Environment
3
WTO: What is it?
?
WTO is the only global organisation dealing with the rules of trade (in goods, services and trade related issues) between the nations based on the WTO agreements as have already been negotiated and signed by the member countries and ratified by their parliaments.
4
WTO: Perception
? ?
?
?
?
? ?
Theoretically, there is no alternative other than being within the WTO WTO will Impact Every Business and Every Aspect of the Value Chain of Every Business There is an Advantage of Time to initiate reform measures to be globally competitive Post Doha - Road Map for Globalization Failure of Cancun - Breakdown of Multilateral Trade Agenda? Growth of FTAs - Over 43% of world trade, could rise to 55% in the near future Hope for healthy growth of multilateral trade in the mid-term
5
WTO: Reality
?153 Members, 28 Observers, 76 Institutional
Observers to the General Council as on January 2007 (as on May 16th ?08)
? ?
Over 90% of World Exports 38 Agreements Signed, all of which are Binding on all the Members Decision by Consensus - One Member One Vote
- Reality is Different - The Quads Dominate - Failure of WTO will create more Problems
?
6
WTO: Objectives
?
?
? ? ?
To Establish a Fair, Equitable, RuleBased, Transparent and Multilateral Trading System Progressive Liberalisation and Elimination of Tariff & Non-Tariff Barriers to Trade in Goods and Services Rejection of Protectionism Elimination of Discrimination Integration of Developing Countries in the Multilateral System
7
? 16 Articles - Scope, Functions, Structure, Relations …, Decision Making
? Increasing Market Access through - Reduction & of Tariff Rates Binding - Elimination of Quantitative Restrictions (QRs) & Non-Tariff Barriers (NTBs) ? Practising Non-Discrimination through - Most Favoured Nations (MFNs) & - National Treatment ? Improve Multilateral Trading System ? Wider Coverage of World Trade under Agreed, Effective & Enforceable Multilateral Disciplines ? Enhancing Relations with International organisations (UNCTAD, ILO, IMF-WB)
8
?URUGUAY ROUND
? National - International Co-operation ? Coherent Economic & Trade Policies
WTO: Mechanisms
?
Increasing Market Access Through: ? Reduction of Tariff Rates ? Binding of Tariff Rates
?
Elimination of Quantitative Restrictions & Non-Tariff Barriers Practicing Non-Discrimination: ? Most Favored Nations (MFN) ? National Treatment
?
9
-
Trade in Goods & Services
? WTO Covers …
General Agreement on Trade in Services (GATs) Agreement on Agriculture (AoA) Trade Related Investment Measures (TRIMS) Trade Related Intellectual Property Rights (TRIPS)
-
Dispute Settlement Mechanisms
Non-Tariff Barriers (NTBs) and Technical Barriers to Trade (TBT) Dumping/Anti-Dumping Measures Safeguards, Subsidies and Countervailing Measures, etc.
-
10
Increasing Number of New Issues
?
New (Singapore) Issues
?
?
Trade & Investment
Trade & Competition Policy
?
?
Transparency in Government Procurement
Trade Facilitation
?
? ?
Trade & Environment
E-Commerce Trade & Labour Standards, (with ILO)
---------------------------------* Explicit consensus on establishing the modalities for 11 negotiations - Doha; delayed after Cancun breakdown ...
WTO: Ministerial Meet
? ? ?
Policy Making Body, Meets Once in Two Yrs. Singapore - Dec. 1996, Geneva - 1998, Seattle - Nov. 1999 (Suspended) The Fourth Ministerial, Doha, November 9-14, 2001
- Doha Development Agenda
? Fifth Ministerial - Cancun, Mexico, Sept. 2003 - a
failure ? Sixth Ministerial in Hong Kong – December 13 –18, 2005
12
Trade Related Intellectual Property Rights (TRIPs)
? Intellectual Property (IP) refers to “a Creation of Human Mind that is
of Value to the Society, while Intellectual Property Rights (IPRs) are Rights Granted by the State to Persons Over Creation of Their Mind.”
? The TRIPs Agreement of WTO covers Nine Categories of IPs:
Copy Rights and Related Rights Trademarks including Service Marks Geographical Indications Industrial Designs Layout Designs of Integrated Circuits Trade Secrets Patents Patenting of Micro-Organisms and New Plant Varieties (i.e. seeds, and other propagating materials incl. Bio-Diversity)
? Minimum Levels of Substantive Norms and Standards to be followed
by Member Countries for the Protection of the IPRs as well as their Enforcement.
