Objectives To study the role of WTO in India To study the impact of WTO agreement on

India To study Geographical Indication To study Anti-Dumping Action To study role of India in WTO - 2025

Literature Review India Launches Safeguard Investigation

On Saturated Fatty Alcohols:○ WTO NEWS

On 19 February 2014, India notified the WTO’s Committee on Safeguards that it initiated on 13 February 2014 a safeguard investigation on saturated fatty alcohols.

Reasons For Initiation Of Investigation

The import of Saturated Fatty Alcohols has shown an increasing trend in absolute terms as well as the relative terms;

Share of domestic industry in domestic consumption and domestic demand has fallen significantly;

Though sale of the domestic industry increased in 2013-14 as compared to the preceding year 2012-13, it has declined significantly in comparison to 2010-11;

Profitability of the domestic industry has steeply deteriorated, leading to financial losses.

The Domestic Industry’s petition has been examined as it has been found that increased imports of the Saturated Fatty Alcohols have caused or threatening to cause serious injury to the domestic producers of the Saturated Fatty Alcohols. Accordingly, it has been decided to initiate an investigation.

What is a safeguard investigation?

A safeguard investigation seeks to determine whether increased imports of a product are causing, or is threatening to cause, serious injury to a domestic industry.

During a safeguard investigation, importers, exporters and other interested parties may present evidence and views and respond to the presentations of other parties.

A WTO member may take a safeguard action (i.e. restrict imports of a product temporarily) only if the increased imports of the product are found to be causing, or threatening to cause, serious injury.

US files dispute against India over measures relating to solar cells and solar modules

○ WTO NEWS On 11 February 2014, the United States notified

the WTO Secretariat of a request for consultations with India concerning certain measures relating to domestic content requirements for solar cells and solar modules. The measures correspond to Phase II of the Jawaharlal Nehru National Solar Mission programme.

Reasons For A Request For Calculations

India adopted this programme to promote development of solar power generation facilities.

According to the United States, India requires solar power developers to purchase and use solar cells and solar modules of domestic origin.

The United States adds that solar power developers receive certain benefits and advantages, such as long term tariffs for electricity, contingent on their purchase and use of solar cells and solar modules of domestic origin.

The claim states that India provides less favourable treatment to imported solar cells and solar modules that that accorded to like products originated in India and they are trade-related investment measures inconsistent with India's obligations under the GATT.

What is a request for consultations?

The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation.

After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.

Members Start Implementing Bali Farm Package, As Concerns Remain About Subsidy Breaches

○ WTO NEWS The WTO’s Agriculture Committee began work on

three decisions taken at the December 2013 Bali Ministerial Conference, when it met on 29 January 2014.

It also heard questions and answers about countries actually or possibly breaching their agreed limits on subsidies i.e. 10% of the agri-GDP.

CNTD… A strong political statement to keep export subsidies

low (along with policies with equivalent effects, known collectively as “export competition”)

A commitment on how to deal with a certain type of quota (known as a “tariff quota”) when imports repeatedly fall significantly below the quota limit

An agreement that the cost of building up food stocks by developing country governments, for food security, need not be counted against the country’s domestic support limits, provided certain conditions were met.

Azevêdo calls Bali “a leap forward in favour of developing countries”

○ WTO NEWS Director-General Roberto Azevêdo, in a speech at the

Confederation of Indian Industry Partnership Summit in Bangalore on 28 January 2014, said that “besides being a boost to the WTO as an institution, what we delivered in Bali has tremendous economic significance and will improve the lives of millions around the world”.

He added: “The work has only just begun and we have the chance to make 2014 the year that the Doha round is put back on track. It will not be easy, but it is achievable. I hope that together we can capitalize on the success in Bali, and seize the opportunity that it has provided.”

WTO The World Trade Organization (WTO) is a

global international organization dealing with the rules of trade between nations. The work of WTO moves around WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments.

The goal is to help producers of goods and services, exporters, and importers conduct their business.

Need For WTO It helps to contribute towards international peace, by helping the

trade to flow smoothly and dealing with disputes over trade issues. It allows disputes to be handled constructively. With Global

boundaries evading, more and more trade is taking place, and hence, leading to more chances for disputes. To put forth to the claim, around 300 cases have been filed since inception of WTO, and without peaceful and harmonious way to resolve them, they could have led to a political crisis.

It is based on rules and has nothing to do with power of the nation. It gives consumers more choice and a broader range of qualities to

choose from. The fact that there exists a forum to handle crisis, gives confidence

to nations to do more and more trade, thereby increasing the income, and stimulating economic growth.

India And WTO India is a founder member of the General Agreement on

Tariffs and Trade (GATT) 1947 and its successor, the World Trade Organization (WTO), which came into effect on 1/1/1995 after the conclusion of the Uruguay Round.

