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10 World Trade Organisation

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10 World Trade Organisation

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bekap47420
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10 WORLD TRADE ORGANISATION , 10.1 Introduction 10.2. WTO 10.3. WTO Agreements 10.4 Critical Appraisal 10.5 WTO and Covid-19 Pandemic India is a founder member of both G.A.T.T, (1947) and success organisation, World Trade Organisation (WTO). WTO came int? existence on January 1, 1995 replacing GATT (General Agree ae and Trade). India became a founder member of WTO 4 atifying the WTO Agreement on 30, December 1994. It incorpont” Arthur Dunkel's Proposals, ie. Dunkel Draft in respect © ipisrnational trade and trade related matters, The Dunkel del" adden December 1991 by Arthur Dunkel avho was the Di General of GATT, The success! " uccessful conclusion of the Uruguay Round marked ! beginnir i ng of a new era i TUS . its system, Before the era In the functioning of the globa ia the future shape completion of the Uruguay Round negolt int encouraging ha of the global trading environment Wes nt ne 8 Failure of WTO agreement, world trade coule™ | a aa | » Bee N ld Trade Organisation ii li 163 1} rt given to agriculture in develo | upp ped countries, It takes into account the non- trade concerns of developing countries and their Gevelopment needs including food security and rural development. d TRIPS: The Declaration recognizes that the TRIP. and should be ihe tpreted and implemented ina of WTO members right to protect public health a to medicines for all. | 's Agreement can | manner supportive | ind to promote access | | special and Differential Treatment: take into account the principle of spe for developing countries. The negotiations should fully cial and differential treatment Services : The negotiating guidelines and Procedures adopted by the Council for Trade in Services would form the basis for continuing negotiations in services with a view to achieving the objectives of GATS. Industrial tariffs : The negotiations under industrial tariffs would | aim at reducing or as appropriate eliminating tariffs, including the teduction of tariff peaks, high tariffs and tariff escalations, as well as non tariff barriers, in particular on products of export interest to developing countries. Labour: The declaration recognises that ILO is the appropriate forum to address the issue of core labour standards. The Bali Ministerial Conference, December 2013 taken agricultural issues more seriously alongwith trade facilitation and development issues. India has insisted on excluding food procurement expenses { ftom agricultural subsidies. The Bali Conference has failed to resolve the issues concern ing an Agreement on Trade Facilitation and Ministrial Decision on Public Stockholding for Food Security Purposes, Trade Facilitation Agreement (TFA) is aimed at lao | ansparency and simplification of customs procedures, use 1 “ectronic payments and risk management techniques and faster | clearances at ports, } The expenses incurred for procuring food for food security is not cluded in Aggregate Measurement of Support (AMS) provided | i |. 164 Business Economics - VI (T, \[Link], : such procurement and stockholding is done at market Prices ang not at administered prices. SEM-v}) India along with member countries of G.33, opposed the inclusion of procurement expenses in AMS. On 27 November, 2014 prolonged discussion and a firm stand by India and other of G.33, the General Council of WTO. adopted the decisi and agreed not to include food procurement and st expenses incurred for food security purpose in permanent solution is worked out. After a Members on on TEA ockholding AMS, till a Developments in TRIPs An amendment to the agreement on intellectual Property rights, the first since the establishment of WTO in 1995, entered into force on 23 January, 2017. The amendment aims at adapting rules of global trading system to public health needs of people in poor countries. It attempts to secure for developing countries legal pathway to access affordable medicines under WTO rules. The amendment gives legal certainty that generic medicines can be exported at reasonal prices to satisfy the needs of countries with no pharmaceutical production capacity, or those with limited capacity. By doing so, it helps the most vulnerable access to the drugs that meet their needs, helping to deal with diseases such as HIV / AIDS, tuberculosis or malaria as well as other epidemics, Flexibilities in compulsory licensing are allowed in WTO's TRIPS agreement. Accordingly governments can issue compulsory licences to allow companies to make a patented product or use a patented process under licence without consent of patent owner, but only under certain conditions aimed at safeguarding the legitimate interest of the patent holder. Developments in TRIMs Since the inception of WTO, flow of capital between the count particularly to developing countries has increased. Howevet Lect developments in developing Countries in terms of increase in! et contents, employment to locals, export requirements and many ° Ales measures for safeguarding national interest have become KUM ly ” X World Trade Organisation 165 for foreign investment. Even from G-20 countries, restrictive measures have increased in recent years. The current trade-war, through increase in tariffs has affected the foreign investment. It is however, expected that to avoid tariffs, investment may increase in tariff imposing countries, Restrictions on repatriation of profit, a requirement to increase in investment to promote Research and Development (R&D) have further restricted foreign investment. Developments in GATs A decision ona 'service waiver’ was adopted in the Eight Ministerial Conference in December, 2011. It allows WTO members to provide preferential treatment to services and service supplies of LDCs. In the Ninth Ministerial Conference at Bali (Indonesia) in December 2013, it was decided to expedite the effective operationalisation of ‘service waiver'. India along with 22 other developing countries worked out a draft on "Negotiations on Trade in Services" (NGP). According to NGP, the negotiations will fully preserve the right to choose the sectors and modes of supply while undertaking commitments. Due Considerations will be given to the needs of small and medium sized Service-suppliers, particularly those of the developing countries, NGP shall aim to increase the participation of developing countries 'N trade in services. They shall have flexibility in making commitments. The least developed countries shall be given special Priority in making commitments, because of their economic situation. The Negotiations will be on the basis of request and offer approach. 80tiations will be followed either bilaterally or between groups of Countries or multilaterally. The concessions agreed in the "e§0tiations will be made applicable to other countries also. The Present scenario is more of restrictive trade with USA imposing retictions on import of goods and services. This has ee ‘9 auliation from other countries. Currently the international | trad atmosphere is more of trade war rather than trade liberalisation. 166 Business Economics - VI (T.¥.[Link]. : SEM-V1) i zi jo - Iweala, in mid-year report on The Director General, Ngozi Okonjo - Iw p teas related developments covering mid October 2021 to mid May 2022 has said that WTO members continued to exercise restraint in imposing trade restrictions despite economic slowdown. The WTO agreement has ensured the continuation of an open world trading system, based on nondiscrimination and settlement of disputes within a multilateral framework. The WTO agreement represents the most thorough reform of the world trading system since the first GATT was signed in 1947. Achievements : The main achievements of WTO Agreements are: 1, It has extended the application of multilateral rules to areas previously excluded, including trade in agricultural products, and textiles and clothing. In addition, the General Agreement on Trade in Services (GATS) and the agreements on trade- related intellectual property rights (TRIPs) and trade related investment measures (TRIMs) extended the coverage of multilateral trade rules, 2. The establishment of WTO strengthened the mechanisms for reviewing policies, implementing rules, and settling disputes among trading partners, 3, It resulted in significant tariff reductions in industrial goods, as both developed and developing countries are committed t reducing their tariffs, 4. thas incorporated trade in textiles and clothing into the mai" body of multilateral rules and disciplines. Since 1962, such trade has been governed by quota restriction: d bilaterally i" violation of GATT’s MEN rules, aoe 5. It has taken the initial steps toward integrating international trade in agriculture into the WTO framework. The Uruguay Round requires countries to cap and reduce domestic and expo subsidies to agricultural products since they had a distorting influence on international trade, | a sont Te Organisation 167 4 The Uruguay Round did not achieve immediate liberalisation "of services but GATS lays down a framework to define multilateral rights and obligations in this area. GATS is the first step in defining rights and obligations in trade in services, Other achievements of the Uruguay Round are the agreements on TRIPs and TRIMs. It has made significant progress in curbin, the use of non-tariff barriers and strengthened the rules relating to antidumping, countervailing measures, and the use of safeguard mechanisms. g, It has made the dispute settlement mechanism more comprehensive and transparent. Failures: Inspite of substantial achievements of WTO, the WTO has not succeeded in solving some old contentious issues, like the slow pace of trade liberalisation in textiles and clothing. Further the WTO is burdened with new issues which have brought into force the differences between the developed and less developed countries. There is wide divergence of views and lack of convergence amongst the developed and developing countries, especially on agriculture. Similarly, the negotiations on market access for non-agricultural products have lacked a convergence on establishing modalities and formulae for actual tariff cutting negotiations so far. The growing regional trade agreements (RTAs) may undermine the importance of multilateral system of WTO. Thus, there is an urgent need to clearly define the criteria of RTAs. - ame critics have pointed out the 10 major drawbacks of the WTO. ley are : 1. The WTO dictates policy measures. The WTO is for free trade at any cost. Commercial interest takes priority over development. Commercial interest takes priority over environment. Commercial interest takes priority over health and safety. a 7 eB oN WTo destroys jobs and worsens poverty. 