13
(Contd.)
? India has Agreed to Accept Applications from January 1, 1995
Onwards. The Applications will be Received in the „Mailbox? and will be Examined only with Effect from January 1, 2005. Further, the TRIPs Agreement also makes it Obligatory for India to Grant Exclusive Marketing Rights (EMRs) to Pharmaceuticals and Agro-Chemicals, which have been given Product Patents and Marketing Approval in another Member Country of the WTO. ? India?s Concern w.r.t. TRIPs :
Granting of Product Patents to Pharma and Agro Chemicals; Patenting of Micro-Organisms or Life Forms, including Patenting of Products Based on our Bio-Diversity and Traditional Knowledge in other parts of the World; Establishing an Effective sui-generis system for the Protection of New Plant Varieties, Plant Breeders? Rights, which Recognises and Rewards the Traditional Contribution of Rural Communities to the Conservation of Bio-Diversity;
-
14
Trade Related Intellectual Property Rights (TRIPs)
?Indian Patent Act 1970
-
First Amendment 1999
Second Amendment 2002 Third Amendment, March 2005
?WTO Compatible Product Patent Regime
Chemicals, Drugs, Medicines and Food Products
-
Implications
?Doha Development Agenda on TRIPs
15
Trade Related Investment Measures (TRIMs)
? India has to Remove all Trade Related Investment Measures, w.e.f.
January 1, 2000. TRIMs Seeks to Regulated National Investment Policies having a bearing on Trade; Members can apply TRIMs Consistent with National Treatment (Article III), an Obligation on Elimination of QRs (Article XI). National Policy should accordingly be framed considering the withdrawal of:
Local Content Requirement Foreign Exchange Control Requirement Trade Balancing and Export and Import and Export Restrictions
? HK Ministerial : Trade & Investment Issues : certain key issues to
be worked out in „06
16
Non-Tariff Barriers (NTB) and Dispute Settlement Mechanism
? Most Industrial Countries as well as a Number of Developing
Countries use Many Forms of NTBs (Eg. Import/Export Control), Certifications, Standards, Subsidies, Anti-Dumping Measures/Duties, etc.
? 1995-2000: Total 3,551 TBT Notifications ? As a Result, India?s Exports of a Number of Items Have Been
Denied Market Access in Many Countries like USA, EU, Japan, Canada, Saudi Arabia, etc.
? Often times, NTB Measures are used as a Protectionist Measure,
which goes against the Spirit of the WTO Mandates.
? However, a Country can take these issues up with the WTO Dispute
Settlement Understanding for which Clear-Cut Rules have been laid down. In fact, India has taken USA, EU and Several Others to the Dispute Settlement Panel of the WTO and Won the Case.
? HK Ministerial :details being streamlined in 06
17
Anti-Dumping Measures
? ?
USA, EU, India & China are frequent users As on 30th June,07: 1,274; - US: 229 (1st), India 162 (2nd), EU: 149 (3rd), China 103 (4th). HK Ministerial: Negotiations to continue - Several issues to be streamlined Spate of anti dumping measures in the recent months as a fall out of global meltdown / recession.
?
?
18
WTO: Agreement on Agriculture (AoA)
* Applies to: - Market Access “Tariffs Only” - Aggregate Measurement of Support (AMS) - Export Subsidies - Limits on Spending and Quantities - Regulations for Animal & Plant Products * AMS: - Product Specific (Market Prices Support) - Non-Product Specific (eg. Fertilisers, Irrigation, Electricity, Credit Seeds, etc.) - Exemptions: Direct Payments - Green Box (eg. R & D, Pest & Disease Control, Extension, Domestic Food, Environment Assistance, Disaster Relief, etc.) - Blue Box: (eg. Income Support to Producers, Structural Adjustment Assistance, Safety Net, …)
(Contd.)
19
WTO: Agreement on Agriculture (AoA)
? AMS should Not Exceed 10% of the Total Value of Agricultural Production in Case of Developing Countries and 5% for Developed Countries
Exceeding Such Limits, a 20% cut In Support Price in 6 Years for Developed Countries and 13.3% in 10 yrs. for Developing Countries In India: Product Specific AMS is “Negative”: - 23% of Value of Agricultural Product in the early 1990s - Non-Product Specific AMS is Positive: 5.5% - Total AMS is Negative: -17.5%
? AMS is Negative Due to the Fixing of Support Prices Lower
?
?
