Export Import Final

8/4/2019 Export Import Final

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A

TERM PAPER

ON

WORLD TRADE ORGANISATION

Submitted to:

SIR L.A. SHAH LAW COLLEGE

Submitted By:

CHAUHAN BRIJESH R

LL.M SEMESTERI

GROUP: C (BUSINESS LAW)

BATCH: (2011-2012)

ROLL NO: 07

SUBJECT: EXPORT AND IMPORT LAW


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[A].GENERAL AGREEMENT ON TARIFFS AND TRADE [GATT]:[1].ORIGIN OF GATT:

The expansion of international trade in globalization era is actually responsible for theorigin of world institution like IMF, World Bank, GATT, and WTO. Inspite from thesuccess of Agreement of International Monetary Co-operation reflected in theformation of IMF, similar co-operation in international trade was desired by manytrading nations for expansion of international trade. So, it was thought that an attemptmust be made to relax the existing trade restriction, such as tariffs. Some of thecountries took up the matter of trade restrictions by incorporating it into a GeneralAgreement on Tariffs and Trade [GATT].

GATT [General Agreement on Tariffs and Trade] was signed in 1948 by 23 majortrading nations, including India. It is a multilateral arrangement aimed at reducingbarriers to tariff and trade. Later many countries joined GATT. Its membership has

not gone up to more than 64.

Under the GATT, member countries meet regularly to negotiate agreements to reducequotas, tariffs and such other restrictions on international trade. It is a treaty thatis collectively administered by the contracting nations. However, it has becomepermanent international trade and an institution for multilateral expansion of trade.

[2].MAIN OBJECTIVES:The GATT agreement is basically aimed at expansion of the international trade byreducing tariff barriers and eliminating discrimination in international trade.

It focuses on the following objectives;

[i]. Expansion of international trade;

[ii]. Increase of world production by ensuring full employment in participating nations,particularly the developing countries.

[iii]. Ensuring the development and full utilization of world resources; and

[iv]. Raising standard of living of the world community as a whole.

However, the articles of the GATT do not provide directives for attaining theseobjectives. They are to be indirectly achieved by the GATT through the production offree and multilateral international trade.

Moreover, the rules adopted by GATT are based on the following fundamentalprinciples;

[i]. To encourage non-discriminative trade,

[ii]. To oppose the use of quantitative restrictions, and

[iii]. To resolve any dispute or disagreement through consultation.

In short, members of GATT agree to reduce trade barriers and to eliminatediscrimination in international trade so that the gate of wider dimension of world tradeand prosperity can be opened, ultimately leading to promotion of multilateral and freetrade.

[Dunkel Draft of Dunkel Text is another name of GATT].


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[3].GATT IN THE CONTEXT OF INDIAN EXPERIENCE:India is a member of GATT and it has been an important signatory. By virtue of its

membership, India is automatically entitled to enjoy the benefits of Most FavouredNation [MFN] treatment from all the other participating members. Even then, shecould not have assured the same what she has been yielding [generated] through theGATT. Today, even a country like China has been keen on joining the GATT.

In all, there have been eight GATT rounds including the Uruguay Round. The variousrounds of GATT conferences are:

First 1947Geneva [Switzerland], Second 1949Annecy [France], Third 1950-51Torquay [England], Fourth 1956 Geneva [Switzerland], Fifth 1960-61 Geneva[Switzerland], Sixth 1964-67 Geneva [Switzerland], Seventh 1973-79 Tokyo[Japan], and Eighth 1986-93Punta Del Este [Uruguay/Geneva]. The major areas of

negotiations through GATT conferences had been on multilateral trade byencouraging economic liberalization.

INDIAS ROLE AND STAND IN GATT:

In the bargaining process of the Uruguay Round, the Indian Government, tried toensure that no clauses of the negotiations are harmful to the interest of the country.Following are the likely outcomes of the new treaty:

[i]. AGRICULTURE IS A MAJOR SUBJECT OF THE URT .Under the new treaty, member countries have to reduce their agriculture subsidiesover the six years, if they exceed 10 per cent of the value of agricultural production.

India need not fear about this clause, because our product and non-product agro-subsidies are already below 10 percent of the total agro-output value. The membercountries have agreed to reduce import duties on agricultural products by 36 percent.

Further, the developed countries will have to import at least three percent of theiragro-output. These provisions will give a boost to Indias agro-exports whenEuropean farm exports will tend to be more expensive in the world market. There isalso the possibility of a rise in rice imports from Japan and Korea. India has to try itsbest to grab the opportunity and exploit its growth potential and enlarged agro-exportsincluding margined products.

