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The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994). The organization is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an explicit focus on addressing the needs of developing countries. As of June 2012, the future of the Doha Round remains uncertain: The work programme lists 21 subjects in which the original deadline of 1 January 2005 was missed (So was the next unofficial target of the end of 2006.) The further imposition of free trade on industrial goods and services and the protectionism on farm subsidies to domestic agricultural sector requested from the developed countries, and thesubstantiation of the international liberalization of fair trade on agricultural products from developing countries remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiation(s) beyond the Doha Development Round. As a result of this impasse, there has been an increasing amount of bilateral free trade agreementsWTO's current Director-General is Pascal Lamy, who leads a staff of over 600 people in Geneva, Switzerland.
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HISTORY
The multilateral trading systempast, present and future The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. So while the WTO is still young, the multilateral trading system that was originally set up under GATT is well over 50 years old. The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew on average by 6% annually. Total trade in 2000 was 22-times the level of 1950. GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth. The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The last round the 1986-94 Uruguay Round led to the WTOs creation. The negotiations did not end there. Some continued after the end of the Uruguay Round. In February 1997 agreement was reached on telecommunications services, with 69 governments agreeing to wide-ranging liberalization measures that went beyond those agreed in the Uruguay Round. In the same year 40 governments successfully concluded negotiations for tariff-free trade in information technology products, and 70 members concluded a financial services deal covering more than 95% of trade in banking, insurance, securities and financial information. In 2000, new talks started on agriculture and services. These have now been incorporated into a broader agenda launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001.The work programme, the Doha Development Agenda (DDA), adds negotiations and other work on non-agricultural tariffs, trade and environment, WTO rules such as anti-dumping and subsidies, investment, competition policy, trade Page 3 of 41
facilitation, transparency in government procurement, intellectual property, and a range of issues raised by developing countries as difficulties they face in implementing the present In 2000, new talks started on agriculture and services. These have now been incorporated into a broader agenda launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001. The work programme, the Doha Development Agenda (DDA), adds negotiations and other work on non-agricultural tariffs, trade and environment, WTO rules such as antidumping and subsidies, investment, competition policy, trade facilitation, transparency in government procurement, intellectual property, and a range of issues raised by developing countries as difficulties they face in implementing the present
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and campaign as also to develop linkages with overseas organizations in order to create a common perception and approach to the resolution of multilateral trade issues. Exploit all potential provisions of WTO agreement available to the developing nations and advising and counseling the Government of India on all such issues of national importance. To assist the Government in negotiating with the International Community in the perspective of the WTO regime and to help strengthen the Indian position in these regards in all possible ways. To co-ordinate efforts with the Government in creating a level playing field particularly for the accounting professionals in India specially in view of the implementation of the WTO regime on GATS through the most effective means possible including the organization of seminars, publication of articles and monographs, and presentation before the Government. Identify areas of non-fulfillment of the WTO agreement which concern Indian interest and suggest line of action and remedies open for fulfillment of these obligations. Initiate discussions on making the domestic trade and export and import policies more WTO compatible and suggest initiatives to be taken in this respect at various levels to ensure high growth in export and economy including the development of various modes of synergy and effective regulation of trade laws which are functionally divided between Commerce, Finance, Foreign and Product related Ministries. To study the impact and threat perception of WTO agreement on the growing service sector industries including all those covered under 'business services' of GATS agreement in general and knowledge, accountancy and consulting services, transport, communication, medical, education, insurance, banking in particular and suggest policy issues, develop research and education programs aimed at educating members of ICAI.To develop a base of expertise amongst the members of the Institute on Intellectual Property Rights, TRIPS, Anti-dumping laws, EXIM Page 6 of 41
Policy matters etc., through Seminars, training programs and such other methods as may be considered effective.
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DOHA DECLARATION
The WTO Ministerial Conference is a meeting of the organization's highest-level decision making body. The fourth WTO MinisterialConference was carried out in Doha, Qatar, in November 2001 and the During this meeting, the problems of developing countries in implementing the WTO agreements, notably the TRIPS agreement, werediscussed, along with the interpretation of TRIPS and its relationship with other international agreements such as the Convention on Biological Diversity. One of the most important outcomes of the meeting related to public health. Since the implementation of the TRIPS Agreement, one of the main issues of concern which hasarisen is how to ensure that patent countries from having access to medicines. To address this issue, the Ministers at the Doha meeting put forward a public health declaration which stressed that the TRIPS agreement must be interpreted in a way that supports public health via the easy accessibility to existing medicines and the creation of new medicines.It emphasized that the TRIPS Agreement does not prevent member governments from acting to protect public health and affirmed their right to use compulsory licensing (where a third party is allowed to reproduce the patented process or product under license) and parallel importing
The separate declaration on health set forward two specific tasks for the TRIPS council. They were:
to find a solution to the problems countries may face in using compulsory licensing if a country has little or no pharmaceuticalmanufacturing capacity; and to extend the exemptions on pharmaceutical patent protection for LDCs until 2016. While the issue of public health was a major concern at this Conference, the Doha Declaration also instructed the TRIPS Council to continue with the review of Article 27.3 (b) of the TRIPS agreement and to examine the limitations and potential problems which surround the issue of granting IP protection of traditional knowledge. The progress on these revisions and examinations was to be reported at the fifth Ministerial Conference in Mexico in September 2003, but this meeting broke down over disagreements on agriculture subsidies.
