12.

International Business-II
Introduction: Exporting and importing are not such straight forward activities
as buying and selling in the domestic market. Since foreign trade transactions
involve movement of goods across frontiers and use of foreign exchange, a
number of formalities are needed to be performed before the goods leave the
boundaries of a country and enter into that of another.

Export-Import Procedures and Documentation:

A major distinction between domestic and international operations is the

complexity of the latter. Export and import of goods is not that straight forward
as buying and selling in the domestic market. Since foreign trade transactions
involves movement of goods across frontiers and use of foreign exchange, a
number of formalities are needed to be performed before the goods leave the
boundaries of a country and enter into that of another.

Export Procedure: Steps involved in a typical export transaction are as

follows:

i. Receipt of enquiry and sending quotations: The prospective buyer of a

product sends an enquiry to different exporters requesting them to send
information regarding price, quality and terms and conditions for export
of goods. Exporters can be informed of such an enquiry even by way of
advertisement in the press put in by the importer. The exporter sends a
reply to the enquiry in the form of a quotation – referred to as proforma
invoice.
ii. Receipt of order or indent: In case the prospective buyer (i.e., importing
firm) finds the export price and other terms and conditions acceptable, it
places an order for the goods to be despatched. This order, also known as
indent, contains a description of the goods ordered, priced to be paid,
delivery terms, packing and marking details and delivery instructions.
iii. Assessing importer’s creditworthiness and guarantee for payments:
After receipt of the indent, the exporter makes necessary enquiry about
the creditworthiness of the importer. The purpose underlying the enquiry
is to assess the risks on non payment by the importer once the goods
reach the import destination. To minimise such risks, most exporters
demand a letter of credit from the importer. Letter of credit is the most
appropriate and secure method of payment adopted to settle international
transactions.
iv. Obtaining export license: Having become assured about payments, the
exporting firm initiates the steps relating to compliance of export
regulations. Export of goods in India is subject to custom laws which
 demand that the export firm must have an export license before it
proceeds with exports.

Important pre-requisites for getting an export licence is required

some procedures:
 Opening a bank account in any bank authorised by the
Reserve Bank of India (RBI) and getting an account number.
 Obtaining Import Export Code (IEC) number from the
Directorate General Foreign Trade (DGFT) or Regional
Import Export Licensing Authority.
 Registering with appropriate export promotion council.
 Registering with Export Credit and Guarantee Corporation
(ECGC) in order to safeguard against risk of non payments.

An export firm needs to have the Import Export Code (IEC) number as it
needs to be filled in various export/import documents.

v. Obtaining pre-shipment finance: Once a confirmed order and also a

letter of credit have been received, the exporter approaches his banker for
obtaining pre-shipment finance to undertake export production. Pre-
shipment finance is the finance that the exporter needs for procuring raw
materials and other components, processing and packing of goods and
transportation of goods to the port of shipment.
vi. Production or procurement of goods: Having obtained the pre-
shipment finance from the bank, the exporter proceeds to get the goods
ready as per the specifications of the importer.
vii. Pre-shipment inspection: The Government of India has initiated many
steps to ensure that only good quality products are exported from the
country. One such step is compulsory inspection of certain products by a
competent agency as designated by the government. The government has
passed export quality control an inspection act, 1963 for this purpose.
viii. Excise clearance: As per the Central Excise Tariff Act, excise duty is
payable on the materials used in manufacturing goods. The exporter,
therefore, has to apply to the concerned excise commissioner in the
region with an invoice. If the Excise commissioner is satisfied, he may
issue the excise clearance.
[

ix. Obtaining certificate of origin: Some importing countries provide tariff

concessions or other exemptions to the goods coming from a particular
country. For availing such benefits, the importer may ask the exporter to
send a certificate of origin. The certificate of origin acts as a proof that
the goods have actually been manufactured in the country from where the
 export is taking place. This certificate can be obtained from the trade
consulate located in the exporter’s country.
x. Reservation of shipping space: The exporting firm applies to the
shipping company for provision of shipping space. It has to specify the
types of goods to be exported, probable date of shipment and the port of
destination. On acceptance of application for shipping, the shipping
company issues a shipping order. A shipping order is an instruction to the
captain of the ship that the specified goods after their customs clearance
at a designated port be received on board.
[

