General Agreement on Tariffs and Trade
GATT was formed in 1947 and lasted until
1994 was replaced by the World Trade
On 1 January, 1948 the agreement was signed
by 23 countries.
GATT held a total of 8 rounds.
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World Trade Organization
The WTO was born out of the General Agreement on Tariffs
and Trade (GATT).
Headquarters : Geneva, Switzerland
Formation : 1 January 1995
Membership : 153 member countries
Budget : 163 million USD (Approx).
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It is an international organization designed to
supervise and liberalize international trade.
The WTO has 153 members, which represents
more than 95% of total world trade.
WTO cooperate closely with 2 other
component IMF and World Bank.
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WTO is to ensure that global trade
commences smoothly, freely and predictably.
Transparency in trade policies.
Work as a economic research and analysis
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To create economic peace and stability in the
world through a multilateral system based on
consenting member states, that have ratified the
rules of the WTO in their individual countries as
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It was ad hoc &
It had no provision for
creating an organization.
It allowed contradictions in
local law & GATT
It is permanent.
It has legal basis because
member nations have
verified the WTO
More authority than GATT.
It doesn't allow any
contradictions in local law .
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GATT and WTO trade rounds
Name Start Duration Countries Subjects covered Achievements
Geneva April 1947
Signing of GATT, 45,000 tariff
concessions affecting $10 billion of
Annecy April 1949
Countries exchanged some 5,000 tariff
Countries exchanged some 8,700 tariff
concessions, cutting the 1948 tariff
levels by 25%
26 Tariffs, admission of Japan $2.5 billion in tariff reductions
Tariff concessions worth $4.9 billion of
Kennedy May 1964
62 Tariffs, Anti-dumping
Tariff concessions worth $40 billion of
Tariffs, non-tariff measures,
Tariff reductions worth more than
$300 billion dollars achieved
Tariffs, non-tariff measures, rules,
services, intellectual property, dispute
settlement, textiles, agriculture,
creation of WTO, etc
The round led to the creation of WTO,
and extended the range of trade
negotiations, leading to major
reductions in tariffs (about 40%) and
agricultural subsidies, an agreement
to allow full access for textiles and
clothing from developing countries,
and an extension of intellectual
Tariffs, non-tariff measures,
agriculture, labor standards,
investment, transparency, patents etc
The round is not yet concluded.
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After over 7 years of negotiations the Uruguay
Round multilateral trade negotiations were concluded
on December 1993 and were formally ratified in
April 1994 at Marrakesh, Morocco.
The WTO Agreement on Agriculture was one of the
main agreements which were negotiated during the
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The WTO Agreement on Agriculture contains
provisions in 3 broad areas of agriculture:
1. Market access.
2. Domestic support.
3. Export subsidies
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This includes tariffication, tariff reduction and
Tariffication means that all non-tariff barriers
2. variable levies;
3. minimum import price;
4. discretionary licensing;
5. state trading measures.
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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).
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The Agreement contains provisions regarding
members commitment to reduce Export
Developed countries are required to reduce
their export subsidy expenditure by 36%.
For developing countries the percentage cuts
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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.
India does not provide any product specific
support other than market price support.
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In India, exporters of agricultural commodities do not
get any direct subsidy.
Indirect 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
b. subsidies on cost of freight on export shipments of
certain products like fruits, vegetables and floricultural
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India’s basic objectives in the ongoing negotiations
a. To protect its food and livelihood security concerns
and to protect all domestic policy measures taken for
poverty alleviation, rural development and rural
b. To create opportunities for expansion of agricultural
exports by securing meaningful market access in
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The Agreement on Trade Related Investment Measures (TRIMs) is
one of Agreements covered under Annex IA to the Marrakech
Agreement, signed at the end of the Uruguay Round (UR)
negotiations. The Agreement addresses investment measures that
are trade related and that also violate Article III (National
treatment) or Article XI (general elimination of quantitative
restrictions) of the General Agreement on Tariffs and Trade. An
illustrative list of the measures that are volatile of the provisions
of the Agreement is annexed to the text of the Agreement. These
pertain broadly to local content requirements, trade balancing
requirements and export restrictions, attached to investment
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The Agreement requires all WTO Members to notify the
TRIMs that are inconsistent with the provisions of the
Agreement, and to eliminate them after the expiry of the
transition period provided in the Agreement. Transition
periods of two years in the case of developed countries,
five years in the case of developing countries and seven
years in the case of LDCs, from the date of entry into
force of the Agreement (i.e. 1stJanuary 1995) are
provided in the Agreement.
