Kaz-wto and India

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India and WTO

Navnirman Institute of Management

India and World Trade Organization

Location: Centre William Rappard Geneva, Switzerlan

Established: 1 January 1995

Created by: Uruguay Round negotiations (1986-94)

Membership: 153 countries of which 117 are developing countries on 23 July 2008

Budget: 200 million ($180 million, 130 million)

Secretariat staff: 700

Head: Pascal Lamy (Director-General)

Official languages: English, French and Spanish.

Website: www.wto.int


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1.India and World Trade Organization

India is one of the founding members of WTO along with 123 other countries.India's participation in an increasingly rule based system in governance of International trade,

would ultimately lead to better prosperity for the nation. Various trade disputes of India withother nations have been settled through WTO. India has also played an important part in theeffective formulation of major trade policies. By being a member of WTO several countries arenow trading with India, thus giving a boost to production, employment, standard of living and anopportunity to maximize the use of the world resources.

The World Trade Organization came into existence on January 1st, 1995.Government had concluded the Uruguay Round Negotiations on 15th December 1993andMinister had given their political backing to the result by singing the Final Act at the meeting atMarrakesh, morocco in April 1994. The Marrakesh Declaration of April 1994, affirmed that

the result of the Uruguay Round would strengthen the world economy and lead to more trade,investment, employment, and income growth throughout the world. The WTO is theembodiment of the Uruguay Round result and the successor to General Agreement on Trade andTariffs (GATT).


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2.Introduction to General Agreement on Trade

and Tariffs (GATT).

In 1948, a meeting took place in Bretton Woods, New Hampshire: theInternational Monetary Conference. There, negotiators agreed to create the InternationalMonetary Fund and the World Bank. But they could not agree on an organization to deal withinternational trade. 3 years later, in 1947, 23 nations approved the General Agreement on Tariffsand Trade, or GATT. It was meant to be temporary. Trade negotiations under GATT werecarried out in a series of talks called rounds.

From GATT to WTO

Dates Name(Round) Outcome

1947 Geneva Round 45,000 tariff concessions representing half of world trade.1949 Annecy Round Modest tariff reductions.1950-51 Torquay Round 25% tariff reductions in relation to 1948 level1955-56 Geneva Round Modest tariff reductions.1961-62 Dillon Round Modest tariff reductions.1963-67 Kennedy Round Average tariff reductions of 35% of industrial production, only

modest reduction for agriculture product, anti- dumping codes.1973-79 Tokyo Round Average tariff reductions 34% of industrial production. Non-

tariff trade barrier code.1986-94 Uruguay Round Tariff, non-tariff measures, rules, service, intellectual

property, disputes settlement , creation of WTO ,etc.

Objectives:

The primary objective of GATT was to expand international trade by liberalising trade to bringeconomic prosperity. GATT mentions the fallowing important objectives

1. Raising standards of living2. Ensuring full employment a large and steadily growing volume of real income and

effective demand

3. Developing the full use of the resources of the world4. Expanding the production and exchange of goods.


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Basic Principle:

1) Follow the Most Favoured Nation (MFN) clause.

2) Carry on trade in a non discriminatory way.

3) Grant protection to domestic industries.

4) Condemn the use of quantitative restrictions or quotas.

5) Liberalise tariff and non-tariff measures through multilateral negotiations

Uruguay Round:

Uruguay Round (UR) is the name by which the 8th and the latest round of

Multilateral Trade Negotiations (MTNs) held under the auspices of the GATT popularly knownin Punta Del Este in Uruguay launched in September 1986. The main issues in this rounddiscussed were of Agricultural Subsidies, Multi Fibre Agreement (MFA), Trade in Services, AntiDumping etc. These discussions were resolved by the then Director General of GATT, ArthurDunkel. Who came up or Draft of the Uruguay Round consisted of 28 agreements which speltout the results of Multilateral Trade Negotiations (MTN). Some of the main agreements of theUruguay Round were as follows:

1)Anti-Dumping Code:

Dumping is to be condemned if it causes or threatens material injuries to an established domestic

industry. A committee on anti-dumping practices should look into such matters related todumping.

2)Trade Related Investment Measures (TRIMs):

It Refers to certain conditions or restrictions imposed by a Government in respect of foreigninvestment in the country. TRIM is widely employed by developing countries. The agreement onTRIMs provides that no contracting party shall apply any TRIM which is inconsistent withGATT articles. An illustrative list identifies the fallowing TRIMS as inconsistent:-

i.Local content requirement.

ii. Trade balancing requirement

iii.Trade and foreign exchange balancing requirements.

iv.Domestic sales requirements.


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1) Trade related aspects of Intellectual Property Rights (TRIPs) One of the most controversial outcomes of Uruguay Round is the agreement on TradeRelated aspects of Intellectual Property Rights (TRIPs) including Trade in counterfeitGoods. According to GATT Intellectual Property Rights are the rights given to personsover the creations of their minds. They usually give the creator an exclusive right over theuse of individuals creation for a certain period of time.

2)Trade in services

Bank, Insurance, Transport and Communication, etc. are trade related services. The draftagreement proposed that all restrictions on such services should be waived.

Conclusion:

Following the Uruguay Round (UR) Agreement GATT was converted from a provisionalagreement into a formal international organisation known as World Trade Organisation (WTO).

The organisation began its function from 1st Jan. 1995. It serves as a single institutionalframework directed by a Ministerial Conference once every two years and its regular business isoverseen by a general council. The WTO secretariat is based in Geneva, Switzerland. Themembership of the WTO increased from 128 in July 1995 to 150 countries by Jan. 1st 2010. TheWTO members now accounts for over 97 percent of the international trade.


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3.Introduction toWTO:

The World Trade Organization is an international organization which was createdfor the liberalization of international trade. The World Trade Organization came into existence

on January 1st, 1995 and it is the successor to General Agreement on Trade and Tariffs (GATT).The World trade organization deals with the rules of trade between nations at a global level.WTO is responsible for implementing new trade agreements. All the member countries of WTOhave to follow the trade agreement as decided by the WTO.

In April of 1994, most of those 123 nations signed an agreement. India to havesigned this agreement at the time of formation of W.T.O. It replaced GATT with the World TradeOrganization. The WTO has 153 members, representing more than 97% of total world trade and30 observers, most seeking membership. The WTO is governed by a ministerial conference,meeting every two years; a general council, which implements the conference's policy decisions

and is responsible for day-to-day administration; and a director-general, who is appointed by theministerial conference. The WTO's headquarters is at the Centre William Rappard, Geneva,Switzerland.

The WTO is run by its member governments. All major decisions are made by themembership as a whole, either by ministers (who meet at least once every two years) or by theirambassadors or delegates (who meet regularly in Geneva). Decisions are normally taken byconsensus. In this respect, the WTO is different from some other international organizations suchas the World Bank and International Monetary Fund. In the WTO, power is not delegated to a

board of directors or the organizations head. When WTO rules impose disciplines on countriespolicies that is the outcome of negotiations among WTO members. The rules are enforced by themembers themselves under agreed procedures that they negotiated, including the possibility oftrade sanctions. But those sanctions are imposed by member countries, and authorized by themembership as a whole. This is quite different from other agencies whose bureaucracies can, forexample, influence a countrys policy by threatening to withhold credit. Reaching decisions byconsensus among some 150 members can be difficult. Its main advantage is that decisions madethis way are more acceptable to all members. And despite the difficulty, some remarkableagreements have been reached. Nevertheless, proposals for the creation of a smaller executivebody perhaps like a board of directors each representing different groups of countries are

heard periodically. But for now, the WTO is a member-driven, consensus-based organization.

The WTO's founding and guiding principles remain the pursuit of open borders,the guarantee of most-favoured-nation principle and non-discriminatory treatment by and amongmembers, and a commitment to transparency in the conduct of its activities. The opening ofnational markets to international trade, with justifiable exceptions or with adequate flexibilities,will encourage and contribute to sustainable development, raise people's welfare, reduce poverty,


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and foster peace and stability. At the same time, such market opening must be accompanied bysound domestic and international policies that contribute to economic growth and developmentaccording to each member's needs and aspiration.