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The General Agreement on Tariffs and Trade (GATT), was established after World War II in the wake of other new multilateral institutions dedicated to international economic cooperation notably the Bretton Woods institutions known as the World Bank and the International Monetary Fund. A comparable international institution for trade, named the International Trade Organization was successfully negotiated. The ITO was to be a United Nations specialized agency and would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. But the ITO treaty was not approved by the U.S. and a few other signatories and never went into effect. In the absence of an international organization for trade, the GATT would over the years "transform itself" into a de facto international organization. Functions of WTO
The former GATT was not really an organisation; it was merely a legal arrangement. On the other hand, the WTO is a new international organisation set up as a permanent body. It is designed to play the role of a watchdog in the spheres of trade in goods, trade in services, foreign investment, intellectual property rights, etc.Article III has set out the following five functions of WTO; (i) The WTO shall facilitate the implementation, administration and operation and further the objectives of this Agreement and of the Multilateral Trade Agreements, and shall also provide the frame work for the implementation, administration and operation of the plurilateral Trade Agreements. (ii) The WTO shall provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the Agreement in the Annexes to this Agreement. (iii) The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes. (iv) The WTO shall administer Trade Policy Review Mechanism. (v) With a view to achieving greater coherence in global economic policy making, the WTO shall cooperate, as appropriate, with the international Monetary Fund (IMF) and with the International Bank for Reconstruction and Development (IBRD) and its affiliated agencies. Page 9 of 41
SALIENT FEATURES
The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture and trade policy : market access, domestic support and export subsidies.
Market Access
This includes tariffication, tariff reduction and access opportunities. Tariffication means that all non-tariff barriers such as quotas, variable levies, minimum import prices, discretionary licensing, state trading measures, voluntary restraint agreements etc. need to be abolished and converted into an equivalent tariff. Ordinary tariffs including those resulting from their tariffication are to be reduced by an average of 36% with minimum rate of reduction of 15% for each tariff item over a 6 year period. Developing countries are required to reduce tariffs by 24% in 10 years. Developing countries as were maintaining Quantitative Restrictions due to balance of payment problems, were allowed to offer ceiling bindings instead of tariffication. Special safeguard provision allows the imposition of additional duties when there are either import surges above a particular level or particularly low import prices as compared to 1986-88 levels. It has also been stipulated that minimum access equal to 3% ofdomestic consumption in 1986-88 will have to be established for the year 1995 rising to 5% at the end of the implementation period. Page 10 of 41
Domestic Support
For domestic support policies, subject to reduction commitments, the total support given in 1986-88, measured by the Total Aggregate Measure of Support (total AMS), should be reduced by 20% in developed countries (13.3% in developing countries). Reduction commitments refer to total levels of support and not to individual commodities. Policies which amount to domestic support both under the product specific and non product specific categories at less than 5% of the value of production for developed countries and less than 10% for developing countries are also excluded from any reduction commitments. Policies which have no or at most minimal, trade distorting effects on production are excluded from any reduction commitments (Green Box-Annex 2 of the Agreement on Agriculture. The list of exempted green box policies includes such policies which provide services or benefits to agriculture or the rural community, public stockholding for food security purposes, domestic food aid and certain de-coupled payments to producers including direct payments to production limiting programmes, provided certain conditions are met. Special and Differential Treatment provisions are also available for developing country members. These include purchases for and sales from food security stocks at administered prices provided that the subsidy to producers is included in calculation of AMS. Developing countries are permitted untargeted subsidised food distribution to meet requirements of the urban and rural poor. Also excluded for developing countries are investment subsidies that are generally available to agriculture and agricultural input subsidies generally available to low income and resource poor farmers in these countries.
Export Subsidies
The Agreement contains provisions regarding members commitment to reduce Export Subsidies. Developed countries are required to reduce their export subsidy expenditure by 36% and volume by 21% in 6 years, in equal installment (from 1986 1990 levels). For developing countries the percentage cuts are 24% and 14% respectively in equal annual installment over 10 years. The Agreement also specifies that for products not subject to export subsidy reduction commitments, no such subsidies can be granted in the Page 11 of 41
INDIA'S COMMITMENTS
Market Access
As India was maintaining Quantitative Restrictions due to balance of payments reasons(which is a GATT consistent measure), it did not have to undertake any commitments in regard to market access. The only commitment India has undertaken is to bind its primary agricultural products at 100%; processed foods at 150% and edible oils at 300%. Of course, for some agricultural products like skimmed milk powder, maize, rice, spelt wheat, millets etc. which had been bound at zero or at low bound rates, negotiations under Article XXVIII of GATT were successfully completed in December, 1999, and the bound rates have been raised substantially.
