Chapter 6: Role of India in World Trade Organisation

CHAPTER 6 : ROLE OF INDIA IN WORLD TRADE
ORGANISATION
6.1 Origin and Development of World Trade Organisation (WTO)
The eighth or last Uruguay round of General Agreement on Tariffs and Trade
(GATT) called “Uruguay Round” was of 87 months duration started at Uruguay,
Latin America on September, 1986 and ended in Geneva, Switzerland on December
1993. This Uruguay round of GATT led to the formation of World Trade
Organisation (WTO) in 1995 with series of new agreements on world trade by
replacing GATT [1,10]. GATT ended on 15th April 1994 at the Marrakesh, Morocco
with Marrakesh declaration signed by India and other member countries of GATT
with the formation of WTO [having similar status with International Monetary Fund
(IMF)1 and International Bank for Reconstruction and Development (IBRD)2] in 1995
with the aim to make the world trade more liberalized and till the WTO starts
functioning, all the signatory nations are to follow the Uruguay Round of Agreement
(URA)3 of GATT [1,8]. The main weakness of GATT was inadequacies in the
enforcement of the rules and agreements on international trade , which resulted in the
establishment of WTO [4].
WTO founded by 123 member countries at a meeting in Marakkesh, Morocco on 15th

April 1994, was established on 1st January 1995 and started its functioning with its
Headquarter in Geneva, Switzerland [1,2,6]. WTO set up by 123 member countries is
a legal organization with 137 member nations (as on 30th June, 2000, accounting 90%
and more in global trade ), 140 member nations (as on April, 2001), 146 member
nations (as on 4th April, 2003), 148 member nations (as on 13th October, 2004) and
158 member nations (as on 2nd February, 2013) for multilateral trade agreements
(MTA)4 on goods and services and allied subjects [1,2,6].
WTO looks after the rules and regulations of trade of goods and services between the
member countries; international laws and agreements on tariff5 and trade; intellectual
property rights6; investment measures7; dispute settlement8; trade policy review9 ;
agreements on agriculture10, agreements on textiles and clothings11; anti-dumping12;
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agreement on sanitary and phyto sanitary measures13; subsidies and countervailing
measures14; agreements on safeguards15; etc [1]. WTO is a facilitating forum for
ensuring agreements and commitments in world trade among member countries
[17,18]. By not abiding to WTO’s Agreements, a country will be penalised and will
not be allowed to trade with any WTO member countries and as a result of which
country’s foreign exchange earnings will suffer drastically [3].
6.2 Pre-WTO Regime in World Trade

Pre-WTO regime witnessed after the second world war , the existence of three global
institutions viz. World Bank (established in 1944), International Monetary Fund
(IMF; established in 1994) and International Trade Organisation [ ITO16; proposed in
Havana Charter (ITO’s founding document) in the year 1947, which was not ratified
owing to the oppositions from United States of America (USA) and hence could not
be established]. The Bretton Wood Conference of 1944 actually recommended
establishing World Bank, IMF and ITO. As the recommendation of establishment of
ITO did not materialise, General Agreement on Tariffs and Trade (GATT) came into
existence (in place of ITO) for establishing global trade rules and regulations during
the period 1947 to 1994. GATT being an adhoc type of organisation has no legal
framework [1,6].
Proposals of expanding world trade was circulated by USA in Dec. 1945 which led to
the formation of GATT, based on the provisions laid down in the Havana Charter
[1,17].
GATT was established on 30th October, 1947 by 23 countries (as founder members
including India ) under the leadership of USA for issues on tariff reductions by the
member countries on export and import of goods .GATT came into force on 1st
January,1948 with 23 member countries (called “GATT Contracting Parties”).
GATT, 1947 was replaced by GATT,1994. GATT framed the rules for the world
trade during the period 1947 to 1994 in phases. GATT was initially concentrated on
bilateral trade agreements17 [1,7].
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The GATT trade rounds (five in nos.) till 1960-61 dealt with the reduction of tariffs.
The Kennedy round introduced Anti Dumping Agreement. The Tokyo Round
introduced non-tariff barriers18. The Uruguay Round introduced trades in services;
intellectual property rights; investment measures; dispute settlement; trades in
agriculture, textiles and clothings; creation of WTO; etc [10].
Since the formation of GATT in 1947, the eight or last round i.e URA of GATT
established rules for international trade by means of multilateral trade negotiations19
during 1986 to 1994. GATT was traditionally meant for trades of manufactured goods
and the URA included General Agreement on Trade in Services (GATS); Trade
Related Intellectual Property Rights (TRIPS)20; Trade Related Investment Measures
(TRIMS)21; trades on agriculture, textiles and clothings under GATT. Therefore, the
marathon URA of GATT being multidirectional includes agreement on reduction of
tariffs, strengthening dispute settlement mechanism (DSM), elimination of Multi-
Fibre Arrangement (MFA)22 by phases, TRIPS, TRIMS, GATS [7,10, 17,18].
The General Agreement on Tariffs and Trade (GATT) provides the rules in
international trading for reducing trade barriers with establishment of equitable global
trading system.
Non-discriminatory accesses are to be provided by the member countries of GATT to

each other in international trade and similar treatments are applicable to Most-
Favoured Nations (MFN)23. GATT focused on trade without discrimination, reduction
of trade barriers, stable protection through tariffs if needed, trade liberalization,
multilateral trade, transparency in trade policy, favourable treatment for developing
nations, prohibiting export subsidy [6].
6.2.1 Eight Rounds of Trade Negotiations in GATT
GATT held 8 rounds of trade negotiations which are summarised in Exhibit 6.1
[1,10].
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Exhibit 6.1 : Summary of 8 Rounds of GATT Negotiations [1,10]
Name Start Duration Countries Subjects Achievements

covered
Geneva, April 7 months 23 Tariffs Signing of GATT, 45,000 tariff
Switzerland 1947 concessions effecting $10 billion
of trade.
Annecy, April 5 months 13 Tariffs Countries exchanged some 5,000
France 1949 tariff concessions
Torquay U.K. Sept. 8 months 38 Tariffs Countries exchanged some 8,700
1950 tariff concessions, cutting the 1948
tariff levels by 25%
Geneva, Januar 5 months 26 Tariffs, $2.5 billion in tariff reductions
Switzerland y 1956 admission
of Japan
Geneva (Dillon Sept. 11 months 26 Tariffs Tariff concessions worth $4.9
Round) 1960 billion of world trade.
(1960-
61)
Geneva May 37 months 62 Tariffs, Tariff concessions worth $40
(Kennedy 1964 Anti- billion of world trade.
Round) (1964- dumping
67)
Geneva (Tokyo Sept. 74 months 102 Tariffs, Tariff reductions worth $300
Round) 1973 non-tariff billion dollars achieved.
(1973- measures,
79) “framewor
k”
agreement
s
Geneva Sept. 87 months 123 Tariffs, The round led to the creation of
(Uruguay 1986 non-tariff WTO, and extended the range of
Round) (1986- measures, trade negotiations, leading to
94) rules, major reductions in tariffs (about
services 40%) and agricultural subsidies, an
intellectua agreement to allow full access for
l property, textiles and clothings from
dispute developing countries, and an
settlement extension of intellectual property
, textiles, rights.
agriculture
, creation
of WTO
etc.
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Source :
1. http://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Trade
2. Agarwal, D.R., “A monograph on World Trade Organisation (WTO)”, The
Institute of International Trade, Kolkata, 2005, p 11.
Therefore to describe, GATT since its inception in 1947 undertook following eight
rounds of trade negotiations [1,8,7,10] :
First round conducted at Geneva, Switzerland in 1947 with 23 member nations

including India for reducing the tariffs of 45000 commodities while promoting the
international trade. First round which started in April, 1947 was of seven months
duration
Second round conducted at Annecy, France in 1949 with 13 member nations for
reducing the customs duties of additional 5000 commodities. Second round which
started in April, 1949 was of five months duration.
Third round conducted at Torquay, UK in 1951 with 38 member nations for reduction
of tariffs of 8700 commodities. Third round which started in September 1950 was of
eight months duration.
Fourth round conducted at Geneva, Switzerland in 1956 with 26 member nations for
further reduction of customs duties for goods traded amounting to $ 2.5 billion.
Fourth round which started in January, 1956 was of five months duration.
Fifth round of GATT was of 11 months duration started in September, 1960 and
ended in Geneva on 1961 during 1960-61 with 26 member nations for adopting tariff
concessions for goods traded amounting to $ 4.9 billion. The fifth round was called
“Dhillon Round” in the name and honour of Mr. Douglas Dhillon, U.S Secretary of
State.
Sixth round of GATT was of 37 months duration started in May 1964 and ended in
Geneva on 1967 during 1964-67 with 62 member nations for reduction of tariffs of
goods traded amounting to $ 40 billion and for signing of agreements on food grains
and chemicals and for formulating anti-dumping duties. The sixth round was called
“Kennedy Round” in the name and honour of Mr. John F. Kennedy, U.S President.
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Seventh round called “Tokyo Round” of 74 months duration started at Tokyo, Japan
on September, 1973 and ended in Geneva on 1979 during 1973-79 with 102 member
nations for reduction of tariffs (customs duties) of traded goods amounting to $ 300
million with improvement in trading framework covering subsidies, trade barriers,
customs valuations, procurement policy. .
Eight round called “Uruguay Round” of 87 months duration started at Punta del Este,
Uruguay , Latin America on September, 1986 and ended in Geneva on December
1993 during 1986-1994 with 123 member nations for adoption of “Draft Final Act”
(prepared and placed by Mr. Aurther Dunkel, Director General, GATT) covering
tariff reduction, agricultural subsidies, trade in goods and services, trade related
intellectual property rights (TRIPS), establishment of WTO as a multilateral trade
organization. Uruguay Round covered issues like Safeguards, TRIPS, TRIMS,
Antidumping, Textiles and Clothings, Trade in Services, Agriculture, Subsidies and
Dispute Settlement. In Uruguay (last) round of GATT, rules were extended from
tariff reduction to multilateral trade,trade liberalisation of manufactured goods to
trade in services , extension of intellectual property rights and reduction of trade
barriers (including non-tariff) [1,7,10, 17].
6.2.2 Signatories in GATT

There were 128 GATT signatories (at the end of 1994) with the dates of their signing
the GATT agreement (mentioned within parentheses) and are arranged
alphabetically in Appendix 6.1 [12] :
6.2.3 Domain of GATT
GATT was initially concentrated on bilateral trade agreements. The GATT trade
rounds till 1960-61 dealt with reduction of tariffs. The Kennedy round introduced
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Anti Dumping Agreement. The Tokyo Round introduced non-tariff barriers. The
Uruguay Round introduced trades in services; intellectual property rights; investment
measures; dispute settlement; trades in agriculture, textiles; creation of WTO etc
[1,10].
Therefore, the marathon URA of GATT being multidirectional includes agreement on

reduction of tariffs, strengthening dispute settlement mechanism (DSM), elimination
of Multi-Fibre Arrangement (MFA) by phases, Trade Related Investment Measures
(TRIMS), Trade Related Intellectual Property Rights (TRIPS), General Agreement on
Trade in Services (GATS) [6,7,10].
6.2.4 Objectives of GATT
The major objectives of GATT are [7] :
(i) equating international trade with economic growth and development
(ii) increasing the demand of goods
(iii) increasing the real income
(iv) improving the standard of living
(v) effective usage of resources worldwide
(vi) expansion of production of goods and their international trading
(vii) progressive economic development
(viii) encouraging multilateralism by discouraging bilateralism to expand the

world trade.
(ix) promoting world trade by means of solidariting co-operative attitudes

among member nations.
As over the years, GATT trade rounds on negotiations have reduced tariffs on trade
for manufacturing goods, the main objective of GATT for the reduction of trade
barriers (such as tariffs) to facilitate the liberalised trade among the member countries,
was fulfiled.
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6.2.5 Role of India in GATT
India is one among the 23 founding parties in the GATT and India is the spokesman
of the developing countries in GATT [17,18].
India was the leader of the less developed countries in the multilateral trade
negotiations (MTN) under the GATT. India participated actively in MTN since
India together with developing nations was not in favour for decades for international
economic integration (i.e regional economic blocks) while giving importance to
accelerate development in world trade [17,18].
India was reluctant to endorse the new MTN round in the WTO held at Doha in
Qatar in November, 2001 since India was not satisfied with the agreement in the
eighth Uruguay round due to the fact that India’s developmental strategies were
inward-oriented before 1991 economic reforms [17,18].
A group of developing nations was led by India and Brazil for not to negotiate with
the industrialized nations on the services in the GATT summit 1982. European
Community/Commission, developing countries including India and Brazil criticized
the policies of industrialised nations in the GATT Ministerial meeting in 1984
[17,18].
India and Brazil with other developing nations objected in the GATT summit 1982
that the industrialised developed countries were not obliging the textile trade and
agricultural trade and demanded to eliminate the inconsistencies of GATT measures.
However, India along with Brazil & European Commission/Community reduced their
opposition & agreed to begin the new round in 1985 [17,18].
The Ministerial Uruguay summit in September 1986 at Punta del Estate witnessed
the formation of G-10 (10 developing nations group) led by India and Brazil along
with the formation of other groups viz. G-9, G-40 with the preparation of G-924, G-
1025, G-4026 draft texts on ministerial declaration [17,18].
In the G10 texts India along with Brazil and other developing nations objected the
inclusion of three new issues like services, investment, intellectual property right
since demanded by USA. However, USA has given an ultimatum for withdrawing
from the GATT summit if the three issues are not included under GATT. Later,
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India and USA reached to an agreement to undertake the services negotiation
separately [17,18].
The consultation committee formed under the GATT, settled the disputes on
intellectual property rights relating to trade (TRIPS), investment, agriculture as a
result of which 14 amendments of G-40 text (the amendments of G-40 text were
protested by the industrialised developed nations) were withdrawn for facilitating
trade liberalization and to improve international monetary system [17,18].
Due to strong resentment of the developing countries including India, the URA of
GATT sets phasing out of the MFA between 1995 and 2005 which has penalized the
textile exporters of the developing nations including India [17,18].
6.2.6 GATT’s Impact on India

