India and WTO

India and World Trade Organization

Location: Centre William Rappard Geneva, Switzerlan

Established: 1 January 1995

Created by:  Uruguay Round negotiations (1986-94)   

Membership: 153 countries of which 117 are developing countries on 23 July 2008 

Budget:  200 million ($180 million, €130 million)

Secretariat staff:  700

Head:  Pascal Lamy (Director-General)

Official languages: English, French and Spanish.

Website: www.wto.int

1.India and World Trade Organization

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India is one of the founding members of WTO along with 123 other countries.
India's participation in an increasingly rule based system in governance of International trade,
would ultimately lead to better prosperity for the nation. Various trade disputes of India with
other nations have been settled through WTO. India has also played an important part in the
effective formulation of major trade policies. By being a member of WTO several countries are
now trading with India, thus giving a boost to production, employment, standard of living and an
opportunity to maximize the use of the world resources.

The World Trade Organization came into existence on January 1st, 1995.
Government had concluded the Uruguay Round Negotiations on 15 th December 1993and
Minister had given their political backing to the result by singing the Final Act at the meeting at
Marrakesh, morocco in April 1994. The “Marrakesh Declaration” of April 1994, affirmed that
the result of the Uruguay Round would ‘strengthen the world economy and lead to more trade,
investment, employment, and income growth throughout the world.’ The WTO is the
embodiment of the Uruguay Round result and the successor to General Agreement on Trade and
Tariffs (GATT).

2.Introduction to General Agreement on Trade and Tariffs

(GATT).

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In 1948, a meeting took place in Bretton Woods, New Hampshire: the

International Monetary Conference. There, negotiators agreed to create the International
Monetary Fund and the World Bank. But they could not agree on an organization to deal with
international trade. 3 years later, in 1947, 23 nations approved the General Agreement on Tariffs
and Trade, or GATT. It was meant to be temporary. Trade negotiations under GATT were
carried out in a series of talks called rounds.

From GATT to WTO

Dates Name(Round) Outcome

1947 Geneva Round 45,000 tariff concessions representing half of world trade.
1949 Annecy Round Modest tariff reductions.
1950-51 Torquay Round 25% tariff reductions in relation to 1948 level
1955-56 Geneva Round Modest tariff reductions.
1961-62 Dillon Round Modest tariff reductions.
1963-67 Kennedy Round Average tariff reductions of 35% of industrial production, only
modest reduction for agriculture product, anti- dumping codes.
1973-79 Tokyo Round Average tariff reductions 34% of industrial production. Non-
tariff trade barrier code.
1986-94 Uruguay Round Tariff, non-tariff measures, rules, service, intellectual
property, disputes settlement , creation of WTO ,etc.

Objectives:

The primary objective of GATT was to expand international trade by liberalising trade to bring
economic prosperity. GATT mentions the fallowing important objectives

1. Raising standards of living

2. Ensuring full employment a large and steadily growing volume of real income and
effective demand

3. Developing the full use of the resources of the world

4. Expanding the production and exchange of goods.

Basic Principle:

1) Follow the Most Favoured Nation (MFN) clause.

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2) Carry on trade in a non discriminatory way.

3) Grant protection to domestic industries.

4) Condemn the use of quantitative restrictions or quotas.

5) Liberalise tariff and non-tariff measures through multilateral negotiations

Uruguay Round:

Uruguay Round (UR) is the name by which the 8th and the latest round of
Multilateral Trade Negotiations (MTNs) held under the auspices of the GATT popularly known
in Punta Del Este in Uruguay launched in September 1986. The main issues in this round
discussed were of Agricultural Subsidies, Multi Fibre Agreement (MFA), Trade in Services, Anti
Dumping etc. These discussions were resolved by the then Director General of GATT, Arthur
Dunkel. Who came up or Draft of the Uruguay Round consisted of 28 agreements which spelt
out the results of Multilateral Trade Negotiations (MTN). Some of the main agreements of the
Uruguay Round were as follows:

1)Anti-Dumping Code:

Dumping is to be condemned if it causes or threatens material injuries to an established domestic

industry. A committee on anti-dumping practices should look into such matters related to
dumping.

2)Trade Related Investment Measures (TRIMs):

It Refers to certain conditions or restrictions imposed by a Government in respect of foreign

investment in the country. TRIM is widely employed by developing countries. The agreement on
TRIMs provides that no contracting party shall apply any TRIM which is inconsistent with
GATT articles. An illustrative list identifies the fallowing TRIMS as inconsistent:-

i.Local content requirement.

ii. Trade balancing requirement
iii.Trade and foreign exchange balancing requirements.
iv.Domestic sales requirements.

1) Trade related aspects of Intellectual Property Rights (TRIPs) –

One of the most controversial outcomes of Uruguay Round is the agreement on Trade
Related aspects of Intellectual Property Rights (TRIPs) including Trade in counterfeit
Goods. According to GATT “Intellectual Property Rights” are the rights given to persons

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over the creations of their minds. They usually give the creator an exclusive right over the
use of individual’s creation for a certain period of time.

2)Trade in services –

Bank, Insurance, Transport and Communication, etc. are trade related services. The draft
agreement proposed that all restrictions on such services should be waived.

Conclusion:

Following the Uruguay Round (UR) Agreement GATT was converted from a provisional
agreement into a formal international organisation known as World Trade Organisation (WTO).
The organisation began its function from 1st Jan. 1995. It serves as a single institutional
framework directed by a Ministerial Conference once every two years and its regular business is
overseen by a general council. The WTO secretariat is based in Geneva, Switzerland. The
membership of the WTO increased from 128 in July 1995 to 150 countries by Jan. 1st 2010. The
WTO members now accounts for over 97 percent of the international trade.

3.Introduction toWTO:
The World Trade Organization is an international organization which was created
for the liberalization of international trade. The World Trade Organization came into existence
on January 1st, 1995 and it is the successor to General Agreement on Trade and Tariffs (GATT).
The World trade organization deals with the rules of trade between nations at a global level.

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WTO is responsible for implementing new trade agreements. All the member countries of WTO
have to follow the trade agreement as decided by the WTO.

In April of 1994, most of those 123 nations signed an agreement. India to have
signed this agreement at the time of formation of W.T.O. It replaced GATT with the World Trade
Organization. The WTO has 153 members, representing more than 97% of total world trade and
30 observers, most seeking membership. The WTO is governed by a ministerial conference,
meeting every two years; a general council, which implements the conference's policy decisions
and is responsible for day-to-day administration; and a director-general, who is appointed by the
ministerial conference. The WTO's headquarters is at the Centre William Rappard, Geneva,
Switzerland.

The WTO is run by its member governments. All major decisions are made by the
membership as a whole, either by ministers (who meet at least once every two years) or by their
ambassadors or delegates (who meet regularly in Geneva). Decisions are normally taken by
consensus. In this respect, the WTO is different from some other international organizations such
as the World Bank and International Monetary Fund. In the WTO, power is not delegated to a
board of directors or the organization’s head. When WTO rules impose disciplines on countries’
policies that is the outcome of negotiations among WTO members. The rules are enforced by the
members themselves under agreed procedures that they negotiated, including the possibility of
trade sanctions. But those sanctions are imposed by member countries, and authorized by the
membership as a whole. This is quite different from other agencies whose bureaucracies can, for
example, influence a country’s policy by threatening to withhold credit. Reaching decisions by
consensus among some 150 members can be difficult. Its main advantage is that decisions made
this way are more acceptable to all members. And despite the difficulty, some remarkable
agreements have been reached. Nevertheless, proposals for the creation of a smaller executive
body — perhaps like a board of directors each representing different groups of countries — are
heard periodically. But for now, the WTO is a member-driven, consensus-based organization.

The WTO's founding and guiding principles remain the pursuit of open borders,
the guarantee of most-favoured-nation principle and non-discriminatory treatment by and among
members, and a commitment to transparency in the conduct of its activities. The opening of
national markets to international trade, with justifiable exceptions or with adequate flexibilities,
will encourage and contribute to sustainable development, raise people's welfare, reduce poverty,
and foster peace and stability. At the same time, such market opening must be accompanied by
sound domestic and international policies that contribute to economic growth and development
according to each member's needs and aspiration.