Though, India is basically an agrarian economy, paradoxically she is a dwarf [small]

player in the agro-trade world market. It is necessary to strengthen the countrysagricultural sector for quantitative improvement and high productivity. Unless there isa definite improvement in the quality of agro-products and sufficient marketablesurplus is generated at competitive prices, Indian agricultural exports will remain agrey area in the emerging world economic order.

[ii]. TEXTILES:Textiles is considered as a green area of the GATT agreement. Out of total textile

exports of India, 52 percent of the total cotton textile exports and 77 percent ofreadymade garments exports are to the quota countries. So, with the dismantling ofthe quota system, apparently, India will have a better access to the quota-countries

markets for her textile exports, especially cotton piece goods knitted fabrics andready-made garments. Indeed, under the liberalized environment of both domestics


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and external sectors, with abundant supplies of cotton, skilled labour force, improvedtechnology and due modernization, Indian should be in a position to emerge as amajor force in the global textile markets, despite the stiff competition from countrieslike China, Malaysia, Taiwan and even Pakistan.

[iii].PROVISION FOR INTELLECTUAL PROPERTY RIGHTS [TRIPS]:Provision for intellectual property rights (TRIPs) is a crucial area of the URT with far-reaching implications for developing countries including India. Until now only the

process patent was protected. Under the new agreement, inventors rights widely

cover patents, copyright, industrial design, trade marks as well as performing art. Thephasing-out period is specified as 10 years for drugs and agro-chemicals and 5 yearsfor the rest.

In the years to come, software packages will tend to become more expensive for ourcountry. Indias software industry may become stagnant, unless the government

modifies the present duty structure on software and Indian companies are encouraged

to develop specialized software packages.After TRIPs, the software piracy is expected to come down throughout the world.This would also provide more opportunities for the Indian Professionals to developnew original software packages to sell in the global markets. Of course, with thegrowing R & D everywhere, competition will be intensified and only the best willsurvive. Official claims put Indian benefits from skilled manpower exports to go upfrom $ 1.2 billion at present to $ 5 billion per annum by the end of this century.

[iv].PHARMACEUTICAL INDUSTRY:The TRIPs are likely to create some adverse effect on pharmaceutical industry inIndia, because the new discoveries will be available at very heavy cost. Indian drugs

also need to have their focus in finding new chemical molecules useful for treatmentof tropical diseases like malaria, cholera and typhoid. Indian pharmacists should try todevelop Ayurvedic drugs as an alternative form of medicine. Under the GATTagreement then India can hope to increase her exports of generic, tropical andAyurvedic drugs to many countries. This obviously calls for a rational and pragmaticdrug policy on the part of the government.

[v]. FOODGRAINS:Under the TRIPs, seeds will be patented. Indian farmers inputs costs will increase

due to royalties on seeds. Similarly, agro-chemicals of patented manufacture will bemore expensive. As a result, food grain prices will go up and the average Indianconsumer will be adversely affected. Effective and subsidized public distributionsystem (PDS) can only rescue the poor. But, this would pose an added fiscal burdenon the government.

[vi].SERVICES:The new treaty provides for fair trade and non-discrimination, and reducing entryrestrictions on specialized & skilled labour. This will help India to some extent, as herconsultancy exports will raise.

CONCLUDING REMARKS:

In the post war era, under the disguise of GATT, both economics and politics are at

war in determining the future of global economy. The GATT, in theory, only makes atall claim of treating all contracting parties as equal.


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In practice, however, the poor and small countries are ignored and never allowed tosucceed in asserting themselves. The last Uruguay Round was essentially a gameplayed by the rich countries in sustaining the interests of their multinational firms.This was clearly witnessed in the process and final results of the Uruguay Round. Thetruth of the matter is that the big bosses of the world economy have adopted double

standards in matters of theory and practice of free trade. They preach liberalizationand free trade to increase their access to foreign markets in LDCs. But, at home, theyintroduce high degree of protectionism and government intervention with regard totheir new products, industries and technologies.

[B].WORLD TRADE ORGANISATION [WTO]:The World Trade Organization [WTO] was established on 1st January, 1995 [basis forWTO was laid on April 15, 1994]. It has completely replaced GATT [GeneralAgreement on Tariffs and Trade]. It has been established as a part of the UruguayRound Agreement of the GATT. It also incorporated Dunkel Proposals, betterdescribed as Dunkel Draft, in respect of international trade and trade related matters,

which were made by Arthur Dunkel, Director General of GATT [now retired] inDecember 1991, By April 2003, there were nearly 146 members. WTO has rapidlyaccumulated its strength in international trade.

The WTO has been formed on the basis of trade in manufactured commodities[GATT], trade in services and agricultural products [Dunkel Draft], and other relatedmatters. WTO simply deals with the rules of the trade between nations.