India and Brazil adopted liberalized reforms in 1991 (towards international economic
integration) following the GATT negotiations while dismantling her trade barriers
and favouring foreign direct investment (FDI)27 to overcome the macroeconomic
crisis [17,18].
Countries like India, China and other developing nations witnessing higher tariffs for
manufactured good with high import bills, are likely to be benefited from trade
liberalization and multilateral trading system of GATT.
The multilateral trading system of GATT resulted in trade liberalization in the

developing nations including India thereby encouraged foreign direct investment
(FDI) by the reduction of cost of capital and improvement of market access.
The Indian Copyright Act, 1857 was revised in 1970 following Trade Related
Intellectual Property Rights (TRIPS) of GATT.
In the GATT negotiations, tariffs in the agricultural sector were gradually reduced
over the years. Agricultural subsidies in the developed countries were reduced
substantially which resulted in the increase of global market share of Indian
agricultural products coupled with the availability of Indian agriculture products at
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low price with quality. The subsidy reduction process did not affect the Indian Public
Distribution System (PDS)28 of India.
The trade in textiles and clothing was according to the Multi-Fibre agreement (MFA).
The countries like USA, European Union (EU) restricted the import of textiles
(through quantitative restrictions) from the developing countries including India. The
MFA created hindrances in the India’s textile industry for the quantitative restriction29
measures in USA & EU, as a result of which India had to explore non-quota markets
where there are no Quantitative Restrictions. Under the GATT agreement, India
reduced the tariff levels on several textile products. Later on the MFA was phased out
in the GATT accord on textile products, for which India’s position in the export of
textile products improved and gained considerably.
GATT proposed for universal product patent rather patenting of process in drugs,
foods, seeds and chemicals. The drug and pharmaceutical industry in India has
recorded growth during the process patenting regime instead of product patent. Owing
to GATT negotiations, Indian Patent Laws30 were ammended incorporating the
product patent.
The GATT accord in the service sector has resulted in the growth of the India’s
export of services in the fields of softwares, medical and para-medical services,
insurance, films, financial and banking, engineering and legal services.
Due to GATT accord, India’s export recorded a growth from the liberation policy of
MFN (Most Favoured Nations) tariffs in agricultural, textile and pharmaceutical
sectors.
In Uruguay round of GATT, India’s main concern were on agriculture, Trade Related
Intellectual Property Rights (TRIPs), Multi-Fibre Arrangement (MFA) in textiles,
Trade Related Investment Measures (TRIMS), General Agreement on Trade in
Services (GATS), Dispute Settlement Mechanism. India’s concern was due to the fact
that the Agreements of GATT were against several Indian Laws and Acts & would
adversely affect India’s development agendas & sovereignty. However, it was
presumed that URA of GATT has placed India in a gaining position with Most-
Favoured Nations (MFN) provisions in the multilateral trading system with protection
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from multilateral trade dispute against unilateral trade sanction31 of US Laws32 viz.
Super 301 and Special 301.
The GATT provision of balance of payment was invoked by India for delaying the
phasing out of the quantitative restrictions (QR’s) mostly on the consumer goods. The
countries like Australia, Japan, Canada, European Union (EU) [ with whom India
made bilateral agreement for phasing out the QR’s] along with USA made a
complaint with the WTO against India based on which Dispute settlement Mechanism
(DSM) of the WTO passed rulings against India. India then appealed mentioning that
the DSM has no role to pass rulings for using the provisions of balance of payments
indicating that committee on balance of payment of the WTO should deal with the
complaint. This appeal was lost by India and India had no other options but to phase
out all the QRs in the years 2000 and 2001 [17, 18].
6.2.7 Outcomes of GATT

The URA of GATT resulted in opening of efficient multilateral trading system by
means of :
(i) reduction of agricultural subsidies in Europe, Japan, North America ;
(ii) opening of domestic markets in Europe, Japan, North America to outside

nations in agricultural trade ;
(iii) reduction of tariffs of manufactured goods ;
(iv) replacing quotas by tariffs for manufactured goods in several developed

nations ;
(v) service trade was also brought under the purview of GATT with the
formation of General Agreement on Trade in Services (GATS)33 ;
GATT encouraged the followings :-
i) liberalised trade among member countries ;
ii) non-discrimination among member countries ;
iii) multilaterally agreed trading rules.
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Liberalisation of trade restrictions was not attended by GATT in one full swing. Tariff
reduction issues covered in eight trade rounds of negotiations. GATT regulations were
supported by mutual enforcement system. USA recorded a decline in average tariff by
92% over the span of 33 years during 1947 to 1973-79. Due to GATT negotiations the
world trade recorded a growth.
In agriculture, the non-tariff barriers i.e quotas were converted into tariffs (decreased
to 36% for developed nations and 24% for others) in the Marrakesh declaration in the
year 1994 [8].
6.2.7.1 Achievements of 1st round of GATT

Reduction of tariffs of 45000 commodities amounting to $ 10 billion of world trade
for promoting international trade among member countries [10].
6.2.7.2 Achievements of 2nd round of GATT

Reduction of customs duties for additional 5000 commodities [10].
6.2.7.3 Achievements of 3rd round of GATT

Reduction of tariffs of 8700 commodities & cutting tariff levels of 1948 by 25% [10].
6.2.7.4 Achievements of 4th round of GATT

Further reduction of customs duties for goods amounting to $ 2.5 billion of world
trade [10].

Adopting tariff concessions for goods traded amounting to $ 4.9 billion of world trade
[10].
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Reduction of tariffs of goods traded amounting to $ 40 million of world trade, signing

of agreements on food grains and chemicals and formulation of anti-dumping duties
[10].

Reduction of tariffs (customs duties) of goods traded amounting to $ 300 billion
dollars of world trade; improvement in trading framework covering subsidies, trade
barriers, customs valuations, procurement policy [10].

Creation of WTO; reduction of tariffs by around 40 %; reduction of agricultural
subsidies; agreement on textiles and clothing allowing trades from developing
countries; extension of intellectual property rights and reduction of trade barriers
(including non-tariff); extension of trade of goods to trade in services; Safeguards;
Subsidies; Dispute Settlement; TRIPS; TRIMS; Antidumping [10].
6.2.8 Criticisms of GATT
GATT was biased towards developed country’s interest [6].
In GATT, enforcement of rules and agreements on international trade was inadequate

and this main weakness of GATT resulted in the closure of GATT with establishment
of new world trade regulating body WTO [4].
The URA of GATT was subjected to several criticism viz.
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(i) some member nations felt that their position in global trade is not
advantageous,
(ii) some countries enjoy concessions in protected global market fear of losing
the income due to deteorating terms of trade,
(iii) environmental groups criticized the URA since the promotion of economic
growth through multilateral trading system will lead to environmental
damage [4].
6.2.9 Difference between GATT and WTO

The basic distinctions between GATT and WTO are outlined in Exhibit 6.2 below[9] :
Exhibit 6.2 : Basic distinctions between GATT and WTO
GATT WTO
GATT is adhoc and provisional WTO and its agreements are permanent
GATT had contracting parties WTO has members
GATT allow existing domestic WTO does not permit this

legislation to continue even if
GATT agreement is violated
WTO is more powerful than GATT,

GATT is less powerful, dispute dispute settlement mechanism is faster
settlement mechanism is slow and and more efficient, very difficult to
less efficient, its ruling can easily be block the rulings.
blocked
Source : Francis, C., “International Marketing”, Himalaya Publishing House,

Eighth Revised Edition, 2006, p 71.
6.2.10 End of GATT
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GATT ended on 15th April 1994 at the Marrakesh, Morocco with Marrakesh
declaration signed by India and other member countries of GATT with the formation
of WTO (having similar status with IMF and IBRD) in 1995 with the aim to make the
world trade more liberalized and till the WTO starts functioning, all the signatory
nations are to follow the URA of GATT [1,8].
6.2.11 Recommendation for GATT

Indian agriculture being non-commercial in nature must not be subjected to GATT
rules which are mainly for commercial protection and commercial trading [8].
6.3 Eight Ministerial Conferences of WTO

The rounds of WTO’s Ministerial Conferences held are shown in Exhibit 6.3 [16] :
EXHIBIT 6.3 : Rounds of WTO’s Ministerial Conferences
Round Date Host City
1st 9 - 13 December 1996 Singapore
2nd 18 - 20 May 1998 Geneva, Switzerland
3rd 30 November - 3 December 1999 Seattle, United States
4th 10 - 14 November 2001 Doha, Qatar
5th 10 - 14 September 2003 Cancun, Mexico
6th 13 - 18 December 2005 Hong Kong
7th 30 November - 3 December 2009 Geneva, Switzerland
8th 15 December - 17 December 2011 Geneva, Switzerland
9th 3 December - 6 December 2013 Bali, Indonesia
Source :
http://en.wikipedia.org/wiki/List_of_World_Trade_Organization_Ministerial_Confere
nces
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The WTO’s Ministerial Conference (MC) shall be convened atleast once every two
years by the member countries. Following MC’s held since the formation of WTO in
1995 [16] :
1) First MC was held on 9-13th December, 1996 in Singapore
2) Second MC was held on 18-20th May, 1998 in Geneva, Switzerland
3) Third MC was held on 30th November - 3rd December,1999 in Seattle , USA
4) Fourth MC was held on 9th November - 14th November,2001 in Doha, Qatar
5) Fifth MC was held on 10th - 14th September,2003 in Cancum, Mexico.
6) Sixth MC was held on 13th – 18th December, 2005 in Hong Kong
7) Seventh MC was held on 30th November – 3rd December, 2009 in Geneva,
Switzerland
8) Eight MC was held on 15th – 17th December, 2011 in Geneva, Switzerland
9) Ninth MC was held on 3rd – 6th December, 2013 in Bali, Indonesia
6.4 Member Countries of WTO with Dates of Membership
There are 158 members in WTO (as on 2nd February 2013 with dates of membership
mentioned within parentheses) which are all arranged alphabetically in
Appendix 6.2 .
6.5 Domain of WTO and its Agreements

WTO looks after the rules and regulations of trade of goods and services between the
member countries; international laws & agreements on tariff & trade; intellectual
property rights; investment measures; dispute settlement; trade policy review;
agreements on agriculture, textiles and clothings; anti-dumping ; sanitary and phyto
sanitary measures; subsidies and countervailing measures; safeguards etc. [1] .
The WTO agreements comprising trade of goods and services, intellectual property
rights, dispute settlement, trade policy review are 60 (sixty) in nos. [1].
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The main five agreements under WTO are [1] :
1) Agreement on Agriculture (AOA)
2) Trade Related Intellectual Property Rights (TRIPS)
3) Trade Related investment measures (TRIMS)
4) General Agreement on Trade in Services (GATS)
5) General Agreement on Tariff & Trade (GATT) mainly dealing with Non-
agricultural market access (NAMA)34
WTO agreements cover the Agreement on Trade in goods comprising 13 following

agreements including GATT 1994 [1] :
1) General Agreement on Tariff and Trade 1994
2) Agreement on Agricultural
3) Agreement on Sanitary and Phyto Sanitary Measures
4) Agreement on Textiles and Clothings
5) Agreement on Technical Barriers to Trade35
6) Trade Related Investment Measures
7) Anti-dumping Measures
8) Customs Valuation Methods36
9) Reshipment Inspection
10) Rules of Origin
11) Import Licensing
12) Subsidies & Countervailing measures
13) Agreement on Safeguards
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6.6 Objectives, Functions and Purposes of WTO
6.6.1 Objectives
The major objectives of WTO is to ensure flow of trade smoothly, fairly, freely,
predictably among member countries [5,6].
The main contention of WTO lies in achieving (a) free economic expansion through
continued efforts, (b) strengthening rule-based global trading system, by reckoning
new economic realities in the process of globalization to ensure sustain development
[5,6].
6.6.2 Functions
The WTO’s functions are [5,6] :
1. to administer agreements on trade,
2. to act as a forum for trade negotiations,
3. to settle disputes on trade,
4. to review trade policies of member nations,
5. to assist the developing countries on the issues of trade policies by providing

technical assistance and arranging training programmes,
6. to cooperate with similar international organizations,
7. to take decisions by consensus among the member countries on trade related

issues (when difficult to arrive to a consensus, decisions are taken on two third
majority votes with one country casting one vote),
with special provisions for developing countries viz. implementation of agreements

over long time period, to increase trade opportunities, to help in building proper
infrastructure relating to WTO agreements, in handling disputes, implementation of
technical standards.
6.6.3 Purposes of WTO

Ten purposes behind creation of WTO are [19] :
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1. to reduce living costs,
2. to enhance standard of living,
3. to resolve disputes,
4. to curtail trade obstacles,
5. to enhance economic growth
6. to increase employment,
7. to reduce the cost of international trade/business,
8. to inspire good governance,
9. to develop the nations,
10. to make weak nation stronger,
11. to promote health,
12. to develop environment,
13. to encourage peace
14. to ensure stability and effectiveness.
6.7 Structure of WTO

WTO had 123 founding member countries and 137 member countries (as on 30th
June, 2000) and 146 member countries (as on 4th April, 2003) and 148 member
countries (as on 13th October, 2004) and 158 member countries (as on 2nd February,
2013) showing a continuous increase in accession of countries and membership in
WTO [1,2,6].
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The Article of WTO provides the following structure of WTO [1,6] :
Diagram 6.1 : Structure of WTO
Ministerial Conference
Dispute Trade Policy

Settlement General Council Review Body
Body
Council for Council for Trade Council for

Trade in Goods Related Aspect of Trade in
Intellectual Service
Property Rights
Source : Agarwal, D.R., “A monograph on World Trade Organisation (WTO)”,

The Institute of International Trade, Kolkata, 2005, p 18.
380
Ministerial Conference (MC) is the highest level decision making authority and meets
usually once in two years. MC takes decisions on multilateral trade agreements. Next
level below MC is the General Council37 which meet in WTO’s Head Quarter at
Geneva many times in a year. General Council also acts as Trade Policy Review Body
and Dispute Settlement Body. The four major functions of the General Council are as
follows :
(i) supervising the operations and execution of ministerial declarations and

agreements on goods, services and TRIPS,
(ii) settling trade related disputes under DSM,
(iii) reviewing of trade policy,
(iv) forming three separate councils for goods, services and TRIPS.
Below the level of General Council are the three Councils for goods, services and
TRIPS, all of which report to General Council
The Article IV38 of WTO states about the formation of the following three Councils :
1) Council for Trade in goods
2) Council for Trade in Services
3) Council for Trade Related Aspects of Intellectual Property Rights known as