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As per the provisions of Art. 5.1 of the TRIMs Agreement India
had notified three trade related investment measures as
inconsistent with the provisions of the Agreement:
Local content (mixing) requirements in the production of News
Local content requirement in the production of Rifampicin and
Penicillin – G, and
Dividend balancing requirement in the case of investment in 22
categories consumer goods.
Such notified TRIMs were due to be eliminated by 31st December,
1999. None of these measures is in force at present. Therefore,
India does not have any outstanding obligations under the TRIMs
agreement as far as notified TRIMs are concerned.
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The areas of intellectual property that it covers are: copyright and related rights (i.e. the
rights of performers, producers of sound recordings and broadcasting
organizations); trademarks including service marks; geographical including appellations of
origin; industrial designs; patents including the protection of new varieties of plants;
the layout-designs of integrated circuits; and undisclosed information including trade secrets
and test data.
Three main features of TRIPS :
• Dispute settlement
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The November 2001 Doha Declaration on the TRIPS Agreement and Public
Health was adopted by the WTO Ministerial Conference of
2001 in Doha on November 14, 2001. It reaffirmed flexibility of TRIPS member
states in circumventing patent rights for better access to essential medicines.
In Paragraphs 4 to 6 of the Doha Declaration, governments agreed that:
"4. The TRIPS Agreement does not and should not prevent Members from taking measures
to protect public health. Accordingly, while reiterating our commitment to the TRIPS
Agreement, we affirm that the Agreement can and should be interpreted and
implemented in a manner supportive of WTO Members' right to protect public health
and, in particular, to promote access to medicines for all. In this connection, we
reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS
Agreement, which provide flexibility for this purpose.
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5. Accordingly and in the light of paragraph 4 above, while maintaining our commitments
in the TRIPS Agreement, we recognize that these flexibilities include:
(a) In applying the customary rules of interpretation of public international law, each
provision of the TRIPS Agreement shall be read in the light of the object and purpose of
the Agreement as expressed, in particular, in its objectives and principles.
(b) Each Member has the right to grant compulsory licenses and the freedom to determine
the grounds upon which such licenses are granted.
(c) Each Member has the right to determine what constitutes a national emergency or other
circumstances of extreme urgency, it being understood that public health crises,
including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can
represent a national emergency or other circumstances of extreme urgency.
(d) The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion
of intellectual property rights is to leave each Member free to establish its own regime
for such exhaustion without challenge, subject to the MFN and national treatment
provisions of Articles 3 and 4.
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6. We recognize that WTO Members with insufficient or no manufacturing
capacities in the pharmaceutical sector could face difficulties in making
effective use of compulsory licensing under the TRIPS Agreement. We instruct
the Council for TRIPS to find an expeditious solution to this problem and to
report to the General Council before the end of 2002."These provisions in the
Declaration ensure that governments may issue compulsory licenses on patents
for medicines, or take other steps to protect public health.”
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In 2005, WTO members reached agreement on an amendment to the TRIPS
Agreement to make permanent the temporary waiver contained in the August 30
WTO Decision, which itself fulfilled the requirement of para.6 of the Doha
Declaration on the TRIPS Agreement and Public Health of November 14, 2001.
This decision created a mechanism to allow WTO members to issue compulsory
licenses to export generic versions of patented medicines to countries with
insufficient or no manufacturing capacity in the pharmaceutical sector.
The 2005 Ministerial Declaration stated:
"We reaffirm the importance we attach to the General Council Decision of 30
August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on
TRIPS Agreement and Public Health, and to an amendment to the TRIPS
Agreement replacing its provisions. In this regard, we welcome the work that has
taken place in the Council for TRIPS and the Decision of the General Council of 6
December 2005 on an Amendment of the TRIPS Agreement."
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The amendment, the first ever to the TRIPS Agreement, was circulated to WTO
members for formal adoption. A deadline of December 1, 2007 was set for
members to accept the permanent amendment. For the amendment to be put into
effect, at least two-thirds of members must formally adopt it.
On November 30, 2007 Peter Mandelson, the then European Union's Trade
Commissioner, announced that the European Union formally accepted the World
Trade Organization -approved protocol of December 2005, amending the TRIPS
Agreement. However, in order for the decision to have legal effect, two-thirds of
the WTO's 151 Members are required to ratify the agreement. The European
Union's acceptance only brings the number to 41.
In 2008 a decision was made to extend the deadline for accepting the TRIPS
agreement amendment. The deadline has been extended until 31 December 2009
or "such later date as may be decided by the Ministerial Conference."
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India, as a developing economy, has been benefitted
being a founding member of the World trade
Organization. The country at large has seen many
significant changes which have taken place after the
formation of WTO. There are some issues which are
yet to be sorted out with the WTO and but by and
large things are falling in shape for the Indian
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