India's participation in an increasingly rule based system in the governance of international trade is to ensure more stability and predictability, which ultimately would lead to more trade and prosperity for itself and the 149 other nations which now comprise the WTO.

India also automatically avails of MFN and national treatment for its exports to all WTO members.

Impact Of WTO Agreements On Indian Economy

The signing of WTO agreements will have far reaching effects not only on India’s foreign trade but also on its internal economy.

Although the ultimate goal of WTO is to free world trade in the interest of all nations of the world, yet in reality the WTO agreements has benefitted the developed nations more as compared to developing ones.

Positive Impacts/Benefits /Advantages /Gains from WTO

Increase in Export Earnings:Estimates made by World Bank, International

Monetary Fund (IMF) and the WTO Secretariat, shows that the income effects of the implementation of the Bali Round package will be an increase in traded merchandise goods. It is expected that India’s share in world exports would improve.

CNTD… Agricultural Exports:

Reduction of trade barriers and domestic subsidies in agriculture is likely to raise international prices of agricultural products. India hopes to benefit from this in form of higher export earnings from agriculture. This seems to be possible because all major agriculture development programmes in India will be exempted from the provisions of WTO Agreement.

CNTD… Export of Textiles and Clothing:

With the phasing out of MFA (Multi - Fibre Arrangement), exports of textiles and clothing increased and this will be beneficial for India. The developed countries demanded a 15 year period of phasing out of MFA, the developing countries, including India, insisted that it should be done in 10 years. The Uruguay Round accepted the demand of the latter. But the phasing out Schedule favoured the developed countries because a major portion of quota regime was removed only in the tenth year, i.e. 2005. The removal of quotas benefited not only India but also every other country.

CNTD… Multilateral Rules and Disciplines:

The Uruguay Round Agreement has strengthened multilateral rules and disciplines. The most important of these relate to anti - dumping, subsidies and countervailing measures, safeguards and disputes settlement. This is likely to ensure greater security and predictability of the international trading system and thus create a more favourable environment for India in the New World Economic Order.

CNTD… Growth to Services Exports:

Under GATS agreement, member nations have liberalised service sector. India benefits from this agreement.

E.g. India’s services exports have increased from about 5 billion US $ in 1995 to 143.5 billion US $ in 2012-13.

CNTD… Foreign Investment:

India has withdrawn a number of measures against foreign investment, as per the commitments made to WTO. As a result of this, foreign investment and FDI has increased over the years. A number of initiatives have been taken to attract FDI in India between 2000 and 2002. In 2012-13, the net FDI in India was US $ 24 billion.

Negative Impacts / Problems /Disadvantages of WTO Agreements on Indian Economy

TRIPs:The Agreement on TRIPs at Uruguay Round

weighs heavily in favour of Multinational Corporations and developed countries as they hold a very large number of patents. Agreement on TRIPs will work against India in several ways and led to monopoly of patent holding MNCs. As a member of WTO, India has to comply with standards of TRIPs.

CNTD… Trade Facilitation:

The Bali package includes provisions for lowering import tariffs and agricultural subsidies, which some expect will make it easier for developing countries to compete with the developed world in global markets.

Developed countries would abolish hard import caps on agricultural products from the developing world, instead being only allowed to charge tariffs on amount of agricultural imports exceeding specific limits.

Another important target is reforming customs bureaucracies and formalities to facilitate trade.

The Negative Impact Of Agreement On Trips On Indian Economy

Pharmaceutical Sector:Under the Patents Act, 1970, only process patents were granted to

chemicals, drugs and medicines.This means an Indian pharmaceutical company only needed to

develop and patent a process to produce and sell that drug.This proved beneficial to Indian pharmaceutical companies as they

were in a position to sell quality medicines at low prices both in domestic as well as in international markets.

However, under the agreement on TRIPs, product patents needs to be granted.

This will benefit the MNCs and it is feared that they will increase the prices of medicines heavily, keeping them out of reach of poor.

Again many Indian pharmaceutical companies may be closed down or taken over by large MNCs.

CNTD… Agriculture:

The Agreement on TRIPs extends to agriculture through the patenting of plant varieties.

This may have serious implications for Indian agriculture.

Patenting of plant varieties may transfer all gains in the hands of MNCs which will be in a position to develop almost all new varieties with the help of their huge financial resources and expertise.

CNTD… Microorganisms:

The Agreement on TRIPs also extends to Microorganisms as well.

Research in microorganisms is closely linked with the development of agriculture, pharmaceuticals and industrial biotechnology.

Patenting of microorganisms will again benefit large MNCs as they already have patents in several areas and will acquire more at a much faster rate.