Council for TRIPS,
and each of these Councils functions under the guidances of the “General Council”.
Several specialized committees and working groups are also constituted by WTO for
individual agreements and in the areas of membership application, trade and
competition, trade and investment, trade facilitation, environment, government
procurement etc [1,6].
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6.9 Role of India in WTO
6.9.1 Overview
Shri. Pranab Mukherjee, the then Commerce Minister (present President of India)
signed the Final Act (Uruguay Round Agreement) at Marakkesh (Morocco) on 15th
April,1994 on behalf of India. India is a member of WTO from 1st January,1995 [1].
During the Seattle conference, India stressed the importance of deriving useful
solutions for the implementation issues voiced by the developing countries without
linking to future negotiations on multilateral trade, as a result of which decision was
taken to hold special sessions by WTO’s General Council [2].
In agriculture, India mentioned that the developing countries with agrarian economies
must maintain flexibility for domestic support, market access commitments with
regard to tariff rates, export subsidies due to their concerns on rural employment,
food security [2]. Indian agriculture being non-commercial in nature must not be
subjected to WTO rules which are mainly for commercial protection and commercial
trading [8].
India has stressed that the tariff rates are to be made more transparent, non-
discriminatory for gaining market access by the new & small scale exporters of the
developing countries [2].
India has pointed out in WTO about the eradication of the imbalances/inequities in the
subsidies (export and domestic) used for developing, diversifying and upgrading the
industry.
In anti-dumping, India has stressed upon to avoid anti-dumping (back-to-back)

investigations [2].
India has highlighted the need to make the integration process of textile & clothing
commercially viable while pleading for avoiding anti-dumping actions under quota
restrictions [2].
382
India drawn the attention in the WTO in the areas of Sanitary & Phytosanitary
measures for setting international standard organizations by ensuring active
participation of all countries in setting standards [2].
India proposed (in the TRIPS Agreement) that the patent system is to be aligned with
the provisions of Bio-Diversity as laid down in UN Convention [2].
India is actively participating in the negotiations in the areas of agriculture & services
that have already started in the WTO. India pointed out that the large subsidies
provided in the agriculture sector by the developed countries are creating distortion in
international trade of agricultural products [2].
India stressed the need for increased and active participation by the developing
countries in the trade of services for augmenting progressive liberalization in
conformity with Article XIX of Services Agreement [2].
Since India & several other countries are following a transparent liberal foreign
investment measures, India highlighted that there is no necessity in WTO for a
multilateral investment agreement in WTO for the purpose of undertaking perpetual
commitments by members [2].
India pointed out that multilateral investment agreement (which is binding type) will
eat away the options of strategic policy that are available to the developing nations
(including India) to pursue their developmental industrialization objectives [2].
India mentioned that the Trade Related Investment Measures (TRIMS) agreement is
having adverse impact in the process of industrialisation in the developing countries
[2].
India is not in the favour of linking trade with core labour standards, since its linking
to trade and WTO would result in a position where core labour standards will be
utilized for protectionist purposes. India is in favour that core labour standards issues
are to be tackled under the ambit of the International Labour Organisation (ILO) only
[2].
India is against for the inclusion of environmental issues viz. Agreement on

Technical Barriers to trade (TBT), Sanitary & Phytosanitary measures (SPS) in trade
383
negotiations within the WTO , since the inclusion may give rise to restrictive trade
practices [2].
India pleaded for transferring of environment technology to developing nations in fair

manner , since the developing countries has limited resources which restrict the
adoption of environment friendly technology of large scale in nature [2].
India took the lead in the formation of alliances or groups in the name G1339, G2140,
G2241 of the developing countries for negotiating with the developed countries and in
particular with the US-EU alliance for agriculture issue. India is an active member of
G13, G21, G22.
The NGO’s42 known as civil societies are registered with WTO for accreditation. Out
of 750 NGO’s registered with WTO, 30 NGO’s are from India. 10 NGO’s from India
participated in the Cancum conference of WTO.
Three investment measures relating to trade viz.
(i) Print Media - News Print production requiring mixing local content
(ii) Pharmaceutical - Penicillin G and Rifampicin production requiring local
content.
(iii) Investment in Consumer Goods – of 22 categories requiring dividend
balancing,
were notified by India as inconsistent with TRIMs agreement of WTO. Three notified
TRIMS were to be eliminated within 31st December,1999 and are not in existence.
India steered the elimination of intervention in the international trade on agriculture

by joining the Cairns43 group for the purpose of bringing the agricultural trade under
the WTO with protection measures for agricultural goods [17,18].
India adopted Trade Related Intellectual Property Rights (TRIPS) of Uruguay

Round Agreement (URA) by revising her domestic patent law based on the
rulings of the Dispute Settlement Mechanism (DSM) of the WTO since a complain
was filed by USA, although many nations including India were not in favour to bring
384
intellectual property rights under WTO through TRIPS agreement, as there exists
specialized agencies like World Intellectual Property Organization (WIPO)44,
International Labour Organisation (ILO), United Nation’s specialised agencies,
United Nations Environment Program etc. which can act as the international forum to
negotiate on intellectual property, environment, labour [17,18,22].
Due to the absence of enthusiasm in the Uruguay Round Agreement (URA) India
was not in favour to start Multilateral Trade Negotiations (MTN) in the WTO
summit held in November, 1999 at Seattle, which is quite unlikely of earlier rounds
on MTN’s dealing with quotas and tariffs. The absence of enthusiasm resulted since
URA was unbalanced as because several developing nations had to make several
costly commitments vis-a-vis URA including TRIPS and TRIMS agreements did
not benefit the developing nations at all both in short run and in long run besides the
implementation issues raised by India [17,18].
Opposition of India for starting the new MTN round continued after the failure of the
WTO Seattle summit and before the WTO Doha summit started in November, 2001
[17,18].
India along with other developing nations did not share and favour linking of trade
with core labour standards as was voiced by the AFL-CIO45 (labour organization) of
USA (a participant of WTO Seattle demonstration) [17,18]
Main stand of India in WTO Doha summit is that the implementation issues are to be
addressed first followed by the decision on negotiations in the next New Round,
which was agreed by WTO by including the un-addressed issues relating to
developing countries in the New Round [3].
Although, India participated in the WTO Doha Summit in November, 2001 with
extreme opposition, the leader of the Indian delegation and Commerce Minister Mr.
Murasoli Maran said in the Doha summit that “Rather than charting a divisive course
in unknown waters, let this conference provide a strong impetus to the ongoing
negotiations on agriculture and services, and the various mandated reviews that by
themselves form a substantial work program and have implicit consensus [on
385
Singapore issues]. Questions remain even on the need for a multilateral agreement”
(Panagariya 2002, “India on the GATT and the WTO”, www.iie.com, pp. 94)
[17,18].
India’s demand was on the issue of “Geographical Indicators”46 which India was
demanding. India’s demand of making some of her commodities as Global Brand was
agreed by the WTO in the line of the right of Global Brands given by the WTO to the
products of other countries [3].
India remains active in the multilateral trading negotiations for her own interest
(Mattoo and Subramanian 2000) as because India will get access in world market by
strengthening the multilateral trade process by overcoming the threats of Regionalism
or Colonialism [17,18].
India realised that there are needs of changing her role to active promoter of trade
liberalization in the MTN’s round launched at Doha in November, 2001 [17,18].
6.9.2 Suggestions of Bergsten and Peterson Institute for International

Economics
Bergsten (1999) identified seven issues which are relevant and interest to India (which
India can present in the next Conference of WTO to be held in November 2001 in
Doha, Qatar) [17,18].
In addition to Bergsten’s suggestions, Peterson Institute for International Economics

(PIIE), Washington D.C, USA proposed three suggestions viz. to liberalise their
market access, to reduce their tariff escalation and peaks, to reduce their border
protection (as stated in URA) for opening the market of industrialised nations for
agriculture, apparel and textile products, for which India must try to obtain
commitments from the developed nations [17,18].
386
6.9.2.1 Bergsten’s Seven Suggestions
Bergsten (1999) seven suggestions are [17,18] :
(i) ensuring that specially in USA, MFA quotas on textile and apparel (i.e
clothing) exports of India will not be replaced by high tariffs after phasing
out of MFA,
(ii) to eliminate high tariffs in the industrialised nations on agricultural exports

(specially of India e.g. rice),
(iii) to make new agreements on FDI to benefit India,
(iv) to institute tougher measures on using antidumping duties especially by

USA and EU,
(v) to liberalise movement of persons under GATS in the areas where India
enjoys competitive advantage,
(vi) to eliminate preferential tariffs47 in regional agreements including

NAFTA48 and EU49 for removing discriminations towards India export,
(vii) to strengthen Dispute Settlement Mechanism (DSM) to protect the rights

of nations having low trade and help them.
6.9.2.2 Suggestions of Peterson Institute for International

Economics
According to PIIE, USA India must try to obtain following commitments from
developed nations [17,18] :
(a) to liberalise their market access,
(b) to reduce their tariff escalation and peaks,
(c) to reduce their border protection (as stated in URA),
for the purpose of opening the market of industrialized nations for agriculture,
apparel and textile products [17,18].
387
6.9.2.3 Findings on India’s Compliances to Bergsten’s suggestions
6.9.2.3.1 “Ensuring that Specially in USA, MFA Quotas on Textile
and Apparel (i.e Clothing) Exports of India will not be
Replaced by High Tariffs after Phasing out of MFA”
India lost a part of export of textile and apparel products to China due to the
phasing out of Multi-Fibre Arrangement (MFA) in 1st January, 2005 and tariff
reduction of China – Impact on India [17,18].
In the 2nd WTO Ministerial Conference (1998), India already expressed [24] :
(a) concerns from time to time about the implementation of Agreements for textiles
and clothings as India drew the attention in the WTO’s Singapore Conference about
the adverse impact on the country’s exports of textile and clothing and the series of
safeguard measures taken by the country inconsistent with the URA,
(b) concerns as the member nations resisting trade liberalization in the MFA regime
are demanding faster liberalization in non-MFA sector in the countries like India,
(c ) her satisfaction as the Council for Trade in Goods of WTO is entrusted with the
task of implementation of ATC ( Agreement on Textiles and Clothings), as any
restrictions on exports of textiles and clothings from India for getting market access
will have negative impact on income and employment, as a result of which
multilateral trading system will be at stake.
6.9.2.3.2 “To Eliminate High Tariffs in the Industrialised Nations on

Agricultural Exports (specially of India e.g Rice)”
In the 2nd WTO Ministerial Conference (1998), India expressed her satisfaction that
Agreement on Agriculture (AOA) will be reviewed in the WTO in the year 2000 due
to the imbalances in the Agreement [24].
In the 5th WTO Ministerial Conference (2003), India mentioned that [25] :
388
India stood besides the interest of farmers in the developing nations since effected
from trade distortion on agriculture resulted from high subsidies that prevails in the
developed nations and any negotiations that will place the livelihood, survival of
large community of Indian farmers at stake and risk cannot be agreed.
High tariffs and non-tariff barriers are to be reduced relating to the products of interest
which developing nations are interested upon.
India along with 20 member nations submitted a joint proposal relating to agriculture
for a constructive approach.
6.9.2.3.3 “To Make New Agreements on FDI to Benefit India”
Contradictions
Since India & several other countries are following a transparent liberal foreign
investment measures, India highlighted that there is no necessity in WTO for a
multilateral investment agreement in WTO for the purpose of undertaking perpetual
commitments by members.
India pointed out that multilateral investment agreement (which is binding type) will
eat away the options of strategic policy that are available to the developing nations
(including India) to pursue their developmental industrialization objectives.
India mentioned that the Trade Related Investment Measures (TRIMS) agreement is
having adverse impact in the process of industrialisation in the developing countries.
Impact on India :
India notified her Trade-Related Investment Measures (TRIM) under the URA of
TRIMS of GATT [17,18].
In the 1st WTO Conference (1996), India commented that WTO can focus upon
liberalization of investment as trade and investment are related to one another as trade
liberalization achieved in many directions substantially [23].
In the 5th WTO Conference (2003), India expressed the view that multilateral
investment agreement neither ensures additional flows of investment nor reduces the
389
costs of transaction for investors and hence necessity of such an agreement is in dark
– Contradiction [27].
6.9.2.3.4 “To Institute Tougher Measures on Using Antidumping

Duties Especially by USA and EU”
Contradictions
In anti-dumping , India has stressed upon to avoid anti-dumping (back-to-back)

investigations.
India has highlighted the need to make the integration process of textile & clothing
commercially viable while pleading for avoiding anti-dumping actions under quota
restrictions.
Acceptance
Anti-dumping agreement of WTO is in the line of Article IV quoted in GATT 1994.

These anti-dumping measures assumed a great importance in India specially in post-
QR phase since April,2001
Between January, 1995 and December, 2001 with the functioning of WTO, 248
antidumping actions were initiated by India which is second largest after USA
initiating 255 antidumping actions followed by European Commission with 246
antidumping actions
Contradictions
In the 1st WTO Ministerial Conference (1996), India pointed out that frequent anti-
dumping investigations initiated by the developed countries against the goods
exported by the developing nations has serious ill-effect in India’s export due to
increase in litigation costs and uncertain risk they involve [23]
In the 6th WTO Ministerial Conference (2005) , India pointed out that tariffs alone
does not govern market access but the exporters in the developing nations face the
obstacles from non-tariff barriers by not adhering to anti-dumping and technical
standards [28].
390
In the 2nd WTO Ministerial Conference (1998), India said that Indian products are
subjected to anti-dumping measures and levy of duties leading to instabilities in the
market causing shutdown of small units resulting to unemployment [24].
During 1980’s , 1600 and more anti-dumping cases were filed world over by USA,
EC, Canada, Australia and New Zealand. During 1990 to 1994, USA filed on an
average 53.4 anti-dumping cases per year followed by Australia filing on an average
51.2 such cases per year and EU filing 34.6 cases & Mexico filing 24.6 cases. In the
year 2000, USA initiated 47 cases followed by Argentina filing 45 cases and India 41
cases. In the year 2001, India filed 75 cases followed by USA filing 74 cases, EU 28
cases and Argentina 26 cases. Now the developing countries account for half of the
cases filed world wide on anti-dumping [21].
Comments : Therefore, Bergsten’s suggestion on instituting tougher

disciplines/measures for imposition of anti-dumping duties by India since the year
2000 was attained. However, there were contradictions to Bergsten’s proposition on
imposition of anti-dumping duties by India earlier.
6.9.2.3.5 “To Liberalise Movement of Persons under GATS in the

Areas where India enjoys Competitive Advantage”
In the 1st WTO Ministerial Conference (1996), India expressed her concern that
“movement of natural persons” negotiations coming to end in July 1995 did not
produce meaningful results. Infact, India intend to pursue the movement of skilled
persons from her country as such movements were made restrictive during 1994 &
1995 [23].
In the 2nd WTO Ministerial Conference (1998), India pointed out that the imbalances
in GATS are market access for the professionals of developing countries, free flow of
goods and services from developed nations into developing countries, not to give any
exposure to the comparative advantage of professionals from developing nations
including India & etc [24].
391
In the 2nd WTO Ministerial Conference (1998), India expressed her satisfaction that
GATS will be reviewed in the WTO in the year 2000 due to the imbalances in the
Agreement [24].
In the 4th WTO Ministerial Conference (2001) India pointed out that movement of
professionals in service sector needs to be addressed with priority [26].
6.9.2.3.6 “To Eliminate Preferential Tariffs in Regional Agreements

including EU and NAFTA for Removing Discriminations towards
India’s Export”
In the 2nd WTO Ministerial Conference (1998), India pointed out that recent past has
witnessed favour towards regionalism50. There had been increase in trade among the
nations within a regional group with discrimination for third countries outside the
region. GATT’s Article XXIV specified that regional groupings are exception to
multilateral trade and are consistent with multilateral trading system. India pointed out
that rules of regional economic grouping to be made clear to ensure that third
countries are not denied to access the market of the region such that multilateral
trading system must not lose its meaning [24].
India remain active in the Multilateral trading negotiations for her own interest
(Mattoo and Subramanian 2000) since India will get access in world market by
or Colonialism51 [17,18].
6.9.2.3.7 “To Strengthen Dispute Settlement Mechanism (DSM) to