Domestic Support
India does not provide any product specific support other than market price support. During the reference period (1986-88 ), India had market price support programmes for 22 products, out of which 19 are included in our list of commitments filed under GATT. The products are - rice, wheat, bajra, jawar, maize, barley, gram, groundnut, rapeseed, toria, cotton, Soyabean (yellow), Soyabean (black), urad, moong, tur, tobacco, jute, and sugarcane. The total product specific AMS was (-) Rs.24,442 crores during the base period. The negative figure arises from the fact that during the base period, except for tobacco and sugarcane, international prices of all products was higher than domestic prices, and the product specific AMS is to be calculated by subtracting the domestic price from the international price and then multiplying the resultant figure by the quantity of production. Non-product specific subsidy is calculated by taking into account subsidies given for fertilizers, water, seeds, credit and electricity. During the reference period, the total nonproduct specific AMS was Rs.4581 crores. Taking both product specific and non-product specific AMS into account, the total AMS was (-) Rs.19,869 crores i.e. about (-) 18% of the value of total agricultural output. Since our total AMS is negative and that too by a huge magnitude, the question of our undertaking reduction commitments did not arise. As such, we have not undertaken any Page 12 of 41
commitment in our schedule filed under GATT. The calculations for the marketing year 1995-96 show the product specific AMS figure as (-) 38.47% and non-product specific AMS as 7.52% of the total value of production. We can further deduct from these calculations the domestic support extended to low income and resource poor farmers provided under Article 6 of the Agreement on Agriculture. This still keeps our aggregate AMS below the de minimis level of 10%.
Export Subsidies
In India, exporters of agricultural commodities do not get any direct subsidy. The only subsidies available to them are in the form of (a) exemption of export profit from income tax under section 80-HHC of the Income Tax Act and this is also not one of the listed subsidies as the entire income from Agriculture is exempt from Income Tax per se. (b) subsidies on cost of freight on export shipments of certain products like fruits, vegetables and floricultural products. We have in fact indicated in our schedule of commitments that India reserves the right to take recourse to subsidies (such as, cash compensatory support) during the implementation period
MANDATED NEGOTIATIONS
Article 20 of the Agreement on Agriculture (AoA) mandates that negotiations for continuing the reform process in agriculture will be initiated one year before the end of the implementation period. As the implementation period for developed countries culminated at the end of the year 2000, the negotiations on the Agreement on Agriculture have begun in January 2000. These negotiations are being conducted in special sessions of the WTO Committee on Agriculture (COA) at Geneva. The following are the broad parameters for carrying out negotiations: Experience of member countries in implementation of reduction commitments till date; The effects of reduction commitments on World Trade in Agriculture; Non trade Page 13 of 41
concerns, special and differential treatment to developing country members and the objective of establishing a fair and market oriented agricultural trading system; and Identifying further commitments necessary to achieve the long-term objectives of the Agreement. During extensive deliberations in the WTO Committee on Agriculture and in the General Council, member countries had agreed to broadly adhere to the mandate of Article 20 of the Agreement. In pursuance of the same, in the first phase of the negotiations, members have submitted 47 negotiating proposals, which were discussed in Seven Special Sessions of the CoA. With the approval of the Cabinet Committee on WTO Matters, India also submitted its negotiating proposals to the WTO on 15th January 2001, in the areas of market access, domestic support, export competition and food security. These proposals were drawn up and drafted based on inputs received from wide ranging consultations with various stakeholders and keeping in view Indias objectives in the negotiations, which are to protect its food and livelihood security concerns and to protect all domestic policy measures taken for poverty alleviation, rural development and rural employment as also to create opportunities for expansion of agricultural exports by securing meaningful market access in developed countries. India also co-sponsored two papers, one on "Market Access" along with 11 other developing countries and another on "Export Credits for Agricultural Products" along with 9 other countries/group of countries.
WTO AGREEMENT
The organization
The WTOs overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does this by: Administering trade agreements Acting as a forum for trade negotiations Settling trade disputes Reviewing national trade policies
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Assisting developing countries in trade policy issues, through technical assistance and training programmes Cooperating with other international organizations The WTO has about 150 members, accounting for about 95% of world trade. Around 30 others are negotiating membership. Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTOs predecessor, GATT. The WTOs agreements have been ratified in all members parliaments. The WTOs top level decision-making body is the Ministerial Conference which meets at least once every two years. Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members capitals) which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body. At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council. Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements. The WTO Secretariat, based in Geneva, has around 600 staff and is headed by a directorgeneral. Its annual budget is roughly 160 million Swiss francs. It does not have branch offices outside Geneva. Since decisions are taken by the members themselves, the Secretariat does not have the decision-making role that other international bureaucracies are given The Secretariats main duties are to supply technical support for the various councils and committees and the ministerial conferences, to provide technical assistance for Page 15 of 41
developing countries, to analyze world trade, and to explain WTO affairs to the public and media. The Secretariat also provides some forms of legal assistance in the dispute settlement process and advises governments wishing to become members of the WTO.