xi. Packing and forwarding: The goods are then properly packed and
marked with necessary details such as name and address of the importer,
gross and net weight, port of shipment and destination, country of origin,
etc. The exporter then makes necessary arrangement for transportation of
goods to the port. On loading goods into the railway wagon, the railway
authorities issue a ‘railway receipt’ which serves as a title to the goods.
xii. Insurance of goods: The exporter then gets the goods insured with an
insurance company to protect against the risks of loss or damage of the
goods due to the perils of the sea during the transit.
xiii. Customs clearance: The goods must be cleared from the customs before
goods can be loaded on the ship. For obtaining customs clearance, the
exporter prepares the shipping bill. Shipping bill is the main document on
the basis of which the customs office gives the permission for export.
Shipping bill contains particulars of the goods being exported the name of
the vessel, the port at which goods are to be discharged, country of final
destination, exporter’s name and address, etc.,

Five copies of the shipping bill along with the following documents are then
submitted to the customs appraiser at the customs house:

 Export Contract or Export Order

 Letter of Credit
 Commercial Invoice
 Certificate of Origin
 Certificate of Inspection, where necessary
 Marine Insurance Policy

After submission of these documents, the Superintendent of the

concerned port trust is approached for obtaining the carting order.

Carting order is the instruction to the staff at the gate of the port to permit
the entry of the cargo inside the dock.
xiv. Obtaining mates receipt: The goods are then loaded on board the ship
for which the mate or the captain of the ship issues mate’s receipt to the
port superintendent. A mate receipt is a receipt issued by the commanding
officer of the ship when the cargo is loaded on board, and contains the
information about the name of the vessel, berth, date of shipment,
description of packages, marks and numbers, condition of the cargo at the
time of receipt on board the ship, etc.
xv. Payment of freight and issuance of bill of lading: The C&F (Clearing
and forwarding) agent surrenders the mates receipt to the shipping
company for computation of freight. After receipt of the freight, the
shipping company issues a bill of lading which serves as an evidence that
the shipping company has accepted the goods for carrying to the
designated destination. In the case the goods are being sent by air, this
document is referred to as airway bill.
xvi. Securing Payment: After the shipment of goods, the exporter informs
the importer about the shipment of goods. The importer needs various
documents to claim the title of goods on their arrival at his/her country
and getting them customs cleared. The documents that are needed in this
connection include certified copy of invoice, bill of lading, packing list,
insurance policy, certificate of origin and letter of credit.

Import Procedure: Import trade refers to purchase of goods from a foreign

country. Import procedure differs from country to country depending upon the
country’s import and customs policies and other statutory requirements.

i. Trade enquiry: The first thing that the importing firm has to do is to
gather information about the countries and firms which export the given
product. The importer can gather such information from the trade
directories and/or trade associations and organisations. Having identified
the countries and firms that export the product, the importing firm
approaches the export firms with the help of a trade enquiry for collecting
information about their export prices and terms of exports. A trade
enquiry is a written request by an importing firm to the exporter for
supply of information regarding the price and various terms and
conditions on which the latter is ready to export goods.

Major Documents Needed In Connection With Export Transaction:

A. Documents related to goods:

1. Export invoice
2. Packing list
3. Certificate of origin
4. Certificate of inspection
 B. Documents related to shipments:
1. Mate’s receipt
2. Shipping Bill
3. Bill of lading
4. Airway Bill
5. Marine insurance policy
6. Cart ticket
C. Documents related to payment:
1. Letter of credit
2. Bill of exchange
3. Bank certificate of payment

ii. Procurement of import licence: The importer needs to consult the

Export Import (EXIM) policy in force to know whether the goods that he
or she wants to import are subject to import licensing. In case goods can
be imported only against the licence, the importer needs to procure an
import licence.
iii. Obtaining foreign exchange: Since the supplier in the context of an
import transaction resides in a foreign country, he/she demands payment
in a foreign currency. Payment in foreign currency involves exchange of
Indian currency into foreign currency.
iv. Placing order or indent: After obtaining the import licence, the importer
places an import order or indent with the exporter for supply of the
specified products. The import order contains information about the price,
quantity, size, grade and quality of goods ordered and the instructions
relating to packing, shipping, ports of shipment and destination, delivery
schedule, insurance and mode of payment.
v. Obtaining letter of credit: If the payment terms agreed between the
importer and the overseas supplier is a letter of credit, then the importer
should obtain the letter of credit from its bank and forward it to the
overseas supplier. A letter of credit is a guarantee issued by the
importer’s bank that it will honour payment up to certain amount of
export bills to the bank of exporter.
vi. Arranging for finance: The importer should make arrangements in
advance to pay to the exporter on arrival of goods at the port. Advanced
planning for financing imports is necessary so as to avoid huge
demurrages (i.e penalties) on the importer goods lying uncleared at the
port for want of payments.

