India & Wto


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All about India & WTO in a nutshell!!

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India & Wto

  1. 1. Presented By: Ronak Rathor
  2. 2.  General Agreement on Tariffs and Trade  GATT was formed in 1947 and lasted until 1994 was replaced by the World Trade Organization  On 1 January, 1948 the agreement was signed by 23 countries.  GATT held a total of 8 rounds. 30/01/15 2XIDAS Jabalpur
  3. 3.  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). 30/01/15 3XIDAS Jabalpur
  4. 4.  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. 30/01/15 XIDAS Jabalpur 4
  5. 5.  WTO is to ensure that global trade commences smoothly, freely and predictably.  Transparency in trade policies.  Work as a economic research and analysis centre. 30/01/15 XIDAS Jabalpur 5
  6. 6. 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 Well. 30/01/15 XIDAS Jabalpur 6
  7. 7. GATT  It was ad hoc & provisional.  It had no provision for creating an organization.  It allowed contradictions in local law & GATT agreements. WTO  It is permanent.  It has legal basis because member nations have verified the WTO agreements.  More authority than GATT. It doesn't allow any contradictions in local law . 30/01/15 XIDAS Jabalpur 7
  8. 8. GATT and WTO trade rounds[27] Name Start Duration Countries Subjects covered Achievements Geneva April 1947 7 months 23 Tariffs Signing of GATT, 45,000 tariff concessions affecting $10 billion of trade Annecy April 1949 5 months 13 Tariffs Countries exchanged some 5,000 tariff concessions Torquay September 1950 8 months 38 Tariffs Countries exchanged some 8,700 tariff concessions, cutting the 1948 tariff levels by 25% Geneva II January 1956 5 months 26 Tariffs, admission of Japan $2.5 billion in tariff reductions Dillon September 1960 11 months 26 Tariffs Tariff concessions worth $4.9 billion of world trade Kennedy May 1964 37 months 62 Tariffs, Anti-dumping Tariff concessions worth $40 billion of world trade Tokyo September 1973 74 months 102 Tariffs, non-tariff measures, "framework" agreements Tariff reductions worth more than $300 billion dollars achieved Uruguay September 1986 87 months 123 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 property rights. Doha November 2001 ? 141 Tariffs, non-tariff measures, agriculture, labor standards, environment, competition, investment, transparency, patents etc The round is not yet concluded. 30/01/15 8XIDAS Jabalpur
  9. 9. WTO STRUCTURE.doc 30/01/15 XIDAS Jabalpur 9
  10. 10. Introduction.  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 Uruguay Round. 30/01/15 XIDAS Jabalpur 10
  11. 11.  The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture: 1. Market access. 2. Domestic support. 3. Export subsidies 30/01/15 XIDAS Jabalpur 11
  12. 12.  This includes tariffication, tariff reduction and access opportunities.  Tariffication means that all non-tariff barriers such as... 1. quotas; 2. variable levies; 3. minimum import price; 4. discretionary licensing; 5. state trading measures. 30/01/15 XIDAS Jabalpur 12
  13. 13.  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). 30/01/15 XIDAS Jabalpur 13
  14. 14.  The Agreement contains provisions regarding members commitment to reduce Export Subsidies.  Developed countries are required to reduce their export subsidy expenditure by 36%.  For developing countries the percentage cuts are 24%. 30/01/15 XIDAS Jabalpur 14
  15. 15.  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. 30/01/15 XIDAS Jabalpur 15
  16. 16.  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 products. 30/01/15 XIDAS Jabalpur 16
  17. 17. India’s basic objectives in the ongoing negotiations are: a. To protect its food and livelihood security concerns and to protect all domestic policy measures taken for poverty alleviation, rural development and rural employment. b. To create opportunities for expansion of agricultural exports by securing meaningful market access in developed countries. 30/01/15 XIDAS Jabalpur 17
  18. 18. 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 decision making. 30/01/15 18XIDAS Jabalpur
  19. 19. 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. 30/01/15 19XIDAS Jabalpur
  20. 20. 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 Print,  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. 30/01/15 20XIDAS Jabalpur
  21. 21. 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 : • Standards • Enforcement • Dispute settlement 30/01/15 21XIDAS Jabalpur
  22. 22. 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. 30/01/15 22XIDAS Jabalpur
  23. 23. 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. 30/01/15 23XIDAS Jabalpur
  24. 24. 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.” 30/01/15 24XIDAS Jabalpur
  25. 25. 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 the 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." 30/01/15 25XIDAS Jabalpur
  26. 26. 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." 30/01/15 26XIDAS Jabalpur
  27. 27. 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 Economy. 30/01/15 27XIDAS Jabalpur