Total
than International Prices - Many Issues
? HK Ministerial : several key decisions towards reducing
agri subsidies by DCs.Details being worked out.
20
? ?
12 Categories of Services, with 161 Sub-Groups Mandated Renegotiation is on ... New Commitments to be Made ? Multilateral Agreement to Provide Legally Enforceable Rights to Trade in Services ? No Tariff or Generalised Protection Mechanism ? Four Principle Modes: Cross Border Supply Consumption Abroad Commercial Presence Presence of Natural Persons ? Market Access & National Treatment ? One Time MFN Exemptions for 10 Years … ? HK Ministerial : several key decisions towards reducing agri subsidies by DCs.Details being worked out.
General Agreement on Trade in Services (GATS)
21
GATS: India to Open Services under UR
?
Cabinet Committee on WTO has put in place (on June 5, ?03) a roadmap for services negotiations ? Opening of services: - Business Services (engineering, R & D, technical testing and analysis services) financial services, construction & engineering, computer & related services, architecture, telecom, health, accounting, tourism, & maritime services. ? Not to be opened now: - Audit, legal, postal & courier services, retail & wholesale trading ? Commerce Ministry to work out the details ? 25 Requests received and 62 made by India -----------------22 * India’s Commitments are skewed and not
?WTO Dynamics ...
•
WTO will impact every business and every aspect of the value chain of every business
NEO - Darwinism ? Globalise or Perish
•
The Crucial Issue : Making Indian Economy / Industry / Firm Efficient and Globally Competitive ? WTO Compatible
23
?
Indian Industry/Firms will have to Play the Global Game by the Global Rules in an “Adversarially Competitive” Environment The Imperative: Recognition & Acceptance of the Liberal (Market) Economic Philosophy
- Excelling in Competition is the Name of
the Game
?
24
Domestic Industry - Comparative Disadvantages in Being Globally Competitive
-
High Input Cost - 30% higher than China?s
Infra. Bottlenecks Technology and R & D Gap Lack of Economies of Scale Absence of Right Product Quality Deficiency Delivery Problems Historical Baggage
-
System Rigidities
Old World Mind-Set
* Some of them getting removed, a number of industries are becoming 25 competitive
II. Hong Kong Ministerial Declaration The Road Ahead
26
From Seattle to Doha to Cancun
? Seattle failed due to uncompromising negotiating
? ? ?
?
position of the Quads, particularly US vs. developing countries. US made it a failure for its political interest ! Doha – Morasali Maron, former Commerce Minister, India stood firm Doha Development Agenda was compromised largely based on India voicing the points of interest for all developing countries. Voice of developing countries were also heard, but in isolation.
27
HK Ministerial Declaration
“We renew our resolve to complete the Doha Work programme fully and to conclude the negotiations launched at Doha successfully in 2006.” _________________________________
* Difficult path ahead- multilateraism marches on in micro steps
Hong Kong Declaration
? Limited success – “Micro steps” ? ?
?
?
- No specific group won or lost Successful negotiating stance by 115 developing countries. Doha to Hong Kong : consolidation of 2/3rd of the world population in 115 developing countries ( G-20, G-33, ACP) No longer signing on the dotted line In principal approval of July 31, 2004 Framework.
29
HK Ministerial Declaration
? HK Ministerial could have been a failure if
both developed &developing countries could not have negotiated properly ? The failure would have led to adding problems particularly for developing countries. _______________________________
? Loss of rule based multilateral framework -were
problem for developing countries.
30
HK Ministerial to protect their position but ? The Quads first tried Declaration
they finally accepted developing countries? demand in various areas. ? More collective & cooperative strength will be needed to work by the first half of 2006 ? Tough negotiations ahead.
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Agreement on Agriculture(AOA)
? Removal of Export Subsidy by 2013 ? Reducing Domestic Subsidy
? Market Access – 4 Bands of tariff cuts
? But no agreement on the threshold of the cuts
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in the bounds. ? Face saving clause: „substantial part? of the cuts will be during the first half of the agreed implementation deadline 2013 ? Front loading : EU pushed for 20% ; Brazil 80% Compromise on “substantial part”… as above.
Agreement on Agriculture (AOA)
? Agreement on the reduction of Domestic Support ? ? ?
?
?