The organization is currently endeavoring to persist with a trade negotiation

called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance
equitable participation of poorer countries which represent a majority of the world's population.

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However, the negotiation has been dogged by "disagreement between exporters of agricultural
bulk commodities and countries with large numbers of subsistence farmers on the precise terms
of a 'special safeguard measure' to protect farmers from surges in imports. At this time, the future
of the Doha Round is uncertain."

Function of WTO:
1. Negotiating the reduction or elimination of obstacles to trade (import tariffs, other
barriers to trade) and agreeing on rules governing the conduct of international trade (e.g.
antidumping, subsidies, product standards, etc.)

2. Administering and monitoring the application of the WTO's agreed rules for trade in
goods, trade in services, and trade-related intellectual property rights

3. Monitoring and reviewing the trade policies of the members, as well as ensuring
transparency of regional and bilateral trade agreements

4. Settling disputes among the members regarding the interpretation and application of the
agreements 

5. Building capacity of developing country government officials in international trade

matters

6. Assisting the process of accession of some 30 countries who are not yet members of the
organization 

7. Conducting economic research and collecting and disseminating trade data in support of
the WTO's other main activities

8. Explaining to and educating the public about the WTO, its mission and its activities.

Benefits of WTO:

World Trade Organization helps member states in various ways and this enables them to reap
benefits such as:
1. Helps promote peace within nations: 

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Peace is partly an outcome of two of

the most fundamental principle of
the trading system; helping trade
flow smoothly and providing
countries with a constructive and fair
outlet for dealing with disputes over
trade issues. Peace creates
international confidence and
cooperation that the WTO creates
and reinforces. Around 300 disputes
have been brought to the WTO since
it was set up in 1995.
2. Disputes are handled
constructively: 
As trade expands in volume, in the numbers of products traded and in the number of
countries and company trading, there is a greater chance that disputes will arise. WTO
helps resolve these disputes peacefully and constructively. If this could be left to the
member states, the dispute may lead to serious conflict, but lot of trade tension is reduced
by organizations such as WTO.
3. Rules make life easier for all:
WTO system is based on rules rather than power and this makes life easier for all trading
nations. WTO reduces some inequalities giving smaller countries more voice, and at the
same time freeing the major powers from the complexity of having to negotiate trade
agreements with each of the member states.
4. Free trade cuts the cost of living:
Protectionism is expensive, it raises prices, and WTO lowers trade barriers through
negotiation and applies the principle of non-discrimination. The result is reduced costs of
production (because imports used in production are cheaper) and reduced prices of
finished goods and services, and ultimately a lower cost of living.
5. It provides more choice of products and qualities:
 It gives consumer more choice and a broader range of qualities to choose from.

6. Trade raises income: 

Through WTO trade barriers are lowered and this
increases imports and exports thus earning the
country foreign exchange thus raising the country's
income.
7. Trade stimulates economic growth: 

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With upward trend economic growth, jobs can be created and this can be enhanced by
WTO through careful policy making and powers of freer trade.
8. Basic principles make life more efficient:
The basic principles make the system economically more efficient and they cut costs.
Many benefits of the trading system are as a result of essential principle at the heart of the
WTO system and they make life simpler for the enterprises directly involved in
international trade and for the producers of goods/services. Such principles include; non-
discrimination, transparency, increased certainty about trading conditions etc. together
they make trading simpler, cutting company costs and increasing confidence in the future
and this in turn means more job opportunities and better goods and services for
consumers.
9. Governments are shielded from lobbying:
WTO system shields the government from narrow
interest. Government is better placed to defend
themselves against lobbying from narrow interest
groups by focusing on trade-offs that are made in
the interests of everyone in the economy.
10. The system encourages good governance:
The WTO system encourages good government.
The WTO rules discourage a range of unwise
policies and the commitment made to liberalize a
sector of trade becomes difficult to reverse. These
rules reduce opportunities for corruption. 

Criticisms of WTO:

1. WTO has increasing inequality:

Free trade is not working for the majority of the world. During a most recent
period of rapid growth in global trade and investment--1960 to 1998--inequality
worsened both internationally and within countries. The UN Development
Program reports that the richest 20 percent of the world's population consume
86 percent of the world's resources while the poorest 80 percent consume just
14 percent. WTO rules have hastened these trends by opening up countries to
foreign investment and thereby making it easier for production to go where the
labor is cheapest and most easily exploited and environmental costs are low.
This pulls down wages and environmental standards in developed countries that
have to compete globally.

2. WTO has liberal the policy related to health:

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For the past nine years, the European Union has banned beef raised with
artificial growth hormones. The WTO recently ruled that this public health law
is a barrier to trade and should be abolished. The EU has to rollback its ban or
pay stiff penalties.\

3. Negotiation and decision making in the WTO are dominated by the developed
countries.

4. Because of the dependence of developing country on the developed ones, the

developed countries are able to resort to arm-twisting tactics.

5. The WTO has not been successful in imposing the organization’s disciplines on
the developed countries

6. Many of the policy liberalizations are done without considering the vulnerability
of the developing countries and the possible adverse effect on them.

Structure of the WTO :

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Highest authority: the Ministerial Conference:

So, the WTO belongs to its members. The countries make their decisions through
various councils and committees, whose membership consists of all WTO members. Topmost is
the ministerial conference which has to meet at least once every two years. The Ministerial
Conference can take decisions on all matters under any of the multilateral trade agreements.

Second level: General Council in three guises:

Day-to-day work in between the ministerial conferences is handled by three bodies:

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1. The General Council:

WTO’s highest-level decision-making body in Geneva, meeting regularly to

carry out the functions of the WTO. It has representatives (usually ambassadors
or equivalent) from all member governments and has the authority to act on
behalf of the ministerial conference which only meets about every two years.
The council acts on behalf on the Ministerial Council on all of the WTO affairs.
The current chairman is Amb. Eirik Glenne (Norway).

2. The Dispute Settlement Body:

It is made up of all member governments, usually represented by ambassadors

or equivalent. The current chairperson is H.E. Mr. Muhamad Noor Yacob
(Malaysia).

3. The Trade Policy Review Body:

The WTO General Council meets as the Trade Policy Review Body to
undertake trade policy reviews of Members under the TRPM. The TPRB is thus
open to all WTO Members. The current chairperson is H.E. Ms. Claudia Uribe
(Colombia).

All three are in fact the same - the Agreement Establishing the WTO states they are all the
General Council, although they meet under different terms of reference. Again, all three consist
of all WTO members. They report to the Ministerial Conference. The General Council acts on
behalf of the Ministerial Conference on all WTO affairs. It meets as the Dispute Settlement Body
and the Trade Policy Review Body to oversee procedures for settling disputes between members
and to analyze members’ trade policies.

Third level: councils for each broad area of trade, and more:

Three more councils, each handling a different broad area of trade, report to the General Council:

1. The Council for Trade in Goods (Goods Council)

There are 11 committees under the jurisdiction of the Goods Council each with a specific
task. All members of the WTO participate in the committees. The Textiles Monitoring
Body is separate from the other committees but still under the jurisdiction of Goods
Council. The body has its own chairman and only 10 members. The body also has several
groups relating to textiles. The current chairperson is Amb. Yonov Frederick Agah
(Nigeria).

2. The Council for Trade in Services (Services Council)

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Information on intellectual property in the WTO, news and official records of the
activities of the TRIPS Council, and details of the WTO’s work with other international
organizations in the field.

3. The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)

The Council for Trade in Services operates under the guidance of the General Council
and is responsible for overseeing the functioning of the General Agreement on Trade in
Services (GATS). It is open to all WTO members, and can create subsidiary bodies as
required.

As their names indicate, the three are responsible for the workings of the WTO agreements
dealing with their respective areas of trade. Again they consist of all WTO members. They cover
issues such as trade and development, the environment, regional trading arrangements, and
administrative issues. The Singapore Ministerial Conference in December1996 decided to create
new working groups to look at investment and competition policy, transparency n government
procurement, and trade facilitation. Two more subsidiary bodies dealing with the plurilateral
agreements (which are not signed by all WTO members) keep the General Council informed of
their activities regularly.