In other words, it has evolved a set of rules for the conduct of world trade, but WTO

can be looked from different angles likeit is an organization for liberalizing trade, ithelps the governments to negotiate trade agreements, it is a place for the membercountries to settle trade disputes, it operates a system of trade rule, and above all, it isa place where member countries try to sort out the trade problems they face with eachother. WTO was born out of negotiations and everything done is the result ofnegotiations.

[1].FEATURES:The distinctive features of the WTO are:

[i]. Unlike the GATT, it is a legal entity.

[ii]. Unlike the International Monetary Fund (IMF) and the World Bank (WB) it is not anagent of the United Nations.

[iii]. Unlike the IMF and the World Bank, there is no weighted voting , but all the WTOmembers have equal rights.

[iv]. Unlike the GATT, the agreements under the WTO are permanent & binging to themember countries.

[v]. Unlike the GATT, the WTO dispute settlement system is based not on dilatory butautomatic mechanism. It is also quicker and binding on the members. As such, theWTO is a powerful body.

[vi]. Unlike the GATT, the WTOs approach is rule-based and time-bound.

[vii]. Unlike the GATT, the WTOs ahs wider coverage. It covers trade in goods as well asservices.


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[viii]. Unlike the GATT, the WTOs has a focus on trade-related aspects of intellectualproperty rights and several other issues of agreements.

Above all, the WTO is a huge organizational body with a large secretariat.

[2].OBJECTIVES: The purposes and objectives of the WTO [Marrakesh Agreement] are as follows

[i]. To ensure the reduction of tariff and other barriers to trade.

[ii]. To eliminate discriminatory treatment in international trade relations.

[iii]. To facilitate higher standards of living, full employment, a growing volume of realincome and effective demand, and an increase in production and trade in goods andservices of the member nations.

[iv]. To ensure that least developed countries secure a level of share in the growth ofinternational trade.

[v]. To facilitate the optimal use of the worlds resources for sustainable development.

[vi]. To promote an integrated, more viable and durable trading system by including all theresolutions of the Uruguay Rounds multilateral trade negotiat ions.

Above all, to ensure that linkages trade policies, environmental policies withsustainable growth and development are taken care of by the member countries inevolving a new economic order.

[3].FUNCTIONS:The most important function of the WTO is to implement, administer, direct andfurther the objective of the Multilateral and Plurilateral Trade Agreements resultingfrom the Uruguay Round. The major functions of the WTO are as follows

[i]. To lay down a substantive code of conduct for reducing trade barriers including tariffsand elimination of discrimination in international trade relations.

[ii]. To provide the institutions framework for the administration of the code.

[iii]. To provide an integrated structure of administration to facilitate implementation,administration, and fulfillment of the objectives of the WTO Agreement and othermultilateral trade agreement.

[iv]. To ensure the implementation of the substantive (existing) code.

[v]. To act as a forum for the negotiation of further trade liberalization.

[vi]. To cooperate with the IMF and WB and its associates for establishing coherence[unity or consistency] in trade policy making.

[vii]. To settle the trade related disputes.


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WTO PRINCIPLES:

[i]. There should not be any discrimination either among trading nations, Most FavouredNations [MFN] or between national and foreign products and services. This principlegives the concept of national treatment.

[ii]. International trade should be made progressively free through agreements that reducebarriers to foreign goods and services.

[iii]. Government and business should expect predictable conditions when engaged in traderelations with other countries.

[iv]. International rules for fair economic competition by discouraging unfair tradepractices.

[v]. Rules and conditions should be more beneficial for less developed countries [LDCs].

[4].WTO CODE/AGREEMENT:The WTO through its code provides a framework for an integrated approach to deal

with trade-related economic issues. The WTO code lies in international instruments,such as, Multilateral Trade Agreements [MTA] and the Plurilateral Trade Agreements[PTA]. In its essence, the WTO agreement is based on the results of the UruguayRound of negotiations.

The WTO agreement, thus, covers the following

[i]. Multilateral Agreements on Trade in goods,

[ii]. General Agreements on Trade in services,

[iii]. Agreements on TRIPS,

[iv]. Rules and procedures of dispute settlement,

[v]. Plurilateral Trade Agreements [PTA][vi]. Trade Policy Review Mechanism [TPRM]

Among all the above, agreement on Agriculture deserves greater attention of mostof the developing agrarian countries. The WTO agreement seeks to deal with non-tariff measures affecting global competition. The agreement specifically aims atreducing domestic and export subsidies on agricultural goods. It has become aburning issue from the agrarian economic point of view. WTO wants agriculturalsubsidies on exports should be reduced and should not exceed more than 10% of theannual value of total agricultural product measured at international price.