Since 1995, the updated GATT has become the WTOs umbrella agreement for trade in goods. It has annexes dealing with specific sectors such as agriculture and textiles, and with specific issues such as state trading, product standards, subsidies and actions taken against dumping. Banks, insurance firms, telecommunications companies, tour operators, hotel chains and transport companies looking to do business abroad can now enjoy the same principles of freer and fairer trade that originally only applied to trade in goods. These principles appear in the new General Agreement on Trade in Services (GATS). WTO members have also made individual commitments under GATS stating which of their services sectors they are willing to open to foreign competition, and how open those markets are. The WTOs intellectual property agreement amounts to rules for trade and investment in ideas and creativity. The rules state how copyrights, patents, trademarks, geographical names used to identify products, industrial designs, integrated circuit layout-designs and undisclosed information such as trade secrets intellectual property should be protected when trade is involved. The WTOs procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgements by specially-appointed independent experts are based on interpretations of the agreements and individual countries commitments. The system encourages countries to settle their differences through consultation. Failing that, they can follow a carefully mapped out, stage-by-stage procedure that includes the possibility of a ruling by a panel of experts, and the chance to appeal the ruling on legal grounds. Confidence in the system is borne out by the number of cases brought to the WTO around 300 cases in eight years compared to the 300 disputes dealt with during the entire life of GATT (194794).
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The Trade Policy Review Mechanisms purpose is to improve transparency, to create a greater understanding of the policies that countries are adopting, and to assess their impact. Many members also see the reviews as constructive feedback on their policies. All WTO members must undergo periodic scrutiny, each review containing reports by the country concerned and the WTO Secretariat. Developing countries Over three quarters of WTO members are developing or least-developed countries. All WTO agreements contain special provision for them, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities and support to help them build the infrastructure for WTO work, handle disputes, and implement technical standards. The 2001 Ministerial Conference in Doha set out tasks, including negotiations, for a wide range of issues concerning developing countries. Some people call the new negotiations the Doha Development Round. Before that, in 1997, a high-level meeting on trade initiatives and technical assistance for least-developed countries resulted in an integrated framework involving six intergovernmental agencies, to help least-developed countries increase their ability to trade, and some additional preferential market access agreements. A WTO committee on trade and development, assisted by a sub-committee on leastdeveloped countries, looks at developing countries special needs. Its responsibility includes implementation of the agreements, technical cooperation, and the increased participation of developing countries in the global trading system The WTO organizes around 100 technical cooperation missions to developing countries annually. It holds on average three trade policy courses each year in Geneva for government officials. Regional seminars are held regularly in all regions of the world with a special emphasis on African countries. Training courses are also organized in Geneva for officials from countries in transition from central planning to market economies
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The WTO set up reference centres in over 100 trade ministries and regional organizations in capitals of developing and least-developed countries, providing computers and internet access to enable ministry officials to keep abreast of events in the WTO in Geneva through online access to the WTOs immense database of official documents and other material. Efforts are also being made to help countries that do not have permanent representatives in Geneva.
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That said, there are many over-riding reasons why were better off with the system than without it. Here are 10 of them. 1. The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government
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participants (principle of nondiscrimination); stimulating economic activity through guaranteed policy bindings; and promoting trade and development through progressive liberalization. Further negotiations for progressive liberalisation commenced by 1.1.2000, as mandated under GATS. The Doha Ministerial Conference has given a further direction to these negotiations by mandating that members should submit initial requests for specific commitments by 30 June 2002 and initial offers by 31 March 2003. According to the paragraph 15 of the Ministerial Declaration, there is an agreement on negotiations on trade in services shall be conducted with a view to promoting the economic growth of all trading partners and the development of developing and leastdeveloped countries. We recognize the work already undertaken in the negotiations, initiated in January 2000 under Article XIX of the General agreement on Trade in Services, and the large number of proposals submitted by Members on a wide range of sectors and several horizontal issues, as well as on movement of natural persons. with a view to achieving the objectives of the General Agreement on Trade in Services, as stipulated in the Preamble, Article IV and Article XIX of that Agreement. Participants shall submit initial requests for specific commitments by 30 June 2002 and initial offers by 31 March 2003. To take stock of the progress of the Doha Round of trade talks, a Ministerial meeting was held in Hong Kong from 13th-18th December, 2005, in which the following timelines were agreed to: a) 28th February, 2006, for submitting plurilateral requests; b) 31st July, 2006, for submitting the second round of Revised Offers; and c) 31st October, 2006, for submitting the draft final schedule of commitments The Hong Kong Ministerial declaration provided guidance to WTO Members to take forward the Services negotiations as per the provisions included in Annex C of the declaration. In a sense, Hong Kong was a watershed in the Services negotiations in a number of aspects, some of which are: Guidance on the various Modal targets aimed at making services trade less restrictive and more transparent Agreement to begin plurilateral negotiations, which would be complementary to the bilateral Request-Offer process Agreement on developing disciplines in domestic regulations before the end of the current Round In pursuance of the Hong Kong Ministerial Declaration, the Page 22 of 41
