International Relations - World Trade Organization

WORLD TRADE
ORGANIZATION (WTO)
ASST. PROF. ANITA RATHOD
Dr. Anita Rathod, BBA IB, ICCS.

HISTORY OF THE MULTILATERAL TRADING SYSTEM
The early days of trade
• Trade and foreign policy have been intertwined throughout history,
with foreign policy often tailored to promote trade interests.
• In the 3rd century BC, during the Han Dynasty, China used its military
power to maintain the Silk Road for its value for trade.
• In the year 30 BC, Rome conquered Egypt in large part to have a better
supply of grain

BEFORE THE GATT
• A single page of text from 1941 is a powerful reminder
that the desire for peace and security drove the creation
of today’s global economic system.
• The global rules that underpin our multilateral economic
system were a direct reaction to the Second World War
and a desire for it to never be repeated.

THE GATT YEARS
• In Havana in 1948, the UN Conference on Trade and Employment concluded a
draft charter for the ITO, known as the Havana Charter, which would have
created extensive rules governing trade, investment, services, and business and
employment practices.
• However, the United States failed to ratify the agreement. Meanwhile, an
agreement to phase out the use of import quotas and to reduce tariffs on
merchandise trade, negotiated by 23 countries in Geneva in 1947, came into
force as the GATT on January 1, 1948.
• GATT means General Agreement on Tariffs and Trade

• The GATT system evolved over 47 years to become a de facto global trade
organization that eventually involved approximately 130 countries. Through various
negotiating rounds, the GATT was extended or modified by numerous supplementary
codes and arrangements, interpretations, waivers, reports by dispute-settlement
panels, and decisions of its council.
• During negotiations ending in 1994, the original GATT and all changes to it
introduced prior to the Uruguay Round were renamed GATT 1947.
• GATT 1994 became an integral part of the agreement that established the WTO.
• Other core components include the General Agreement on Trade in Services (GATS),
which attempted to supervise and liberalize trade; the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS),

• Improve protection of intellectual property across borders;
• The Understanding on Rules and Procedures Governing the Settlement of Disputes (which
established rules for resolving conflicts between members)
• The Trade Policy Review Mechanism (which documented national trade policies and assessed
their conformity with WTO rules)
• Four plurilateral agreements, signed by only a subset of the WTO membership, on civil aircraft,
government procurement, dairy products, and bovine meat (though the latter two were
terminated at the end of 1997 with the creation of related WTO committees).
• These agreements were signed in Marrakech, Morocco, in April 1994, and, following their
ratification, the contracting parties to the GATT treaty became charter members of the WTO. By
the 2020s the WTO had more than 160 members.

THE WTO
• LOCATION: Geneva, Switzerland
• ESTABLISHED: 1 January 1995
• CREATED BY: Uruguay Round negotiations (1986-94)
• MEMBERSHIP: 164 members representing 98% of world trade (as of 30 Sept
2018)
• BUDGET: 197 million Swiss francs for 2018
• SECRETARIAT STAFF: 630
• HEAD: Roberto Azevêdo (Director-General)

FUNCTIONS:
• In brief, the World Trade Organization (WTO) is the only
international organization dealing with the global rules of trade. Its
main function is to ensure that trade flows as smoothly, predictably
and freely as possible.
• “By lowering trade barriers through negotiations among member
governments, the WTO’s system also breaks down other barriers
between peoples and trading economies.

• Administering WTO trade agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring trade policies
• Technical assistance and training for developing economies
• Cooperation with other international organizations

THE GENERAL AGREEMENT ON TRADE IN SERVICES
(GATS)
• The creation of the GATS was one of the landmark achievements of the Uruguay
Round, whose results entered into force in January 1995.
• The GATS was inspired by some objectives –
• Creating a credible and reliable system of international trade rules;
• Ensuring fair and equitable treatment of all participants (principle of non-
discrimination);
• Stimulating economic activity through guaranteed policy bindings; and promoting
trade and development through progressive liberalization.

THE GATS - FOUR MODES OF SUPPLYING SERVICES
• Cross-border supply
• Consumption abroad
• Commercial presence
• Presence of natural persons

BASIC OBLIGATIONS UNDER THE GATS
• (a) General obligations
• MFN treatment:
• Transparency:
• (b) Specific commitments
• Market access:
• National treatment:

TRADE-RELATED ASPECTS OF INTELLECTUAL
PROPERTY RIGHTS (TRIPS)
• The TRIPS Agreement, which came into effect on 1 January 1995, is to date the
most comprehensive multilateral agreement on intellectual property.
• TRIPs covers most forms of intellectual property including copyright and related
rights (i.e. the rights of performers, producers of sound recordings and
broadcasting organizations); trademarks including service marks; geographical
indications 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.