The organization is currently endeavoring to persist with a trade negotiation

called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhanceequitable participation of poorer countries which represent a majority of the world's population.However, the negotiation has been dogged by "disagreement between exporters of agriculturalbulk commodities and countries with large numbers of subsistence farmers on the precise termsof a 'special safeguard measure' to protect farmers from surges in imports. At this time, the futureof the Doha Round is uncertain."

Function of WTO:

1. Negotiating the reduction or elimination of obstacles to trade (import tariffs, otherbarriers to trade) and agreeing on rules governing the conduct of international trade (e.g.antidumping, subsidies, product standards, etc.)

2. Administering and monitoring the application of the WTO's agreed rules for trade ingoods, trade in services, and trade-related intellectual property rights

3. Monitoring and reviewing the trade policies of the members, as well as ensuringtransparency of regional and bilateral trade agreements

4. Settling disputes among the members regarding the interpretation and application of theagreements

5. Building capacity of developing country government officials in international tradematters

6. Assisting the process of accession of some 30 countries who are not yet members of theorganization

7. Conducting economic research and collecting and disseminating trade data in support ofthe WTO's other main activities

8. Explaining to and educating the public about the WTO, its mission and its activities.


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Benefits of WTO:

World Trade Organization helps member states in various ways and this enables them to reapbenefits such as:

1. Helps promote peace withinnations:

Peace is partly an outcome of two ofthe most fundamental principle ofthe trading system; helping tradeflow smoothly and providingcountries with a constructive andfair outlet for dealing with disputesover trade issues. Peace createsinternational confidence andcooperation that the WTO createsand reinforces. Around 300 disputeshave been brought to the WTO sinceit was set up in 1995.

2. Disputes are handled constructively:As trade expands in volume, in the numbers of products traded and in the number ofcountries and company trading, there is a greater chance that disputes will arise. WTOhelps resolve these disputes peacefully and constructively. If this could be left to themember states, the dispute may lead to serious conflict, but lot of trade tension is reduced

by organizations such as WTO.3. Rules make life easier for all:

WTO system is based on rules rather than power and this makes life easier for all tradingnations. WTO reduces some inequalities giving smaller countries more voice, and at thesame time freeing the major powers from the complexity of having to negotiate tradeagreements with each of the member states.

4. Free trade cuts the cost of living:Protectionism is expensive, it raises prices, and WTO lowers trade barriers throughnegotiation and applies the principle of non-discrimination. The result is reduced costs of

production (because imports used in production are cheaper) and reduced prices offinished goods and services, and ultimately a lower cost of living.

5. It provides more choice of products and qualities:It gives consumer more choice and a broader range of qualities to choose from.


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6. Trade raises income:Through WTO trade barriers are lowered and thisincreases imports and exports thus earning thecountry foreign exchange thus raising the country'sincome.

7. Trade stimulates economic growth:With upward trend economic growth, jobs can be created and this can be enhanced byWTO through careful policy making and powers of freer trade.

8. Basic principles make life more efficient:The basic principles make the system economically more efficient and they cut costs.Many benefits of the trading system are as a result of essential principle at the heart of theWTO system and they make life simpler for the enterprises directly involved ininternational trade and for the producers of goods/services. Such principles include; non-discrimination, transparency, increased certainty about trading conditions etc. togetherthey make trading simpler, cutting company costs and increasing confidence in the futureand this in turn means more job opportunities and better goods and services forconsumers.

9. Governments are shielded from lobbying:WTO system shields the government fromnarrow interest. Government is better placed todefend themselves against lobbying from narrowinterest groups by focusing on trade-offs that aremade in the interests of everyone in the economy.

10.The system encourages good governance: The WTO system encourages good government.The WTO rules discourage a range of unwisepolicies and the commitment made to liberalize asector of trade becomes difficult to reverse. Theserules reduce opportunities for corruption.

Criticisms of WTO:

1. WTO has increasing inequality:Free trade is not working for the majority of the world. During a most recent

period of rapid growth in global trade and investment--1960 to 1998--inequalityworsened both internationally and within countries. The UN DevelopmentProgram reports that the richest 20 percent of the world's population consume86 percent of the world's resources while the poorest 80 percent consume just


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14 percent. WTO rules have hastened these trends by opening up countries toforeign investment and thereby making it easier for production to go where thelabor is cheapest and most easily exploited and environmental costs are low.This pulls down wages and environmental standards in developed countries thathave to compete globally.

2. WTO has liberal the policy related to health:For the past nine years, the European Union has banned beef raised withartificial growth hormones. The WTO recently ruled that this public health lawis a barrier to trade and should be abolished. The EU has to rollback its ban or

pay stiff penalties.\

3.Negotiation and decision making in the WTO are dominated by the developedcountries.

4. Because of the dependence of developing country on the developed ones, thedeveloped countries are able to resort to arm-twisting tactics.

5. The WTO has not been successful in imposing the organizations disciplines onthe developed countries

6. Many of the policy liberalizations are done without considering the vulnerabilityof the developing countries and the possible adverse effect on them.


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Structure of the WTO :

Highest authority: the Ministerial Conference:

So, the WTO belongs to its members. The countries make their decisions throughvarious councils and committees, whose membership consists of all WTO members. Topmost isthe ministerial conference which has to meet at least once every two years. The MinisterialConference can take decisions on all matters under any of the multilateral trade agreements.


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Second level: General Council in three guises:

Day-to-day work in between the ministerial conferences is handled by three bodies:

1. The General Council:WTOs highest-level decision-making body in Geneva, meeting regularly to

carry out the functions of the WTO. It has representatives (usually ambassadorsor equivalent) from all member governments and has the authority to act onbehalf of the ministerial conference which only meets about every two years.The council acts on behalf on the Ministerial Council on all of the WTO affairs.The current chairman is Amb. Eirik Glenne (Norway).

2. The Dispute Settlement Body:It is made up of all member governments, usually represented by ambassadors

or equivalent. The current chairperson is H.E. Mr. Muhamad Noor Yacob(Malaysia).

3. The Trade Policy Review Body:The WTO General Council meets as the Trade Policy Review Body toundertake trade policy reviews of Members under the TRPM. The TPRB is thusopen to all WTO Members. The current chairperson is H.E. Ms. Claudia Uribe(Colombia).

All three are in fact the same - the Agreement Establishing the WTO states they are all the

General Council, although they meet under different terms of reference. Again, all three consistof all WTO members. They report to the Ministerial Conference. The General Council acts onbehalf of the Ministerial Conference on all WTO affairs. It meets as the Dispute Settlement Bodyand the Trade Policy Review Body to oversee procedures for settling disputes between membersand to analyze members trade policies.

Third level: councils for each broad area of trade, and more:

Three more councils, each handling a different broad area of trade, report to the General Council:

1. The Council for Trade in Goods (Goods Council)There are 11 committees under the jurisdiction of the Goods Council each with a specifictask. All members of the WTO participate in the committees. The Textiles MonitoringBody is separate from the other committees but still under the jurisdiction of GoodsCouncil. The body has its own chairman and only 10 members. The body also has severalgroups relating to textiles. The current chairperson is Amb. Yonov Frederick Agah(Nigeria).


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2. The Council for Trade in Services (Services Council)Information on intellectual property in the WTO, news and official records of theactivities of the TRIPS Council, and details of the WTOs work with other international

organizations in the field.3. The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)

The Council for Trade in Services operates under the guidance of the General Counciland is responsible for overseeing the functioning of the General Agreement on Trade inServices (GATS). It is open to all WTO members, and can create subsidiary bodies asrequired.

As their names indicate, the three are responsible for the workings of the WTO agreementsdealing with their respective areas of trade. Again they consist of all WTO members. They cover

issues such as trade and development, the environment, regional trading arrangements, andadministrative issues. The Singapore Ministerial Conference in December1996 decided to createnew working groups to look at investment and competition policy, transparency n government procurement, and trade facilitation. Two more subsidiary bodies dealing with the plurilateralagreements (which are not signed by all WTO members) keep the General Council informed oftheir activities regularly.