vii. Receipt of shipment advice: After loading the goods on the vessel, the
overseas supplier dispatches the shipment advice to the importer. A
 shipment advice contains information about the shipment of goods. The
information provided in the shipment advice includes details such as
invoice number, bill of lading/airways bill number and date, name of the
vessel with date, the port of export, description of goods and quantity and
the date of sailing of vessel.
viii. Retirement of import documents: Having shipped the goods, the
overseas supplier prepares a set of necessary documents as per the terms
of contract and letter of credit and hands it over to his or her banker for
their onward transmission and negotiation to the importer in the manner
as specified in the letter of credit. The set of documents normally contains
bill of exchange, commercial invoice, bill of lading/airway bill, packing
list, certificate of origin, marine insurance policy, etc.

The acceptance of bill of exchange for the purpose of getting

delivery of the documents is known as retirement of import documents.

ix. Arrival of goods: Goods are shipped by the overseas supplier as per the
contract. The person in charge of the carrier (ship or airway) informs the
officer in charge at the dock or the airport about the arrival of goods in
the importing country. He provides the document called import general
manifest. Import general manifest is a document that contains the
details of the imported goods.
x. Customs clearance and release of goods: All the goods imported into
India have to pass through customs clearance after they cross the Indian
borders. Customs clearance is a somewhat tedious process and calls for
completing a number of formalities. It is, therefore, advised that
importers appoint C&F agents who are well versed with such formalities
and play an important role in getting the goods customs cleared.

The importer or his agent presents the bill of entry to the port
authority. After receiving necessary charges, the port authority issues the
release order.

Major Documents Used In An Import Transactions:

 Trade enquiry
 Proforma invoice
 Import order or indent
 Letter of credit
 Shipment advice
 Bill of lading
 Airway bill
 Bill of entry
  Bill of exchange
 Sight draft
 Usance draft
 Import general manifest
 Dock challan

Foreign Trade Promotion – Measures and Schemes: Details of various trade

promotion measures and schemes available to business firms to facilitate their
export and import operations are announced by the government in its export-
import (EXIM) policy. They are as follows:

i. Duty drawback scheme: Since goods meant for exports are not
consumed domestically, these are not subjected to payment of various
excise and customs duties. Any such duties paid on export goods are,
therefore, refunded to exporters on production of proof of exports of these
goods to the concerned authorities. Such refunds are called duty draw
backs.
ii. Export manufacturing under bond scheme: This facility entitles firms
to produce goods without payment of excise and other duties. The firms
desirous of availing such facility have to give an undertaking (i.e bond)
that they are manufacturing goods for export purposes and will export
such products on their production.
iii. Exemption from payment of sales taxes: Goods meant for export
purposes are not subject to sales tax. Even for a long time, income
derived from export operations had been exempt from payment of income
tax. Now this benefit of exemption from income tax is available only to
100 percent Export Oriented Units.
iv. Advance licence scheme: It is a scheme under which an exporter is
allowed duty free supply of domestic as well as imported inputs required
for the manufacture of export goods. As such the exporter is not required
to pay customs duty on goods imported for use in the manufacture of
export goods. The advance licences are available to both the types of
exporters- those who export on a regular basis and also to those who
export on an random basis.
v. Export Promotion Capital Goods Scheme (EPCG): The main
objective of this scheme is to encourage the import of capital goods for
export production. This scheme allows export firms to import capital
goods at lower rates of customs duties subject to actual user condition and
fulfilment of specified export obligations. If the said conditions are
fulfilled by the manufacturers, then they can import the capital goods
either at zero or concessional rate of import duty.
 vi. Scheme of recognising export firms as export house, trading house
and superstar trading house: With an objective to promote established
exporters and assist them in marketing their products in international
markets, the government grants the status of Export House, Trading
House, Star Trading House to select export firms. This status is granted to
a firm on its achieving a prescribed average export of performance in past
select years. Besides attaining a minimum of past average export
performance, such export firms have to also fulfil other conditions as laid
down in the import-export policy.
vii. Export of Services: In order to boost the export of services, various
categories of service houses have been recognised. These houses are
recognised on the basis of the export performance of the service
providers. They are referred to as Service Export House, International
Service Export House, International Star Service Export House based on
their export performance.
viii. Export Finance: Exporters require finance for the manufacture of goods.
Finance is also needed after the shipment of the goods because it may
take sometime to receive payment from the importers. Therefore, two
types of export finances are made available to the exporters by authorised
banks. They are termed as pre-shipment finance or packaging credit and
post-shipment finance.
ix. Export Processing Zones (EPZs): Export Processing Zones are
industrial estates, which form enclaves from the Domestic Tariff Areas
(DTA). These are usually situated near seaports or airports. They are
intended to provide an internationally competitive duty free environment
for export production at low cost. This enables the products of EPZs to be
competitive, both quality-wise, in the international markets. These zones
have been set up at various places in India which include: Kandla
(Gujarat), Santa Cruz (Mumbai), Falta (West Bengal), Noida (Uttar
Pradesh), Cochin (Kerala), Chennai (Tamil Nadu), and Vishakapatnam
(Andhra Pradesh).
x. 100 percent Export Oriented Units (100 percent EOUs): The 100
percent Export oriented units scheme, introduced in early 1981, is
complementary to the EPZ scheme. It adopts the same production regime,
but offers a wider option in location with reference to factors like source
of raw materials, ports, hinterland facilities, availability of technological
skills, existence of an industrial base and the need for a larger area of land
for the Project.
Organisational Support: Government of India has also set up from time-to-
time various institutions in order o facilitate the process of foreign trade in our
country. Some of the important institutions are as follows:

 Department of Commerce: Department of Commerce in the Ministry of

Commerce, Government of India is the apex body responsible for the
country’s external trade and all matters connected with it. This may be in
the form of increasing commercial relations with other countries, state
trading, export promotional measures and the development and regulation
of certain export oriented industries and commodities.
 Export Promotion Councils (EPCs): Export Promotion Councils are
non profit organisations registered under the Companies Act or the
Societies Registration Act, as the case may be. The basic objective of the
export promotion councils is to promote and develop the country’s
exports of particular products falling under their jurisdiction. At present
there are 2 EPC’s dealing with different commodities.
 Commodity Boards: Commodity Boards are the boards which have been
specially established by the Government of India for the development of
production of traditional commodities and their exports. These boards are
supplementary to the EPCs. The functions of commodity boards are
similar to those of EPCs. At present there are seven commodity boards in
India: Coffee Board, Rubber Board, Tobacco Board, Spice Board, Central
Board, Skill Board, Tea Board, and Coir Board.
 Export Inspection Council (EIC): Export Inspection Council of India
was setup by the Government of India under Section 3 of the Export
Quality Control and Inspection Act 1963. The council aims at sound
development of export trade through quality control and pre-shipment
inspection.
 Indian Trade Promotion Organisation (ITPO): Indian Trade
Promotion Organisation was setup on 1st January 1992 under the
companies Act 1956 by the Ministry of Commerce, Government of India.
Its headquarter is at New Delhi. ITPO was formed by merging the two
agencies viz., Trade Development Authority and Trade Fair Authority of
India. ITPO is a service organisation and maintains regular and close
interaction with trade, industry and Government.

ITPO have five regional offices at Mumbai, Bangalore, Kolkata,

Kanpur and Chennai and four international offices at Germany, Japan,
UAE and USA.

 Indian Institute of Foreign Trade (IIFT): Indian Institute of Foreign

Trade is an institution that was setup in 1963 by the Government of India
 as an autonomous body registered under the Societies Registration Act
with the prime objective of professionalising the country’s foreign trade
management.
 Indian Institute of Packaging (IIP): Indian Institute of Packaging (IIP)
was setup as a national institute jointly by the Ministry of Commerce,
Government of India, and the Indian Packaging industry and allied
interests in 1966. Its headquarters and principal laboratory is situated at
Mumbai and three regional laboratories are located at Kolkata, Delhi and
Chennai. It is a training-cum-research institute pertaining to packaging
and testing.
 State Trading Organisations: A large number of domestic firms in India
found it very difficult to compete in the world market. At the same time,
the existing trade channels were unsuitable for promotion of exports and
bringing about diversification of trade with countries other than European
countries. The main objective of the STC is to stimulate trade, primarily
export trade among different trading partners of the world.