Protect the Rights of Nations having Low Trade and help them”
The Dispute Settlement Mechanism (DSM) of WTO being a legal process rather than
political process is much stronger than that of GATT and several developing nations
including India along with USA and members of EU are abiding the decisions
emerging from DSM [17,18].
392
In the 2nd WTO Ministerial Conference (1998), India expressed concerns on the
trends for unilateral action of some developed nations against the provisions of URA
as a result of which country is forced to take such unilateral issues to dispute
settlement with huge expenses and difficulties as the developing nations and LDCs52
are facing resource and skill constraints – hence distorting multilateral trading system
in world trade [24].
6.9.2.4 Findings on India’s Compliances to PIIE’s suggestions
In the 2nd WTO Ministerial Conference (1998), India while trying to obtain supports
and commitments from the developed nations expressed her view that “Spirit of
mutual support and encouragement must exists among WTO members for achieving
the goal of WTO. All member nations must have negotiating skills rather than to be
adverse in nature” [24].
Moreover, in the 2nd WTO Ministerial Conference (1998), India pointed out that India
has played an important role in GATT & now playing in WTO in shaping the global
multilateral trading system by effective participation in formation of all trade
agreements even by contributing to satisfactory conclusions of difficult negotiations.
India realised that the needs of changing her role to active promoter of trade
liberalization in the MTN’s new round launched at Doha in November, 2001.
6.9.2.4.1 Liberalisation of Market Access in the Developed Countries

India has stressed that the tariff rates are to be made more transparent, non-
discriminatory for gaining market access by the new & small scale exporters of the
developing countries.
India remain active in the Multilateral trading negotiations for her own interest
(Mattoo and Subramanian 2000) since India will get access in world market by
or Colonialism [17,18].
393
In the 1st WTO Ministerial Conference (1996), India pointed out that creation of WTO
for establishment of multilateral trading system resulted several gains and one such
gain is that Agreement on Agriculture opens new horizon for farmers globally by
improving their standard of living resulting from greater market access.
In the 2nd WTO Ministerial Conference (1998), India pointed out that rules of
regional economic grouping to be made clear to ensure that third countries are not
denied to access the market of the region such that multilateral trading system must
not lose its meaning.
In the 2nd WTO Ministerial Conference (1998), India pointed out that the imbalances
in GATS (relating to market access) are market access for the professionals of
developing countries, protection measures of the developed nations to restrict market
access for trading of goods and services by the developing nations,
In the 2nd WTO Ministerial Conference (1998), India is of the view that opportunities
of developed countries for availing the market access as provided by URA are much
more as compared to the opportunities that are available to the developing countries,
as a result of which developing nations are against widening the WTO’s activities.
In the 3rd WTO Ministerial Conference (1999), India mentioned that India is believer
of trade negotiations concentrating on market access such that trade flows smoothly
following the principle of equity.
In the 3rd WTO Ministerial Conference (1999), India emphasised that trade
liberalization should focus upon larger market access with higher trade flows.
In the 5th WTO Ministerial Conference (2003), India is of view that India is of view
that effective measures are required in WTO’s multilateral trading system for meeting
the expectation of developing countries for economic development and trade
liberalisation.
In the 6th WTO Ministerial Conference (2005), India emphasized that Small and
Medium Industries in developing countries which provide livelihood to millions of
workers , need the removal of tariff peaks to have market access in the developed
countries.
394
In the 8th WTO Ministerial Conference (2011), India appealed to all developed
nations to commit for DFQF53 market access within July 2012 according to the
declaration in Hong Kong Conference (2005).
6.9.2.4.2 Reduction of tariff escalation and peaks
In the 2nd WTO Ministerial Conference (1998), India pointed out that by virtue of
GATT’s URA & formation of WTO, the gain of multilateral trading system is the
setting up of Free trade54 by means of reduction of tariff and non-tariff barriers [24].
In the 4th WTO Ministerial Conference (2001), India expressed her views that
although, all the concessions of URA are implemented by the developed nations, trade
barriers viz. tariff peaks and tariff escalation are continuously effecting exports of
developing countries , which needs to addressed by not destroying small scale and
sensitive industries in the developing nations engaging large work force [26].
In the 5th WTO Ministerial Conference (2003), India expressed her views that high
tariffs and non-tariff barriers are to be reduced in the developed countries relating to
the products of interest which developing nations are interested upon [27].
In the 6th WTO Ministerial Conference (2005), India said that Small and Medium
Industries in developing countries which provide livelihood to millions of workers ,
need the removal of tariff peaks to have market access in the developed countries
[28].
6.9.2.4.3 Reduction of Border Protection (as stated in URA)

In the 1st WTO Ministerial Conference (1996), India expressed her observations that
in the last 50 years during the GATT regime , trade barriers across the globe were
reduced [23].
395
In the 6th Ministerial Conference (2005), India mentioned that tariffs alone does not
govern market access but the exporters in the developing nations face the obstacles
from non-tariff barriers by not adhering to anti-dumping and technical standards [28].
In the 2nd WTO Ministerial Conference (1998), India pointed out that by virtue of
GATT’s URA & formation of WTO, simplification of border measures is the gain of
multilateral trading system [24].
Combining the market access, tariff escalation/peak, border protection issues relating
to agriculture, India mentioned in the 3rd WTO Ministerial Conference (1999) that
export subsidies are to be eliminated by the developed nations in agriculture trades
alongwith removal of other distortive measures such that large rural economies and
domestic production in the developing nations are not effected [25].
6.9.2.4.4 Opening Market for Agriculture, Apparel, Textile Products
in the Developed Nations
India pointed out that the large subsidies provided in the agriculture sector by the
developed countries are creating distortion in international trade of agricultural
products.
India took the lead in the formation of alliances or groups in the name G13, G21, G22
of the developing countries for negotiating with the developed countries and in
particular with the US-EU alliance for agriculture issue.
India expected to gain if the commitments on market access under the Uruguary
Round Agreement (URA) are implemented without considering China’s accession in
WTO in the year 2002.
India steered the elimination of intervention in the international trade on agriculture

by joining the Cairns group for the purpose of bringing the agricultural trade under
the WTO in the line of international trade of manufactured goods.
396
India pointed out in the 1st WTO Ministerial Conference (1996) that creation of WTO
for establishment of multilateral trading system resulted in several gains and two such
gains are (a) the integration of international trade on textile and clothings within
multilateral framework and (b) “Agreement on Agriculture” opens new horizon for
farmers globally resulting from greater market access.
India expressed her concerns in the 1st WTO Ministerial Conference (1996) that
bilateral trades of textiles and clothings are to be discontinued with augmentation of
multilateral trading arrangements, due to the fact that the importing countries lack
commercial integrations of these products and some of India’s trading partners
attempted to delink the integration from liberalization.
India pointed out in the 2nd WTO Ministerial Conference (1998) that :
(a) India expressed concerns from time to time about the implementation of
Agreements for textiles and clothings. India drew the attention in the WTO’s
Singapore Conference about the adverse impact on the country’s exports of textile and
clothing and the series of safeguard measures taken by the country are found to be
inconsistent with the URA.
(b) India expressed her satisfaction as the Council for Trade in Goods of WTO is
entrusted with the task of implementation of ATC ( Agreement on Textiles and
Clothings), as any restrictions on exports of textiles and clothings from India for
getting market access will have negative impact on income and employment, as a
result of which multilateral trading system will be at stake. Moreover, the Agreement
on Agriculture (AOA) will be reviewed in the WTO in the year 2000 due to the
imbalances in the agreement – one of such imbalances is the shortcomings in the
market access.
6.9.3 Conference wise
397
Roles that India played in WTO are clear from the excerpts of the speeches of Union
Commerce Minister of India deliberated in different rounds of WTO Ministerial
Conferences and are discussed seriatim below conference wise :
6.9.3.1 1st WTO Conference in Singapore
A Statement was deliberated by Dr. B.B Ramaiah, Union Minister of Commerce of

India in the 1st WTO Conference held in Singapore during 9-13th December,1996 on
the stands taken by India on WTO issues as follows [11, 23] :
Although, India was having strong resentments on certain aspects of some agreements
of GATT 8th Round, India pointed out that creation of WTO for establishment of
multilateral trading system resulted several gains. The gains are viz. creation of global
institution to oversee international trade with dispute settlement system, integration of
international trade on textile and clothings within multilateral framework, “Agreement
on Agriculture” opens new horizon for farmers globally by improving their standard
of living resulting from greater market access while accelerating the reduction of
domestic subsidies in developed nations.
India and other developing nations are facing enumerable problems for
implementation of various agreements. The problems are procedural complexities,
issuing of numerous notifications, lack of adequate human and financial resources,
building up political consensus within the country.
India expressed her concerns about the adverse reactions of TRIPS Agreement, the
agreement mainly mooted by the developed countries. Adverse effects of TRIPS are
on viz. prices of drugs & pharmaceutical products, prices of agro-chemicals, heavy
costs of implementation of TRIPS, high payments on royalty, monopolistic control,
as a result of which ways of sorting out these concerns have to be found collectively
India expressed her concerns that bilateral trades of textiles and clothings to be
discontinued with augmentation of multilateral trading arrangements, due to the fact
that the importing countries lack commercial integrations of these products and some
of India’s trading partners attempted to delink the integration from liberalization.
398
India expressed her concern that “movement of natural persons” negotiations coming
to an end in July 1995 did not produce meaningful results. Infact, India intend to
pursue the movement of skilled persons from her country as such movements were
made restrictive during 1994 & 1995.
India pointed out that frequent anti-dumping investigations initiated by the developed
countries against the goods exported by the developing nations has serious ill-effect
in India’s export due to increase in litigation costs and uncertain risk they involve.
This is also the situation with frequent actions on countervailing duty. India
commented that international trade must not encroach upon the domestic production
system of the countries and any attempt of WTO to invade into domestic production
will create problems.
India commented that WTO can focus upon liberalization of investment as trade and
investment are related to one another similar to the line that trade liberalization
achieved in many directions substantially.
Many countries including India opposed the inclusion of “Core Labour Standard (on
basic rights & interests of workers)” in WTO agenda as India viewed that
International Labour Organisation (ILO)55 is having exclusive competency to deal
with “Core Labour Standard”.
6.9.3.2 2nd WTO Conference in Geneva

A Statement was deliberated by Mr. Ramakrishna Hegde, Union Minister of
Commerce of India in the 2nd WTO Conference held in Geneva during 18-20th
May,1998 on the stands taken by India on WTO issues as follows [11, 24] :
In the last 50 years during the GATT regime , trade barriers across the globe were
reduced. GATT’s URA has accommodated the interests of member nations for
meaningful negotiations. India has played an important role in GATT & now playing
in WTO in shaping the global multilateral trading system by effective participation in
formation of all trade agreements even by contributing to satisfactory conclusions of
difficult negotiations.
399
India pointed out that by virtue of GATT’s URA & formation of WTO, the
multilateral trading system gains the followings :
(i) MFN (Most Favoured Nation) treatment for all members by individual nation
(ii) Free trade by means of reduction of tariff & non-tariff barriers
(iii) trade distorting measures were eliminated which include subsidies, rules and
regulations to bring uniformity in all country’s legislation
(iv) border measures were simplified.
The intentions in trade negotiations of negotiating countries of URA stated in the

constitution of the Marrakesh Agreement (which established WTO) are to :
(i) to raise the living standards,
(ii) to provide full employment,
(iii) to ensure growth in real income and demand,
(iv) to expand production of goods,
(v) to expand trade in goods and services,
(vi) to optimize the utilization of world’s resources,
(vii) to preserve and protect environment,
(viii) to ensure that developing countries including Less Developing Countries

(LDCs) achieve a share in the growth of global trade commensurate to
their economic development.
India mentioned that spirit of mutual support and encouragement must exists among
WTO members for achieving the goal of WTO and all member nations must have
negotiating skills rather than to be adverse in nature.
India pointed out that developing nations are worried about the implementation
aspects of Uruguay Round Agreements (URA) relating to special and differential
treatment as there are no clear guidelines on implementation issues. Moreover, Indian
products are subjected to anti-dumping measures and levy of duties leading to
400
instabilities in the market causing shutdown of small units resulting to unemployment
in India.
GATT’s Article XVIII B (Appendix-6.4) states that Quantitative Restrictions on

imports may be imposed by developing nation for ensuring a level of foreign
exchange reserves adequate to implement economic development programmes.
However, in reality economic development is ignored and therefore all the developing
nations are of the opinion that economic development can not be ignored but to be
brought in action.
India expressed concerns on the trends for unilateral action of some developed nations
against the provisions of URA as a result of which India is forced to take such
unilateral issues to dispute settlement with huge expenses and difficulties as the
developing nations and LDCs are facing resource and skill constraints – hence
distorting multilateral trading system in world trade.
Recent past has witnessed favour towards regionalism. There had been increase in
trade among the nations within a regional group with discrimination for third
countries outside the region. GATT’s Article XXIV specified that regional groupings
are exception to multilateral trade and are consistent with multilateral trading system.
India pointed out that rules of regional economic grouping to be made clear to ensure
that third countries are not denied to access the market of the region such that
multilateral trading system must not lose its meaning.
India expressed concerns from time to time about the implementation of Agreements
for textiles and clothings. India drew the attention in the WTO’s Singapore
Conference about the adverse impact on the country’s exports of textile and clothing
and the series of safeguard measures taken by the country inconsistent with the URA.
India expressed concerns as the member nations resisting trade liberalization in the
MFA regime are demanding faster liberalization in non-MFA sector in the countries
like India
India expressed her satisfaction as the Council for Trade in Goods of WTO is
entrusted with the task of implementation of ATC ( Agreement on Textiles and
Clothings), as any restrictions on exports of textiles and clothings from India for
401
getting market access will have negative impact on income and employment, as a
result of which multilateral trading system will be at stake.
India expressed her satisfaction also as the Agreement on Agriculture (AOA) and the
General Agreement on Trade in Services (GATS) will be reviewed in the WTO in the
year 2000 due to the imbalances in the agreements. The imbalances in AOA are viz
(a) prohibition of export subsidies in developing countries and allowing export
subsidies in developed nations, (b) open priced system (implying that a country must
import agriculture commodities if produced cheaper in other countries), (c)
shortcomings in market access. The imbalances in GATS are viz. (a) market access
for the professionals of developing countries, (b) free flow of goods and services from
developed nations into developing countries, (c) not to give any exposure to the
comparative advantage of professionals from developing nations including India, (d)
pressure on developing countries to open the markets for goods and services of the
developed nations having comparative advantage, (e) protection measures of the
developed nations to restrict market access for trading of goods and services by the
developing nations, (f) restrictions in import policy, (g) unrealistic levels of
standards/testing/labeling/certification set by the developed nations for developing
nations and not scientifically justified, (h) barriers on movement of services, (i)
unfavourable policy of government procurement, (j) barriers to investment, (h)
barriers like anti-dumping and countervailing.
India expressed concerns on the imbalances noticed in TRIPS Agreement. TRIPS