Fourth level: down to the nitty-gritty:

Each of the higher level councils has subsidiary bodies this are as follows:

1. The Goods Council

- subsidiary under the Council for Trade in Goods. It has committeesconsisting of all member countries, dealing with specific subjects such as agriculture,market access, subsidies, anti-dumping measures and so on. Committees include thefollowing:

y Information Technology Agreement (ITA) Committeey State Trading Enterprisesy Textiles Monitoring Body - Consists of a chairman and 10 members

acting under it.y Groups dealing with notifications - process by which governments

inform the WTO about new policies and measures in their countries.

2. The Services Counci l- subsidiary under the Council for Trade in Services which dealswith financial services, domestic regulations and other specific commitments.

3. Dispute Settlement panels and Appellate Body - subsidiary under the Dispute SettlementBody to resolve disputes and the Appellate Body to deal with appeals.


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Other committeesy Committees on

Trade and Environment Trade and Development (Subcommittee on Least-Developed Countries) Regional Trade Agreements

Balance of Payments Restrictions Budget, Finance and Administration

Basic Principal of WTO:

The WTO agreement are lengthy and complex as they are legal texts covering a wide range ofactivities there are 5 main basic principle and this principle are foundation of WTO.

1. Non-Discrimination.:It has two major components: the most favoured nation (MFN) rule, and

the national treatment policy. Both are embedded in the main WTO rules on goods,services, and intellectual property, but their precise scope and nature differ across theseareas. The MFN rule requires that a WTO member must apply the same conditions on alltrade with other WTO members, i.e. a WTO member has to grant the most favorableconditions under which it allows trade in a certain product type to all other WTOmembers. "Grant someone a special favour and you have to do the same for all otherWTO members."National treatment means that imported goods should be treated no lessfavorably than domestically produced goods (at least after the foreign goods have entered

the market) and was introduced to tackle non-tariff barriers to trade (e.g. technicalstandards, security standards et al. discriminating against imported goods).

2. Reciprocity:It reflects both a desire to limit the scope of free-riding that may arise

because of the MFN rule, and a desire to obtain better access to foreign marke e greaterthan the gain available from unilateral liberalization; reciprocal concessions intend ts. Arelated point is that for a nation to negotiate, it is necessary that the gain from doing so b

to ensure that such gains will materialize.

3. Binding and enforceable commitments:The tariff commitments made by WTO members in a multilateral trade

negotiation and on accession are enumerated in a schedule (list) of concessions. Theseschedules establish "ceiling bindings": a country can change its bindings, but only after


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negotiating with its trading partners, which could mean compensating them for loss oftrade. If satisfaction is not obtained, the complaining country may invoke the WTOdispute settlement procedures.

4. Transparency:The WTO members are required to publish their trade regulations, to

maintain institutions allowing for the review of administrative decisions affecting trade,to respond to requests for information by other members, and to notify changes in trade policies to the WTO. These internal transparency requirements are supplemented andfacilitated by periodic country-specific reports (trade policy reviews) through the TradePolicy Review Mechanism (TPRM).The WTO system tries also to improve predictabilityand stability, discouraging the use of quotas and other measures used to set limits onquantities of imports.

5. Safety valves:In specific circumstances, governments are able to restrict trade. There are

three types of provisions in this direction: articles allowing for the use of trade measuresto attain noneconomic objectives; articles aimed at ensuring "fair competition"; andprovisions permitting intervention in trade for economic reasons.Exceptions to the MFNprinciple also allow for preferential treatment of developing countries, regional free tradeareas and customs unions.[citation needed]

Procedure of joining WTO:

The process of becoming a WTO member is unique to each applicant country,and the terms of accession are dependent upon the country's stage of economic development andcurrent trade regime. The process takes about five years, on average, but it can last more if thecountry is less than fully committed to the process or if political issues interfere. As is typical ofWTO procedures, an offer of accession is only given once consensus is reached among interestedparties. Any state or customs territory having full autonomy in the conduct of its trade policies

may join (accede to) the WTO, but WTO members must agree on the terms. Broadly speakingthe application goes through four stages:

First, Tellus about yourself :

The government applying for membership has to describe all aspects of its tradeand economic policies that have a bearing on WTO agreements. This is submitted to the WTO in


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a memorandum which is examined by the working party dealing with the countrys application.These working parties are open to all WTO members.

Second, Work out with us individually what you have to offer:

When the working party has made sufficient progress on principles and policies,parallel bilateral talks begin between the prospective new member and individual countries. Theyare bilateral because different countries have different trading interests. These talks cover tariffrates and specific market access commitments, and other policies in good sand services. The newmembers commitments are to apply equally to all WTO members under normal non-discrimination rules, even though they are negotiated bilaterally. In other words, the talksdetermine the benefits (in the form of export opportunities and guarantees) other WTO memberscan expect when the new member joins. (The talks can be highly complicated. It has been saidthat in some cases the negotiations are almost as large as an entire round of multilateral trade

negotiations.)

Third, Lets draft membership terms:

Once the working party has completed its examination of the applicants traderegime, and the parallel bilateral market access negotiations are complete, the working partyfinalizes the terms of accession. These appear in a report, a draft membership treaty (protocol ofaccession) and lists (schedules) of the member-to-bees commitments.

Finally, The decision:

The final package, consisting of the report, protocol and lists of commitments, ispresented to the WTO General Council or the Ministerial Conference. If a two-thirds majority ofWTO members vote in favors, the applicant is free to sign the protocol and to accede to theorganization. In many cases, the countrys own parliament or legislature has to ratify theagreement beforemembership is complete.


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Differences Between GATT And WTO

No. GATT WTO

1 It was origin in Bretton woods conferenceafter the end of second world war. It wasfounded in 1948 with 23 members by thename of GATT [General Agreement onTariffs and Trade].

The WTO came into existence on January1st, 1995 with 123 members and it is thesuccessor to GATT.

2 GATT was a provisional legal agreement WTO is an organization with permanentagreements

3 GATT dealt only with trade in goods WTO covers services and intellectualproperty rights

4 The GATT dispute settlement was very

slow.

The WTO dispute settlement system is

faster, more automatic5 GATT had only contracting parties. WTO has members

6 While GATT was multi-lateral instrument ,by the 1980s,many new agreement had beenadded of plurilateral, and therefore,selective in nature

WTO are almost multilateral and thus,involve commitment for entire membership.

7 GATT is less powerful and less efficient, itsruling can be easily blocked.

WTO is very powerful and more efficient,its very difficult to block the rulling.

8 GATT system allowed existing domesticlegislation to continue even if it violated aGATT agreement.

WTO doesnt permit this


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4.World map of WTO participation

Members

Members, dualy represented with the European Communities

Observer, ongoing accession

Observer

Non-member, negotiations pending

Non-member

Membership:

The WTO has 153 members (76 members at its foundation and a further74 members joined over the following years). The 25 states of the European Union arerepresented also as the European Communities. Some non-sovereign autonomous

entities of member states are included as separate members.

The latest member to join was Vietnam (although the Kingdom of Tongawas admitted on 15 December, 2005 during the ministerial conference, Tonga has yetto finalize ratification of this admittance, and is not expected to do so until July 2007).

The shortest accession negotiation was that of the Kyrgyz Republic,lasting 2 years and 10 months. The longest was that of the People's Republic of China,


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lasting 15 years and 5 months. Russia, having first applied to join GATT in 1993, isstill in negotiations for membership.

A number of non-members have been observers (31) at the WTO andare currently negotiating their membership: Algeria, Andorra, Azerbaijan, Bahamas

(process frozen in 2001), Belarus, Bhutan, Bosnia and Herzegovina, Cape Verde,Equatorial Guinea (expected to start membership negotiations in 2007 or earlier),Ethiopia, Holy See (Vatican; special exception from the rules allows it to remainobserver without starting negotiations), Iran 1, Iraq, Kazakhstan, Lao People'sDemocratic Republic, Lebanon, Libya, Montenegro, Russian Federation, Samoa, SaoTome and Principe, Serbia, Seychelles (negotiations frozen since 1998), Sudan,Tajikistan, Ukraine, Uzbekistan, Vanuatu (accession agreed in 2001, but not ratified byVanuatu itself), and Yemen.

