All about world trade agreements for food processing industries.

1. WORLD TRADE AGREEMENTS
RELATED WITH FOOD
BUSINESS
SUBMITTED TO: SUBMITTED BY:
DR. ANEETA KHATAK UNNATI KSHETRIYA
ASSISTANT PROFESSOR 190080820026
MSC. FOOD TECH.
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2. CONTENT
1. INTRODUCTION
2. HISTORY
3. OBJECTIVES
4. FUNCTIONS
5. WORLD TRADE AGREEMENTS:
 AGREEMENT ON AGRIBUSINESS (AoA)
 AGREEMENT ON THE APPLICATION OF SANITARY AND PHYTOSANITARY
MEASURES (SPS)
 AGREEMENT ON TECHNICAL BARRIER TO TRADE (TBT)
• AGREEMENT ON TRADE RELATED INTELLECTUAL PROPERTY RIGHTS (TRIPS)
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3. INTRODUCTION:
• World Trade Organization (WTO) is one of the most powerful institutions in the
world. It is an international, multilateral organization, which sets the rules for the global
trading system & resolves disputes between its member states.
 It oversees global trade in goods & services and has 30 agreements.
 WTO headquarters are located in Geneva, Switzerland.
 Ngonzi Okonjo is the current 7th Director-General from Nov. 2020
 Currently - 164 members.
WTO’s aim- is to promote free trade and stimulate economic growth.
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4. HISTORY:
The ITO was initially form, along with the International Monetary Fund (IMF) and
the World Bank, as one of the key pillars of post-World War II reconstruction
and economic development, 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.
GENERAL AGREEMENT ON TARIFFS & TRADE (GATT) :
GATT – created set of global rules that governed trade in goods :
Substantial reduction in tariff and other barriers to trade
Eliminate discriminatory treatment in international commerce
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5. • GATT only focused on trade in goods, contracting parties, provisional,
WTO's rules are legal and permanent extended to include; focus on members, Intellectual
Property, Investment, Services, Telecommunications and Financial services (banking).
OBJECTIVES:
 To ensure the conduct of international trade on non-discrimination basis.
 To raise standard of living and income, ensuring full employment,
 To expand production and trade.
 Ensuring better share for developing countries.
 To enhance competitiveness among all trading partners so as to benefit consumers
and help in global integration.
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6. PRINCIPLE:
• Non-discrimination between countries:
No Most Favoured Nation (MFN) Treatment - no special deals to trading
partners, all members of WTO must be treated the same
No National Special Treatment - locals and foreigners are treated equally
• Freer trade: gradually through negotiations
• Predictability: Promising not to raise tariffs is called binding a tariff and binding
leads to greater certainty for businesses
• Promoting competition
• Encouraging Development and Economic Reform
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7. FUNCTION:
 Transparent, free and rule-based trading system.
 Provide forum for negotiations and common institutional framework for conduct of trade relations
among members
 Trade Policy Review Mechanism – designed to contribute to greater transparency and
understanding of trade policies and practices to members.
 Concern for LDCs (Least-developed countries) and NFIDCs (Net Food-Importing
Developing Countries)
 Concern on Non-trade issues like Food Security, Environment, Health etc.
 Coherence in global economic policy-making – cooperating with IMF and world bank.
• Technical assistance and training for developing countries
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8. •WORLD TRADE
AGREEMENTS RELATED
TO FOOD
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9. 1.AOA: AGREEMENT ON AGRICULTURE
• The implementation of the Agreement on Agriculture started with effect from 1.1.1995. As
per the provisions of the Agreement, developed countries would complete their reduction
commitments within 6 years, i.e., by the year 2000, whereas the commitments of the
developing countries would be completed within 10 years, i.e., by the year 2004
 Covers three broad areas of agriculture and trade policy:
Market access,
Domestic support and
Export subsidies
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10.  Domestic support: structures(subsidies) into 3 categories or "boxes":
 Green Box: contains fixed payments to producers for environmental programmes e.g. Research,
Extension, so long as payments are ‘decoupled’ from current prodn.levels.
 Amber Box: contains domestic subsidies that governments have agreed to reduce but not eliminate.
Product Specific – MSP, Non-product specific (fertilizers, Power, Irrigation etc.)
 Blue Box: contains subsidies which can be increased without limit, so long as payments are linked to
production-limiting programe.
 Market Access: refers to reduction of tariff (or non-tariff) barriers to trade by member-states. The 1995 AoA
required tariff reductions of:
 36% avg. reduction by developed countries, with a min.per tariff line reduction of 15% over 5yrs.
 24% avg. reduction by developing countries with a min.per tariff line reduction of 10% over 9yrs.
 Export subsidies
• Required developed countries to reduce export subsidies by at least 36% (by value) or by at least 21% (by
volume) over the five years to 2000
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11. INDIAS COMMITMENT TO AOA:
1. Market Access
• India maintaining Quantitative Restrictions due to balance of payments reasons
• The only commitment India has undertaken is to bind its
Primary agricultural products at 100%;
Processed foods at 150% and
• Edible oils at 300%.
2. Domestic Support
• India does not provide any product specific support other than market price support.
• Non-product specific subsidy for fertilizers, water, seeds, credit and electricity.
