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INTRODUCTION OF WTO
WTO was formed on 1st Jan , 1995
It took over GATT (general agreement on tariffsand trade). In 8th round of GATT, popularlyknown as Uruguay round, members nation ofGATT decided to set up a new organization,‘World Trade Organization’ in place of GATT.
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World Trade Organisation
Established on 1.1.1995
160 members
97% of world trade
Geneva Switzerland
Decision making body – (Ministerial Conference)
General council
Trade Policy review body
Dispute settlement body Council for Trade in Goods
Council for Trade in services
Council for TRIPS
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WTO Vs GATT5
GATT WTOIT WAS AD HOC AND
PROVISIONAL
IT IS PERMANENT, MORE
AUTHORITY THAN GATT
IT HAS NO PROVISION FOR
CREATING AN ORGANIZATION.
IT HAS LEGAL BASIS BECAUSE
MEMBER NATIONS HAVE
VERIFIED THE WTO
AGREEMENTS
IT ALLOW CONTRADICTION IN
LOCAL LAW AND GATT
AGREEMENTS.
IT DOSEN’T ALLOW ANY
CONTRADICTION IN LOCAL LAW.
DEALS WITH TRADE IN GOODS DEALS IN TRADE IN SERVICES
AND INTELLECTUAL PROPERTY
AS WELL
DISPUTE SETTLEMENT LESS
EFFICIENT
FASTER AND MORE AUTOMATIC
OBJECTIVES OF
WTO
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to implement the new world
trade agreement.
promote multilateral trade
improve the level of living and
speed up economic
development
promote free trade
enhance competitiveness
increase the level of
production and productivity
with employment
expand and utilize world
resources
development of poorest
nation
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Scope of WTO
Trade in goods
Trade related investments
Measures (TRIMs)
General Agreements on Trade in
Services (GATS)
Trade Related Intellectual
Property Right’s (TRIPs)
ARGUMENTS IN
FAVOUR OF WTO
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Increase in inflow of foreign investment
Increase in agricultural export
Increase in foreign trade
Benefits for clothing and textile industry
Improvement in services
Inflow of better technology and better products
GATT11
It all began with trade in goods. From 1947 to 1944, GATTwas the forum for negotiation lower customs duty rates andother trade barriers, the text of general agreement spelt outimportant rules, particularly non-discrimination.
Since 1995, the updated GATT has become the WTO’sumbrella agreement for trade in goods.
It has annexes dealing with specific sectors such asagriculture and textiles, and with specific issues such asstate trading, product standards, subsidies and actionstaken against dumping.
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1• Cross–border supply
2• Consumption abroad
3• Commercial presence
4• Presence of natural person
Four modes of supply
Trade related investments measures
Measures prohibited by TRIM’S agreement
Local content requirement
Trade balancing requirement
Foreign exchange restriction
Export restriction
Exceptional provisions of TRIM’s agreement
Transitional period
Exception for developing countries
Equitable provisions
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TRIPs
The WTO’s intellectual property agreementamounts to rule for trade and investment inideas and creativity.
The rule state how copy rights, patents,trademarks, geographical names used toidentify products, industrial designs andundisclosed information such as trade secrets –”intellectual property” – should be protectedwhen trade is involved.
In nutshell, the TRIPs Agreement covers 7categories of intellectual property.
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Article27.3 :
Parties may exclude from patentability:
a)diagnostic, therapeutic and surgical methods for the treatment of
humans oranimals
b)plants and animals other than microorganisms, and essentially
biological processes for the production of plants or animals other
than non-biological and microbiological processes.
Parties shall provide for the protection of plant varieties either by
patents or by an effective sui generis system or by any combination
there of.
TRIPs
Dispute settlement system16
When Dispute Arises ?
Dispute settlement
The WTO’s procedure for resolving trade quarrelsunder the Dispute Settlement Understanding is vitalfor enforcing the rules and therefore for ensuringthat trade flows smoothly. Countries bring disputesto the WTO if they think there rights under theagreements are being in fringed. Judgments byspecially-appointed independent experts are basedon interpretations of the agreements and individualcountries commitments.
HOW ARE DISPUTE SETTLED ?
How long to settle a dispute? These approximate periods for each stage of a dispute settlement procedure are target figures — the agreement is flexible. In addition, the countries can settle their dispute themselves at any stage. Totals are also approximate.
60 days Consultations, mediation, etc
45 days Panel set up and panellists appointed
6 months Final panel report to parties
3 weeks Final panel report to WTO members
60 daysDispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60-90 days Appeals report
30 daysDispute Settlement Body adopts appeals report
Total = 1y 3m (with appeal)
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Source:Understanding the WTO: Settling Disputes - A unique contribution
WTO and Indian Agriculture18
Introduction
After over 7 years of negotiation 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.