plurilateral process has begun in Geneva. 21 plurilateral groups have been formed in various service sectors and two plurilateral group meetings have been held so far. Importance of Service Sector Broadly defined, a service is a product of human activity aimed to satisfy a human need, which does not constitute a tangible commodity. There are many types of services, ranging from heart surgery to road construction, electricity transmission to education, and childcare towater purification. Services are important for employment and employment growth. This is because many traditional services, including distribution, education and social services, are labour intensive. In many services sectors it has also proved more difficult to substitute capital for labour than in manufacturing. The expansion of services and the emergence of new services have been driven by income-related demand shifts, technological developments, falling costs of communications and the increased presence of transnational corporations. In particular, the new information and communication technologies and the incessant compulsion on companies to cut costs have led to the growth of outsourcing of services. In recent years this outsourcing is now being off-shored to low-cost countries such as India, Philippines etc. Services are coming to dominate the economic activities of countries at virtually every stage of development, making services trade liberalization a necessity for the integration of the world economy. In the high-income industrialized economies, the value added by services generally exceeds 60 per cent of total output. In many developing economies, even allowing for the fact that governments are major service providers (education, healthcare, sanitation, etc.), the commercial market for services is huge and growing and the trend is clear: as national economies develop and incomes rise, the commercial service sector accounts for an everlarger share of GDP. It is widely recognised that liberalisation of trade in Services has manifold benefits. Some of them can be listed as the following, Freer trade in services enables countries to better enjoy the benefits of globalization and improves economic efficiency just as freer trade in goods does. It contributes to job creation, higher incomes, more consumer choice, downward pressure on inflation, and a better quality of life.More, better and lower cost services are important because services are the "enablers" that permit economies to function and prosper. Some form essential infrastructure - transport, communications, finance, information. Capital markets, for Page 23 of 41
example, cannot function efficientlywithout abundant, high-quality information that can be quickly and frequently communicated. Other services are critical to the success of manufacturing and agriculture. For some manufacturers, services provide a large second source of revenues and contribute significantly to company growth and job creation. The manufacturing process and the business of running manufacturing industries are infused with services functions from beginning to end: research and development, inventory management and control, transport,marketing, advertising, insurance, and "backroom" functions, such as accounting and legal services.Liberalization of trade in services is an important means to encourage the continued rapid expansion of foreign direct investment, to integrate national economies more effectively and to reduce income and other disparities among countries. Because services production and consumption normally are proximate and simultaneous, services trade usually entails a significant transfer of technology and know-how from country to country. This is critical, especially for developing and emerging markets, which can acquire state-of-the-art skills relatively quickly and inexpensively through trade - at least in comparison with the time and expense that would be required to develop them de novo.
- Reforms undertaken by IRDA: Foreign equity upto 26% permitted in Insurance sector. Telecom Services FDI limit raised to 74% in recent policy reforms Postal Services Amendment to the Indian Postal Act proposed with the objective to regulate Courier Services. Air Transport Services - Private sector participation in Delhi and Mumbai airports clears - Air Transport Regulatory Authority proposed Education Services Foreign Education Providers Bill under consideration of the Government Health Services - MRAs being proposed with Singapore - Proposal mooted to raid various private hospitals Professional Services - Limited Liability Partnership (LLP) Act enacted enabling legislations in various Acts governing Professional Services are underway. - A new Companies Bill, 2009 based o n the recommendations of the J.J.Irani Committee report has been introduced in the Lok Sabha on 3rd August, 2009 by the Ministry of Corporate Affairs for its enactment.
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MISSION STATEMENT
About the WTO a statement by the Director-General The World Trade Organization the WTO is the international organization whose primary purpose is to open trade for the benefit of all. The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. The WTO also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application. The current body of trade agreements comprising the WTO consists of 16 different multilateral agreements (to which all WTO members are parties) and two different plurilateral agreements (to which only some WTO members are parties). Over the past 60 years, the WTO, which was established in 1995, and its predecessor organization the GATT have helped to create a strong and prosperous international trading system, thereby contributing to unprecedented global economic growth. The WTO currently has 155 members, of which 117 are developing countries or separate customs territories. WTO activities are supported by a Secretariat of some 700 staff, led by the WTO Director-General. The Secretariat is located in Geneva, Switzerland, and has an annual budget of approximately CHF 200 million ($180 million, 130 million). The three official languages of the WTO are English, French and Spanish. Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the organization's business in the intervals between Ministerial Conferences. Both of these bodies comprise all members. Specialized subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, administer and monitor the implementation by members of the various WTO agreements. More specifically, the WTO's main activities are:
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negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade) and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies, product standards, etc.)