Iran first applied to join the WTO in 1996, but the United States,accusing Tehran of supporting international terrorism, blocked its application 22 times.

The U.S. said in March it would drop its veto on a start to Iran's accession negotiations.The U.S. has chosen not to block Iran's latest application for membership as part of anuclear related deal.

Syria first applied to join the WTO in October 2001, then again inJanuary 2004 and September 2005. Its application for membership is currently stillpending, waiting for WTO General Council approval to start negotiations

The following states (15) and territories (2) so far have no officialinteraction with the WTO: the states of Eritrea, Somalia, Liberia, Turkmenistan, NorthKorea, Monaco, San Marino, East Timor, Comoros, Nauru, Tuvalu, Palau, Kiribati,

Micronesia, Marshall Islands and the territories of Western Sahara, Palestine.Current Member of WTO:

No. Country Year of joining No. Country Year of joining

1 Albania 8 -Sept-2000 (n) 76 Kuwait 1-Jan-95

2 Angola 1- Dec -96 (g) 77KyrgyzRepublic 20 December 1998 (n)

3Antigua andBarbuda 1-Jan-95 78 Latvia 10 February 1999 (n)

4 Argentina 1-Jan-95 79 Lesotho 31 May 1995 (g)5 Armenia 5 -Feb-03 (n) 80 Liechtenstein 1 September 1995 (g)6 Australia 1 -Jan-95 81 Lithuania 31 May 2001 (n)7 Austria 1-Jan-95 82 Luxembourg 1-Jan-958 Bahrain 1-Jan-95 83 Macao, China 1-Jan-959 Bangladesh 1-Jan-95 84 Madagascar 17 November 1995 (g)

10 Barbados 1-Jan-95 85 Malawi 31 May 1995 (g)


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11 Belgium 1-Jan-95 86 Malaysia 1-Jan-9512 Belize 1-Jan-95 87 Maldives 31 May 1995 (g)13 Benin 22 -Feb- 96 (g) 88 Mali 31 May 1995 (g)14 Bolivia 13 -Sept- 1995 (g) 89 Malta 1-Jan-95

15Botswana

31-May-95 (g) 90Mauritania

31 May 1995 (g)16 Brazil 1-Jan-95 91 Mauritius 1-Jan-95

17Brunei

Darussalam 1-Jan-95 92 Mexico 1-Jan-9518 Bulgaria 1 December 1996(n) 93 Moldova 26 July 2001 (n)

19Burkina

Faso 3 June 1995 (g) 94 Mongolia 29 January 1997 (n)20 Burundi 23 July 1995 (g) 95 Morocco 1-Jan-9521 Cambodia 13 October 2004 (n) 96 Mozambique 26 August 1995 (g)22 Cameroon 13 Dec. 1995 (g) 97 Myanmar 1-Jan-95

23 Canada 1-Jan-95 98 Namibia 1-Jan-95

24

Central

AfricanRepublic 31 May 1995 (g) 99

NetherlandsincludingNetherlandsAntilles 1-Jan-95

25 Chad ) 19 October 1996 (g 100 Nepal 23 April 2004 (n)26 Chile 1-Jan-95 101 New Zealand 1-Jan-9527 China 11 Dec. 2001(n) 102 Nicaragua 3 September 1995 (g)28 Colombia 30 April 1995 (g) 103 Niger 1-Jan-9529 Congo 27 March 1997 (g) 104 Nigeria 1-Jan-95

30 Costa Rica 1 January 1995 105 Norway 1-Jan-9531 Cte dIvoire 1 January 1995 106 Oman 9 November 2000 (n)

32 Croatia 30 Nov. 2000 (n) 107 Pakistan 1-Jan-9533 Cuba 20 April 1995 (g) 108 Panama 6 September 1997 (n)

34 Cyprus 30 July 1995 (g) 109PapuaNewGuinea 9 June 1996 (g)

35Czech

Republic 1-Jan-95 110 Paraguay 1-Jan-95

36

DemocraticRepublic of

the Congo 1 January 1997 (g) 111 Peru 1-Jan-95

37 Denmark 1-Jan-95 112 Philippines 1-Jan-9538 Djibouti 31 May 1995 (g) 113 Poland 1 July 1995 (g)39 Dominica 1-Jan-95 114 Portugal 1-Jan-95

40Dominican

Republic 9 March 1995 (g) 115 Qatar 13 January 1996 (g)41 Ecuador 21 January 1996 (n) 116 Romania 1-Jan-9542 Egypt 30 June 1995 (g) 117 Rwanda 22 May 1996 (g)


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43 El Salvador 7 May 1995 (g) 118Saint Kitts andNevis 21 February1996 (n)

44 Estonia 13 Nov. 1999 (n) 119 Saint Lucia 1-Jan-95

45

European

Communities 1-Jan-95 120

Saint Vincent& the

Grenadines 1-Jan-9546 Fiji 14 January 1996 (g) 121 Saudi Arabia 11-Dec-0547 Finland 1-Jan-95 122 Senegal 1-Jan-95

48

FormerYugoslav

Republic ofMacedonia 4 April 2003 (n) 123 Sierra Leone 23 July 1995 (g)

49 France 1-Jan-95 124 Singapore 1-Jan-95

50 Gabon 1-Jan-95 125SlovakRepublic 1-Jan-95

51 Gambia 23 October 1996 (g) 126 Slovenia 30 July 1995 (g)

52 Georgia 14 June 2000 (n) 127Solomon

Islands 26 July 1996 (g)53 Germany 1-Jan-95 128 South Africa 1-Jan-9554 Ghana 1-Jan-95 129 Spain 1-Jan-9555 Greece 1-Jan-95 130 Sri Lanka 1-Jan-9556 Grenada 22 Feb. 1996 (g) 131 Suriname 1-Jan-9557 Guatemala 21 July 1995 (g) 132 Swaziland 1-Jan-95

58GuineaBissau 31 May 1995 (g) 133 Sweden 1-Jan-95

59 Guinea 25 October 1995 (g) 134 Switzer

land 1 July 1995 (g)60 Guyana 1-Jan-95 135 Chinese Taipei 1 January 2002 (n)

61 Haiti 30 January 1996 (g) 136 Tanzania 1-Jan-9562 Honduras 1-Jan-95 137 Thailand 1-Jan-95

63Hong Kong,China 1-Jan-95 138 Togo 31 May 1995 (g)

64 Hungary 1-Jan-95 139Trinidad andTobago 1 March 1995 (g)

65 Iceland 1-Jan-95 140 Tunisia 29 March 1995 (g)66 India 1-Jan-95 141 Turkey 26 March 1995 (g)

67 Indonesia 1-Jan-95 142 Uganda 1-Jan-9568 Ireland 1-Jan-95 143

United Arab

Emirates 10 April 1996 (g)

69 Israel 21 April 1995 (g) 144United

Kingdom 1-Jan-9570 Italy 1-Jan-95 145 United States 1-Jan-9571 Jamaica 9 March 1995 (g) 146 Uruguay 1-Jan-9572 Japan 1-Jan-95 147 Venezuela 1-Jan-95


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73 Jordan 11 April 2000 (n) 148 Viet Nam 11-Jan-0774 Kenya 1-Jan-95 149 Zambia 1-Jan-9575 Korea 1-Jan-95 150 Zimbabwe 3 March 1995 (g)

150 governments, since January 2007, with date of membership (g = the 51 original GATTmembers who joined after 1 January 1995; n = new members joining the WTO through aworking party negotiation)

5.India And WTO

Brief Introduction

INDIAS ROLE INTHE WTO

India is a founding member of the GATT (1947), it actively participated in theUruguay Round Negotiations, and is a founding member of the WTO. India strongly favours themultilateral approach to trade relations and grants MFN treatment to all its trading partners,including some who are not members of WTO. Within the WTO, India is committed to ensuringthat the sectors in which the developing countries enjoy a comparative advantage are adequatelyopened up to international trade. It also has to see that the different WTO Agreements aretranslated into specific enforceable dispensations, in order that developing countries arefacilitated in their developmental efforts. India feels that the multilateral system would itself gainif it adequately reflected these concerns of the developing countries, so as to create the necessaryimpetus to enable developing country members to catch up with their developed countrycounterparts