Agreement on Agriculture
The WTO Agreement on Agriculture
contains provisions in three broad areas
of agriculture
1. Market access.
2. Domestic support.
3. Export subsidies.
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Market access20
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 prices
4. Discretionary licensing
5. State trading measures
AoA provisions on market
access
Prohibition of quantitative restriction on
import
Tariff binding and reduction
Bound versus Applied tariffs
Tariff Rate Quota
Special safeguard measures
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Domestic Support
WTO uses a traffic light analogy to
group program
Green box (non-trade distorting)
Blue box (production limiting)
Amber box (market distorting)
Prohibited(i.e. red box)
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Measure be placed in green box
1. It must be publicly funded govt. program and
does not involve transfers from consumers.
2. It must not have the effect of price support to
producer
Or it must comply to these criteria
A general service e.g. pest and disease control, training,
extension, advisory services, health, safety etc.
Stockholding of product for food security
Domestic food aid
Income insurance or income safety program
For natural disaster relief etc.
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Measure be placed in blue box◦ Be based on fixed area and yield
◦ Be made of 85% or less of the base level of production
◦ If livestock payments, be made on fixed no of head
Amber box◦ Product specific domestic support
◦ Non-product specific domestic support
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En export subsidy reduce the price paid by foreign importer, which mean domestic consumer pay more than foreign consumer
Export subsidy in Agricultural SectorDirect export subsidies contingent on export performance
Sale of non-commercial product on less prices than domestic market
Producer financed subsidy
Cost reduction measures
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Some of agricultural product under 23 product groups, such as wheat, coarse grain, sugar, beef, cheese and oilseeds.
Rates of cut◦ Developed countries
21% by volume
36% corresponding budgetary outlay
Over 6 years
◦ Developing countries
14% by volume
24% corresponding budgetary outlay
Over 10 years
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Year India's Total Annual Agri- Annual % share of Agri-
Exports (Rs. Growth exports Growth Exports in Total
Crore) Rate (%) (Rs. Crore) Rate (%) Exports
1990-91 32553 17.7 6317 16.5 19.4
1991-92 44041 35.3 7894 24.9 17.9
1992-93 53688 21.9 9082 15.0 16.9
1993-94 69751 29.9 12632 39.1 16.1
1994-95 82674 18.5 13269 5.0 16.0
1995-96 106353 28.6 20344 53.3 19.1
1996-97 118817 11.7 24362 19.8 20.5
1997-98 130100 9.5 24626 1.1 18.9
1998-99 139752 7.4 25387 3.1 18.1
2000-01 203571 27.6 27288 12.3 13.4
2001-02 209018 2.7 28144 3.1 13.4
2002-03 255137 22.1 32473 15.4 12.7
2003-04 293367 15.0 34615 6.6 11.7
2004-05 375340 27.9 38078 10.0 10.1
2005-06 456418 21.6 45220 18.8 0.9
2006-07 571779 25.3 57392 26.9 10.8
2007-08 655864 14.7 76006 32.4 11.5
2008-09 840755 28.2 80648 6.1 9.5
2009-10 845534 0.6 85211 5.6 10.0
2010-11 1142649 35.1 113116 32.7 9.8
TRENDS IN INDIA'S AGRICULTURAL EXPORTS DURING 1990-91 TO 2010-11
Source: 1. Govt. of India, Economic Survey- 2011-12, P. A 80.
2. Govt. of India, Ministry of Agriculture, Agricultural Statistics At a Glance- 2010.
SUGGESTIONSBased on the above discussion the following steps may berelevant to boost the space of growth of Agri-exports fromIndia in near future.1. Lack of co- ordination among various department engaged
in the promotion of agricultural exports has created numberof problems. Hence, there is an urgent need to establishefficient co-ordination among these departments.
2. In the wake up new economic policy of liberalization andWTO rules special care should be taken by the governmentto protect the interest of exporting farmers.
3. It is also necessary to create the awareness among theexporting farmers with regards to sanitary and phyto-sanitary standards imposed by developed countries.
4. Agri-exports need to organize themselves untidily to faceglobal competition instead of each exporter trying to exportin small quantities in an unorganized manner.
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5.At present, new emerging markets like Eastern Europe, China, UAE,
African countries have a lot of potential for absorbing more Agri-
exports. Hence, the efforts should be made to tap the potential of
there markets
6. The apex marketing agency like APEDA should intensify and speed-
up the export procedure of quality agricultural product.
7. High rate of interest for export finance make India's exports non-
competitive. Therefore, the rate of interest changed by financial
intuitions is reasonable.
8. The government should come forward to invest on basic
infrastructure. In this regard a complete cold chain facility needs
to be created on urgent basis.
9. Sincere and dedicated efforts are also needed to increase the
quality of exportable fruits and vegetables because there is
immense scope for increasing exports of fruits and vegetables in
India.
10. The proper branding of agricultural products needs to be
promoted as the branded products gets higher prices in comparison
to unbranded items.
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Conclusion
India as a developing economy, has been benefitted being a founding member of 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.
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