administering and monitoring the application of the WTO's agreed rules for trade in goods, trade in services, and trade-related intellectual property rights monitoring and reviewing the trade policies of our members, as well as ensuring transparency of regional and bilateral trade agreements settling disputes among our members regarding the interpretation and application of the agreements building capacity of developing country government officials in international trade matters assisting the process of accession of some 30 countries who are not yet members of the organization conducting economic research and collecting and disseminating trade data in support of the WTO's other main activities explaining to and educating the public about the WTO, its mission and its activities 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 among members, and a commitment to transparency in the conduct of its activities. The opening of national markets to international trade, with justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable development, raise people's welfare, reduce poverty, and foster peace and stability. At the same time, such market opening must be accompanied by sound domestic and international policies that contribute to economic growth and development according to each member's needs and aspirations. Principles of the trading system Page 27 of 41
The WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy games. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO:
trading partners, which could mean compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute 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 and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy Review Mechanism (TPRM). The WTO system tries also to improve predictability and stability, discouraging the use of quotas and other measures used to set limits on quantities of imports. 5.Safety valves. In specific circumstances, governments are able to restrict trade. The WTOs agreements permit members to take measures to protect not only the environment but also public health, animal health and plant health Accession and membership The process of becoming a W.T.O member is unique to each applicant country, and the terms of accession are dependent upon the country's stage of economic development and current trade regime. The process takes about five years, on average, but it can last more if the country is less than fully committed to the process or if political issues interfere. The shortest accession negotiation was that of the Kyrgyz Republic, while the longest was that of the People's Republic of China (P. Farah, Five Years of China's WTO Membership, 263304). Russia, having first applied to join GATT in 1993, was approved for membership in December 2011. An offer of accession is only given once consensus is reached among interested parties. WTO accession progress. (As of June 2012, including pending membership of the Russian Federation.): Members (including dual-representation with the European Union)
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Goods and/or Services offers submitted Memorandum on Foreign Trade Regime (FTR) submitted Observer, negotiations to start later or no Memorandum on FTR submitted Frozen procedures or no negotiations in the last 3 years No official interaction with the WTO A country wishing to accede to the WTO submits an application to the General Council, and has to describe all aspects of its trade and economic policies that have a bearing on WTO agreements. The application is submitted to the WTO in a memorandum which is examined by a working party open to all interested WTO M After all necessary background information has been acquired, the working party focuses on issues of discrepancy between the WTO rules and the applicant's international and domestic trade policies and laws. The working party determines the terms and conditions of entry into the WTO for the applicant nation, and may consider transitional periods to allow countries some leeway in complying with the WTO rules. The final phase of accession involves bilateral negotiations between the applicant nation and other working party members regarding the concessions and commitments on tariff levels and market access for goods and services. The new member's commitments are to apply equally to all WTO members under normal non-discrimination rules, even though they are negotiated bilaterally. When the bilateral talks conclude, the working party sends to the general council or ministerial conference an accession package, which includes a summary of all the working party meetings, the Protocol of Accession (a draft membership treaty), and lists ("schedules") of the member-to-be's commitments. Once the general council or ministerial conference approves of the terms of accession, the applicant's parliament must ratify the Protocol of Accession before it can become a member. The WTO has 155 members (to become 156 on the pending accession of Russia) and 29 observer governments (including the Russian Federation). In addition to states, the
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European Union is a member. WTO members do not have to be full sovereign nationmembers. Instead, they must be a customs territory with full autonomy in the conduct of their external commercial relations. Thus Hong Kong (as "Hong Kong, China" since 1997) became a GATT contracting party, and the Republic of China (Taiwan) acceded to the WTO in 2002 as "Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu" (Chinese Taipei) despite its disputed status. The WTO Secretariat omits the official titles (such as Counselor, First Secretary, Second Secretary and Third Secretary) of the members of Chinese Taipei's Permanent Mission to the WTO, except for the titles of the Permanent Representative and the Deputy Permanent Representative. Iran is the biggest economy outside the WTO. With the exception of the Holy See, observers must start accession negotiations within five years of becoming observers. A number of international intergovernmental organizations have also been granted observer status to WTO bodies. 14 states and two territories so far have no official interaction with the WTO.
export subsidies. The General Agreement on Trade in Services was created to extend the multilateral trading system to service sector, in the same way as the General Agreement on Tariffs and Trade (GATT) provided such a system for merchandise trade. The agreement entered into force in January 1995. The Agreement on Trade-Related Aspects of Intellectual Property Rights sets down minimum standards for many forms of intellectual property (IP) regulation. It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994. The Agreement on the Application of Sanitary and Phytosanitary Measuresalso known as the SPS Agreementwas negotiated during the Uruguay Round of GATT, and entered into force with the establishment of the WTO at the beginning of 1995. Under the SPS agreement, the WTO sets constraints on members' policies relating to food safety (bacterial contaminants, pesticides, inspection and labelling) as well as animal and plant health (imported pests and diseases). The Agreement on Technical Barriers to Trade is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO at the end of 1994. The object ensures that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade". The Agreement on Customs Valuation, formally known as the Agreement on Implementation of Article VII of GATT, prescribes methods of customs valuation that Members are to follow. Chiefly, it adopts the "transaction value" approach. Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Trade-Related Aspects of Intellectual Property Rights (TRIPS) is arguably the most important and comprehensive international agreement on intellectual property rights. Member countries of the WTO areautomatically bound by the agreement. The Agreement covers most forms of intellectual property including patents, copyright, trademarks, geographical indications, industrial designs, trade secrets, and exclusionary rights over new plant varieties.