International Trade Institutions and Trade Agreements:

The First World War (1914-1919) and the Second World War (1939-45)
were accompanied by massive destruction of life and property the world over.
Almost all the economies of the world were adversely affected. Due to scarcity
of resources, countries were not in a position to take up any reconstruction or
developmental works. Even the international trade amongst nations got
adversely affected because of the devalue of the world’s currency system.

The meeting was concluded with the setting up of three international

institutions, namely the International Monetary Fund (IMF), International Bank
for Reconstruction and Development (IBRD) and the International Trade
Organisation (ITO). They considered these three organisations as three pillars of
economic development of the world.

The major objectives and functions of these three international

institutions are:

 World Bank: The international Bank for Reconstruction and

Development (IBRD), commonly known as World Bank, was result of
the Bretton Woods Conference. The main objectives behind setting up
this international organisation were to aid to task of reconstruction of the
war-affected economies of Europe and assist in the development of the
underdeveloped nations of the world. For the first few years, the World
Bank remained preoccupied with the task of restoring war-torn nations in
Europe. Having achieved success in accomplishing this task by late
 1950’s the World Bank turned its attention to the development of
underdeveloped nations.

Functions of the World Bank:

1. The World Bank is entrusted with the task of economic growth and
widening of the scope of international trade.
2. It placed more emphasis on developing infrastructure facilities like
energy, transportation and others.
3. Since the underdeveloped countries depend heavily on agriculture and
small industries, the attempt to develop infrastructure has hardly any
effect on these two sectors.
4. The World Bank later decided to divert resources to bring about industrial
and agricultural development in these countries.
5. Assistance is extended to different countries for raising cash crops so that
their incomes rise and they may export the same for earning foreign
exchange.
6. The bank has also been providing resourced for education, sanitation,
health care and small scale enterprises.

 International Development Association (IDA): was setup in 1960 as an

affiliate of the World Bank. IDA was established primarily to provide
finance to the less developed member countries on a soft loan basis. It is
due to its objective of providing soft loans that it is called the Soft Loan
Window of the IBRD.

Objectives of IDA:

1. To provide development finance on easy terms to the less developed

member countries.
2. To provide assistance for poverty alleviation in the poorest countries.
3. To provide finance at concessional interest rates in order to promote
economic development, raise productivity and living standards in less
developed nations.
4. To extend macroeconomic management services such as those relating to
health, education, nutrition human resources development and population
control.

 International Finance Corporation (IFC): was established in July 1956

in order to provide finance to the private sector of developing countries.
IFC is also an affiliate of the World Bank, but it has its own separate legal
entity, funds and functions. All the members of the World Bank are
eligible to become members of IFC.
  Multinational Investment Guarantee Agency (MIGA): was
established in April 1988 to supplement the functions of the World
Bank and IFC.

Objectives of MIGA:

1. To encourage flow of direct foreign investment into the less developed

member countries.
2. To provide insurance cover to investors against political risks.
3. To provide guarantee against non-commercial risks (like dangers
involved in currency transfer, war and civil disturbances and breach of
contract).
4. To insure new investments, expansion of existing investments,
privatisation and financial restructuring.
5. To provide promotional and advisory services.
6. To establish credibility.

 International Monetary Fund(IMF): is the second international

organisation next to the World Bank. IMF which came into existence in
1945 has its headquarters located in Washington DC. In 2005, it had 191
countries as its members. The major idea underlying the setting up of the
IMF is to evolve an orderly international monetary system.

Objectives of IMF:

1. To promote international monetary cooperation through a permanent

institution.
2. To facilitate expansion of balanced growth of international trade.
3. To promote exchange stability with a view to maintain orderly exchange
arrangements among member countries.
4. To assist in the establishment of a multilateral system of payments in
respect of current transactions between members.

Functions of IMF:

1. Acting as a short-term credit institution.

2. Providing machinery for the orderly adjustment of exchange rates.
3. Acting as a reservoir of the currencies of all the member countries, from
which a borrower nation can borrow the currency of other nations.
4. Acting as a lending institution of foreign currency and current
transactions.
5. Determining the value of a country’s currency and altering it.
6. Providing machinery for international consultations.
World Trade Organisation (WTO): was initially decided at the Bretton
Woods conference to setup the International Trade Organisation (ITO) to
promote and facilitate international trade among the member countries and to
overcome various restrictions and discriminations as were being practiced at
that time.

