World Trade Organisation

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Session 4

History

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GATT was established by U.S,U.K and some developed countries in 1947

UN appointed UNCTAD committee in 1964 to secure some concessions for developing countries

GATT was made progressively liberal in a series of negotiations

In its Uruguay rounds WTO came into existence in 1st Jan, 1995

Objectives of WTO

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Raising the standard of living and income

Promoting full employmentExpanding production & Trade and

optimum utilisation of world resourcesIntroduce sustainable developmentEnsuring LDC’s secure a better share of

growth in world Trade

DIRECTOR-GENERAL: Roberto Azevêdo

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His appointment took effect on 1 September 2013 for a four-year term.

Launch of the World Trade Report in Singapore

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At the launch of the World Trade Report in Singapore, Pascal Lamy is accompanied on the podium by (from left to right) WTO Spokesperson Keith Rockwell, Professor Kishore Mahbubani and WTO Chief Economist Patrick Low.

Functions of WTO

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Administering and implementing multilateral Trade agreement

Resolving Trade DistputesMaintaining Trade related databaseActing as watch dog of international trade

constantly examining the trade regimes of individual members

WTO does not aim at economic or political integration, but seeks to promote free trade among member countries

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Organisation Structure of WTO

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•Ministerial Conference

•General Council

•Dispute Settlement Body

COUNCILS

•Trade in goods

•Trade in services

•TRIPS

•Trade Policy Review Body

•Committee on Trade & Development

•Committee on BOP

•Committee on Budget, Finance & Administration

Principles of WTO

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Trade Without Discrimination 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 Predictability through Binding - promising not to

raise tariffs is called binding a tariff and binding leads to greater certainty for businesses

Promoting Fair Competition Encouraging Development and Economic

Reform

Functions of WTO

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Administering WTO trade agreements Forum for trade negotiations Handling Trade Dispute Monitoring national trade policies Technical assistance and training for

developing countries Cooperation with other international

organizations

Trade Negotiations Committee, Geneva 11

Agreements / Subjects in WTO

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AgricultureStandards & SafetyTextilesServicesIntellectual Property Antidumping & SubsidiesNon Tariff BarriersPlurilateral AgreementsTrade Policy Review

TRIPS

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Ideas and knowledge are an increasingly important part of trade. Most of the value of new medicines and other high technology products lies in the amount of invention, innovation, research, design and testing involved.

Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them.

Many products that used to be traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value — for example brandnamed clothing or new varieties of plants.

Types of intellectual property

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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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Patents, industrial designs, integrated circuit designs, geographical indications and trademarks have to be registered in order to receive protection. The registration includes a description of what is being protected — the invention, design, brandname, logo, etc — and this description is public information.

Copyright and trade secrets are protected automatically according to specified conditions. They do not have to be registered, and therefore there is no need to disclose, for example, how copyrighted computer software is constructed.

Other conditions may also differ, for example the length of time that each type of protection remains in force.

Textiles

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MFA -This was a framework for bilateral agreements or unilateral actions that established quotas limiting imports into countries whose domestic industries were facing serious damage from rapidly increasing imports.

Since 1995, the WTO’s Agreement on Textiles and Clothing (ATC) took over from the Mulltifibre Arrangement. By 1 January 2005, the sector was fully integrated into normal GATT rules. In particular, the quotas came to an end, and importing countries are  no longer be able to discriminate between exporters. The Agreement on Textiles and Clothing no longer exists

Developing Countries

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About two thirds of the WTO’s around 150 members are developing countries

extra time for developing countries to fulfil their commitments (in many of the WTO agreements)

Provisions designed to increase developing countries’ trading opportunities through greater market access (e.g. in textiles, services, technical barriers to trade)

Povisions requiring WTO members to safeguard the interests of developing countries when adopting some domestic or international measures (e.g. in anti-dumping, safeguards, technical barriers to trade)

   provisions for various means of helping developing countries (e.g. to deal with commitments on animal and plant health standards, technical standards, and in strengthening their domestic telecommunications sectors).

Issues of developing countries

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They complain that they still face exceptionally high tariffs on selected products (“tariff peaks”) in important markets that continue to obstruct their important exports. Examples include tariff peaks on textiles, clothing, and fish and fish products.

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A related issue is “tariff escalation”, where an importing country protects its processing or manufacturing industry by setting lower duties on imports of raw materials and components, and higher duties on finished products

Erosion of preferences — special tariff concessions granted by developed countries on imports from certain developing countries become less meaningful if the normal tariff rates are cut because the difference between the normal and preferential rates is reduced.

Can they Benefit from WTO

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only if their economies are capable of responding. This depends on a combination of actions: from improving policy-making and macroeconomic management, to boosting training and investment. The least-developed countries are worst placed to make the adjustments because of lack of human and physical capital, poorly developed infrastructures, institutions that don’t function very well, and in some cases, political instability.

Disadvantages to India

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TRIPS includes product patents (while we had only process patent) , it can be granted to methods of agriculture, horticulture & biotech process.

Drug Prices will increasePresently plant breeding & seed production is in public

domain, change will hurt Indian agriculture.Services like banking, insurance, investment banking,

health -overseas service providers will enter into the services sectors in the country, thereby reducing the chances of domestic enterprises.

India takes EU to WTO

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EU authorities have been seizing cargoes of drugs from India because they believe these medicines infringe local patent laws while transiting from its customs. However, under the rules on trade for public health in the Trips agreement, a developing country is allowed to buy life-saving drugs from any another country where they are generic or off-patent. So, even if the drug is patented in a third country, under Trips, it has to allow the cargoes to pass.

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In January, Dutch authorities had seized a consignment of drugs to fight high blood pressure manufactured by Dr Reddy’s Lab on its way to Brazil, and sent it back to India

India and Brazil have both objected to EU’s actions. In a recent meeting of the WTO’s council on Trips, India stated that such actions fit into a larger trend that risks upsetting the “delicate balance” between IP rights holders and public policy goals

Benefits to India

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Largest increase in merchandise trade in goods will be in agriculture, forestry, fishery products and beverages.

Phasing out of MFA will increase exports

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Issues in WTO

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An issue that has arisen recently is how to ensure patent protection for pharmaceutical products does not prevent people in poor countries from having access to medicines

agreed to extend exemptions on pharmaceutical patent protection for least-developed countries until 2016.

WTO impact on Indian Sectors

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AgriculturePharmaTextileServices

WTO impact on developing Economies

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