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The TRIPS agreement outlines several important trade related aspects of intellectual property. More specifically, it requires signatory countries to adhere to its criteria for intellectual property monopoly grants of limited duration, along with requiring adherence to the Paris Convention, Berne Convention and other WTO Conventions. The criteria are minimum standards for granting a monopoly over any type of IP, as well as duration limits, enforcement provisions and methods of IP dispute settlements When the TRIPS Agreement took effect on January 1, 1995, all developed countries were given twelve months from the date of signing the agreement to implement its provisions. Developing countries and transition economies (under certain conditions) were given five years, until 2000. Least developed countries (LDCs) were given 11 years, until 2006, to comply. Some countries have indicated that a longer period should obtain. For pharmaceutical patents in these LDCs, the term for compliance has been extended to 2016. There are currently 30 LDCs within the WTO organization bound by TRIPS and another 10 LDCs are waiting accession. Some of the most important (and controversial) provisions in the TRIPS agreement concern patent protection. TRIPS signatories are obliged to make patents available for all inventions, whether products or processes, in all fields of technology without discrimination (Article 27.1). Interestingly, TRIPS does not define the term "invention". The agreement states three exceptions that countries may rely on to exclude otherwise patentable subject matter. These include: inventions which are contrary to ordre public or morality, i.e. inventions which are dangerous to human, animal or plant life or health or seriously prejudicial to the environment. (Article 27.2) diagnostic, therapeutic and surgical methods for the treatment of humans or animals (Article 27.3(a)). plants and animals other than microorganisms and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. Any country excluding plant varieties from patent protection must provide aneffective sui generis system of protection (Article 27.3 (b)). The interpretation of this last clause has been extremely contentious.
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The term sui generis (Latin for 'of its own gender/genus') is notdefined in the agreement, but it is generally believed that it enables member countries to fashion their own protection scheme for plants. Possible protection mechanisms include the Plant Breeder's Rights system offered by UPOV Convention, plant patents or a licensing regime. More than one form of plant protection can be implemented in a given member country.Controversy surrounding Article 27.3 One of the controversies of Article 27.3 focuses on the meaning of 'sui generis' and exactly what is considered an 'effective' form of plant variety monopoly right. In part because of the difficulties with this provision, Article 27.3 was to be reviewed in 1999, four years after the entry into force of the agreement. The review has never been completed, and this Article remains a hot issue. To date, some 30 countries are calling for further discussion on Article 27.3, and some have proposed: rewriting the Article to exclude patents for any organisms or genetic material (although ostensibly countries could achieve this by defining these subject matters as "discoveries" and not "inventions"); defining in detail what an effective plant variety development right system is;extending exclusionary rights of some sort to traditional or indigenous knowledge; and making explicit linkages with obligations for the conservation and use of biodiversity, including mandatory disclosure of the source of genetic materials used in a patented invention, and creating obligations to record arrangements for access to genetic resources as evidence of prior informed consent. It remains to be seen whether any of these proposals will be adopted. Patentee Rights, Term of Protection and Enforcement Rights The rights obtainable by patentees are clearly outlined in Article 28. The Article also provides that rights are conferred for products which are directly obtained by a patented process or method.
procedures and appropriate remedies so that right holders, be they patentees,copyright owners or other intellectual property owners, caneffectively enforce their rights.
Effects of TRIPS and the Resulting Controversies One of the effects of the TRIPS agreement have been to tie trade and intellectual property together. Traditionally, developing countries have opposed the range of nontariff barriers, such as the protection of inventions, which they see as preventing them from trading competitively throughout the rest of the world. Controversy has arisen over perceptions of inconsistency between the TRIPS Agreement and other international agreements, such as the Convention on Biological Diversity. There have also been suggestions, for example, that patenting restricts the availability of the latest chemicals, pharmaceuticals and fertilizers, thereby necessitating the use of older, less-safe and more toxic products. There have been reports that intellectual property rights on plant varieties erode biological diversity, especially in agriculture. Some countries are also demanding that the existing intellectual property system should accommodate concepts traditionally outside of the scope of intellectual property, for example indigenous and traditional knowledge. The examples above highlight some of the issues surrounding the TRIPS agreement which are the subject of much international debate. For further discussion of the political implications surrounding these issues, see Genetically Engineered Food Alert Campaign's website. The WTO Ministerial Conference is a meeting of the organization's highest-level decision making body. The fourth WTO Ministerial Conference was carried out in Doha, Qatar, in November 2001 and the outcomes of the meeting are referred to as the Doha Declaration. During this meeting, the problems of developing countries the WTO agreements, notably the TRIPS agreement, were discussed, along with the interpretation of TRIPS and its relationship with other international agreements such as the Convention on
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Biological Diversity.