• Not undertaken any commitment in scheduled filed under GATT, since total AMS is negative and that too
by a huge magnitude,
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12. 3. Export Subsidies
• Exporters of agricultural commodities do not get any direct subsidy apart from
• (a) exemption of export profit from income tax under section 80-HHC of Income Tax Act.
• (b) subsidies on cost of freight on export shipments of certain products like fruits, vegetables etc.
• Indicated that India reserves the right to take recourse to subsidies (such as, cash compensatory
support) during the implementation period.
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13. 2. SPS: THE SANITARY AND PHYTO SANITARY
AGREEMENT
• It concerns the application of food safety and animal and plant health regulations.
• According to the WTO SPS Agreement, food safety measures should:
 Be based on science
 Not be unnecessarily trade-restrictive
 Not discriminate arbitrarily between Members
 Be based on Codex standards
All countries maintain measures to ensure that food is safe to
consumers and to prevent the spread of pests or diseases among
plants and animals.
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14. • KEY FEATURES:
1. International standards:
Encourages government to established national SPS measure consistent with international standards,
guidelines and recommendations – “harmonization”
2. Risk assessment:
Countries must establish SPS measures on the basis of an appropriate assessment of actual risk involved, the
assessment procedure they used and the level of risk they determined to be acceptable.
3. Adapting to conditions:
Due to differences in climate, existing pests or diseases or food safety condition, it is not always appropriate
to impose the same sanitary and phytosanitary requirements on food, animal or plant products coming from
different countries.
• Therefor sanitary and phytosanitary measures sometimes vary depending on the country of origin of the
food or plant product concerned.
4. Transparency:
The SPS agreement increases the transparency of sanitary and phytosanitary measures.
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15. 3. TBT: AGREEMENT ON TECHNICAL BARRIER TO
TRADE
• “Technical barriers to trade” – use of domestic regulatory process as a means of protecting
domestic producers.
• Covers all technical regulations, voluntary standards and conformity assessment procedures
except when these are covered by the SPS
• Legitimate objectives include:
 National security
 Prevention of deceptive practices
 Human health
 Plant and animal health
 Environment
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16. • The TBT agreements seeks to ensure that:
 Mandatory product regulations
 Voluntary product regulations
 Conformity assessment procedures (procedures designed to test a products
conformity with mandatory regulations or voluntary standards)
 Requires use of international standards (including Codex Alimentarius standards
on food quality, labelling, etc.)
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17. 4. TRIPS: AGREEMENT ON TRADE-RELATED
ASPECTS OF INTELLECTUAL PROPERTY RIGHTS
• The areas covered by the TRIPS Agreement
 Copyright and related rights
 Trademarks, including service marks
 Geographical indications
 Industrial designs
 Patents
 Layout-designs (topographies) of integrated circuits
 Undisclosed information, including trade secrets
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18. • The TRIPS Agreement has an additional important principle: intellectual property
protection should contribute to technical innovation and transfer of technology. Both
producers and users should benefit, and economic and social welfare should be enhanced,
the agreement says.
• Common examples include extension of copyright Protection to computer programs which
are now treated as literary works,
• The application of patent protection to plants, animals, microorganisms, DNA sequences and
pharmaceuticals.
“When the WTO agreements took effect on 1 January 1995, developed countries were given
one year to ensure that their laws and practices conform with the TRIPS agreement.
Developing countries and (under certain conditions) transition economies were given five
years, until 2000. Least-developed countries had 11 years, until 2006 — now extended to 2013
in general, and to 2016 for pharmaceutical patents and undisclosed information”.
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19. GOVERNMENT INSTITUTIONS RELATED TO
INTERNATIONAL TRADE:
 Directorate general of foreign trade (DGFT)
 Indian institute of packaging (IIP)
 Agricultural and processed food products development authority (APEDA)
 Export promotion councils (EPCs)
 Indian institute of foreign trade (IIFT)
 State trading corporation of India (STC)
 Chamber of commerce (CoC)
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20. CRITICISM:
• Even though WTO is a fairly new institution, there has been public scepticism and concern
about how it functions since the beginning
• When WTO was set up, the majority of developing countries were not at the table and were barely
consulted. As a result, the WTO essentially protects MNCs based in the North and acts as a tool of rich and
powerful countries - notably US, EU, Japan and Canada.
 Some examples of managing global economy impartially are:
1) rich countries are able to maintain high import duties and quotas in certain products, blocking imports
from developing countries (e.g. clothing);
2) the increase in non-tariff barriers such as anti-dumping measures allowed against developing
countries;
3) the maintenance of high protection of agriculture in developed countries while developing ones are
pressed to open their markets;
4) many developing countries do not have the capacity to follow the negotiations and participate
actively in the Uruguay Round; and
• The TRIPs agreement which limits developing countries from utilizing some technology that originates
from abroad in their local systems
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21. REFERENCES:
• WTO Agreements (trade.gov)
• World Trade Organization (WTO) | History & Facts | Britannica
• 01ES_WTO.PDF
• Agreement establishing the World Trade Organization (wto.org)
• untitled (wto.org)
• WTO AGREEMENTS (slideshare.net)
• WTO Agreement on Agriculture (slideshare.net)
• Wto agreements (slideshare.net)
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22. THANK YOU
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