6.INDIAS WTO COMMITMENT

Under the Uruguay Round India has bound 67% of all its tariff lines, whereas prior to that only 6% of tariff lines were bound. The bindings range from 0 to 300% foragricultural products from 0 to 40% for other products. Under the Uruguay Round manufactured products were bound at 25% on intermediate goods and 40% on finished goods Balance of

payments Under the exceptional provision of Article XVIII: B of GATT, India has some residualquantitative restrictions on import. maintained for balance-of-payments purpose. Theseaggregate to 2,714 tariff lines at the eight-digit level of the Indian Trade Classification. In May1997, India presented to the WTO a plan for the elimination of these restrictions in imports,including those on consumer goods. This plan was considered at the consultations with India ofthe WTO Committee on Balance-of- Payments Restrictions in June-July 1997. At the request ofthe United States, a panel was constituted on 18 November 1997 to examine the US allegation


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that the continued maintenance of quantitative restrictions on imports by India is inconsistentwith India's obligations under the WTO Agreement

Agriculture:

The only commitment India has undertaken under the Agreement is to bind itsagricultural tariffs. This commitment has been fulfilled by India binding its tariffs for primaryagricultural products at 100%, processed food products at 150% and edible oils at 300%.India'sprevailing agricultural tariffs are well within the bound rates. Under the Uruguay Round,whenever we have bound tariffs on agriculturalcommodities at zero or very low-levels,renegotiation of tariff bindings have been soughtunder Article XXVIII of GATT. The Agreementon Agriculture was designed to improve world

trade, raise prices of agricultural products andensure higher standards of living for farmers.

Textiles:

As per the obligations under the Agreement on Textile and Clothing (ATC) tointegrate this sector into GATT 1994 in stages, the Indian Government moved cotton and woolyarn, polyester staple fibre and 20 other industrial fabrics on to the list of freely importablegoods in 1995. India is concerned about the fact that repeated anti-dumping investigation bycertain trading partners on the same product lines, without giving full effect to the special

dispensation provisions of Article 15 of the Anti-dumping Agreement has resulted in tradeharassment for its exporters of textiles.

Intellectual Property :

India is availing itself of the transition periods due to her under Article 65 of theTRIPS Agreement to meet her obligations under the seven areas covered by the Agreement.India's achievements in this field have been in the passing of TRIPS plus legislation in the fieldof Copyright Law. The 1994 amendments to the Act of 1957 provides protection to all originalliterary, dramatic, musical and artistic works, cinematographic films and sound recordings. Themost recent changes bring sectors such as satellite broadcasting, computer software and digital

technology under Indian copyright protection

Trades related investment measure:

Substantial modifications have already been made to the foreign investmentregime, increasing the number of sector where foreign investment can take place and alsoincreasing the foreign equity limit on these investments. India has already notified the trade-


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related investment measures maintained by it in terms of Articles 2 and 5 of the TRIMsAgreement and the illustrative list annexed to the TRIMs Agreement

Anti-du

mping:

Anti-dumping and countervailing duties are imposed under the Customs TariffAct 1975 and the Rules made there under. The Act and Rules are on the lines of the respectiveGATT Agreement on anti-dumping and countervailing duties. The time limits and the procedures prescribed under the Indian laws/GATT Agreement is strictly followed by thedesignated authority. With the increasing number of cases, the Government of India proposes toset up a Directorate General of Anti-dumping and Allied Duties for expeditious disposal of anti-dumping and countervailing duty cases

Services sector:

The services sector accounts for about 40% of India's GDP, 25% of employmentand 30% of export earnings. Recognizing the importance of the services sector in achievinghigher economic growth, the government is giving added emphasis to improving services such astelecommunications, shipping, roads, ports and air transport. The foreign direct investmentregime has been liberalized to attract foreign investment in the services sector.India actively participated in the Uruguay Roundservices negotiations and madecommitments in 33 activities ascompared to an average of 23 for

developing countries. India also participated in the spill- overnegotiations. In basictelecommunication services, India hasundertaken commitments in the areasof voice telephone service for local andlong-distance (within the service area),cellular mobile services and other services such as circuit switched data transmission sources,facsimile services, private leased circuit services as per details given in the schedule of

commitments. While developed countries have surplus capital to invest, most of the developingcountries have surplus of skilled, semi- skilled and unskilled workers. We have a large pool ofwell- qualified professionals capable of providing services abroad. As developed countries havea comparative advantage in exporting capital intensive services, similarly developing countrieshave a comparative advantage in exporting labour intensive services involving movement of persons. In Article IV of GATS, there is a clear obligation to increase the participation ofdeveloping countries in trade in services. The Agreement also recognizes the basic asymmetry in


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the level of development of the services sector in developed and developing countries and acommitment that the developed countries will take concrete measures aimed at strengthening thedomestic service sector of developing countries and providing effective market access in sectorsand modes of supply of export interest to developing countries.

Information Technology:

India participated in the negotiations on the Agreement from the early stages andafter examination of the implications of the proposed agreement and extensive discussions withtrading partners joined as a participant on 1 April 1997. India is committed to phasing out theimport tariffs on the products covered by the ITA as scheduled

Regional trade agreements:

India attaches significance to her participation in regional agreements within theframework of multilateral rules. India has been instrumental in setting up the South Asian

Association for Regional Cooperation (SAARC), whose major achievement in 1995 was theconclusion of the negotiations on trade preferences within the framework of the SAARCPreferential Trading Arrangement (SAPTA). SAPTA became operational on 7 December 1995and includes preferential tariff concessions on 226 items and product groups. A second round ofSAPTA trade negotiations was launched in January 1996 to broaden tariff concessions. Indiagranted concessions on 902 tariff lines, effective 1 March 1997

7.COMPARISONOFINDIASFOREIGNTRADEBENEFITS

Before becoming the member of WTO:

Its agreed that India was one of the founder member of WTO; it faced problems in ForeignTrade grounds. The problems that India faced before the formation of WTO were the following:

(1)Absence of Anti dumping

(2)No Subsidy Facilities

(3)Absence of TRIMs & TRIPs

(4)Lac of Market Scenario & Strategies

After becoming the member of WTO:

(1)Anti-Dumping:

Dumping is condemned if it causes or threatens material injury to an establishedindustry. A product is considered as dumped when its export price becomes less as compared tothe normal price in the exporting country plus a reasonable amount for administrative, sellingand any other costs and for profits. Anti dumping measures can be employed only if dumped


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imports are shown to cause serious damage to the domestic industry in the import industry. Themeasures are not allowed if the margin of dumping is de minimise. (2)Subsidies - The draftagreement defined certain specific subsidies which would be subjects to various disciplines. Certain other types of subsidies would fall under prohibited category

2)Technical barriers to trade:

Technical regulation and standards along with testing and certification procedures should notcreate unnecessary obstacles to trade

3) Right of market:

The main issue is to reduce tariff and other trade restriction in case of commodities likeagricultural goods, textiles etc.

4)TRIMs (Trade related investment measures) :

Widely employed by developing countries. Refers to certain conditions imposedby government inrespect of foreign investment. The agreement of TRIM provides the followinginconsistent TRIMs.

a) Local content requirement

b) Trade balancing requirement

c) Trade and foreign exchange balancing requirement.

d) Domestic sales requirements.

5) TRIPs (Trade Related Aspects of Intellectual Property Rights:

It is defined as information with commercial value. Intellectual Property Rights have beencharacterised as a composite of ideas, inventions and creative expression.

8.IMPACT OF WTO ON INDIA

1.AGRICULTURE

Globalization manifesting in progressive integration of economies and societieshas assumed increasing significance in the lives of common people all over the world. In thefield of the trade the World Trade Organization (WTO) is the principal international institutionresponsible for laying down rules for the smooth conduct of trade in goods and services amongnations in this globalized world. This is achieved by developing a set of rules of multilateraltrading system which aims to remove, inter alia, trade barriers (tariff and non tariff) as well asreduce and eventually remove domestic support and system of export subsidies that distort


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international trade between nations. These problems of trade distortion are most conspicuous inagriculture sector. Agriculture is of special significance for developing countries particularly theextreme poor (i.e. those living on one dollar or less per day). It has been estimated that threequarters of them about 900 million people live and work in rural areas, most of them as smallfarmers. Table 1 shows that where as agriculture contributes 3% to the GDP and employs only4% of the population in developed countries the corresponding figures for developing countriesare 26% and 70% respectively.