Agreement vide Article 65 provides a ten years transition period to India for
introduction of product patent in the areas viz. technology, agro-chemicals,
pharmaceuticals which was neutralised by Article 70.9 of TRIPS , an Article which
provides absolute marketing rights for patented products. With regard to geographical
indicators/indications, additional protection measures are provided for spirits and
wines whereas geographic specific products having origin in developing countries are
denied. Example to this is the Basmati rice of India for which unscrupulous activities
by some foreign enterprises took place. Hence, India mentioned that there is a need of
higher protection measures for other product categories apart from spirits and wines in
TRIPS’s Article 23.
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Amendments in the TRIPS Agreement was proposed by India due to the fact that
biotechnology indigenously developed over the decades in India is used without any
benefits provided by the patentees to the actual developer of biotechnology.
Imbalances in TRIPS and the absence of any benefits for indigenous technology and
know-how of the developing countries including India are the mismatches with
“Convention on Biodiversity”56 (an international agreement).
TRIPS Agreement has the provision of transfer of technology relating to environment

by the developed nations in a fair manner with reasonable terms to the developing
countries as because the developed countries fixed difficult national standards of
mandatory type for transfer of technology. Transfer of technology in free, fair,
reasonable terms is feasible as (a) sufficient resources are available in the developed
countries to compensate their exporters for transfer of technology at non-commercial
prices (b) compensation funds are available from subsidies in the developed countries
and (c) supportive measures provided to the producers of developed nations.
India is of the view that (a) shortcomings in URA and implementation issues are to be
addressed in fair manner, (b) opportunities of developed countries for availing the
market access as provided by URA are much more as compared to the opportunities
that are available to the developing countries, as a result of which developing nations
are against widening the WTO’s activities, (c) implementation issues and exiting
agenda of WTO are to be sorted out rather taking up new agenda, (d) people
understanding the need of multilateral trading system will increase WTO’s faith many
times.
India pointed out that India is strongly committed towards the success of multilateral
trade regime which along with WTO can serve the needs of underprivileged poorest
section all over the world.
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6.9.3.3 3rd WTO Conference in Seattle
A Statement was deliberated by Mr. Murasoli Maran, Union Minister of Commerce

and Industry of India in the 3rd WTO Conference held in Seattle during 30 November
-3rd December 1999 on the stands taken by India on WTO issues as follows [11,25] :
India pointed out that India is committed towards multilateral trading system of non-
discriminatory and rule-based in nature. India expressed concerns about the critical
gaps of Uruguay Round Agreement of GATT which needs to be addressed properly.
India felt that it is a matter of concern about the imbalances of several agreements on
anti-dumping, TRIMS, intellectual property rights, subsidies, implementation issues
of agriculture & textile , since economic integration can’t progress without eradicating
poverty.
India pointed out that (a) India is the believer of trade negotiations concentrating on
market access such that trade flows smoothly following the principle of equity, (b)
India emphasized on information technology and e-commerce for the development
process, (c) export subsidies are to be eliminated by the developed nations in
agriculture trades along with removal of other distortive measures such that large rural
economies and domestic production in the developing nations are not effected, (d)
India was in favour of including environmental protection in WTO agenda within the
periphery of multilateral trading system by agreeing at Marrakesh to establish a WTO
Committee for Trade and Environment, (e) India shall oppose in changing of
Committee’s structure and any mandates to legitimize unilateral trade restrictions, (f)
as in the 1st WTO Conference held at Singapore, it was decided that issues of Labour
Standard belong to ILO and therefore, India shall oppose its inclusion in future
negotiations of WTO, (g) trade liberalization should focus upon larger market access
with higher trade flows since India emphasized on creation of global awareness of
WTO.
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6.9.3.4 4th WTO Conference in Doha
A Statement was deliberated by Mr. Murasoli Maran, Union Minister of Commerce

and Industry of India in the 4th WTO Conference held in Doha during 9 – 13th
November 2001 on the stands taken by India on WTO issues as follows [11,26] :
India pointed out that (a) accession of China in WTO (as China joined WTO lately)
made WTO more universal organisation, (b) agricultural reform must eliminate
subsidies which distort trades and domestic support with the removal of unfair trade
barriers of farm export thereby protecting food and livelihood of rural populations
depending on agriculture in developing countries, (c) movement of professionals in
service sector needs to be addressed with priority, (d) the developmental deficits in
WTO agreements need to be recognised by WTO for taking remedial actions and
developmental strategies have to be country specific, (e) imbalances in URA are a
matter of concern for developing countries including India since 1998 and to resolve
the implementation issues in this Conference, (f) although, all the concessions of
URA are implemented by the developed nations, trade barriers viz. tariff peaks and
tariff escalation are continuously effecting exports of developing countries , which
needs to be addressed in WTO by not destroying small scale and sensitive industries
in the developing nations engaging large work force.
India focussed upon the need of multilateral agreement in Investment, Govt.

procurement, trade facilitation, trade transparency, trade competition, as in these areas
basic questions remain on the need for such multilateral agreements.
India opposed (i) linking trade with labour standards and (ii) using environmental
related measures on protectionism and (iii) imposing unilateral trade restriction. URA
on TRIPS invited criticisms from developing countries (including India) and
negotiations are to be conducted to extend geographical indicators/indications for
products without misappropriating biological, genitical, traditional knowledge
resources of the developing nations.
India is of the view that (i) WTO’s TRIPS Agreement shall not prevent the
Governments to protect public health by ensuring availability , affordability of
medicines for all from the angle of meeting human right universally, (ii) WTO
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negotiations must be in the line of URA and must resolve all implementation related
issues, (iii) WTO is meant for improving the multilateral trading system and should
not deal with globalisation , liberalisation and non-trade related issues.
6.9.3.5 5th WTO Conference in Cancum

A Statement was deliberated by Mr. Arun Jaitley, Union Minister of Commerce and
Industry and Law and Justice of India in the 5th WTO Conference held in Cancum
during 10 – 14th September 2003 on the stands taken by India on WTO issues as
follows[11,27] :
India applauded the accession of Nepal and Cambodia into WTO who have joined
WTO very lately. India appreciated the decision of WTO which make the import of
cheaper generic drugs by the poorer countries easier which they can’t manufacture by
themselves. India is of view that effective measures are required in WTO’s
multilateral trading system for meeting the expectation of developing countries for
economic development and trade liberalisation. Due to lack of transparency and less
participation of developing nations in the decision making process of WTO,
developing nations must not perceive that the decision making process in WTO’s
multilateral trading system is discriminatory, non-responsive, opaque by
implementing an inclusive decision making process and by prescribing clear
guidelines to conduct preparatory process in the Conferences. According to India, (i)
drafted Cancun text was not adequate on implementation issues and affect the
developing nations adversely on agriculture, industrial tariffs, Singapore issues as
the draft Ministerial text of Cancum projected only the views of certain developed
nations without accommodating aspirations of developing nations which are
legitimate, (ii) outstanding implementation issues are to be negotiated as agreed &
needs to be addressed on a priority basis.
India stood besides the interest of farmers in the developing nations since effected
from trade distortion on agriculture resulted from high subsidies that prevails in the
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developed nations and any negotiations that will place the livelihood, survival of
large community of Indian farmers at stake and risk which cannot be agreed at all.
India is of the view that high tariffs and non-tariff barriers prevailing in the developed
nations are to be reduced relating to the products of interest which developing nations
are interested upon, (ii) differential and special treatments for the developing nations
and dealing sensitive products remain as the negotiating elements in WTO for the
purpose of rural development, food security, livelihood of agrarian developing
countries. Harmonisation of tariffs and creation/expansion of tariff rate quotas in
agriculture cannot be accepted by India and India along with 20 member nations
submitted a joint proposal relating to agriculture for a constructive approach.
India expressed the view that (i) multilateral investment agreement neither ensures
additional flows of investment nor reduces the costs of transaction for investors and
hence necessity of such an agreement is in dark, (ii) different countries viewed issues
relating to Competition differently and the elements of competitions viz. core and
cooperation principles, coverages and prohibition of groups of nations keeping the
price high are to be understood properly before multilateral implications can be
comprehended, (iii) liberalisation of certain service sectors is essential for enhancing
the service growth in the developing nations. India felt that progress is to made in the
developing countries in the areas of trade debt, trade finance, transfer of technology.
India supported the countries who have taken initiatives on price stabilisation and
cotton subsidies which are the areas of interest of the developing countries and need
to be addressed in the WTO forum.
6.9.3.6 6th WTO Conference in Hong Kong (13-18 December, 2005)

A Statement was deliberated by Mr. Kamal Nath , Union Minister of Commerce and
Industry of India in the 6th WTO Conference held in Hong Kong during 13 – 18th
December 2005 on the stands taken by India on WTO issues as follows [11,28] :
India applauded the accession of Saudi Arabia and Tonga into WTO fraternity who
have joined WTO very lately.
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India pointed out that (i) trade commitments till now has put millions of people of the
developing & LDC nations into poverty & unemployment and not to be supported at
all for fulfilling the ambitions of developed nations, (ii) in agriculture several
developing nations witnessed comparative advantage in international trade even
though the trade structure in agriculture sector is highly distorted mingled with low
income & poor livelihood of farmers in several developing nations including India for
which Special Safeguard Mechanism and developing Special Products can effectively
be applied upon, (iii) Indian farmers are not in favour of subsidies provided in the
developed nations, (iv) small and medium Industries in developing countries which
provide livelihood to millions of workers , need the removal of tariff peaks to have
market access in the developed countries, (v) industries in the developing countries on
textiles and clothings, leather and footwear and medium technology based
commodities have trade barriers in the line for example maintaining 30% duty on
leather handbags and zero duty on aero planes , (vi) tariffs alone does not govern
market access but the exporters in the developing nations face the obstacles from non-
tariff barriers by not adhering to anti-dumping and technical standards.
India pointed out that (i) Negotiations in service sector needs to addressed properly
for clear guidelines and directions by maintaining the flexibilities available under
GATS for the developing nations, (ii) Hong Kong Conference must set forth
negotiations on the issues relating to establishing relation between TRIPS Agreement
and Bio-Diversity Convention, (iii) Proposal of DFQF (duty-free quota-free) access of
LDC’s exports to developed countries requires to be finalized.
6.9.3.7 7th WTO Conference in Geneva
A Statement was deliberated by Mr. Anand Sharma , Union Minister of Commerce

and Industry of India in the 7th WTO Conference held in Geneva during 30th
November – 3rd December 2009 on the stands taken by India on WTO issues as
follows [11,29] :
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The theme of this WTO Conference was “The WTO, the Multilateral Trading System
and the Current Global Economic Environment”
India mentioned that global economy over a year is reeling under the most severe
crisis which not happened in the last seven decades, as a result of which there had
been acute contraction of aggregate demand leading to disasters in global production
and world trade followed by the crisis of employment, food, livelihood in the
developing nations with the poors been hardest hit of the crisis.
India being the WTO’s founding member nation is interested to increase credibility,
efficiency and growth of WTO. India proposed in WTO for a rule based multilateral
trading system to improve the functioning, transparency, efficiency of WTO, which
has been acceded to and agreed upon in WTO and all member nations of WTO bear
the responsibility to strengthen the rule based system.
6.9.3.8 8th WTO Conference in Geneva

A Statement was deliberated by Mr. Anand Sharma , Union Minister of Commerce
and Industry and Textiles of India in the 8th WTO Conference held in Geneva during
15 – 17th December 2011 on the stands taken by India on WTO issues as follows
[11,30] :
India applauded the accession of Russian Federation, Samoa, Montenegro and

Vanuatu into WTO who have all joined WTO lately. LDC related decisions was
supported by India. Service waiver is accorded with high priority by India for the
LDCs. India supported both the streamlining of LDCs accession and their request to
extend the transition period for TRIPS agreement vide Article 66.1.
India expressed concerns on (i) the DDA (Doha Development Agenda) negotiations;
(ii) DFQF, Cotton issues which are of interest to LDCs are to be addressed in WTO
with foremost priority. India was the first country to provide DFQF market access to
all LDCs following the mandate of WTO’s Hong Kong Conference. Scheme for
LDCs on Duty Free Tariff Preference with tariff reductions made effective in India in
August 2008. India appealed to all developed nations to commit for DFQF market
access within July 2012 according to the declaration in Hong Kong Conference. India
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mention that Hong Kong declaration on cotton issues for the developing countries to
be implemented fully. India will fulfil the promise of DDA and to see that WTO grow
much more stronger and not to endure only.
6.9.3.8.1 Proposed 9th Ministerial Conference of WTO
It was proposed that the Ninth Ministerial Conference of the WTO will be held at
Bali, Indonesia from 3rd December 2013 to 6th December 2013 with the opening
ceremony scheduled on 3 December 2013 and two working days on 4th and 5th
December 2013 and the closing ceremony on 6 December 2013 [31].
Ambassador Elin Johansen, Norway, Chair General Council, WTO proposed the Bali
Ministerial Conference schedules in consultations with members countries (including
India).
The chair proposed the followings in consultation with the members [31] :
(i) Firstly to ensure the “FIT” principle — Full participation, Inclusiveness, and
Transparency;
(ii) Secondly, any issue for action/decision as proposed by the members in the line of
consensus principle; and
(iii) Thirdly, issues for action/decision proposed by the members to be agreed well
before 9th Ministerial Conference.
Indonesia welcomed the dates of the 9th Ministerial Conference of WTO [31].
6.9.3.9 Ninth Ministerial Conference of WTO at Bali, Indonesia