68 Business Economics - Vi ([Link], *SEiny. 1 i 7. Small countries are powerless in the WTO. 8. WTOis the tool of powerful lobbies. 9. Weaker countries are forced to join WTO. 10. The WTO is undemocratic. The above criticisms were rejected by the WTO by arguing other, However it should be noted that WTO which emerged frory GA is the brainchild of advanced countries with a hidden agenda of serving their interest mainly to increase the scope for investmes and market. In the recent global recession most of the wi countries opted for increased protectionism. At Present USA President Donald Trump is becoming more protectionist. Developing countries have no much choice but to go along WI0 and derive maximum possible advantages. It has given them opportunity to improve their own economies both in quality and quantity. inde One of the biggest challen, has come in the form of tl 2020. The uncertainty b: country in the world Posed one of the biggest threats to free flow ot 800ds, services, capital and human resources between countries. ges faced by world trade in modern histor he COVID-19 pandemic starting frome! rought about by lockdowns in almost ever bal world, every country is de; endent on the glob Supply chain for smooth ane uninterr pied flow of inputs neces) for production and distribution of goods and services. This ce Supply chain was Severely disrupted in the early period of ther" At the Same time during the Pandemic there has been a0 tal concasing need for countries to trade with each other in essed commodities and medical Products. Countries have been cOmP 1, {0 restrict their exports te meet domestic demand for es$0 lx including food. This resulted in other countries dept eink vi aaa al Commodities suffer, Due to the pam ef lop hain got severely disrupted, The less 4" eae World T rade Organisation 4¢9 countries were very badly hit by the disruption in world trade. The WTO has been acting as an effective forum to deal with the major jgsues that have confronted world trade during the COVID-19 pandemic. The following are some of the ways in which the WTO responded to the COVID-19 crisis: 1. Co-ordination of trade policies: WTO has helped member nations to co-ordinate their trade policies during the crisis. 2. Trade in Essential Items: During the pandemic, many countries have restricted exports of essential commodities, especially food products in order to meet domestic demand and encourage domestic producers. This has caused problems for countries that are dependent on food import, resulting in high food inflation, increased poverty and starvation. The special meeting of the WTO committee on Agriculture was a forum for food importing countries to question food exporting countries on their justification of export restrictions. WTO stressed on the need for international cooperation to overcome the challenges of the pandemic. WTO members submitted their proposals and commitment to ensure free flow of essential goods and food products. Subsequently, many member nations like India, USA and Germany lifted export restrictions on medical products. 3. TRIPs: WTO has been working on the problems related to intellectual property rights during the pandemic. It has served as forum for member nations to address their IPR issues in international trade of medical products and vaccines. The aim of WTO has been to enable better access to vaccines. But countries have been reluctant to suspend their IP rights over vaccines, On the basis of a proposal submitted by India and South Africa, the members are debating whether some IPR Provisions related to vaccines should be waived by nations for a specified period of time. There is still no agreement on this. Monitoring of Trade Policy Responses: Some of the pandemic Specific relief measures given by member nations to their Produces, like domestic subsidies given to businesses, can pose a threat to free and fair trade. WTO helps member nations to ~ Business Economics - VI ([Link] ‘SE collectively monitor the policy changes different Countries hy adopted in response to the pandemic and accordingly helpe Wve member country to prepare its own response. ah 170 Thus, WTO has played the role of a forum for addressing the concerns of nations that were very badly affected due to the disruption of world trade during the COVID-19 pandemic. | 1. What is WTO ? On what principle does it function 2 | . _ Explain briefly the important agreements of WTO. 3. Explain briefly the following WTO agreements : (a) TRIPs (b) GATS | (©) TRIMs 4, Examine the achievements and fai ailures of WTO. —_

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