Fourth level: down to the nitty-gritty:

Each of the higher level councils has subsidiary bodies this are as follows:

1. The Goods Council - subsidiary under the Council for Trade in Goods. It has committees
consisting of all member countries, dealing with specific subjects such as agriculture,
market access, subsidies, anti-dumping measures and so on. Committees include the
following:

 Information Technology Agreement (ITA) Committee

 State Trading Enterprises
 Textiles Monitoring Body - Consists of a chairman and 10 members
acting under it.
 Groups dealing with notifications - process by which governments
inform the WTO about new policies and measures in their countries.

2. The Services Counci l - subsidiary under the Council for Trade in Services which deals
with financial services, domestic regulations and other specific commitments.

3. Dispute Settlement panels and Appellate Body - subsidiary under the Dispute Settlement
Body to resolve disputes and the Appellate Body to deal with appeals.

Other committees
 Committees on
 Trade and Environment

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 Trade and Development (Subcommittee on Least-Developed Countries)

 Regional Trade Agreements
 Balance of Payments Restrictions
 Budget, Finance and Administration

Basic Principal of WTO:

The WTO agreement are lengthy and complex as they are legal texts covering a wide range of
activities there are 5 main basic principle and this principle are foundation of WTO.

1. Non-Discrimination.:

It has two major components: the most favoured nation (MFN) rule, and
the national treatment policy. Both are embedded in the main WTO rules on goods,
services, and intellectual property, but their precise scope and nature differ across these
areas. The MFN rule requires that a WTO member must apply the same conditions on all
trade with other WTO members, i.e. a WTO member has to grant the most favorable
conditions under which it allows trade in a certain product type to all other WTO
members. "Grant someone a special favour and you have to do the same for all other
WTO members."National treatment means that imported goods should be treated no less
favorably than domestically produced goods (at least after the foreign goods have entered
the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical
standards, security standards et al. discriminating against imported goods).

2. Reciprocity:

It reflects both a desire to limit the scope of free-riding that may arise
because of the MFN rule, and a desire to obtain better access to foreign marke e greater
than the gain available from unilateral liberalization; reciprocal concessions intend ts. A
related point is that for a nation to negotiate, it is necessary that the gain from doing so b
to ensure that such gains will materialize.

3. Binding and enforceable commitments:

The tariff commitments made by WTO members in a multilateral trade

negotiation and on accession are enumerated in a schedule (list) of concessions. These
schedules establish "ceiling bindings": a country can change its bindings, but only after
negotiating with its trading partners, which could mean compensating them for loss of
trade. If satisfaction is not obtained, the complaining country may invoke the WTO
dispute settlement procedures.

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4. Transparency:

The WTO members are required to publish their trade regulations, to

maintain institutions allowing for the review of administrative decisions affecting trade,
to respond to requests for information by other members, and to notify changes in trade
policies to the WTO. These internal transparency requirements are supplemented and
facilitated by periodic country-specific reports (trade policy reviews) through the Trade
Policy Review Mechanism (TPRM).The WTO system tries also to improve predictability
and stability, discouraging the use of quotas and other measures used to set limits on
quantities of imports.

5. Safety valves:

In specific circumstances, governments are able to restrict trade. There are

three types of provisions in this direction: articles allowing for the use of trade measures
to attain noneconomic objectives; articles aimed at ensuring "fair competition"; and
provisions permitting intervention in trade for economic reasons.Exceptions to the MFN
principle also allow for preferential treatment of developing countries, regional free trade
areas and customs unions.[citation needed]

Procedure of joining WTO:

The process of becoming a WTO member is unique to each applicant country,

and the terms of accession are dependent upon the country's stage of economic development and
current trade regime. The process takes about five years, on average, but it can last more if the
country is less than fully committed to the process or if political issues interfere. As is typical of
WTO procedures, an offer of accession is only given once consensus is reached among interested
parties. Any state or customs territory having full autonomy in the conduct of its trade policies
may join (“accede to”) the WTO, but WTO members must agree on the terms. Broadly speaking
the application goes through four stages:

• First, “Tell us about yourself”:

The government applying for membership has to describe all aspects of its trade
and economic policies that have a bearing on WTO agreements. This is submitted to the WTO in
a memorandum which is examined by the working party dealing with the country’s application.
These working parties are open to all WTO members.

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• Second, “Work out with us individually what you have to offer”:

When the working party has made sufficient progress on principles and policies,
parallel bilateral talks begin between the prospective new member and individual countries. They
are bilateral because different countries have different trading interests. These talks cover tariff
rates and specific market access commitments, and other policies in good sand services. The new
member’s commitments are to apply equally to all WTO members under normal non-
discrimination rules, even though they are negotiated bilaterally. In other words, the talks
determine the benefits (in the form of export opportunities and guarantees) other WTO members
can expect when the new member joins. (The talks can be highly complicated. It has been said
that in some cases the negotiations are almost as large as an entire round of multilateral trade
negotiations.)

• Third, “Let’s draft membership terms”:

Once the working party has completed its examination of the applicant’s trade
regime, and the parallel bilateral market access negotiations are complete, the working party
finalizes the terms of accession. These appear in a report, a draft membership treaty (“protocol of
accession”) and lists (“schedules”) of the member-to-bee’s commitments.

• Finally, “The decision”:

The final package, consisting of the report, protocol and lists of commitments, is
presented to the WTO General Council or the Ministerial Conference. If a two-thirds majority of
WTO members vote in favors, the applicant is free to sign the protocol and to accede to the
organization. In many cases, the country’s own parliament or legislature has to ratify the
agreement before
membership is complete.

Differences Between GATT And WTO

No GATT WTO

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.
1 It was origin in Bretton woods conference The WTO came into existence on January
after the end of second world war. It was 1st, 1995 with 123 members and it is the
founded in 1948 with 23 members by the successor to GATT.
name of GATT [General Agreement on
Tariffs and Trade].
2 GATT was a provisional legal agreementWTO is an organization with permanent
agreements
3 GATT dealt only with trade in goods WTO covers services and intellectual
property rights
4 The GATT dispute settlement was very The WTO dispute settlement system is
slow. faster, more automatic
5 GATT had only “contracting parties”. WTO has “members”

6 While GATT was multi-lateral instrument , WTO are almost multilateral and thus,
by the 1980s,many new agreement had been involve commitment for entire membership.
added of plurilateral, and therefore,
selective in nature
7 GATT is less powerful and less efficient, its WTO is very powerful and more efficient,
ruling can be easily blocked. its very difficult to block the rulling.
8 GATT system allowed existing domestic WTO doesn’t permit this
legislation to continue even if it violated a
GATT agreement.

4.World map of WTO participation

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██ Members 

██ Members, dualy represented with the European Communities 

██ Observer, ongoing accession 

██ Observer 

██ Non-member, negotiations pending 

██ Non-member

Membership:

The WTO has 153 members (76 members at its foundation and a further
74 members joined over the following years). The 25 states of the European Union are
represented also as the European Communities. Some non-sovereign autonomous
entities of member states are included as separate members.

The latest member to join was Vietnam (although the Kingdom of Tonga
was admitted on 15 December, 2005 during the ministerial conference, Tonga has yet
to finalize ratification of this admittance, and is not expected to do so until July 2007).

The shortest accession negotiation was that of the Kyrgyz Republic,

lasting 2 years and 10 months. The longest was that of the People's Republic of China,
lasting 15 years and 5 months. Russia, having first applied to join GATT in 1993, is
still in negotiations for membership.

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A number of non-members have been observers (31) at the WTO and

are currently negotiating their membership: Algeria, Andorra, Azerbaijan, Bahamas
(process frozen in 2001), Belarus, Bhutan, Bosnia and Herzegovina, Cape Verde,
Equatorial Guinea (expected to start membership negotiations in 2007 or earlier),
Ethiopia, Holy See (Vatican; special exception from the rules allows it to remain
observer without starting negotiations), Iran 1, Iraq, Kazakhstan, Lao People's
Democratic Republic, Lebanon, Libya, Montenegro, Russian Federation, Samoa, Sao
Tome and Principe, Serbia, Seychelles (negotiations frozen since 1998), Sudan,
Tajikistan, Ukraine, Uzbekistan, Vanuatu (accession agreed in 2001, but not ratified by
Vanuatu itself), and Yemen.