The objectives of Marrakesh Agreement which established WTO, declarations of
Doha and subsequent rounds are reaffirmed in the Bali Ministerial Conference. In
Bali, reports of General Council and that of other bodies of WTO are acknowledged
since they are poised towards strengthening multilateral trading system [32].
The Bali round dealt with several aspects viz. trade and transfer of technology, small
economies, aids for trade, electronic commerce, non-violation of TRIPS, extension of
410
transition period for Least Development Countries (LDC) of WTO under Article 66.1,
accession of LDCs, accession of Yemen Republic, trade facilitation agreement, public
stockholding for food security, tariff rate quota administration of agricultural
products, export competition, cotton issues, DFQF market access for LDCs,
preferential rules of origin for LDC’s, special and differential treatment monitoring
mechanism, waiving preferential treatment to services, service suppliers of LDCs,
trade negotiations Committee to prepare work chart on remaining issues for
strengthening the decisions on LDC, agriculture and development issues, issues not
addressed fully in Bali will be covered in relevant WTO Committees [32].
A statement was deliberated by Mr. Anand Sharma, Union Minister of Commerce of

India in the 9th WTO Conference held in Bali, Indonesia during 3rd December, 2013 to
6th December 2013 on the stands taken by India on WTO issues as follows [33] :
India affirmed her faith for the multilateral trading system introduced by the WTO
considering the progress made for accessions of new member nations in WTO during
the past few years. WTO is presently have 158 member nations. India proposed
that negotiations of WTO conference held at Geneva needs to be evaluated. India is
hopeful that the Bali package would attain substantial horizontal balance since (a)
agenda of trade facilitation have several issues remaining unresolved and (b) almost
all the texts drafted in WTO negotiations being beneficial for developing nations lack
binding commitments on the part of the developed nations to provide benefits for the
developing nations in contrary to the requirement of the developing nations to make
commitments of significances in trade facilitation and hence the imbalances are to be
redressed at Bali conference and (c) core element of financial support for the
developing nations including Least Developed Countries (LDC) in the trade
facilitation emerged in WTO negotiations getting diluted due to the non-binding and
weak referencing in the footnotes of the texts and (d) the drafted texts on issues
(which are beneficial for the developing nations) including DFQF (offered in less
contrary to Hong Kong declaration 2005), export competition, cotton subsidies and
mechanism of monitoring are only statements of mere intentions and (e) imbalanced
trade rules to be converted to correct, fair rule based multilateral trading system and
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(f) the WTO Doha round recognizing food security, rural development and livelihood
security admitted to rectify the asymmetrical and imbalanced trade rules [33].
India voiced to secure the interests of agro-based farming community and to make
food security essential by elimination of hunger with right for food. India is firm on
her stand on non-negotiable food security issue. WTO rules for ensuring food security
by means of food grains publicly stocked require to be rectified in the light of the
proposal mooted by G-33 [33].
India supported the Trade Facilitation Agreement newly negotiated [33].
To resolve several issues which are complex in nature, India played significant role
even by lowering her ambitions on key demands including Customs Co-operation
arena, the spirit of which are found to be missing on the part of some developed
member countries of WTO [33].
Although, the trade facilitation text is lacking consensus which is of grave concern to
several WTO member nations including India,India is hopeful for the implementation
of a balanced negotiations on trade facilitation as per Article No. X.3 contained in
Marrakesh Agreement [33].
India voiced her support for the Least Developed Countries (LDC) such that LDC’s
share in world trade can be rightly established by expanding market access covering
DFQF for the LDCs [33].
India is in favour of drawing conclusion of almost 12 years old complex Doha

Development Agreement (DDA) as a part of post – Bali feature to enhance the
magnamity of multilateral trading system [33].
India voiced for inclusive and transparent decision making process for the
development of multilateral trading system [33].
6.11 Submission of Papers by India in WTO Rounds on 21 Issues
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India’s manifold and multidirectional contributions in the World Trade Organisation
in various WTO Rounds on different issues can be visualised from the titles and date
of submissions of papers in WTO enlisted in Appendix 6.3. India submitted papers in
different WTO rounds on following issues [34] :
1. Agriculture (from the year 1997 to 2006)
2. Competition Policy (from the year 1997 to 2002)
3. Disputes (from the year 2002 to 2005)
4. Environment (from the year 1997 to 2006)
5. General Council (from the year 1998 to 2004)
6. Investment (from the year 1997 to 2002)
7. Non-Agricultural Market Access (from the year 2002 to 2008)
8. WTO Rules (from the year 2002 to 2008)
9. SPS Notifications by India (from the year 1996 to 2007)
10. TBT Notifications by India (from the year 2002 to 2007)
11. Trade Related Aspects of Intellectual Property Rights (TRIPS) (from the year
1999 to 2006)
12. Trade Facilitation (from the year 2005 to 2006)
13. Trade and Development (from the year 2002 to 2005)
14. Services
15. Trade in Financial Services (in the year 1997)
16. General Agreement of Trade Services (from the year 1994 to 1998)
17. Services – Informal papers (from the year 2003 to 2005)
18. Negotiating Group on Basic Telecommunications Services (from the year

1995 to 1996)
19. Negotiating Group on Maritime Transport Services (from the year 1995 to
1996)
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20. Services – Special Sessions (from the year 2000 to 2005)
21. Trade Negotiating Committee (from the year 2003 to 2005)
6.12 WTO’s Impact on India
The industry captains in India ought to understand properly the compulsions in

agreeing to WTO, as agreeing to WTO is one way of opening the Indian Economy.
They must be aware about the challenges that have arose due to WTO. Their mindset
is towards License & Permits. Due to WTO Agreements/Laws (i) Indian captains
need to equip themselves to face the challenges of improved quality with low price &
need to switch over from small domestic production to large global production while
operating in competitive market rather than operating in protected market (ii) India
have to import agriculture products from 2004-05 (iii) India have to bring down the
average tariff rate on goods imported to 10% within 2004-05 (iv) Indian Patent Act57
to be modified in the line of WTO & to do patenting by not questioning foreign
patenting (v) Indian industry needs to make right investment in the business [3].
India introducing economic/trade liberalization policy since July 1991 is cutting down
its tariffs gradually (for improving competitiveness globally) in consequence to the
commitments of tariff reduction undertaken in the WTO [2].
Due to implementation of WTO agreements, India witnessed development in

agriculture, textile, pharmaceutical sectors [6].
India is continuously shaping her policies in the line of international obligations

conforming to WTO Agreements in the areas like services, intellectual property
rights, investment, dispute settlement, trade policy review, agriculture, textile,
subsidies, anti-dumping, product standards.
Quantitative Restrictions (QR) is a non-tariff barrier for import or export of goods.

There are only 500 items (as on 2008) under QR (maintained for the environmental
and security reasons) reduced from 8000 items in the QR list prior to 1991 and 2700
items in the QR list existing in April,1997 [1]. Therefore, the WTO trade regime is
gradually reducing the list of items under QR. India lost a case once in dispute
414
settlement body of WTO and forced to reduce items from the QR list form April,
2001.
In the light of the Trade Related Intellectual Property Rights (TRIPS) agreement of
WTO, WTO members are required to receive applications for patenting of products in
order to grant “Exclusive Marketing Right (EMR)”58 and as a result of which the
“Patents Amendment Act 2002” was enacted by Govt. of India while introducing
product patents for pharmaceuticals, agro-chemicals, food items.
Following the TRIPS agreement of WTO, India replaced her “Trade & Merchandise
Marks Act, 1958” by “Trade Marks Act, 1999”59 w.e.f. 15th September,2003
Complying with the TRIPS agreement of WTO, some Indian products viz. Basmati
Rice, Darjeeling Tea, Agra Petha, Bikaner Bhujia, Alphanso Mango etc. found place
under “Geographical Indications” phrase of TRIPS. “Geographical
Indicators/Indications” define the goods originating in a country meeting quality
reputation or other characteristics attributing to its country of origin. Government of
India enacted the “Geographical Indication of Goods (Registration and Protection)
Act 1999”60 on 12th December,1999 which came into force w.e.f 15th
September,2003.
Anti-dumping agreement of WTO is in the line of Article IV quoted in GATT 1994.

These anti-dumping measures assumed a great importance in India specially in post-
QR phase since April,2001
The Dispute Settlement Mechanism (DSM) of WTO being a legal process rather than
political process is much stronger than that of GATT and several developing nations
including India along with USA and members of EU are abiding the decisions
emerging from DSM [17,18].
India expected to gain if the commitments on market access under the Uruguay
Round Agreement (URA) are implemented without considering China’s accession in
WTO in the year 2002.
India lost a part of export of textile and apparel products to China due to the phasing
out of Multi-Fibre Arrangement (MFA) in 1st January, 2005 and tariff reduction of
China [17,18].
415
India adopted Trade Related Intellectual Property Rights (TRIPS) of Uruguay
Round Agreement (URA) by revising her domestic patent law based on the
rulings of the Dispute Settlement Mechanism (DSM) of the WTO since a complain
was filed by USA, although many nations including India were not in favour to bring
intellectual property rights under WTO through TRIPS agreement, since there exists
specialized agencies like World Intellectual Property Organization (WIPO),
International Labour Organisation (ILO), United Nation’s specialised agencies,
United Nations Environment Program etc. which can act as the international forum to
negotiate on intellectual property, environment, labour. WTO’s ruling favouring
USA was based on the fact that there are no secured & legal methods in India
dealing agrichemical and pharmaceutical [22].
India notified her Trade-Related Investment Measures (TRIM) under the URA of
TRIMS of GATT.
The GATT provision of balance of payment was invoked by India for delaying the
phasing out of the quantitative restrictions (QR’s) mostly on the consumer goods. The
countries like Australia, Japan, Canada, European Union (EU) [ with whom India
made bilateral agreement for phasing out the QR’s] along with USA made a
complaint with the WTO against India based on which Dispute settlement Mechanism
(DSM) of the WTO passed rulings against India. India then appealed mentioning that
the DSM has no role to pass rulings for using the provisions of balance of payments
indicating that committee on balance of payment of the WTO should deal with the
complaint. This appeal was lost by India and India had no other options but to phase
out all the QRs in the years 2000 and 2001 [17,18].
Trade in services gathered momentum in WTO negotiations by adopting the

negotiation procedures since March 2001. The General Agreement on Trade in
Services (GATS) of URA allows the countries to select service sectors (exempted
from MFN) and India made commitments on 233 service sectors. However, India did
not commit anything on market access and reduction of tariffs and subsidies from
Uruguay Round Agreement & onwards [3].
416
India and other developing nations (who do not even have significant shares in global
trade) can do little to stop a new round if the major global trading nations wish to
begin a new round [17,18].
Between January, 1995 and December, 2001 with the functioning of WTO, 248
antidumping actions were initiated by India which is second largest after USA
initiating 255 antidumping actions followed by European Commission with 246
antidumping actions [17,18].
TRIPS agreement resulted in imposition of high costs on developing nations

(including India). The WTO’s Trade and Environment Committee turned costly for
India since the link between market access and labour standards imposition shall
offset the comparative advantage of labour abundant nations (including India) for
products which are labour intensive [17,18].
India producing drugs and pharmaceuticals would be benefited from the WTO Doha
(November, 2001) declaration on health issue [17,18].
Infact, the WTO’s impact in world trade which can be visualised from the following
schematic diagram, having its consequences in India [9].
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Diagram 6.2 : Impact of WTO in world trade
THE WTO IMPACT
GATT/GATS TRIMS TRIPS
Liberalisation Liberalisation of Provides monopoly

of trade in goods International power to owners of
and services Investments intellectual property
Increases Facilitates Opportunity Increases Facilitates Facilitates

competition global for Indian foreign joint ventures foreign
from foreign sourcing firms to Investment and tech- investment by
goods/ export and compe- nology Indian firms
services tition from acquisition (including
foreign firms joint ventures)
Threat to Benefits Increases Threat to Benefits Benefits

domestic consumers competi- domestic the domestic
Firms tiveness firms economy firms
of domestic
firms
Encourages globalization of Indian firms
Source : International Marketing, Francis Cherunilam, Himalaya Publishing House, pp. 90.
418
6.13 Outcomes of WTO
WTO over the years is progressing towards establishing of multilateral trading regime
in world trade with multilateral consensus among member countries of WTO through
multilateral negotiations.
Achievements of WTO are [6] :
(i) Implementation of URA of GATT
(ii) conclusion of agreement on telecommunication services, financial services in

1997
(iii) constituting of agreements viz. AOA, TRIPS, TRIMS, GATS, 13 Agreements on

trade in goods
(iv) benefiting the developing countries including India in world trade,
in the line of the objectives and functions of WTO set forth.
6.14 Some Criticism of WTO

India and other developing nations (who do not even have significant shares in global
trade) can do little to stop a new round if the major global trading nations wish to
begin a new round [17,18].
“ To my mind, WTO suffers from what I call as Marilyn Monroe Syndrome”61