CNTD… TRIMs:

Agreement on TRIMs provides for treatment of foreign investment on par with domestic investment.

This Agreement too weighs in favour of developed countries.

There are no provisions in Agreement to formulate international rules for controlling restrictive business practices of foreign investors.

In case of developing countries like India, complying with Agreement on TRIMs would mean giving up any plan or strategy of self reliant growth based on locally available technology and resources.

CNTD… GATS:

One of the main features of Uruguay Round was the inclusion of trade in services in negotiations.

This too will go in favour of developed countries.Under GATS agreements, the member nations have to

open up services sector for foreign companies.The developing countries including India have opened

up services sector in respect of banking, insurance, communication, telecom, transport etc. to foreign firms.

The domestic firms of developing countries may find it difficult to compete with giant foreign firms due to lack of resources & professional skills.

CNTD… Non - Tariff Barriers:

Several countries have put up trade barriers and non- tariff barriers following the formation of WTO.

This has affected the exports from developing countries.

The Union Commerce Ministry has identified 13 different non - tariff barriers put up by 16 countries against India.

E.g. MFA (Multi - fibre arrangements) put by USA and European Union is a major barrier for Indian textile exports.

CNTD… Agreement on Agriculture (AoA):

The AoA is biased in favour of developed countries.

The issue of food security to developing countries is not addressed adequately in AoA.

The existence of global surplus of food grains does not imply that the poor countries can afford to buy.

The dependence on necessary item like food grains would adversely affect the Balance of Payment position.

CNTD… Inequality within the Structure of WTO:

There is inequality within the structure of WTO because the agreements and amendments are in favour of developed countries.

The member countries have to accept all WTO agreements irrespective of their level of economic development.

CNTD… LDC Exports:

The 6th Ministerial Conference took place at Hong Kong in December 2005.

In this Conference, it was agreed that all developed country members and all developing countries declaring themselves in a position to do so, would provide duty - free and quota- free market access on a lasting basis to all products originating from all Least Developed Countries (LDCs).

India has agreed to this. Now, India's export will have to compete with cheap LDC exports internationally. Not only this, the cheap LDC exports will come to Indian market and compete with domestically produced goods.     

CNTD… Agricultural Subsidy Programme

According to Agreement of Agriculture (AoA) proposed by WTO, the member countries are required to maintain the price-support-based food subsidy de minimis 10% of the agri-GDP.

However, if the Indian Government implements the Food Security Act, 2013, its agri-subsidies will certainly increase above 10%.

Because the subsidies level was fixed on prices prevailing in 1986-88 and thus, need to reflect the current prices that have gone up substantially since then.

CNTD… India will face several problems in the process of

complying with WTO agreements, but it can also reap benefits by taking advantage of changing international business environment.

For this, it needs to develop and concentrate on its areas of core competencies.

Protecting the Geographical Indication for Darjeeling Tea

This issue relates to the geographical indication (GI) protection of Darjeeling tea due to the unauthorized use and registration of ‘Darjeeling and Darjeeling logo’ by International Tea KK, a Japanese company, already registered in Japan by the Tea Board of India.

The issue also refers to the unauthorized use and attempted registration of the words ‘Darjeeling and Darjeeling logo’ by some other countries like France, Russia, United States, Germany, Israel, Norway and Sri Lanka.

CNTD… In order to deal with the situations described

ahead, India, along with several other member countries of the WTO, wants to extend the proposed register for GI to include products or goods, other than wines and spirits, which may be distinguished by the quality, reputation or other characteristics essentially attributable to their geographical origin.

CNTD… The Doha Ministerial Declaration under

paragraphs 12 and 18 also provides a mandate for the issue of providing a higher level of protection to GIs to products other than ‘wines and spirits’ to be addressed by the TRIPS Council.

During the last four years the Tea Board of India has spent approximately US$200, 000 for legal and registration expenses, costs of hiring an international watch agency and fighting infringements in overseas jurisdictions.

The Indian Shrimp Industry Organizes to Fight the Threat of Anti-Dumping Action

This issue deals with the way in which the Indian shrimp industry responded when faced with an anti-dumping action in the United States.

It also indicates the potential impact of the anti-dumping action on the fragmented, small-producers-dominated industry.

CNTD… The Ad Hoc Shrimp Trade Action Committee

(ASTAC), an association of shrimp farmers in southern states of the United States, filed an anti-dumping petition against six countries — Brazil, China, Ecuador, India, Thailand and Vietnam.

The import duty for India is 14.2%, for China is 49.09%, for Brazil 36.91%, for Vietnam 16.01%, for Ecuador 7.3% and for Thailand 6.39% decided by the US Department Of Commerce.