& Product Specific Support Review of the criteria for the Green box support ( R&D, food aid for the poor, etc), But no clear roadmaps. Inclusion of Special Products ( food, livelihood security) where tariff could be high. Special Safeguard Measures – protecting developing countries? farmers from uncertainties of agriculture mkt like sudden import surge & drop of price Price based triggers to work
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AOA
? Domestic Support – 3 Bands for reduction in Final
Bound Total AMS & trade distorting domestic support with linear cuts in the higher band. ________________________
?Details with numbers to be worked out –
tough negotiations ahead
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Non Agricultural Market Access (NAMA)
? July, 2004 framework -flexibility
? Swiss Formula: Certain tariff cuts will be stiffer,
while certain tariff lines to be kept unbound. ? Countries with higher tariff will have stiffer cuts – improved mkt access for developing countries? exports , ? But the“coefficient” ( = the no. determining the tariff cuts to be finalized) ? Developing counties? demand : coefficients to be 10 implying a 77% tariff cut by developing countries , FICCI desired coefficient to be 30%, means a cut by 53%.
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NAMA
? One of the biggest gains - Elimination of Tariff
Peaks / Escalation. ? Possibility of linkage between tariff cuts in Agriculture & industrial goods. ? Culmination of Grand Alliance of developing countries ? Developed countries maintain high tariff peaks for export products from developing countries ( eg. Garments value added leather products, auto components etc.. from India ) although average tariff rate is very low (3.8%)
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NAMA
? Some selected items to be exempted.
? Next round of negotiation will be tough
? Arithmetics of tariff peaks & escalation to be
agreed upon. _________________________
?Wait & Watch
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General Agreement on Trade in Services (GATS)
? Mode 1 ( Cross Border Supply) &
? Mode 4 ( Movement of Natural Persons) ? Two other modes ( consumption abroad (Mode 2) &
commercial Presence( mode 3) to be taken up later. ? Kamal Nath, India?s Commerce Minister, pressed for the demand of developing countries – 2 (above) got accepted.
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GATS
General agreement on : ? Mode I : better scope for supply of say; BPO & ITES from India ? Mode 4: Better prospects for supplying service providers to developed countries for temporary visa. ? Flexibility of Economic Needs test. ? Only assurance received from developed countries in opening modes 1 & 4 ? Further liberalization of services trade of developing countries will be demanded by developing countries.
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Implementation & other Issues
General agreement on addressing issues regarding ? Anti dumping duties ? Non Tariff Barriers ? Dispute Settlement Negotiations ? E Commerce , Trade Facilitation etc… ? IPR – recognition of the need for a balance between private IPR and the rights of the communities over genetic materials & traditional knowledge, etc..etc…
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Hong Kong Ministerial Declaration
? Pined down & number of rule based trading
norms ( gains for developing countries like India) but left open for detailed negotiations… ? Indian trade industry and govt. will have to sit together to work out the details ? Many vital numbers/ reduction schedule will have to be worked out soon, but at the same time based on a liberal economic share in a globlised world vis a vis the protection of economic interest. ___________________________
? Intense multilateralism, with up’s & downs will
determine int’l b/s env’t.
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HK Ministerial Declaration
? All issues are presently being/ to be discussed at the level
of General Council / various committees, with the office of the Director General playing the role of a facilitator. ? Discussions to be completed by April/July 2006 ? But July ?06 meeting failed – no arithmetic on subsidy cut particularly by US was offered, while EU offered some reduction
? Not acceptable to developing countries ? Stalemate continue still date (February 2007)
“Talks broke down on July ’06 on US shallow offer on 42 cutting domestic support”
Developing countries like India are concerned because
•US, EU & Japan maintain high tariff on products of export interest to developing countries like India (eg. Japan: 140% on leather products, US: 35% on farm products etc.) •US incidence of subsidies for rice: 39%, cotton 48% •US has increased trade distorted farm subsidy further from $ 19 bn to $ 22 bn – post July ’05 summit •US strategizing to sift actionable subsidies (Blue & Amber Boxes) to Green Box, which is non actionable •G – 20 wants this subsidies to be cut to 12.8 bn $ “We are not averse to giving market access to US farm 43 products provided the subsidies are whittled down - India ”
Twilight of Doha Development Agenda ?
?
DDA Negotiations bogged over 8 years
• USA & EU unwilling to make political compromise • Rapid growth of Bilateralism & Regional Trade Groups • Mini-ministerial meet, July 08/Dec 08 • Global downturn – rising protectionism/ trade war • Will Multilateralism eventually “triumph” in a world facing climate change, financial crisis ,deep recession in DCs, rising protectionism, shrinking global trade & Invest, a divide between developed and developing countries ? Yet business/ competition is increasing fast… (Read links for details)
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Thank You
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