(Bhattacharya, 2002). According to Mr Pascal Lari, Principal negotiator, WTO
Conference, Doha,WTO is suffering from Frankenstein Syndrome62 [3].
WTO rules are mainly for commercial protection and commercial trading but not for
non-commercial purposes [8].
419
NOTES
1
International Monetary Funds (IMF) :
IMF was founded in the year 1948 ( at an international treaty took place in the United
Nations Monetary and Finance Conference convened at Bretton Woods, New
Hampshire in the year 1944) with the objective for stabilizing foreign exchange rates,
facilitating multilateral clearing system and eliminating restrictions/controls on
foreign trade payment transactions and providing gold or foreign currency to member
countries. Countries with difficult balance of payment position with deficit in Current
Account can receive advances in the currency the country needs in return to the own
currency of the country with a repayment period of five years. IMF without lending
provides credit gurantees to the member countries. Member countries contribute funds
(partly paid in gold and partly in own currency of the country) to IMF and thereby
earn the voting rights. Higher contributions result higher voting rights. Contribution
or subscription is based on the quota of the member country, which is derived from
volume of national income, foreign trade, reserve assets of the country [2].
2
International Bank for Reconstruction and Development (IBRD) :
International Bank for Reconstruction and Development (IBRD) is also known as
World Bank was established jointly with the International Monetary Funds (IMF)
under the Bretton Woods Agreement convened at New Hampshire in the year 1944.
IBRD provided funds, loans, guarantees to the countries in the postwar era for
reconstruction and the period of loans ranges from 15 years to 25 years. IBRD being a
specialized bank of United Nations and the members are the member countries of
IMF. International Development Association (IDA) formed in the year 1960 and
International Finance Corporation (IFC) formed in the year 1961 are branches of
IBRD [2].
3
Uruguay Round of Agreement (URA) :
The eighth or last Uruguay round of General Agreement on Tariffs and Trade
(GATT) called “Uruguay Round” was of 87 months duration started at Uruguay,
Latin America on September, 1986 and ended in Geneva, Switzerland on December
420
1993. This Uruguay round of GATT led to the formation of World Trade
Organisation (WTO) in 1995 with series of new agreements on world trade by
replacing GATT. The eight or last round i.e. URA of GATT established rules for
international trade by means of multilateral trade negotiations during 1986 to 1994.
GATT was traditionally mainly for trades of manufactured goods and the URA
included General Agreement on Trade in Services (GATS); Trade Related Intellectual
Property Rights (TRIPS); Trade Related Investment Measures (TRIMS); trades on
agriculture, textiles and clothings under GATT. Therefore, the marathon URA of
GATT being multidirectional includes agreement on reduction of tariffs,
strengthening dispute settlement mechanism (DSM), elimination of Multi-Fibre
Arrangement (MFA) by phases, TRIPS, TRIMS, GATS [1, 11, 12, 13, 14].
4
Multilateral Trade Agreement (MTA) :
MTA is an agreement between more than two countries for regulation of trade
between them without any discrimination. Purpose behind this agreement is to
reduce trade barriers among the participants and to enhance the economic integration
between them, aiming at liberalization of trade [15].
5
Tariff :
By tariff we mean taxes that are levied upon imports or exports in the form of duty
and is often called as international trade tariff. Tariff barriers are the most oldest and
common trade policy instruments. With the intervention of GATT and WTO tariff
barriers are reduced gradually to greater extent by the member countries of GATT
and WTO [3].
6
Intellectual Property Rights (IPR) :
Intellectual Property Rights are the rights for people for their creations of minds. An
exclusive right is given to the creator to use the creative work for a certain time
period. IPR is divided into two categories [1] :
a) Copy right and Rights relating to Copyright : The purpose behind this right is to
protect copyright & protects rights relating to copyright for encouraging and
421
rewarding the creative works. Under this category rights granted to:
(i) Authors for literary works
(ii) Artist for artistic works
(iii) Performers, producers for broadcasting & phonograms
b) Industrial property. The purpose behind this right is to stimulate innovative
design and to create technology. This protect distinctive signs of trademark,
geographical indicator. Industrial designs, inventions and trade secrets come
under this category.
The Agreement on TRIPS (Trade related intellectual property rights) deals with the
IPRS of following types:
(i) Copy right and rights relating to copyright
(ii) Trademarks.
(iii) Service marks.
(iv) Industrial design.
(v) Layout designs of circuits
(vi) Geographical indications
(vii) Patents
(viii) Trade secrets to protect undisclosed matter.
7
Investment Measures :
Investment Measures w.r.t world trade means trade related investment measures
(TRIMS). TRIMS is the imposition of certain restrictions and conditions by a country
w.r.t allowing the foreign investment in that country. Developing countries uses the
TRIMs. As per the agreement on TRIMs, no member countries of WTO can apply
TRIMS, inconsistent to the Articles of WTO. Following TRIMs are identified as
inconsistent [5] :
(i) Requirement of local contents – using local inputs in the commodities of
certain amount.
(ii) Requirement of trade balancing – not to allow imports to exceed exports by
certain proportion.
(iii) Requirement of balancing foreign exchange.
422
(iv) Requirement of domestic sales – local selling of output by certain proportion.
Prior to liberalization, India employed no. of TRIMS and several inconsistent TRIMs
are gradually been phased out since 1991.
8
Dispute Settlement Mechanism (DSM) :
Dispute Settlement Mechanism (DSM) is to settle the disputes in global trade. DSM
deals with the settlement of disputes due to violation of Agreements and to settle
disputes among member countries of WTO w.r.t the obligations and rights. Dispute
Settlement body represented by member countries of WTO is established in WTO to
provide judgments to solve disputes relating to trade among the member nations. An
Appellate Body with seven members is established by Dispute Settlement Body
(DSB). Some of the judgments pronounced by DSB are as follows [1]:
(i) US – Anti dumping Act 1916.
(ii) US – Section 110 (5) of the US Copyright Act.
(iii) US – Continued Dumping and Subsidy Offset Act 2000 etc.
9
Trade Policy Review :
Reviewing of Foreign Trade Policy is undertaken periodically to find out the
reflection of WTO agreements in the trade policies of the WTO’s member nations,
since the member nations have a tendency to frame their trade policies to meet their
own interest. Periodical review undertaken by WTO, to achieve the WTO’s
objectives for global trade
10
Agreements on Agriculture (AOA) :
Agreement on Agriculture (AOA) deals with three agreements on Market Access,
Export subsidies (Competitiveness), Domestic support [1].
Market Access – the member nations of WTO are to reduce import duties for allowing
market access to the member countries
Export subsidies (competitiveness) – not to allow any export subsidies on farm
exports by the exporting nations.
423
Domestic Support – includes indirect or direct supports on agriculture provided by a
nation in own country. Direct supports are subsidies for inputs of energy, fertilizer,
pesticides, seeds, irrigation. Indirect supports are by means of R&D on agriculture.
However, domestic supports are subject to (a) certain ceilings classified as blue box,
amber box, green box and (b) certain restrictions to reduce/eliminate subsidies which
create distortions in trade
11
Agreements on Textiles and Clothings (AOTC) :
Agreements on Textiles and Clothings came into operation w.e.f. 1.1.2005. This
agreement was merged with GATT for trades of goods. Under Multi fibre agreement
countries adopting QRs are to phase out the QRs upto 49% within 31.12.2002 but
16% QRs withdrawn only. Developing countries exporting textiles demanded to
grant market access in EU and US as per their commitments in WTO. QRs of textiles
shall be phased out which will open new avenues for the textile industries of India [1].
12
Antidumping :
Dumping occurs when a country exports the commodities at a price below the normal
value to another nation. The normal value of the goods is the price the commodities
are sold in the domestic market of the country which exports the goods. Dumping
being an unfair trade practice distorts the international market and Antidumping
measure rectify this distortion created by dumping. Antidumping (in the form of
imposition of antidumping duties) provides fair competition as per WTO agreement.
Agreement on Antidumping is in pursuance of Article IV of GATT 1994.
Antidumping measures assumed great significance in India in the post QR era [1, 17].
13
Agreements on Sanitary and Phyto Sanitary Measures (ASPSM) :
Measures of Sanitary and Phyto Sanitary are to protect life or health of animal and
plant but not to be utilized arbitrarily and must not result to discrimination. These
measures are for food items under the Agreements on Agriculture [1].
14
Subsidies and Countervailing Measures (SCM) :
424
Countervailing Measures in the form of countervailing duties means the member
nations of WTO can impose this duty when the exporting nation subsidizes the
product through monetary or fiscal helps. It a special kind of duty to offset any sorts
of subsidies within the practices of GATT 1994. Countervailing duty is computed
based on subsidy value per unit of export commodities and this duty must not exceed
the subsidy amount. Agreement on subsidies and countervailing measures is based on
Agreement on Interpretation and Application of Articles VI, XVI, XXIII of GATT’S
Tokyo round negotiations. The agreement provides three types of subsidies viz
prohibited subsidy, actionable subsidy, non- actionable subsidy [1].
15
Agreements on Safeguard (AOS) :
Agreements on Safeguards is laid down in Article XIX of GATT, 1947, which
protects specified domestic industry of the GATT’s member nation from sudden
increase in imports of any commodity which seriously injure the domestic industry.
The safeguard measures shall be in existence for a period of 8 years since the
measures were applied or for a period of 5 years from the agreement date setting the
WIO, whichever is later. Safeguard measures are not applicable to a commodity of
developing member nation if the share of imports of the commodity of the developing
member nation is not greater than 3% [1].
16
International Trade Organisation (ITO) :
Economic and Social Council (ECOSOC) an organ of UN Conference set up a
committee in 1946 for International Trade Organisation (ITO). This committee
convened UN conference in Havana, Cuba during November, 1947 to March, 1948
regarding Trade and Employment. The countries participating in this UN conference
made an agreement called “Havana Charter” for promoting international and national
actions to achieve the objections of (a) growth/ expansion of world economy by
increasing production, consumption, income, exchange of goods, (b) fostering
economic development and industrial growth (c) reduction of tariffs and trade barriers
by eliminating discrimination in global trade (d) facilitating problems in world trade
by means of co-operation and consultation. Havana Charter included measures for
425
employment, reconstruction, economic development, commercial policy (on tariffs,
non-tariffs, taxation, state trading), commodity agreements, setting up ITO. Havana
charter was not ratified later and ITO was never established [6].
17
Bilateral Trade Agreements (BTA) :
Bilateral Trade Agreement depends on political relationships and mutual trust
between the two concerned countries. BTA is meant for close economic / commercial
co-operations between two countries. Smoother trade flow between two countries is
governed by the previsions laid down in the agreement. Trades take place between
two countries relaxing import restrictions. BTA decides the following issues before
its operation [3] :
(i) duration of agreement.
(ii) currency and mode of payment .
(iii)list of both export and import items for the two countries.
(iv) time period after which the bilateral trade is balanced.
(v) according status of MFN to both the countries.
(vi) export quotas of some goods (having higher demand in other
countries) are fixed in BTA.
At some point of time, 220 such trade agreements were operational in the world and
around 200 such agreements account for 50% of total global trade. However, WTO
and UNCTAD raised objections for BTA for violation of multilateral trade system
and as BTA are discriminatory in nature. But attitudes of WTO , UNCTAD towards
BTA were softened later based on the stands of the developing countries for the
requirement of BTA to expand their foreign trade. Govt of India finalized 25 such
trade agreements in the past.
18
Non-tariff Barriers :
Non-tariff barriers are import quotas (tariff quotas, unilateral quotas, bilateral quota,
mixing quota, import licensing), quantitative restrictions, quality standards; subsidies
and incentives; voluntary export restrictions (VER); administrative policies; domestic
or local requirements [3].
426
19
Multilateral Trade Negotiations (MTN) :
Under the Multilateral Trade Negotiations, non-reciprocal in international trade was
taken up in the Tokyo Round of GATT in September,1970 and a framework of
understanding was issued in July, 1980 to provide special treatments for the less
developed countries (LDC) [6].
20
TRIPS :
TRIPS cover IPR’s Agreement on TRIPS provide uniform patent and IPR regulations
for all member nations. Intellectual Property Rights are the rights for people for their
creations of minds. An exclusive right is given to the creator or to use the creative
work for a certain time period. IPR is divided into two categories [1] :
(a)Copy right and rights relating to copyright : The purpose behind this right is to
protect copyright & protects rights relating to copyright for encouraging the creative
works. Under this category rights granted to:
(i) Authors for literary works
(ii) Artist for artistic works
(iii) Performers, producers for broadcasting & phonograms
(b)Industrial property. The purpose behind this right is to stimulate innovative design
and to create technology. This protect distinctive signs of trademark, geographical
indicator. Industrial designs, inventions and trade secrets come under this category.
The Agreement on TRIPS (Trade related intellectual property rights) deals with the
IPRS of following types:
(i)Copy right and rights relating to copyright
(ii)Trademarks
(iii) Service marks.
(iv)Industrial design.
(v)Layout designs of circuits
(vi)Geographical indications
(vii)Patents
(viii)Trade secrets to protect undisclosed matter.
427
21
TRIMS :
TRIMS is the imposition of certain restrictions and conditions by a country w.r.t
allowing the foreign investment in that country. Developing countries uses the
TRIMs. As per the agreement on TRIMs, no member countries of WTO can apply
TRIMs, inconsistent to the Articles of WTO. Following TRIMs are identified as
inconsistent [5] :
(i)Requirement of local contents – using local inputs in the commodities of certain
amount.
(ii)Requirement of trade balancing – not to allow imports to exceed exports by certain
proportion.
(iii)Requirement of balancing foreign exchange.
(iv)Requirement of domestic sales – local selling of output by certain proportion.
Prior to liberalization, India employed no. of TRIMS and several inconsistent TRIMs
are gradually been phased out since 1991.
22
Multi-Fibre Arrangement (MFA) :
Multi-Fiber Arrangement governed the bilateral negotiation of quotas of textile and
clothing till the Uruguay Round ended. This provided Q.Rs of selective type when
increase of imports of any products causing damages to the domestic industry of the
importing nation. MFA being non – discriminatory differs from the GATTS rules.
Later, MFA was replaced by Agreement on textiles and clothings of WTO leading to
the elimination of quotas within 31.12.2004 [1].
23
Most Favoured Nation (MFN) :
The signatories of international treaties /agreements allow the facilities of extension
of any sorts of favourable trading aspects to one another and include the facilities in
subsequent agreements with the third nations. These provisions in any agreements or
treaties are called “MFN“ clauses. All GATT member nations would allow the
treatment of “MFN” to one another regarding market areas [6].
24
G9 :
428
G9 is the Group of 9 nations. G9 comprises 6 countries of European Free Trade
Association (EFTA), New Zealand, Australia, Canada. Six countries of EFTA are
Austria, Sweden, Norway, Switzerland, Finland, Liechtenstein [26].
25
G10 :
G10 is the Group of 10 nations. G10 was led by India, Brazil and comprises 10
countries viz. India, Brazil, Argentina, Peru, Yugoslavia, Tanzania, Nicaragua, Egypt,
Nigeria, Cuba. Group of 10 nations participated in the General Agreements to Borrow
(GAB) which was established in the year 1962 by 8 (eight) IMF member countries viz
India, Brazil, Argentina, Peru, Yugoslavia, Tanzania, Nicaragua, Egypt and the
Central Banks of Germany, Sweden by making available resources to the IMF for
drawing by participant countries and non-participant countries. Switzerland joined
GAB in the year 1964. Group of ten joined the Smithsonian Agreement in December,
1971. This agreement replaced the fixed exchange rate with floating exchange rate
[27].
26
G40 :
G40 is the Group of 40 nations. G40 is led by Colombia, Switzerland comprises G9