Another aspect is Green Box polices which are related to domestic support

measures and have minimum impact on free trade, are not subject to such reductioncommitments.

Besides this, the WTO agreement also recommend that trade in Textiles and Clothingshould be governed under General Rules of GATT [as against the Multi-FiberAgreement].

The WTO agreement on Anti-dumping sets out new and more detailed rules and thecriteria, anti-dumping measures, and disputes settlement. It also includes allinternationally traded services, which have to be promoted with liberal approach ofthe service sector.

The TRIPs agreement gives protection in the following categories;


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These categories are copyright, trademarks, geographical indications, industrialdesigns, patents, integrated circuits, and trade secrets. For example, the owner ofregistered trademark possesses exclusive right for use.

Plurilateral Trading Agreements [PTA] consists of

[i]. Agreement on Trade in Civil Aircrafts,[ii]. Agreement on Government Procurement,

[iii]. International Bovine Meat Agreement and

[iv]. International Dairy Agreement.

[5].STRUCTURE OF WTO: The organizational structure of the WTO is outlined in the given chart

MINISTERIAL CONFERENCE [MC]

General Council [GC]

Dispute Settlement Body

[DSB]

Trade Policy Review Body

[TPRB]

Councils

[I], [II], [III]

Director General

[DG]

Committees

[I], [II], [III]

[I] = Council for trade ingoods

[I]. Committee on trade anddevelopment

[II] = Council for trade in

services

Secretariat of the

WTO[II].Committee on BOP restrictions

[III] = Council for TRIPs[III].Committee on Budget,

Finance and Administration

The Ministerial Conference [MC] is at the top of the structural organization of theWTO. It is the supreme governing body, which takes ultimate decisions on allmatters. It is scheduled to meet every two years with the first meeting held inSingapore in December 1996.


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The MC consists of a representative from each member country and has full authorityto take decisions on any matter arising from the Multilateral Trade Agreements. It isthe chief policy making body of the WTO and major policy changes require approval.

The General Council [GC] is composed of the representatives of all the members. It isthe real engine of the WTO which acts on behalf of the MC. The GC is responsiblefor managing the WTO between Ministerial Conference meetings. It has authority toact in all areas. The GC is not free to initiate discussion for change and carry out allthe necessary preparatory work. It also acts as the Dispute Settlement Body [DSB] aswell as the Trade Policy Review Board [TPRB].

The principal functions of GC are

[i]. To act as a Dispute Settlement Body [DSB] under the Terms of Understanding onRules and Procedures governing the Settlement of Disputes.

[ii]. To administer the Trade Policy Review Mechanism, and

[iii]. To supervise and ensure the smooth running of the Councils for Trade in Goods,Services and Trade-related Aspects of Intellectual Property Rights as well as all Tradecommittees.

For the day to day running of the WTO, the General council delegates responsibilityto three major bodies

[a]. The Council for Trade in Goods;

[b]. The Council for Trade in Services; and

[c]. The Council for Trade-related aspects of Intellectual Property Rights.

Dispute Settlement Body [DSB] functions when any member country believes thatanother country has violated trade rule.

The WTO convenes [set up] a judicial panel and discusses the issue when two tradingcountries fail to resolve the dispute.

DSB constitutes three expert trade lawyers from neutral member countries. Anydispute is to be settled within 16 months. [Case: USA filed case against EuropeanUnion (1995)]

Council for Trade in Goods includes specific sectors such as state trading, product

standards, subsidies and action against dumping. Council for Trade in Services includes services like Banking, Insurance, Hotel,

telecommunication and transport.

Trade related aspects of intellectual property rights [TRIPs] relates to rules for tradeand investment in ideas and creativity. A significant and ever increasing volume ofworld trade is now regulated by intellectual property rights in one form or another.The TRIPs agreement attempts to regulate and standardize international IPR in orderto prevent copying and piracy and to create a fairer trade market.

Trade Policy Review Body [TPRB] improves transparency and creates greaterunderstanding of the policy among the member countries. There are three committee

viz., the committee on Trade and Development [CTD], the Committee on Balance ofPayments Restrictions [CBOPR], and the Committee on Budget, Finance and


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Administration [CBFA]. These committees execute the functions assigned to them bythe WTO and the GC.

The administration of the WTO is conducted by the Secretariat which is headed by theDirector General [DG] appointed by the MC for the tenure of four years. He isassisted by the four Deputy Directors from different member countries. The annualbudget estimates and financial statements of the WTO are presented by the DG to theCBFA for review and recommendations for the final approval by the GC.

Documents

Export Import Final