AREAS OF INTELLECTUAL PROPERTY:
• Patents
• Trade Marks
• Copyrights
• Geographical Indications
• Industrial Designs

PATENTS
• A patent is an exclusive right granted for an invention, which is a product or a
process that provides, in general, a new way of doing something, or offers a new
technical solution to a problem. To get a patent, technical information about the
invention must be disclosed to the public in a patent application.
• The patent owner has the exclusive right to prevent or stop others from
commercially exploiting the patented invention.
• Patent protection means that the invention cannot be commercially made, used,
distributed, imported or sold by others without the patent owner's consent.

ACTS RELATED TO PATENTS
• The Patents Act, 1970
• The Patents (Amendment) Act, 1999

TRADE MARKS
• Trade Marks have been defined as any sign or any combination of signs capable of
distinguishing the goods or services of one undertaking from those of other
undertakings.
• The Agreement provides that initial registration and each renewal of registration shall
be for a term of not less than 7 years and the registration shall be renewable
indefinitely. Compulsory licensing of Trade Marks is not permitted.
• Act related to Trade Marks
• • Trade Marks Acts
• • Trade Marks Act, 1999
• • New Elements in the Trade Marks Act, 1999

COPYRIGHTS
• Copyright (or author’s right) is a legal term used to describe the rights that creators
have over their literary and artistic works.
• Works covered by copyright range from books, music, paintings, sculpture, and
films, to computer programs, databases, advertisements, maps, and technical
drawings.
• Literary works such as novels, poems, plays, reference works, newspaper articles;
• Computer programs, databases;
• Films, musical compositions, and choreography;
• Artistic works such as paintings, drawings, photographs, and sculpture;
• Architecture; and
• Advertisements, maps, and technical drawings.

INDUSTRIAL DESIGNS
• An industrial design constitutes the ornamental or aesthetic aspect of an article.
• A design may consist of three-dimensional features, such as the shape or surface
of an article, or of two-dimensional features, such as patterns, lines or color.
• In principle, the owner of a registered industrial design or of a design patent has
the right to prevent third parties from making, selling or importing articles bearing
or embodying a design which is a copy, or substantially a copy, of the protected
design, when such acts are undertaken for commercial purposes.

GEOGRAPHICAL INDICATIONS
• A geographical indication (GI) is a sign used on products that have a specific
geographical origin and possess qualities or a reputation that are due to that
origin. In order to function as a GI, a sign must identify a product as originating in
a given place.
• In addition, the qualities, characteristics or reputation of the product should be
essentially due to the place of origin.
• Since the qualities depend on the geographical place of production, there is a
clear link between the product and its original place of production.

TRADE SECRETS
• Trade secrets are IP rights on confidential information which may be sold or licensed.
• The unauthorized acquisition, use or disclosure of such secret information in a manner
contrary to honest commercial practices by others is regarded as an unfair practice and
a violation of the trade secret protection.
• In general, to qualify as a trade secret, the information must be:
• commercially valuable because it is secret,
• be known only to a limited group of persons, and
• be subject to reasonable steps taken by the rightful holder of the information to keep it
secret, including the use of confidentiality agreements for business partners and employees.

TRIPS WORK IN THE WTO
• Work of the TRIPS Council
• TRIPS Council “special sessions”
• Notifications — members’ transparency toolkit
• Review of members’ implementing legislation
• Technical cooperation in the TRIPS area

TRADE-RELATED INVESTMENT MEASURES (TRIMS)
• This Agreement, negotiated during the Uruguay Round, applies only to measures that
affect trade in goods.
• Recognizing that certain investment measures can have trade-restrictive and distorting
effects, it states that no Member shall apply a measure that is prohibited by the provisions
of GATT Article III (national treatment) or Article XI (quantitative restrictions).
• The Agreement contains transitional arrangements allowing Members to maintain notified
TRIMs for a limited time following the entry into force of the WTO
• The Agreement also establishes a Committee on TRIMs to monitor the operation and
implementation of these commitments.

FEATURES OF TRIMS
• Abolition of restriction imposed on foreign capital
• Offering equal rights to the foreign investor on par with the domestic investor
• No restrictions on any area of the investment
• No limitation or ceiling on the quantum of foreign investment
• Granting of permission of without restrictions to import raw material and other
components
• No Force on the foreign investors to use the total products or materials
• Export of the part of the final product will not be mandatory
• Restrictions on repatriation of dividend interest and royalty will be removed
• Phased manufacturing programming will be introduced to increase the domestic
content of manufacturer

TRIMS AND FOREIGN INVESTMENT POLICY
CHANGES IN INDIA
• India has made several foreign investment liberalization measures since the
launch of the New Industrial Policy in1991.
• Regulations for both FDI and FPI were simplified and now foreign investment is
allowed in almost all sectors.

REFERENCE WEBSITE LINKS
• https://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm
• https://www.wto.org/
• https://www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm
• https://www.wipo.int/about-ip/en/

International Relations - World Trade Organization

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