Table 1: Key differences between agriculture systems in developed and developing countries

Parameters Developed Countries Developing Countries

(including least developed)

Nature of Agriculture System Commercial/Export Oriented SubsistenceShare of GD 3% 26%Contribution to foreignexchange

8.3% 27%

Population Engaged inagriculture

4% 27%

The agriculture was included in the multilateral trading system after the eighth(Uruguay) round of talks under GATT on demand of developing countries who had acomparative advantage in this sector and its benefits were being denied to them. This trade roundstretched from 1986-1994 and concluded in establishment of WTO and inclusion among othersof agriculture in the discipline of WTO. This was achieved by developing countries only after paying a heavy price in the form concessions on many fronts especially intellectual property

rights and services.

WTO policies impact agriculture principally through the following agreements:

1. Agreement on Agriculture (AOA)

2. Agreement on Application of Sanitary and Phytosanitary Standards (SPS)(Dealing with Healthand disease related issues)

3. Agreement on Technical Barriers to Trade (TBT): (Dealing with Regulations, standards,testing and certification procedures, packaging, marking and labeling requirements, etc)

4.Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs): (Dealing withPatents and copyrights, plant breeders rights etc).

Activists cry foul that Indian agriculture, already reeling under severe drought and fall in cashcrop prices, will die once the import curbs are removed and free flow of food items are allowedinto India.


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"There is going to be 'madness' in the agriculture sector. Farmers will be hit hard by the WTO regime. What happens to our vegetable oils, rice, rubber, coconuts and fruits, ifsimilar items can be imported cheaply from other countries," asks K Sundaran, a social activistespousing farmers causes in South India.

He says currently there is a massive distortion in the international trade inagriculture. Industrialised countries have been giving huge domestic subsidies to theiragricultural sector that there is excessive production, import restrictions and dumping of agri-products in international markets. But despite the concerns of farmers, many believe the WTOrules will not adversely affect the Indian agriculture as it is made out.Developed nations havecommitted to the WTO that they would reduce subsidies and tariff. Then overseas markets willbe available for Indian agricultural products.

2. PHARMACEUTICALS

India has one of the most efficient pharmaceutical industries in the worldPharmaceutical firms grew mainly thanks to the absence of patent protection of medical drugs inthe country. For instance, Indian companies are now producing their own AIDS drugs, which areavailable cheaply, compared to the original products from foreign countries.

But the imposition of the new WTO rules will begin to threaten India'sachievements in the pharmaceutical field. The Indian Patents Act, introduced in 1970, boostedIndian pharma companies. The Act allowed them to develop and patent alternative processes forproducts discovered and patented elsewhere.

According to the Indian Drug Manufacturers' Association, self-sufficiency in Indian

pharmaceutical sector is more than 70 per cent.

"Worldwide, India is a country of very low prices for high- quality medicines," points out theIDMA president Nishchal H Israni.

But now the rules of the game in the pharmaceutical industry will change as Indiahas committed to toe the WTO line on product patents. Product patent rules and ExclusiveMarketing Rights (EMR) under the WTO could affect a paradigm shift in India's pharma majors.As per the EMR provision, a product for which original patent was granted prior to 1995, is notfit for an EMR in the country. This has forced nine leading domestic pharma companies to form

the Indian Pharmaceutical Alliance that has demanded a more transparent WTO regime for EMRgrants.

How will the WTO rules affect 500,000 employees working in roughly 20,000 pharma firms inthe country?


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Well, many expect a spate of mergers, acquisitions and alliances in the domesticpharmaceutical industry in the coming years, as the impact of WTO regulations kick in, Indianpharma players are learning to collaborate and consolidate to grow.

If the industry is to be believed, the Matrix-Strides merger is only the beginning of the shakeout

that the pharma sector is set to witness over the next few years.

3.THE SERVICE SECTOR

As per the WTO rules, two obligations apply to all services. They are the MostFavoured Nation (MFN) treatment and transparency by way of publication of all laws andregulations. Which in other words means that areas like banking, insurance, investment banking,health, and many other professional services that are opened up will be bound by the WTOcommitments? India will have to open up its services sector to other WTO member countries.

The result many overseas service providers will enter into the services sectors in

the country, thereby reducing the chances of domestic enterprises.But experts believe India neednot be frightened of the WTO rules on services because the country at present has a distinctcompetitive advantage in many areas that include health, engineering construction, computersoftware and other professional services.

4 TEXTILES AND CLOTHING

The WTO agreement on the textiles and clothing states that the Multi-FibreAgreement (MFA) will eventually be eliminated. MFA at present groups the major importercountries are-- the United States, Austria, Canada, the European Community, Finland and

Norway -- who apply restrictions by way of quota.Exporting countries like India are a part to the MFA. The phasing out of MFA

will boost textile exports from India. It will also increase investment in textiles and jointventures. But the risk is that as India opens up its market from next month, import of textiles andclothing will considerably increase from countries like China, the Unites States, Taiwan andIndonesia. This will force many textile manufacturers to modernise their mills and improvequality.

5 INFORMATIONTECHNOLOGY

Under the Information Technology Agreement signed under the WTO, Indianhardware and software companies can become major players in the value-added arena.Availability of high-skilled of IT personnel and low cost of labour and operation will allow Indiato compete in the international market.

6.TRIPS (TRADE RELATED INTELLECTUAL PROPERTY RIGHTS)


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TRIPS Article 27.3(b), which requires all WTO countries to provide some kind ofintellectual property rights (IPR) on plant varieties, was up for review in 1999. TRIPS are aclearly anti- developing country treaty. Its provisions seriously threaten self reliance inagriculture and the livelihoods of farmers. TRIPS do not contain any elements of equity orbenefit sharing. It does not allow countries to claim a share of benefits companies who breednew varieties using farmers varieties as the base since there is no provision requiring disclosureof the country of origin from where base materials have been taken. The Trade Related Aspectsof Intellectual Rights (TRIPS) agreement set minimum standards for protection of IPRs, astandard that is closer to the level of protection provided in the developed world.

9.Doha Round

The Doha Development Round or DohaDevelopment Agenda (DDA) is the current trade-negotiation

round of the World Trade Organization (WTO) which commencedin November 2001. Its objective is to lower trade barriers aroundthe world, which allows countries to increase trade globally. As of2008, talks have stalled over a divide on major issues, such asagriculture, industrial tariffs and non-tariff barriers, services, andtrade remedies.[1] The most significant differences are betweendeveloped nations led by the European Union (EU), the UnitedStates (USA), and Japan and the major developing countries ledand represented mainly by China, Brazil, India, and South Africa.There is also considerable contention against and between the EU and the USA over their

maintenance of agricultural subsidiesseen to operate effectively as trade barriers.

The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001.Subsequent ministerial meetings took place in Cancn, Mexico (2003), and Hong Kong (2005).Related negotiations took place in Geneva, Switzerland (2004, 2006, 2008); Paris, France(2005); and Potsdam, Germany (2007).

The most recent round of negotiations, 23-29 July 2008, broke down after failingto reach a compromise on agricultural import rules.After the breakdown, major negotiations werenot expected to resume until 2009. Nevertheless, intense negotiations, mostly between the USA,

China, and India, were held in the end of 2008 in order to agree on negotiation modalities.However, these negotiations did not result in any progress.Doha Round talks are overseen by theTrade Negotiations Committee (TNC), whose chair is the WTOs director-general, currentlyPascal Lamy. The negotiations are being held in five working groups and in other existing bodiesof the WTO. Selected topics under negotiation are discussed below in five groups: marketaccess, development issues, WTO rules, trade facilitation and other issues.