Iran first applied to join the WTO in 1996, but the United States,
accusing Tehran of supporting international terrorism, blocked its application 22 times.
The U.S. said in March it would drop its veto on a start to Iran's accession negotiations.
The U.S. has chosen not to block Iran's latest application for membership as part of a
nuclear related deal.

Syria first applied to join the WTO in October 2001, then again in
January 2004 and September 2005. Its application for membership is currently still
pending, waiting for WTO General Council approval to start negotiations

The following states (15) and territories (2) so far have no official
interaction with the WTO: the states of Eritrea, Somalia, Liberia, Turkmenistan, North
Korea, Monaco, San Marino, East Timor, Comoros, Nauru, Tuvalu, Palau, Kiribati,
Micronesia, Marshall Islands and the territories of Western Sahara, Palestine.
Current Member of WTO:

No. Country Year of joining No. Country Year of joining

1 Albania 8 -Sept-2000 (n) 76 Kuwait 1-Jan-95
Kyrgyz
2 Angola 1- Dec -96 (g) 77 Republic 20 December 1998 (n)
Antigua and
3 Barbuda 1-Jan-95 78 Latvia 10 February 1999 (n)
4 Argentina 1-Jan-95 79 Lesotho 31 May 1995 (g)
5 Armenia 5 -Feb-03 (n) 80 Liechtenstein 1 September 1995 (g)
6 Australia 1 -Jan-95 81 Lithuania 31 May 2001 (n)
7 Austria 1-Jan-95 82 Luxembourg 1-Jan-95
8 Bahrain 1-Jan-95 83 Macao, China 1-Jan-95
9 Bangladesh 1-Jan-95 84 Madagascar 17 November 1995 (g)
10 Barbados 1-Jan-95 85 Malawi 31 May 1995 (g)
11 Belgium 1-Jan-95 86 Malaysia 1-Jan-95
12 Belize 1-Jan-95 87 Maldives 31 May 1995 (g)
13 Benin 22 -Feb- 96 (g) 88 Mali 31 May 1995 (g)
14 Bolivia 13 -Sept- 1995 (g) 89 Malta 1-Jan-95

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15 Botswana 31-May-95 (g) 90 Mauritania 31 May 1995 (g)

16 Brazil 1-Jan-95 91 Mauritius 1-Jan-95
Brunei
17 Darussalam 1-Jan-95 92 Mexico 1-Jan-95
18 Bulgaria 1 December 1996(n) 93 Moldova 26 July 2001 (n)
Burkina
19 Faso 3 June 1995 (g) 94 Mongolia 29 January 1997 (n)
20 Burundi 23 July 1995 (g) 95 Morocco 1-Jan-95
21 Cambodia 13 October 2004 (n) 96 Mozambique 26 August 1995 (g)
22 Cameroon 13 Dec. 1995 (g) 97 Myanmar 1-Jan-95
23 Canada 1-Jan-95 98 Namibia 1-Jan-95
Netherlands —
Central including
African Netherlands
24 Republic 31 May 1995 (g) 99 Antilles 1-Jan-95
25 Chad ) 19 October 1996 (g 100 Nepal 23 April 2004 (n)
26 Chile 1-Jan-95 101 New Zealand 1-Jan-95
27 China 11 Dec. 2001(n) 102 Nicaragua 3 September 1995 (g)
28 Colombia 30 April 1995 (g) 103 Niger 1-Jan-95
29 Congo 27 March 1997 (g) 104 Nigeria 1-Jan-95
30 Costa Rica 1 January 1995 105 Norway 1-Jan-95
31 Côte d’Ivoire 1 January 1995 106 Oman 9 November 2000 (n)
32 Croatia 30 Nov. 2000 (n) 107 Pakistan 1-Jan-95
33 Cuba 20 April 1995 (g) 108 Panama 6 September 1997 (n)
Papua New
34 Cyprus 30 July 1995 (g) 109 Guinea 9 June 1996 (g)
Czech
35 Republic 1-Jan-95 110 Paraguay 1-Jan-95
Democratic
Republic of
36 the Congo 1 January 1997 (g) 111 Peru 1-Jan-95
37 Denmark 1-Jan-95 112 Philippines 1-Jan-95
38 Djibouti 31 May 1995 (g) 113 Poland 1 July 1995 (g)
39 Dominica 1-Jan-95 114 Portugal 1-Jan-95
Dominican
40 Republic 9 March 1995 (g) 115 Qatar 13 January 1996 (g)
41 Ecuador 21 January 1996 (n) 116 Romania 1-Jan-95
42 Egypt 30 June 1995 (g) 117 Rwanda 22 May 1996 (g)
Saint Kitts and
43 El Salvador 7 May 1995 (g) 118 Nevis 21 February1996 (n)
44 Estonia 13 Nov. 1999 (n) 119 Saint Lucia 1-Jan-95
45 European 1-Jan-95 120 Saint Vincent 1-Jan-95
Communities & the

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Grenadines
46 Fiji 14 January 1996 (g) 121 Saudi Arabia 11-Dec-05
47 Finland 1-Jan-95 122 Senegal 1-Jan-95
Former
Yugoslav
Republic of
48 Macedonia 4 April 2003 (n) 123 Sierra Leone 23 July 1995 (g)
49 France 1-Jan-95 124 Singapore 1-Jan-95
Slovak
50 Gabon 1-Jan-95 125 Republic 1-Jan-95
51 Gambia 23 October 1996 (g) 126 Slovenia 30 July 1995 (g)
Solomon
52 Georgia 14 June 2000 (n) 127 Islands 26 July 1996 (g)
53 Germany 1-Jan-95 128 South Africa 1-Jan-95
54 Ghana 1-Jan-95 129 Spain 1-Jan-95
55 Greece 1-Jan-95 130 Sri Lanka 1-Jan-95
56 Grenada 22 Feb. 1996 (g) 131 Suriname 1-Jan-95
57 Guatemala 21 July 1995 (g) 132 Swaziland 1-Jan-95
Guinea
58 Bissau 31 May 1995 (g) 133 Sweden 1-Jan-95
59 Guinea 25 October 1995 (g) 134 Switzerland 1 July 1995 (g)
60 Guyana 1-Jan-95 135 Chinese Taipei 1 January 2002 (n)
61 Haiti 30 January 1996 (g) 136 Tanzania 1-Jan-95
62 Honduras 1-Jan-95 137 Thailand 1-Jan-95
Hong Kong,
63 China 1-Jan-95 138 Togo 31 May 1995 (g)
Trinidad and
64 Hungary 1-Jan-95 139 Tobago 1 March 1995 (g)
65 Iceland 1-Jan-95 140 Tunisia 29 March 1995 (g)
66 India 1-Jan-95 141 Turkey 26 March 1995 (g)
67 Indonesia 1-Jan-95 142 Uganda 1-Jan-95
United Arab
68 Ireland 1-Jan-95 143 Emirates 10 April 1996 (g)
United
69 Israel 21 April 1995 (g) 144 Kingdom 1-Jan-95
70 Italy 1-Jan-95 145 United States 1-Jan-95
71 Jamaica 9 March 1995 (g) 146 Uruguay 1-Jan-95
72 Japan 1-Jan-95 147 Venezuela 1-Jan-95
73 Jordan 11 April 2000 (n) 148 Viet Nam 11-Jan-07
74 Kenya 1-Jan-95 149 Zambia 1-Jan-95
75 Korea 1-Jan-95 150 Zimbabwe 3 March 1995 (g)

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150 governments, since January 2007, with date of membership (“g” = the 51 original GATT
members who joined after 1 January 1995; “n” = new members joining the WTO through a
working party negotiation)

5.India And WTO

Brief Introduction
INDIA’S ROLE IN THE WTO

India is a founding member of the GATT (1947), it actively participated in the

Uruguay Round Negotiations, and is a founding member of the WTO. India strongly favours the
multilateral approach to trade relations and grants MFN treatment to all its trading partners,
including some who are not members of WTO. Within the WTO, India is committed to ensuring
that the sectors in which the developing countries enjoy a comparative advantage are adequately
opened up to international trade. It also has to see that the different WTO Agreements are
translated into specific enforceable dispensations, in order that developing countries are
facilitated in their developmental efforts. India feels that the multilateral system would itself gain
if it adequately reflected these concerns of the developing countries, so as to create the necessary
impetus to enable developing country members to catch up with their developed country
counterparts