Role of India in WTO - 2025 According to the WTO Secretariat Report, along with the policy

statement by the Government of India, India is expected to snatch most of the business deals that are presently catering the developed nations which includes major service based industries like telecom, financial services, infrastructure services such as transport and power.

The increase in availability and reduction in tariffs has prompted many developed nations to go for business with India especially in IT & ITeS industry.

If the trend continues then by 2025, India is expected to cater to the software and services demands of major giants of the business world.

Analyzing the present relationship with the promising economic growth of India, one can be sure that India is going to enjoy a very candid and bright relationship with WTO and associated member nations by 2025.

Immigration Laws & Trade Barriers India, which is going through a phase wherein the immigration

laws act as a barrier in free movement of professionals from developing countries, would play a major role in setting up of an immigration law which would be of more profit to the developing countries.

Services Sector boom in India has forced it to think on the lines of coming up with a immigration law wherein much issues will not exist in free movement of individuals, and with India being a giant amongst IT and ITeS Services Sector, is expected to lead the way in bringing about this change.

India has aligned itself with WTO in the goal to reduce the trade barriers and tariffs to zero by 2025. This will help in liberalization process of India and also help other developing countries become economically strong by 2025.

Pharmaceutical Sector India has had a growing pharmaceutical sector and in

another 20 years, it would be one of India's leading sectors.

It has been able to produce low cost, high quality drugs, and hence, India, along with WTO, would play a major role towards making the right drugs available at the right time in under-developed economies.

India exports a modest $ 290 million in Africa which is approximately around 2 per cent of its total market.

With Pharmaceutical Sector gaining pace, this market share is bound to increase.

Multilateral Trade There is a trend towards unilateral action by certain

developed countries in total disregard of provisions laid down in the Uruguay Round Agreements.

India has always been trying to take such issues to dispute settlement mechanism.

India will be at the helm of required measures to stop such activities from taking place, and thereby help in bringing a system of multilateral trading which would be in favour of the developing countries.

CNTD… Distinguished delegates are aware that

developing countries and least-developed countries have to battle against resource constraints and shortage of skills and expertise in these areas. Such unilateral actions will be brought to disrepute the entire multilateral trading system.

 Another important issue has been an increasing trend in recent past in favour of regionalism such as EU, ASEAN, etc...

Protection of Biodiversity & Traditional Knowledge

India has been actively pursuing the implementation of the convention on biological diversity.

By 2025, India would be at the fore-front of bringing about changes in the ‘Protection of Biodiversity and Traditional Knowledge’, by taking various measures.

It would be able to take the measures like using Intellectual Property Rights to prevent traditional knowledge, prior informed consent and supplemental means for benefit sharing like contractual arrangement.

Agriculture Agriculture employs over 70 per cent of the

labour force in low-income countries, 30 per cent in middle-income countries and only 4 per cent in high-income countries.

Rapid growth of agriculture is essential for ensuring food security and alleviation of poverty.

CNTD… In 2025, India is expected to be self-sufficient in

the food grain production. India has good agricultural land, which is still not getting used.

Most of the agriculture is done in the north India, but in the northern east and southern part, not much attention is given.

If India is able to use this land properly, then the production will be enough in order to meet domestic consumption and also India will be helping other countries by exporting these.

Services Sector & Reforms In next two decades, services will dominate the economic

activities of countries at virtually every stage of development, making services trade liberalization is a necessity for the integration of the world economy.

As of now, in many developing nations, like India, the service sector is single largest contributor to economic output, ahead of both agriculture or industry.

Even allowing for the fact that governments are major service providers (education, healthcare, sanitation, etc.), the commercial market for services is huge and growing in virtually every country.

The trend is very clear, as international economies develop and incomes rise, the commercial service sector accounts for an ever-larger share of GDP.

CNTD… This sector is less infrastructure- (and capital)

intensive than traditional manufacturing sectors. By 2025, it is expected that this sector will employ at least 3 million people and generate export revenues of US$ 50 billion, representing about 8 per cent of the global IT services outsourcing market.

Era of US-India Relations, 2025

India's voice carries weight and credibility in many areas of world and many developing countries would look at India as a leader in major global issues.

The close relationship between India and US towards the development of such countries, would lead a new era of US-India Relations - into reality.

Conclusion Trade is an engine for growth. In the past this engine has

sputtered due to India’s policies rather than its geography. The challenges ahead for India now lie in implementing sound

domestic policies that increase competition in, and improve the contestability of, domestic markets.

However, active multilateral engagement can be incrementally helpful in facilitating domestic reform and gaining access for India’s exports of goods and labor services.

India needs to develop a proactive approach rather than a defensive approach to benefit from the changing environment under WTO.

The voice of the developing countries needs to be heard so that the benefits and the risks associated with increased trade are clear and there is no undermining of national efforts to develop.

Thank You