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Before Doha

Before the Doha ministerial, negotiations had already been under way on trade inagriculture and trade in services. These ongoing negotiations had been required under the lastround of multilateral trade negotiations (the Uruguay Round, 1986-1994). However, somecountries, including the United States, wanted to expand the agriculture and services talks toallow trade-offs and thus achieve greater trade liberalization.

The first WTO ministerial conference, which was held in Singapore in 1996,established permanent working groups on four issues: transparency in government procurement,trade facilitation (customs issues), trade and investment, and trade and competition. Thesebecame known as the Singapore issues. These issues were pushed at successive ministerials bythe European Union, Japan and Korea, and opposed by most developing countries.[1] Since noagreement was reached, the developed nations pushed that any new trade negotiations mustinclude these issues.

The negotiations were intended to start at the ministerial conference of 1999 inSeattle, USA, and be called the Millennium Round but, due to several different events includingprotest activity outside the conference (the so-called "Battle of Seattle"), the negotiations werenever started.Due to the failure of the Millennium Round, it was decided that negotiations wouldnot start again until the next ministerial conference in 2001 in Doha, Qatar.

According to the so-called "built-in agenda", negotiations on agriculture and tradein services started in 2000. These negotiations were later merged into the overall Dohanegotiations.

Just months before the Doha ministerial, the United States had been attacked byterrorists on 11 September 2001. Some government officials called for greater political cohesionand saw the trade negotiations as a means toward that end. Some officials thought that a newround of multilateral trade negotiations could help a world economy weakened by recession andterrorism-related uncertainty. According to the WTO, the year 2001 showed "...the lowestgrowth in output in more than two decades," and world trade contracted that year.

Doha, 2001

Began in November 2001, committing all countries to negotiations openingagricultural and manufacturing markets, as well as trade-in-services (GATS) negotiations andexpanded intellectual property regulation (TRIPS). The intent of the round, according to itsproponents, was to make trade rules fairer for developing countries. However, by 2008, criticswere charging that the round would expand a system of trade rules that were bad fordevelopment and interfered excessively with countries' domestic "policy space".


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Importance of US presidential 'fast-track' authority

The round had been planned for conclusion in December 2005 after two moreministerial conferences had produced a final draft declaration. The WTO pushed back its self-imposed deadline to slightly precede the expiration of the U.S. President's Congressional Fast

Track Trade Promotion Authority. Any declaration of the WTO must be ratified by the U.S.Congress to take effect in the United States. Trade Promotion Authority prevents Congress fromamending the draft. It expired on 30 June 2007, and congressional leaders decided not to renewthis authority for President George W Bush.

Cancn, 2003

The 2003 Cancn talksintended to forge concrete agreement on the Doha roundobjectivescollapsed after four days during which the members could not agree on a frameworkto continue negotiations. Low key talks continued since the ministerial meeting in Doha but

progress was almost non-existent.This meeting was intended to create a framework for furthernegotiations.

Collapse of negotiations

The Cancn ministerial collapsed for several reasons. First, differences over theSingapore issues seemed incapable of resolution. The EU had retreated on some of its demands,but several developing countries refused any consideration of these issues at all. Second, it wasquestioned whether some countries had come to Cancn with a serious intention to negotiate. Inthe view of some observers, a few countries showed no flexibility in their positions and only

repeated their demands rather than talk about trade-offs. Third, the wide difference betweendeveloping and developed countries across virtually all topics was a major obstacle. The U.S.-EU agricultural proposal and that of the G20 developing nations, for example, show strikinglydifferent approaches to special and differential treatment. Fourth, there was some criticism ofprocedure. Some claimed the agenda was too complicated. Also, Cancn ministerial chairman,Mexicos Foreign Minister Luis Ernesto Derbez, was faulted for ending the meeting when hedid, instead of trying to move the talks into areas where some progress could have been made.

The collapse seemed like a victory for the developing countries. The failure toadvance the round resulted in a serious loss of momentum and brought into question whether the

1 January 2005 deadline would be met.The North-South divide was most prominent on issues ofagriculture. Developed countries farm subsidies (both the EUs Common Agricultural Policyand the U.S. government agro-subsidies) became a major sticking point. The developingcountries were seen as finally having the confidence to reject a deal that they viewed asunfavorable. This is reflected by the new trade bloc of developing and industrialized nations: theG20. Since its creation, the G20 has had fluctuating membership, but is spearheaded by the G4(the People's Republic of China, India, Brazil, and South Africa). While the G20 presumes to


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negotiate on behalf of all of the developing world, many of the poorest nations continue to havelittle influence over the emerging WTO proposals.

Geneva, 2004

The aftermath of Cancn was one of standstill and stocktaking. Negotiations weresuspended for the remainder of 2003. Starting in early 2004, U.S. Trade Representative RobertZoellick pushed for the resumption of negotiations by offering a proposal that would focus onmarket access, including an elimination of agricultural export subsidies.He also said that theSingapore issues could progress by negotiating on trade facilitation, considering further action ongovernment procurement, and possibly dropping investment and competition. This interventionwas credited at the time with reviving interest in the negotiations, and negotiations resumed inMarch 2004.

In the months leading up to the talks in Geneva, the EU accepted the elimination

of agricultural export subsidies by date certain. The Singapore issues were moved off the Dohaagenda. Compromise was also achieved over the negotiation of the Singapore issues as the EUand others decided. Developing countries too played an active part in negotiations this year, firstby India and Brazil negotiating directly with the developed countries (as the so-called non-partyof five) on agriculture, and second by working toward acceptance of trade facilitation as asubject for negotiation.

With these issues pushed aside, the negotiators in Geneva were able toconcentrate on moving forward with the Doha Round. After intense negotiations in late July2004, WTO members reached what has become known as the Framework Agreement(sometimes

called the July Package), which provides broad guidelines for completing the Doha roundnegotiations. The agreement contains a 4-page declaration, with four annexes (A-D) coveringagriculture, non-agricultural market access, services, and trade facilitation, respectively. Inaddition, the agreement acknowledges the activities of other negotiating groups (such as those onrules, dispute settlement, and intellectual property) and exhorts them to fulfill their Doha roundnegotiating objectives. The agreement also abandoned the 1 January 2005 deadline for thenegotiations and set December 2005 as the date for the 6th ministerial to be held in Hong Kong.

Paris, 2005

Trade negotiators wanted to make tangible progress before the December 2005WTO meeting in Hong Kong, and held a session of negotiations in Paris in May 2005.

Paris talks were hanging over a few issues: France protested moves to cutsubsidies to farmers, while the U.S., Australia, the EU, Brazil and India failed to agree on issuesrelating to chicken, beef and rice. Most of the sticking points were small technical issues, makingtrade negotiators fear that agreement on large politically risky issues will be substantially harder.


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Hong Kong, 2005

The Hong Kong Convention Center, which was the site of the Sixth WTOMinisterial Conference

The Sixth WTO Ministerial Conference took place in Hong Kong, 13 to 18December, 2005. Although a flurry of negotiations took place in the fall of 2005, WTO director-general Pascal Lamy announced in November 2005 tha t a comprehensive agreement onmodalities would not be forthcoming in Hong Kong, and that the talks would take stock of thenegotiations and would try to reachagreements in negotiating sectors whereconvergence was reported.

Trade ministers representing most of theworld's governments reached a deal that

sets a deadline for eliminating subsidies ofagricultural exports by 2013. The finaldeclaration from the talks, which resolvedseveral issues that have stood in the way ofa global trade agreement, also requiresindustrialized countries to open theirmarkets to goods from the world's poorestnations, a goal of the United Nations for many years. The declaration gave fresh impetus fornegotiators to try to finish a comprehensive set of global free trade rules by the end of 2006.Director-general Pascal Lamy said, "I now believe it is possible, which I did not a month ago."

The conference pushed back the expected completion of the round until the end of 2006.