6.INDIA’S WTO COMMITMENT

Under the Uruguay Round India has bound 67% of all its tariff lines, whereas
prior to that only 6% of tariff lines were bound. The bindings range from 0 to 300% for
agricultural products from 0 to 40% for other products. Under the Uruguay Round manufactured
products were bound at 25% on intermediate goods and 40% on finished goods Balance of
payments Under the exceptional provision of Article XVIII: B of GATT, India has some residual
quantitative restrictions on import. maintained for balance-of-payments purpose. These
aggregate to 2,714 tariff lines at the eight-digit level of the Indian Trade Classification. In May
1997, India presented to the WTO a plan for the elimination of these restrictions in imports,
including those on consumer goods. This plan was considered at the consultations with India of
the WTO Committee on Balance-of- Payments Restrictions in June-July 1997. At the request of
the United States, a panel was constituted on 18 November 1997 to examine the US allegation
that the continued maintenance of quantitative restrictions on imports by India is inconsistent
with India's obligations under the WTO Agreement

Agriculture:

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The only commitment India has undertaken under the Agreement is to bind its
agricultural tariffs. This commitment has been fulfilled by India binding its tariffs for primary
agricultural products at 100%, processed food products at 150% and edible oils at 300%.India's
prevailing agricultural tariffs are well within the
bound rates. Under the Uruguay Round,
whenever we have bound tariffs on agricultural
commodities at zero or very low-levels,
renegotiation of tariff bindings have been sought
under Article XXVIII of GATT. The Agreement
on Agriculture was designed to improve world
trade, raise prices of agricultural products and
ensure higher standards of living for farmers.

Textiles:

As per the obligations under the Agreement on Textile and Clothing (ATC) to
integrate this sector into GATT 1994 in stages, the Indian Government moved cotton and wool
yarn, polyester staple fibre and 20 other industrial fabrics on to the list of freely importable
goods in 1995. India is concerned about the fact that repeated anti-dumping investigation by
certain trading partners on the same product lines, without giving full effect to the special
dispensation provisions of Article 15 of the Anti-dumping Agreement has resulted in trade
harassment for its exporters of textiles.

Intellectual Property :

India is availing itself of the transition periods due to her under Article 65 of the
TRIPS Agreement to meet her obligations under the seven areas covered by the Agreement.
India's achievements in this field have been in the passing of TRIPS plus legislation in the field
of Copyright Law. The 1994 amendments to the Act of 1957 provides protection to all original
literary, dramatic, musical and artistic works, cinematographic films and sound recordings. The
most recent changes bring sectors such as satellite broadcasting, computer software and digital
technology under Indian copyright protection

Trades related investment measure:

Substantial modifications have already been made to the foreign investment

regime, increasing the number of sector where foreign investment can take place and also
increasing the foreign equity limit on these investments. India has already notified the trade-
related investment measures maintained by it in terms of Articles 2 and 5 of the TRIMs
Agreement and the illustrative list annexed to the TRIMs Agreement

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Anti-dumping:

Anti-dumping and countervailing duties are imposed under the Customs Tariff
Act 1975 and the Rules made there under. The Act and Rules are on the lines of the respective
GATT Agreement on anti-dumping and countervailing duties. The time limits and the
procedures prescribed under the Indian laws/GATT Agreement is strictly followed by the
designated authority. With the increasing number of cases, the Government of India proposes to
set up a Directorate General of Anti-dumping and Allied Duties for expeditious disposal of anti-
dumping and countervailing duty cases

Services sector:

The services sector accounts for about 40% of India's GDP, 25% of employment
and 30% of export earnings. Recognizing the importance of the services sector in achieving
higher economic growth, the government is giving added emphasis to improving services such as
telecommunications, shipping, roads, ports and air transport. The foreign direct investment
regime has been liberalized to attract foreign investment in the services sector.India actively
participated in the Uruguay Round services negotiations and made commitments in 33 activities
as compared to an average of 23 for
developing countries. India also
participated in the spill- over
negotiations. In basic
telecommunication services, India has
undertaken commitments in the areas
of voice telephone service for local and
long-distance (within the service area),
cellular mobile services and other
services such as circuit switched data
transmission sources, facsimile
services, private leased circuit services as per details given in the schedule of commitments.
While developed countries have surplus capital to invest, most of the developing countries have
surplus of skilled, semi- skilled and unskilled workers. We have a large pool of well- qualified
professionals capable of providing services abroad. As developed countries have a comparative
advantage in exporting capital intensive services, similarly developing countries have a
comparative advantage in exporting labour intensive services involving movement of persons. In
Article IV of GATS, there is a clear obligation to increase the participation of developing
countries in trade in services. The Agreement also recognizes the basic asymmetry in the level of
development of the services sector in developed and developing countries and a commitment that
the developed countries will take concrete measures aimed at strengthening the domestic service
sector of developing countries and providing effective market access in sectors and modes of
supply of export interest to developing countries.

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Information Technology:

India participated in the negotiations on the Agreement from the early stages and
after examination of the implications of the proposed agreement and extensive discussions with
trading partners joined as a participant on 1 April 1997. India is committed to phasing out the
import tariffs on the products covered by the ITA as scheduled

Regional trade agreements:

India attaches significance to her participation in regional agreements within the

framework of multilateral rules. India has been instrumental in setting up the South Asian
Association for Regional Cooperation (SAARC), whose major achievement in 1995 was the
conclusion of the negotiations on trade preferences within the framework of the SAARC
Preferential Trading Arrangement (SAPTA). SAPTA became operational on 7 December 1995
and includes preferential tariff concessions on 226 items and product groups. A second round of
SAPTA trade negotiations was launched in January 1996 to broaden tariff concessions. India
granted concessions on 902 tariff lines, effective 1 March 1997

7.COMPARISON OF INDIA’S FOREIGN TRADE BENEFITS

Before becoming the member of WTO:

It’s agreed that India was one of the founder member of WTO; it faced problems in Foreign
Trade grounds. The problems that India faced before the formation of WTO were the following:

(1)Absence of Anti – dumping

(2)No Subsidy Facilities
(3)Absence of TRIMs & TRIPs
(4)Lac of Market Scenario & Strategies
After becoming the member of WTO:

(1)Anti-Dumping:

Dumping is condemned if it causes or threatens material injury to an established

industry. A product is considered as dumped when its export price becomes less as compared to
the normal price in the exporting country plus a reasonable amount for administrative, selling
and any other costs and for profits. Anti dumping measures can be employed only if dumped
imports are shown to cause serious damage to the domestic industry in the import industry. The
measures are not allowed if the margin of dumping is de minimise. (2)Subsidies - The draft
agreement defined certain specific subsidies which would be subjects to various disciplines.
Certain other types of subsidies would fall under” prohibited ” category

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2)Technical barriers to trade:

Technical regulation and standards along with testing and certification procedures should not
create unnecessary obstacles to trade

3) Right of market:

The main issue is to reduce tariff and other trade restriction in case of commodities like
agricultural goods, textiles etc.

4)TRIMs (Trade related investment measures) :

Widely employed by developing countries. Refers to certain conditions imposed

by government inrespect of foreign investment. The agreement of TRIM provides the following
inconsistent TRIMs.

a) Local content requirement

b) Trade balancing requirement

c) Trade and foreign exchange balancing requirement.

d) Domestic sales requirements.

5) TRIPs (Trade Related Aspects of Intellectual Property Rights:

It is defined as “information with commercial value”. Intellectual Property Rights have been
characterised as a composite of “ideas, inventions and creative expression.”