One of the most important outcomes of the meeting related to public health. Since the implementation of the TRIPS Agreement, one of the main issues of concern which has arisen is how to ensure that patent protection for pharmaceutical products does notprevent people in poor countries from having access to medicines. To address this issue, the Ministers at the Doha meeting put forward a public health declaration which stressed that the TRIPS agreement must be interpreted in a way that supports public health via the easy accessibility to existing medicines and the creation of new medicines. It emphasized that the TRIPS Agreement does not prevent member governments from acting to protect public health and affirmed their right to use compulsory licensing (where a third party is allowed to reproduce the patented process or product under license) and parallel importing. The separate declaration on health set forward two specific tasks for the TRIPS council. They were: to find a solution to the problems countries may face in using compulsory licensing if a country has little or no pharmaceutical manufacturing capacity; and to extend the exemptions on pharmaceutical patent protection for LDCs until 2016. While the issue of public health was a major concern at this Conference, the Doha Declaration also instructed the TRIPS Council to continue with the review of Article 27.3 (b) of the TRIPS agreement and to examine the limitations and potential problems which surround the issue of granting IP protection of traditional knowledge. The progress on these revisions and examinations was to be reported at the fifth Ministerial Conference in Mexico in September 2003, but this meeting broke down over disagreements on agriculture subsidies.
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governments donot take care of them, and institutional decline will likely be harder to Page 38 of 41
reverse the further it goes. At the same time, it has been repeatedly demonstrated that if institutions do not adapt to change, they will wither, becoming increasingly regarded as vestiges of an older world driven by different interests than those that shape the present. Even when governments show willing to adapt and refashion their co-operative arrangements in recognition of changing circumstances, there will always be a sense in which trade agreements remain incomplete. Agreements cannot foresee every eventuality. So while institutions and contractual provisions can mitigate the uncertainties connected with contractual incompleteness, they can hardly eliminate them. This brings with it two implications. One is that disputes are a natural outflow of contractual incompleteness. The other is that dealing with incompleteness requires a delicate balance between flexibility and adaptation on the one hand, and the preservation of predictability and stability on the other. The report has reviewed a rich history of change and institutional adaptation in the multilateral trading system. It has identified lessons from past experience as well as a number of challenges to come. History shows how the multilateral trading systems focus of purpose proved to be its strength in the early years. The system expanded inexorably over the decades, in terms of membership, issue coverage and institutional purpose, culminating in the establishment of the WTO in 1995. A rather uniform set of issues has tended to dominate the multilateral trading agenda over the life of th institution. Sometimes the idiom has changed and the details may differ through time, but many of the essential challenges involved in searching out mutually beneficia cooperative arrangements remain much the same.
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REFERANCE BOOK
Guide to GATT Law and Practice: GATT Analytical Index. Updated 6th ed. Geneva: WTO and Bernan Press, 1995. Two vols. WTO Analytical Index: Guide to WTO Law and Practice. 1st ed. Geneva: WTO Publications; Lanham, Md: Bernan, 2003. Two volumes The EU, the WTO, and the NAFTA: Towards a Common Law of International Trade? Ed. J.H.H. Weiler. Oxford; New York: Oxford University Press Intellectual Property Rights in the WTO and Developing Countries. Jayashree Watal. Boston: Kluwer Academic T.y.b.com text book: author name michal waz,s.k mishra: S. K. Misra is a Reader in Economics in Hindu College, Delhi University, WEB SITES:google,Wikipedia,world trade organization
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BIBLIOGRAY
anderson, K., Martin, w. and van der Mensbrugghe, d. (2005) Market and welfare Implications of doha reform Scenarios in anderson, K. and Martin, w. (eds.) Agricultural Trade Reform and the D Bourgeois, Jacques H.J. (2001) eU rules on State aids and wto provisions on Subsidies Compared: the Case of State-owned Banks in C.d. ehlermann and M. everson (eds) European Competition Law Annual 1999: Selected Issues in the Field of State Aids, oxford: Hart publishing.Doha Development. Abdel Kader, M. R. (1986) Multilateral Trade Negotiations: The Developing Countries and the GATT Secretariat, Doctoral thesis, University of Geneva, Institut Universitaire de Hautes tudes Internationales: Geneva. Busch, M. L. and Reinhardt, E. (2000) Bargaining in the Shadow of the Law: Early Settlement in GATT/ WTO Disputes, Fordham International Law Journal 24, 1-2: 158-172. (2003) Developing Countries and General Agreement on Tariffs and Trade/World Trade Organization Dispute Settlement, Journal of World Trade 37, 4: 719-735. (2006) Threes a Crowd: Third Parties and WTO Dispute Settlement, World Politics: forthcoming.
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