Geneva, 2006

The July 2006 talks in Geneva failed to reach an agreement about reducing farming subsidiesand lowering import taxes, and negotiations took months to resume. A successful outcome of theDoha round became increasingly unlikely, because the broad trade authority granted under theTrade Act of 2002 to U.S. president George W. Bush was due to expire in 2007. Any trade pactwould then have to be approved by the U.S. Congress with the possibility of amendments, which

would hinder the U.S. negotiators and decrease the willingness of other countries to participate.Hong Kong offered to mediate the collapsed trade liberalisation talks. Director-general of Tradeand Industry, Raymond Young, says the territory, which hosted the last round of Dohanegotiations, has a "moral high-ground" on free trade that allows it to play the role of "honestbroker".[citation needed]


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Potsdam, 2007

In June 2007, negotiations within the Doha round broke down at a conference inPotsdam, as a major impasse occurred between the USA, the EU, India and Brazil. The maindisagreement was over opening up agricultural and industrial markets in various countries andalso how to cut rich nation farm subsidies.

Geneva, 2008

On 21 July 2008, negotiations started again at the WTO's HQ in Geneva on theDoha round but stalled after nine days of negotiations over the refusal to compromise over thespecial safeguard mechanism. "Developing country Members receive special and differentialtreatment with respect to other Members' safeguard measures, in the form of a de minimis importvolume exemption. As users of safeguards, developing country Members receive special anddifferential treatment with respect to applying their own such measures, with regard to permitted

duration of extensions, and with respect to re-application of measures. Technical Informationon Safeguard Measures WTO official site

Negotiations had continued since the last conference in June 2007. Director-general Pascal Lamy said before the start of the conference that the odds of success were over50%. Around 40 ministers attended the negotiations, which were only expected to last five daysbut instead lasted nine days. Kamal Nath, India's Commerce Minister, was absent from the firstfew days of the conference due to a vote of confidence being conducted in India's Parliament.Onthe second day of the conference, U.S. Trade Representative Susan Schwab announced that theU.S. would cap its farm subsidies at $15 billion a year, from $18.2 billion in 2006.The proposal

was on the condition that countries such as Brazil and India drop their objections to variousaspects of the round.The U.S. and the EU also offered an increase in the number of temporarywork visas for professional workers. After one week of negotiations, many considered agreementto be 'within reach'. However, there were disagreements on issues including special protectionfor Chinese and Indian farmers and African and Caribbean banana imports to the EU. India andChina's hard stance regarding tariffs and subsidies was severely criticized by the United States.Inresponse, India's Commerce Minister said "I'm not risking the livelihood of millions of farmers."

Collapse of negotiations

The negotiations collapsed on 29 July over issues of agricultural trade between the United States,India, and China.In particular, there was insoluble disagreement between India and the UnitedStates over the special safeguard mechanism (SSM), a measure designed to protect poor farmersby allowing countries to impose a special tariff on certain agricultural goods in the event of animport surge or price fall.


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Pascal Lamy said, "Members havesimply not been able to bridge theirdifferences." He also said that out of ato-do list of 20 topics, 18 had seen positions converge but the gaps couldnot narrow on the 19th the specialsafeguard mechanism for developingcountries. However, the United States,China and India could not agree on the

Pascal Lamy

threshold that would allow the mechanism to be used, with the United States arguing that thethreshold had been set too low. The European Union Trade Commissioner Peter Mandelsoncharacterized the collapse as a "collective failure". On a more optimistic note, India's Commerce

Minister, Kamal Nath, said "I would only urge the director-general to treat this [failure of talks]as a pause, not a breakdown, to keep on the table what is there."

Several countries blamed each other for the breakdown of the negotiations.TheUnited States and some European Union members blamed India for the failure of the talks. Indiaclaimed that its position was supported by over 100 countries.[ Brazil, one of the foundingmembers of the G-20, broke away from the position held by India. Then-EuropeanCommissioner for Trade Peter Mandelson said that India and China should not be blamed for thefailure of the Doha round.In his view, the agriculture talks had been harmed by the five-yearprogram of agricultural subsidies recently passed by the U.S. Congress, which he said was "one

of the most reactionary farm bills in the history of the U.S.".

Current progress of Doha Round

Several countries have called for negotiations to start again. Brazil and PascalLamy have led this process. Luiz Incio Lula da Silva, president of Brazil, called severalcountries leaders to urge them to renew negotiations. Lamy visited India to discuss possiblesolutions to the impasse.[ A mini-ministerial meeting held in India on September 3rd and 4thpledged to complete the round by the end of 2010.The declaration at the end of the G20 summitof world leaders in London in 2009 included a pledge to complete the Doha round. Although a

WTO ministerial conference scheduled in November 2009 would not be a negotiating session,there would be several opportunities over the year 2009 to discuss the progress. The WTO isinvolved in several events every year that provide opportunities to discuss and advance, at aconceptual level, trade negotiations.

In early 2010, Brazil and Lamy have focused on the role of the United States inovercoming the deadlock. Lula has urged Barack Obama to end the trade dispute between Brazil


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and the US over cotton subsidies following his increase in tariffs on over 100 US goods.. Lamyhas highlighted the difficulty of obtaining agreement from the US without the Presidential fasttrack authority and biennial elections. One of the consequences of the economic crisis of 2008 -2009 is the desire of political leaders to shelter their constituents from the increasinglycompetitive market experienced during market contractions. Lamy hopes that the drop in trade of12% in 2009, quoted as the largest annual drop since the Second World War, could be counteredby successful conclusion of the Doha round.

Benefits

All countries participating in the negotiations believe that there is some economic benefit in adopting the agreement; however, there is considerable disagreement of how muchbenefit the agreement would actually produce. A study by the University of Michigan found thatif all trade barriers in agriculture, services, and manufactures were reduced by 33% as a result ofthe Doha Development Agenda, there would be an increase in global welfare of $574.0 billion.A2008 study by World Bank Lead Economist Kym Andersonfound that global income couldincrease by more than $3000 billion per year, $2500 billion of which would go to the developingworld.Others had been predicting more modest outcomes, e.g. world net welfare gains rangingfrom $84 billion to $287 billion by the year 2015. Pascal Lamy has conservatively estimated thatthe deal with bring an increase of $130 billion.

Several think tanks and public organizations assess that the conclusion of thetrade round will result in a net gain . However, the restructuring and adjustment costs required toprevent the collapse of local industries, particularly in developing countries, is a global concern.For example, a late 2009 study by the Carnegie Endowment for International Peace, the United Nations Economic Commission for Africa (UNECA), the United Nations DevelopmentProgramme and the Kenyan Institute for Research and Policy Analysis found that Kenya wouldsee gains in its exports of flowers, tea, coffee and oil seeds. It would concurrently lose in thetobacco and grains markets, as well as manufacturing of textiles and footwear, machinery andequipment.

The Copenhagen Consensus, which evaluates solutions for global problemsregarding the cost-benefit ratio, in 2008 ranked the DDA as the second-best investment forglobal welfare, after the provision of vitamin supplements to the world's 140 millionmalnourished children.

10.CONCLUSION

The developed countries want that the underdeveloped countries observe somerestrictions relating to labour employment and ecological balance. Their argument is that theunderdeveloped countries use child labours or their social security measures are very poor.Further, these countries do not take measures to control pollution or to maintain ecological


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balance. As a result, cost of production in such countries is low. So, the developed countriesshould be allowed to impose tariffs or imports from underdeveloped countries until thedeveloping countries improve the condition of labour and do not employ child labour. Thus, thedeveloped countries tried to impose many restrictions on the production process of theunderdeveloped countries. Thus, if the developing countries try to protect their interest as agroup, they may stand to gain from the WTO system. If we consider both sides of a coin then wecan conclude that if the developed countries liberalise their import of agricultural goods, Indiasexport of agricultural goods will increase. India has a comparative cost advantage in the production of agricultural commodities. Hence Indias of such commodity is expected toincrease. On the other side according to the agreement of Trade Related Investment Measures(TRIMs), there should not be any discrimination between foreign and domestic investments. Asa result, it will very difficult to control the restrictive activities of the following investors. Thisagreement will also favour investors of the developed countries.

11.BIBLIOGRAPH

1) Essential of Business Environment K.Aswathappa

(2)Business Environment - Francis Cherunilam

(3) www.wikipedia.org

(4) www.wto.org

(5)Annual Report 2007

(6)Department of Commerce, Government of Indi

Documents

Kaz-wto and India