8.IMPACT OF WTO ON INDIA

1.AGRICULTURE

Globalization – manifesting in progressive integration of economies and societies

has assumed increasing significance in the lives of common people all over the world. In the
field of the trade the World Trade Organization (WTO) is the principal international institution
responsible for laying down rules for the smooth conduct of trade in goods and services among
nations in this globalized world. This is achieved by developing a set of rules of multilateral
trading system which aims to remove, inter alia, trade barriers (tariff and non tariff) as well as
reduce and eventually remove domestic support and system of export subsidies that distort
international trade between nations. These problems of trade distortion are most conspicuous in
agriculture sector. Agriculture is of special significance for developing countries particularly the
extreme poor (i.e. those living on one dollar or less per day). It has been estimated that “three
quarters of them about 900 million people – live and work in rural areas, most of them as small
farmers”. Table 1 shows that where as agriculture contributes 3% to the GDP and employs only

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4% of the population in developed countries the corresponding figures for developing countries
are 26% and 70% respectively.

Table 1: Key differences between agriculture systems in developed and developing countries

Parameters Developed Countries Developing Countries

(including least developed)
Nature of Agriculture System Commercial/Export Oriented Subsistence
Share of GD 3% 26%
Contribution to foreign 8.3% 27%
exchange
Population Engaged in 4% 27%
agriculture

The agriculture was included in the multilateral trading system after the eighth
(Uruguay) round of talks under GATT on demand of developing countries who had a
comparative advantage in this sector and its benefits were being denied to them. This trade round
stretched from 1986-1994 and concluded in establishment of WTO and inclusion among others
of agriculture in the discipline of WTO. This was achieved by developing countries only after
paying a heavy price in the form concessions on many fronts especially intellectual property
rights and services.

WTO policies impact agriculture principally through the following agreements:

1. Agreement on Agriculture (AOA)

2. Agreement on Application of Sanitary and Phytosanitary Standards (SPS)(Dealing with Health

and disease related issues)

3. Agreement on Technical Barriers to Trade (TBT): (Dealing with Regulations, standards,

testing and certification procedures, packaging, marking and labeling requirements, etc)

4.Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs): (Dealing with
Patents and copyrights, plant breeders’ rights etc).

Activists cry foul that Indian agriculture, already reeling under severe drought and fall in cash
crop prices, will die once the import curbs are removed and free flow of food items are allowed
into India.

"There is going to be 'madness' in the agriculture sector. Farmers will be hit hard
by the WTO regime. What happens to our vegetable oils, rice, rubber, coconuts and fruits, if
similar items can be imported cheaply from other countries," asks K Sundaran, a social activist
espousing farmers causes in South India.

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He says currently there is a massive distortion in the international trade in

agriculture. Industrialised countries have been giving huge domestic subsidies to their
agricultural sector that there is excessive production, import restrictions and dumping of agri-
products in international markets. But despite the concerns of farmers, many believe the WTO
rules will not adversely affect the Indian agriculture as it is made out.Developed nations have
committed to the WTO that they would reduce subsidies and tariff. Then overseas markets will
be available for Indian agricultural products.

2. PHARMACEUTICALS

India has one of the most efficient pharmaceutical industries in the world
Pharmaceutical firms grew mainly thanks to the absence of patent protection of medical drugs in
the country. For instance, Indian companies are now producing their own AIDS drugs, which are
available cheaply, compared to the original products from foreign countries.

But the imposition of the new WTO rules will begin to threaten India's
achievements in the pharmaceutical field. The Indian Patents Act, introduced in 1970, boosted
Indian pharma companies. The Act allowed them to develop and patent alternative processes for
products discovered and patented elsewhere.

According to the Indian Drug Manufacturers' Association, self-sufficiency in Indian

pharmaceutical sector is more than 70 per cent.

"Worldwide, India is a country of very low prices for high- quality medicines," points out the
IDMA president Nishchal H Israni.

But now the rules of the game in the pharmaceutical industry will change as India
has committed to toe the WTO line on product patents. Product patent rules and Exclusive
Marketing Rights (EMR) under the WTO could affect a paradigm shift in India's pharma majors.
As per the EMR provision, a product for which original patent was granted prior to 1995, is not
fit for an EMR in the country. This has forced nine leading domestic pharma companies to form
the Indian Pharmaceutical Alliance that has demanded a more transparent WTO regime for EMR
grants.

How will the WTO rules affect 500,000 employees working in roughly 20,000 pharma firms in
the country?

Well, many expect a spate of mergers, acquisitions and alliances in the domestic
pharmaceutical industry in the coming years, as the impact of WTO regulations kick in, Indian
pharma players are learning to collaborate and consolidate to grow.

If the industry is to be believed, the Matrix-Strides merger is only the beginning of the shakeout
that the pharma sector is set to witness over the next few years.

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3.THE SERVICE SECTOR

As per the WTO rules, two obligations apply to all services. They are the Most
Favoured Nation (MFN) treatment and transparency by way of publication of all laws and
regulations. Which in other words means that areas like banking, insurance, investment banking,
health, and many other professional services that are opened up will be bound by the WTO
commitments? India will have to open up its services sector to other WTO member countries.

The result many overseas service providers will enter into the services sectors in
the country, thereby reducing the chances of domestic enterprises. But experts believe India need
not be frightened of the WTO rules on services because the country at present has a distinct
competitive advantage in many areas that include health, engineering construction, computer
software and other professional services.

4 TEXTILES AND CLOTHING

The WTO agreement on the textiles and clothing states that the Multi-Fibre
Agreement (MFA) will eventually be eliminated. MFA at present groups the major importer
countries are-- the United States, Austria, Canada, the European Community, Finland and
Norway -- who apply restrictions by way of quota.

Exporting countries like India are a part to the MFA. The phasing out of MFA
will boost textile exports from India. It will also increase investment in textiles and joint
ventures. But the risk is that as India opens up its market from next month, import of textiles and
clothing will considerably increase from countries like China, the Unites States, Taiwan and
Indonesia. This will force many textile manufacturers to modernise their mills and improve
quality.

5 INFORMATION TECHNOLOGY

Under the Information Technology Agreement signed under the WTO, Indian
hardware and software companies can become major players in the value-added arena.
Availability of high-skilled of IT personnel and low cost of labour and operation will allow India
to compete in the international market.

6.TRIPS (TRADE RELATED INTELLECTUAL PROPERTY RIGHTS)

TRIPS Article 27.3(b), which requires all WTO countries to provide some kind of
intellectual property rights (IPR) on plant varieties, was up for review in 1999. TRIPS are a
clearly anti- developing country treaty. Its provisions seriously threaten self reliance in
agriculture and the livelihoods of farmers. TRIPS do not contain any elements of equity or
benefit sharing. It does not allow countries to claim a share of benefits companies who breed
new varieties using farmers’ varieties as the base since there is no provision requiring disclosure
of the country of origin from where base materials have been taken. The Trade Related Aspects

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of Intellectual Rights (TRIPS) agreement set minimum standards for protection of IPRs, a
standard that is closer to the level of protection provided in the developed world.

9.Doha Round
The Doha Development Round or Doha
Development Agenda (DDA) is the current trade-negotiation round of
the World Trade Organization (WTO) which commenced in
November 2001. Its objective is to lower trade barriers around the
wor ld, which allows countries to increase trade globally. As of
2008, talks have stalled over a divide on major issues, such as
agriculture, industrial tariffs and non-tariff barriers, services, and
trade remedies.[1] The most significant differences are between
developed nations led by the European Union (EU), the United
States (USA), and Japan and the major developing countries led
and represented mainly by China, Brazil, India, and South Africa.
There is also considerable contention against and between the EU
and the USA over their maintenance of agricultural subsidies—seen to operate effectively as
trade barriers.

The Doha Round began with a ministerial-level meeting in Doha, Qatar in 2001.
Subsequent ministerial meetings took place in Cancún, Mexico (2003), and Hong Kong (2005).
Related negotiations took place in Geneva, Switzerland (2004, 2006, 2008); Paris, France
(2005); and Potsdam, Germany (2007).

The most recent round of negotiations, 23-29 July 2008, broke down after failing
to reach a compromise on agricultural import rules.After the breakdown, major negotiations were
not expected to resume until 2009. Nevertheless, intense negotiations, mostly between the USA,
China, and India, were held in the end of 2008 in order to agree on negotiation modalities.
However, these negotiations did not result in any progress. Doha Round talks are overseen by the
Trade Negotiations Committee (TNC), whose chair is the WTO’s director-general, currently
Pascal Lamy. The negotiations are being held in five working groups and in other existing bodies
of the WTO. Selected topics under negotiation are discussed below in five groups: market
access, development issues, WTO rules, trade facilitation and other issues.