The countries that were participants to the Bretton Woods conference

agreed upon having some arrangement among themselves so as to liberalise the
world from high customs tariffs and various other types of restrictions that were
in vogue at that time. This arrangement came to be known as the General
Agreement for Tariffs and Trade (GATT).

GATT came into existence with effect from 1st January 1948 and
remained in force till December 1994. GATT was transformed into World
Trade Organisation (WTO) with effect from 1 st January 1995. The head quarters
of WTO are situated at Geneva, Switzerland.

Though, WTO is a successor to GATT, it is a much more powerful body

than GATT. It governs trade not only in goods, but also in services and
intellectual property rights. Unlike GATT, the WTO is a permanent
organisation created by an international treaty ratified by the governments and
legislatures of member states.

India is a founding member of WTO. As on 11 th December 2005, there

were 149 members in WTO.

Objectives of WTO:

1. To ensure reduction of tariffs and other trade barriers imposed by

different countries
2. To engage in such activities which improve the standards of living, create
employment, increase income and effective demand and facilitate higher
production and trade.
3. To facilitate the optimal use of the world’s resources for sustainable
development.
4. To promote an integrated , more viable and durable trading system.

Functions of WTO:

1. Promoting an environment that is encouraging to its member countries to

come forward to WTO in mitigating their grievances.
2. Laying down a commonly accepted code of conduct with a view to
reducing trade barriers including tariffs and eliminating discriminations in
international trade relations.
3. Acting as a dispute settlement body.
 4. Ensuring that all the rules regulations prescribed in the Act are duly
followed by the member countries for the settlement of their disputes.
5. Holding consultations with IMF and IBRD and its affiliated agencies so
as to bring better understanding and cooperation in global economic
policy making.
6. Supervising on a regular basis the operations of the revised agreements
and ministerial declarations relating to goods, services and Trade Related
Intellectual Property Rights (TRIPS).

Benefits of WTO:

1. WTO helps promote international peace and facilitates international

business.
2. All disputes between member nations are settled with mutual
consultations.
3. Rules make international trade and relations very smooth and predictable.
4. Free trade improves the living standard of the people by increasing the
income level.
5. Free trade provides ample scope of getting varieties of qualitative
products.
6. Economic growth has been fastened because of free trade.
7. The system encourages good government.
8. WTO helps fostering growth of developing countries by providing them
with special and preferential treatment in trade related matters.

WTO Agreements: As against GATT which covered only rules relating to

trade in goods, the WTO agreements cover trade in goods, services as well as
intellectual property.

Major WTO agreements are discussed below:

1. Agreements forming Part of GATT: The erstwhile General Agreement

on Tariffs and Trade (GATT) after its substantial modification in 1994
(effected as part of the Uruguay Round of negotiations) is very much part
of the WTO agreements. Besides the General principles of trade
liberalisation, GATT also includes certain special agreements evolved to
deal with specific non-tariff barriers.

2. Agreement of Textile and clothing (ATC): This agreement was evolved

under WTO to phase out the quota restrictions as imposed by the
developed countries on exports of textiles and clothing from the
developing countries.
3. Agreement on Agriculture (AoA): It is an agreement to ensure free and
fair trade in agriculture. Though original GATT rules were applicable to
trade in agriculture, these suffered from certain loopholes such as
exemption to member countries to use some non-tariff measures such as
customs tariffs, import quotas and subsidies to protect interests of the
farmers in the home country.

4. General Agreement on Trade in Services (GATS): Services means acts

or performances that are essentially intangible and cannot be touched or
smelt as goods. GATS is regarded as a landmark achievement of the
Uruguay Round as it extends the multilateral rules and disciplines to
services.

5. Agreement on Trade Related Aspects of Intellectual Property Rights

(TRIPS): The WTO’s agreement on trade Related aspects of intellectual
property Rights (TRIPS) was negotiated in 1986-1994. It was the
Uruguay Round of GATT negotiations where for the first time the rules
relating to intellectual property rights were discussed and introduced as
part of the multilateral trading system. Intellectual property means
information with commercial values such as ideas, inventions, creative
expression and others.