Before Doha
Before the Doha ministerial, negotiations had already been under way on trade in
agriculture and trade in services. These ongoing negotiations had been required under the last
round of multilateral trade negotiations (the Uruguay Round, 1986-1994). However, some
countries, including the United States, wanted to expand the agriculture and services talks to
allow trade-offs and thus achieve greater trade liberalization.

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The first WTO ministerial conference, which was held in Singapore in 1996,
established permanent working groups on four issues: transparency in government procurement,
trade facilitation (customs issues), trade and investment, and trade and competition. These
became known as the Singapore issues. These issues were pushed at successive ministerials by
the European Union, Japan and Korea, and opposed by most developing countries.[1] Since no
agreement was reached, the developed nations pushed that any new trade negotiations must
include these issues.

The negotiations were intended to start at the ministerial conference of 1999 in

Seattle, USA, and be called the Millennium Round but, due to several different events including
protest activity outside the conference (the so-called "Battle of Seattle"), the negotiations were
never started.Due to the failure of the Millennium Round, it was decided that negotiations would
not start again until the next ministerial conference in 2001 in Doha, Qatar.

According to the so-called "built-in agenda", negotiations on agriculture and trade

in services started in 2000. These negotiations were later merged into the overall Doha
negotiations.

Just months before the Doha ministerial, the United States had been attacked by
terrorists on 11 September 2001. Some government officials called for greater political cohesion
and saw the trade negotiations as a means toward that end. Some officials thought that a new
round of multilateral trade negotiations could help a world economy weakened by recession and
terrorism-related uncertainty. According to the WTO, the year 2001 showed "...the lowest
growth in output in more than two decades," and world trade contracted that year.

Doha, 2001
Began in November 2001, committing all countries to negotiations opening
agricultural and manufacturing markets, as well as trade-in-services (GATS) negotiations and
expanded intellectual property regulation (TRIPS). The intent of the round, according to its
proponents, was to make trade rules fairer for developing countries. However, by 2008, critics
were charging that the round would expand a system of trade rules that were bad for
development and interfered excessively with countries' domestic "policy space".

Importance of US presidential 'fast-track' authority

The round had been planned for conclusion in December 2005 — after two more
ministerial conferences had produced a final draft declaration. The WTO pushed back its self-
imposed deadline to slightly precede the expiration of the U.S. President's Congressional Fast
Track Trade Promotion Authority. Any declaration of the WTO must be ratified by the U.S.
Congress to take effect in the United States. Trade Promotion Authority prevents Congress from

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amending the draft. It expired on 30 June 2007, and congressional leaders decided not to renew
this authority for President George W Bush.

Cancún, 2003
The 2003 Cancún talks—intended to forge concrete agreement on the Doha round
objectives—collapsed after four days during which the members could not agree on a framework
to continue negotiations. Low key talks continued since the ministerial meeting in Doha but
progress was almost non-existent.This meeting was intended to create a framework for further
negotiations.

Collapse of negotiations

The Cancún ministerial collapsed for several reasons. First, differences over the
Singapore issues seemed incapable of resolution. The EU had retreated on some of its demands,
but several developing countries refused any consideration of these issues at all. Second, it was
questioned whether some countries had come to Cancún with a serious intention to negotiate. In
the view of some observers, a few countries showed no flexibility in their positions and only
repeated their demands rather than talk about trade-offs. Third, the wide difference between
developing and developed countries across virtually all topics was a major obstacle. The U.S.-
EU agricultural proposal and that of the G20 developing nations, for example, show strikingly
different approaches to special and differential treatment. Fourth, there was some criticism of
procedure. Some claimed the agenda was too complicated. Also, Cancún ministerial chairman,
Mexico’s Foreign Minister Luis Ernesto Derbez, was faulted for ending the meeting when he
did, instead of trying to move the talks into areas where some progress could have been made.

The collapse seemed like a victory for the developing countries. The failure to
advance the round resulted in a serious loss of momentum and brought into question whether the
1 January 2005 deadline would be met.The North-South divide was most prominent on issues of
agriculture. Developed countries’ farm subsidies (both the EU’s Common Agricultural Policy
and the U.S. government agro-subsidies) became a major sticking point. The developing
countries were seen as finally having the confidence to reject a deal that they viewed as
unfavorable. This is reflected by the new trade bloc of developing and industrialized nations: the
G20. Since its creation, the G20 has had fluctuating membership, but is spearheaded by the G4
(the People's Republic of China, India, Brazil, and South Africa). While the G20 presumes to
negotiate on behalf of all of the developing world, many of the poorest nations continue to have
little influence over the emerging WTO proposals.

Geneva, 2004

The aftermath of Cancún was one of standstill and stocktaking. Negotiations were
suspended for the remainder of 2003. Starting in early 2004, U.S. Trade Representative Robert
Zoellick pushed for the resumption of negotiations by offering a proposal that would focus on

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market access, including an elimination of agricultural export subsidies.He also said that the
Singapore issues could progress by negotiating on trade facilitation, considering further action on
government procurement, and possibly dropping investment and competition. This intervention
was credited at the time with reviving interest in the negotiations, and negotiations resumed in
March 2004.

In the months leading up to the talks in Geneva, the EU accepted the elimination
of agricultural export subsidies “by date certain.” The Singapore issues were moved off the Doha
agenda. Compromise was also achieved over the negotiation of the Singapore issues as the EU
and others decided. Developing countries too played an active part in negotiations this year, first
by India and Brazil negotiating directly with the developed countries (as the so-called “non-party
of five”) on agriculture, and second by working toward acceptance of trade facilitation as a
subject for negotiation.

With these issues pushed aside, the negotiators in Geneva were able to
concentrate on moving forward with the Doha Round. After intense negotiations in late July
2004, WTO members reached what has become known as the Framework Agreement(sometimes
called the July Package), which provides broad guidelines for completing the Doha round
negotiations. The agreement contains a 4-page declaration, with four annexes (A-D) covering
agriculture, non-agricultural market access, services, and trade facilitation, respectively. In
addition, the agreement acknowledges the activities of other negotiating groups (such as those on
rules, dispute settlement, and intellectual property) and exhorts them to fulfill their Doha round
negotiating objectives. The agreement also abandoned the 1 January 2005 deadline for the
negotiations and set December 2005 as the date for the 6th ministerial to be held in Hong Kong.

Paris, 2005
Trade negotiators wanted to make tangible progress before the December 2005
WTO meeting in Hong Kong, and held a session of negotiations in Paris in May 2005.

Paris talks were hanging over a few issues: France protested moves to cut
subsidies to farmers, while the U.S., Australia, the EU, Brazil and India failed to agree on issues
relating to chicken, beef and rice. Most of the sticking points were small technical issues, making
trade negotiators fear that agreement on large politically risky issues will be substantially harder.

Hong Kong, 2005

The Hong Kong Convention
Center, which was the site of the Sixth
WTO Ministerial Conference

The Sixth WTO Ministerial

Conference took place in Hong Kong, 13 to

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18 December, 2005. Although a flurry of negotiations took place in the fall of 2005, WTO
director-general Pascal Lamy announced in November 2005 tha t a comprehensive agreement on
modalities would not be forthcoming in Hong Kong, and that the talks would “take stock” of the
negotiations and would try to reach agreements in negotiating sectors where convergence was
reported.

Trade ministers representing most of the world's governments reached a deal that sets a deadline
for eliminating subsidies of agricultural exports by 2013. The final declaration from the talks,
which resolved several issues that have stood in the way of a global trade agreement, also
requires industrialized countries to open their markets to goods from the world's poorest nations,
a goal of the United Nations for many years. The declaration gave fresh impetus for negotiators
to try to finish a comprehensive set of global free trade rules by the end of 2006. Director-general
Pascal Lamy said, "I now believe it is possible, which I did not a month ago."

The conference pushed back the expected completion of the round until the end of 2006.

Geneva, 2006
The July 2006 talks in Geneva failed to reach an agreement about reducing farming subsidies
and lowering import taxes, and negotiations took months to resume. A successful outcome of the
Doha round became increasingly unlikely, because the broad trade authority granted under the
Trade Act of 2002 to U.S. president George W. Bush was due to expire in 2007. Any trade pact
would then have to be approved by the U.S. Congress with the possibility of amendments, which
would hinder the U.S. negotiators and decrease the willingness of other countries to participate.
Hong Kong offered to mediate the collapsed trade liberalisation talks. Director-general of Trade
and Industry, Raymond Young, says the territory, which hosted the last round of Doha
negotiations, has a "moral high-ground" on free trade that allows it to play the role of "honest
broker".[citation needed]

Potsdam, 2007
In June 2007, negotiations within the Doha round broke down at a conference in
Potsdam, as a major impasse occurred between the USA, the EU, India and Brazil. The main
disagreement was over opening up agricultural and industrial markets in various countries and
also how to cut rich nation farm subsidies.

Geneva, 2008
On 21 July 2008, negotiations started again at the WTO's HQ in Geneva on the
Doha round but stalled after nine days of negotiations over the refusal to compromise over the

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special safeguard mechanism. "Developing country Members receive special and differential
treatment with respect to other Members' safeguard measures, in the form of a de minimis import
volume exemption. As users of safeguards, developing country Members receive special and
differential treatment with respect to applying their own such measures, with regard to permitted
duration of extensions, and with respect to re-application of measures.— Technical Information
on Safeguard Measures WTO official site

Negotiations had continued since the last conference in June 2007. Director-
general Pascal Lamy said before the start of the conference that the odds of success were over
50%. Around 40 ministers attended the negotiations, which were only expected to last five days
but instead lasted nine days. Kamal Nath, India's Commerce Minister, was absent from the first
few days of the conference due to a vote of confidence being conducted in India's Parliament.On
the second day of the conference, U.S. Trade Representative Susan Schwab announced that the
U.S. would cap its farm subsidies at $15 billion a year, from $18.2 billion in 2006.The proposal
was on the condition that countries such as Brazil and India drop their objections to various
aspects of the round.The U.S. and the EU also offered an increase in the number of temporary
work visas for professional workers. After one week of negotiations, many considered agreement
to be 'within reach'. However, there were disagreements on issues including special protection
for Chinese and Indian farmers and African and Caribbean banana imports to the EU. India and
China's hard stance regarding tariffs and subsidies was severely criticized by the United States.In
response, India's Commerce Minister said "I'm not risking the livelihood of millions of farmers."

Collapse of negotiations

The negotiations collapsed on 29 July over issues of agricultural trade between the United States,
India, and China.In particular, there was insoluble disagreement between India and the United
States over the special safeguard mechanism (SSM), a measure designed to protect poor farmers
by allowing countries to impose a special tariff on certain agricultural goods in the event of an
import surge or price fall.

Pascal Lamy said, "Members have

simply not been able to bridge their
differences." He also said that out of a
to-do list of 20 topics, 18 had seen
positions c onverge but the gaps could
not narrow on the 19th — the special
safeguard mechanism for developing
countries. However, the United States,
China and India could not agree on the

Pascal Lamy

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 India and WTO

threshold that would allow the mechanism to be used, with the United States arguing that the
threshold had been set too low. The European Union Trade Commissioner Peter Mandelson
characterized the collapse as a "collective failure". On a more optimistic note, India's Commerce
Minister, Kamal Nath, said "I would only urge the director-general to treat this [failure of talks]
as a pause, not a breakdown, to keep on the table what is there."

Several countries blamed each other for the breakdown of the negotiations.The
United States and some European Union members blamed India for the failure of the talks. India
claimed that its position was supported by over 100 countries.[ Brazil, one of the founding
members of the G-20, broke away from the position held by India. Then-European
Commissioner for Trade Peter Mandelson said that India and China should not be blamed for the
failure of the Doha round.In his view, the agriculture talks had been harmed by the five-year
program of agricultural subsidies recently passed by the U.S. Congress, which he said was "one
of the most reactionary farm bills in the history of the U.S.".

Current progress of Doha Round

Several countries have called for negotiations to start again. Brazil and Pascal
Lamy have led this process. Luiz Inácio Lula da Silva, president of Brazil, called several
countries leaders to urge them to renew negotiations. Lamy visited India to discuss possible
solutions to the impasse.[ A mini-ministerial meeting held in India on September 3rd and 4th
pledged to complete the round by the end of 2010.The declaration at the end of the G20 summit
of world leaders in London in 2009 included a pledge to complete the Doha round. Although a
WTO ministerial conference scheduled in November 2009 would not be a negotiating session,
there would be several opportunities over the year 2009 to discuss the progress. The WTO is
involved in several events every year that provide opportunities to discuss and advance, at a
conceptual level, trade negotiations.

In early 2010, Brazil and Lamy have focused on the role of the United States in
overcoming the deadlock. Lula has urged Barack Obama to end the trade dispute between Brazil
and the US over cotton subsidies following his increase in tariffs on over 100 US goods.. Lamy
has highlighted the difficulty of obtaining agreement from the US without the Presidential fast
track authority and biennial elections. One of the consequences of the economic crisis of 2008 -
2009 is the desire of political leaders to shelter their constituents from the increasingly
competitive market experienced during market contractions. Lamy hopes that the drop in trade of
12% in 2009, quoted as the largest annual drop since the Second World War, could be countered
by successful conclusion of the Doha round.

Benefits
All countries participating in the negotiations believe that there is some economic
benefit in adopting the agreement; however, there is considerable disagreement of how much

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benefit the agreement would actually produce. A study by the University of Michigan found that
if all trade barriers in agriculture, services, and manufactures were reduced by 33% as a result of
the Doha Development Agenda, there would be an increase in global welfare of $574.0 billion.A
2008 study by World Bank Lead Economist Kym Andersonfound that global income could
increase by more than $3000 billion per year, $2500 billion of which would go to the developing
world.Others had been predicting more modest outcomes, e.g. world net welfare gains ranging
from $84 billion to $287 billion by the year 2015. Pascal Lamy has conservatively estimated that
the deal with bring an increase of $130 billion.

Several think tanks and public organizations assess that the conclusion of the
trade round will result in a net gain . However, the restructuring and adjustment costs required to
prevent the collapse of local industries, particularly in developing countries, is a global concern.
For example, a late 2009 study by the Carnegie Endowment for International Peace, the United
Nations Economic Commission for Africa (UNECA), the United Nations Development
Programme and the Kenyan Institute for Research and Policy Analysis found that Kenya would
see gains in its exports of flowers, tea, coffee and oil seeds. It would concurrently lose in the
tobacco and grains markets, as well as manufacturing of textiles and footwear, machinery and
equipment.

The Copenhagen Consensus, which evaluates solutions for global problems

regarding the cost-benefit ratio, in 2008 ranked the DDA as the second-best investment for
global welfare, after the provision of vitamin supplements to the world's 140 million
malnourished children.

10.CONCLUSION
The developed countries want that the underdeveloped countries observe some
restrictions relating to labour employment and ecological balance. Their argument is that the
underdeveloped countries use child labours or their social security measures are very poor.
Further, these countries do not take measures to control pollution or to maintain ecological
balance. As a result, cost of production in such countries is low. So, the developed countries
should be allowed to impose tariffs or imports from underdeveloped countries until the
developing countries improve the condition of labour and do not employ child labour. Thus, the
developed countries tried to impose many restrictions on the production process of the
underdeveloped countries. Thus, if the developing countries try to protect their interest as a
group, they may stand to gain from the WTO system. If we consider both sides of a coin then we
can conclude that if the developed countries liberalise their import of agricultural goods, India’s
export of agricultural goods will increase. India has a comparative cost advantage in the
production of agricultural commodities. Hence India’s of such commodity is expected to
increase. On the other side according to the agreement of Trade Related Investment Measure’s
(TRIMs), there should not be any discrimination between foreign and domestic investments. As

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a result, it will very difficult to control the restrictive activities of the following investors. This
agreement will also favour investors of the developed countries.

11.BIBLIOGRAPH
1) Essential of Business Environment – K.Aswathappa

(2)Business Environment - Francis Cherunilam

(3) www.wikipedia.org

(4) www.wto.org

(5)Annual Report 2007

(6)Department of Commerce, Government of Indi

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