nations, 20 developing nations and 11 developed countries [28].
27
Foreign Direct Investment (FDI) :
Foreign Investment are generally of two types viz. Foreign Direct Investment (FDI),
Foreign Portfolio Investment (FPI). FDI means the use of capital flows (long term)
to acquire local productive resources (viz. technology, financial resource, material
inputs, managerial skills, production process, etc.) by foreign enterprise, whereas
FPI means transfer of capital funds (both long term and short term) without
managerial control [6].
28
Public Distribution System (PDS) :
PDS is a food security system followed in India set up by the Ministry of Consumer
Affairs Food and Public Distribution, Govt. of India for distribution of food
commodities (including non-food commodities) to the mass poors of India at a
429
subsided rates. PDS is managed both by the Ministry and the State Govts. of all
States/UT’s. Food Corporation of India procures the commodities and maintains the
PDS. Major commodities of PDS are rice, wheat, sugar, kerosene which are
distributed through a network of shops under PDS called Ration Shops throughout the
country [30].
29
Quantitative Restrictions (QR) :
Quantitative Restrictions is a non-tariff barrier to export and import of commodities
and provides protection to the domestic market. Article XI of GATT does not allow
maintaining of QR’s on imports but a nation can impose QR’s on import, if
situation arise. In India, before 1991, there are 8000 commodities in QR list among
10500 items of the export–import list.Article XVIIIB of GATT 1994 (Appendix-6.4)
allowed 2700 items in the QR list due to the balance of payment problems. India was
forced to eliminate QRs w.e.f. April 2001 while losing a case in the Dispute
Settlement body of WTO. By the year 2005, there were 500 items in QR list of India
for security and environment reasons [1].
30
Indian Patent Laws/Act :
The first legislation on patents was enacted in India as Act VI of 1856 for the purpose
of encouraging inventions of new manufactured goods. This Act was then amended
by Act IX of 1857 and Act XV of 1859. The basis of Act XV of 1859 was the UK
Act of 1852 which allowed the applicant to file patent application in India for use or
publishing in U.K. or India. The Act XV of 1859 was amended in 1872 with
provisions of protecting the designs and called as “the Patents and Designs Protection
Act XIII of 1872”. The Act XIII of 1872 was again amended as Act XVI of 1883
with provisions of protecting the novelty of invention. Act XVI of 1883 was in vogue
for 30 years. However, with the change of patent law in U.K. resulted in enactment of
an Act in 1888 to amend the law of designs and inventions. The Indian Patents and
Designs Act 1911 finally came into force replacing the previous Acts, which was
amended in 1920 to enter into arrangements with UK and other nations. Next
amendment took place in 1930 covering the provisions of granting secret patents,
430
using the inventions by Govt. powers given to the Controller for registering the
patent with increase in terms to 16 years from 14 years. Next amendment resulted in
1950 with formation of Act XXXII of 1950 covering compulsory licence and
revocation and working of inventions. Act LXX of 1952 came into force in 1952 by
amending the Act of 1950 by providing compulsory licence to patents of foods,
medicines, germicides, insecticides, fungicides and providing process for inventions
on surgical / curative apparatus / devices. Then Indian Patent Act 1970 was passed in
the Parliament which remains in force for 24 years till December, 1994. Act of 1970
was subjected to certain changes in the year 1994 in the line of TRIPS agreement of
WTO. Another changes made in the Act of 1970 in 1999 and resulted in the
enactment of India Patients (Amendment Act, 1999 which provided filing of patient
applications for drugs, agro chemicals, pharmaceuticals which were not permitted in
the Act of 1970. Then came the India Patents (Amendment) Act 2002 which came
into force on 20th May 2003 with the establishment of Patent Rules 2003 replacing
Patent Rules 1972. India Patent (Amendment) Act 2005 came into effect from 1st
January, 2005 [31].
31
Unilateral Trade Sanction :
Trade Sanction means imposition of penalty in trades by one country upon another
country. Trade Sanction is of two types viz. Unilateral trade sanction and multilateral
trade sanction. Unilateral trade sanction is the imposition of trade penalty by one
country on another country. Multilateral trade sanction is the imposition of trade
penalty by atleast one country on a no of countries. Licensing costs, import tariffs,
administrative barriers are quite often imposed as trade sanction besides a series of
stringent penalties [21].
32
US Laws Super 301 and Special 301
(a) Super 301 : Super 301 is a provision under US trade law, if removed, have
tremendous scope to expand US exports. Section 301 of US Trade Act, 1974
empowers the US Trade representative (USTR), to identify prioritation of trade
liberalization in all countries and initiating Section 301 in those countries where trade
liberalization is not prioritised and not met. Super 301 of US trade law was made
431
inoperational in 1991 and again came in vogue on 3rd March, 1994 and extended till
December, 1997. Super 301 was reinstituted on 26th January, 1999 dealing with
issues on market access for consulting the countries in order to reach to an agreement
relating to these issues, It agreement (including trade agreements of GATT or WTO)
is not reached, then USTR decides on the imposition of Sanction on trade under
Section 301 [22].
(b) Special 301 : Special 301 is a statute under Section 182 of US Trade Act
1974, by which USTR identifies the countries denying protection towards intellectual
property rights and fair market access and to negotiate on these issues thru’
multilateral and bilateral agreements. Where no agreements can be reached, countries
are placed under in any of the three categories viz. (i) Priority Foreign Country (ii)
Priority Watch List (iii) Watch List. Investigation continues under Section 301 for
priority foreign countries [23].
33
General Agreement on Trade Related Services (GATS) :
GATS is an agreement on trade of intangible services relating to education, health,
banking, insurance, IT, telecom etc. As per GATS there are 12 sectors of services
with a total of 161 sub-sectors and enlisted in Appendix 6.5. GATS is divided into
two parts viz. agreement framework with rules and commitment schedules of each
member nation specifying the access as guaranteed for the service suppliers of foreign
member nations. GATS include all services with the exceptions of services provided
by government and services in the air transport [1].
34
NAMA :
NAMA is the abbreviation of Non-agriculture market access and was introduced in
the Doha round of WTO. NAMA cover the foreign trade of industrial goods. It
enlists special products free from any tariff [1].
35
Agreement on Technical Barriers of Trade (AOTBT) :
This agreement was signed in the Final Act of Uruguay Round of Agreement (URA)
negotiated at Marrakesh on 15.04.1994. The provisions of this agreement are detailed
in Annexure 1A of Multilateral Agreement of trade of goods. The purpose behind this
432
agreement is for ensuring that the technical regulations and standards involving the
requirements and procedures of packaging, labeling, marking must not create any
hindrances in foreign trade. It was laid down in the provision of the Act that the
standards not to be used arbitrarily, unjustifiably which will act as a discrimination
in trade between nations [1].
36
Customs Valuation Methods (CVM) :
Customs Valuation Methods is included in the Agreement on implementation of
Article VII of WTO, to provide rights to the Customs authority to seek further
information about the importers for any doubts on the value of imported commodities
declared. The customs value of the goods imported is not the value declared by
importer but customs establish the value of the imported goods as per the provisions
laid down in the Agreement. Other provisions of the Agreement for Customs
Valuation relates to minimum values and imports by sole agents/distributors and
relevant for developing countries [1].
37
General Council of WTO :
The General Council of WTO is the second highest level authority in decision making
and meet several times in a year in WTO’s head quarter at Geneva. It has the
ambassadors or alike as representatives from all the member nations of WTO.
General Council carry out following functions of WTO [1, 32] :
(i) supervise the operations and execution of ministerial declaration and
agreements on goods, services and TRIPS.
(ii) settle trade related disputes under DSM
(iii) review of trade policy
(iv) looking after the functioning of three separate councils for goods, services and
TRIPS,
in addition to the specific work on multilateral trade agreements
38
Article IV of WTO :
Article IV of WTO provides the structure of WTO with Ministerial Conference (MC)
as the highest level decision making authority taking decisions on multinational trade
433
agreements. Next level below the MC are General Council, Trade Policy Review
Body, Dispute settlement Body. Below the level of General Council are three separate
councils for goods, services and trade related aspects of intellectual property rights
(TRIPS) [1].
39
G13 :
G13 is the Group of 13 nations. G13 comprises the Governmental heads from G8
countries ( United States, United Kingdom, Canada, Russia, Germany, France, Italy
and Japan) and Governmental heads of five leading nations with emerging economies
viz Brazil, India, China, South Africa, Mexico. G13 was established in the 2005 at
the behest the Prime Minister of UK Tony Blair inviting leading nations of emerging
economies to join G8 in the 31st G8 meet held at Gleneagles, Scotland [35].
40
G21 :
G21 is the Group of 21 nations. G21 occasionally called G20, G23, G20+ is a group
of developing nations formed in 20.08.2003 emerging in the 5th WTO Ministerial
Conference held in Cancum, Mexico. This group constitutes around 26% of global
agricultural exports, 60% of population of the world. The document of the Group of
G20 signatories undergone changes to be known as G21 or G22. This group later on
had 23 member nations as on October, 2008 [36].
41
G22 :
G22 is the Group of 22 nations. G21 is known as Willard Group was formed by the
member countries of Asia Pacific Economic Co-operation in 1997 for reforming the
world financial system. This Group comprises G8 nations and 14 other nations like
Poland, Malaysia, Hong Kong, Thailand, Singapore etc. The first meeting of G22 held
in Washington D.C. in 1998 to discuss capital markets and global financial system.
Poland is represented in G20 as a member of the EU [37].
42
NGO :
NGO means Non-Government organisation and is applicable on organisation which
operates in a country or internationally but not at all supported financially by any sorts
434
of direct governmental funds. Examples of NGO are Red Cross Society, Amnesty
International, etc. [2].
43
Cairns Group :
The naming of Cairns group was based on the first meeting held at Cairns an
Australian town in the year 1986 and this group includes 19 (nineteen) agricultural
exporting nations viz. Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia,
Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru,
Philippines, South Africa, Thailand and Uruguay. Cairns Group put the agriculture in
the agenda of Uruguay Round of GATT leading to constituting “Agreement on
Agriculture” with protections for agricultural goods. Countries like USA, EU,
Switzerland, Norway, Japan, South Africa opposed the Cairns Group’s objectives in
Doha Round of WTO for upholding agricultural protection as a matter of public
policy in world trade. Objective of Cairns Group is to liberalise the agriculture trade
by abolishing subsidies (export), domestic support measures, trade distorting
measures (amber box) and by improving market access for agricultural products [38].
44
WIPO :
WIPO is the abbreviation of World Intellectual Property Organisation. WIPO was
formed on 14.09.1967 in a convention with its headquarter in Geneva and came into
force in the year 1970. WIPO has became a specialized organisation of United
Nations in 1974. WIPO administered several treaties and conventions on intellectual
property right and some of them are Paris Convention ad Berne Convention. The main
objective of WIPO is to promote all over the world about the usefulness are usage of
intellectual property seeking co-operation from the member nations. Paris convention
of WIPO dealt to protect industrial property rights in the areas of trademarks,
inventions, industrial designs and etc. Berne convention of WIPO dealt to protect
copyright in the areas of literary works, artistic work, music of works etc. Later,
provisions of Paris and Berne Conventions were included in Article 1 of agreement of
TRIPS [1].
45
AFL-CIO (labour organization) of USA :
435
American Federation of Labour (AFL) was founded in 1886 under the leadership of
Samuel Gompers for organized workers in Unions and Congress of Industrial
Organisations (CIO) was established in 1938 for organizing workers by industries.
AFL-CIO was established in 1955 by merging AFL and CIO.
Federation of Organised Trade established in 1881 was the forerunner of AFL, which
emerged as the most powerful trade union replacing Knights of Labour (KOL). AFL
concentrated on gaining of right to collective bargain for wages, hours, benefits and
working conditions.
Committee for Industrial Organisations (CIO) was formed in November 1935 by the
eight unions. Later two unions joined CIO. AFL suspended the 10 Unions which
CIO focused on automobile, steel rubber industries by entering into agreements with
General Motors and US Steel. In the subsequent years AFI and CIO enter into race of
leadership of American workers. The first convention of CIO held at Pittsburgh on
Nov. 1938 renamed CIO at Congress of Industrial Organisations (CIO) and elected
John L. Lewis as president. CIO drew attentions of several organizations like Ford
Motors, Bethlehem Steel Industry, Youngstown and other big giants and entered into
agreements, besides drawing new Unions as members [41].
46
Geographical Indicators :
“Geographical Indicators” mean Branding. India’s demand of making Darjeeling Tea
& Basmati Rice as Global Brand was acceded to by the WTO in the line of French
wine viz. Champagne, which was already given the right of Global Brand by the
WTO [4].
47
Preferential Tariffs :
Some countries formed small groups under the multilateral trading system for mutual
benefits. Countries within a group negotiate among themselves and settle a
preferential tariff rate for the trades among themselves. To name some of the small
groups are EU, LAFTA, ASEAN etc. The preferential tariff rates are applicable
within the small groups and are low when compared with the conventional tariff rates
outside the GATT’S purview [3].
436
48
NAFTA :
North American Free Trade Agreement (NAFTA) is an agreement which created
trilateral trading block to eliminate the trade barriers and barriers to trade investment
in North America. The agreement was signed by United States, Canada and Mexico
and came into effect from 1st January, 1994. NAFTA replaced the Canada and
United States Free Trade Agreement (CUSFTA). NAFTA established two Co-
operations viz. North American Agreement on Environmental Co-operation
(NAAEC) and North American Agreement on Labour Co-operation (NAALC). The
objectives of NAFTA are to eliminate non- tariff barriers, to eliminate trade barriers,
to eliminate barriers to trade investment, to protect intellectual property rights of the
goods. NAFTA made amendments of the Copyright Act of the United States [46].
49
European Union (EU) :
European Union (EU) is also known as European Community (EC), European
Economic Community (EEC) and European Common Market (ECM). EC is the most
successful regional economic integration. EC was established by the Treaty of Rome,
1957 on 1st January 1958 with six countries viz. German F. Rep , France, Italy,
Netherland , Belgium, Luxembourg. Three countries UK, Ireland, Denmark joined
EC in 1973, Greece joined in 1981. Spain, Portugal joined in 1986. Austria, Sweden,
Finland joined in 1990. EC had 25 member nations as on 1st May 2004. A country to
become a member of EC must be an European Democratic country. EC represents in
the WTO , UN , G8 and G20. EC is having a population of more 500 million
constituting 7.3% of world population. In 2011, the GDP of EC is 17.6 billion US
dollars constituting 20% of world GDP [5, 45].
50
Regionalism :
International Region is defined as “a limited no. of states linked by a geographical
relationship and by a degree of mutual interdependence “ (Joseph Nye). Regionalism
means the interstate associations/ groupings that are formed in a region. Regional
integration was initiated in the 1880’s and the first initiative of regionalism was
witnessed during 1950’s and 1960’s. In late 1990’s, regionalism emerged with
437
renewed interest as a result of which system of regions emerged globally
economically & politically. The formation of trade blocks like European Union,
LAFIA, NAFTA, APEC and so on so forth are the outcomes of Regionalism [42].
51
Colonialism :
Colonialism means the policy of exercising power to regain control over weaker areas
as weaker people. Colonialism is the establishment, acquisition of colonies in one
region/territory by the people from another region/territory. Eurepean colonialism
began in the 16th century and continued till mid-20th Century by establishment of
colonies in Asia, America, Africa, as a result of which colonies established by
European powers (Britain, France, Portugal, Spain, Netherlands) were permitted to
trade with the European countries/ powers for strengthening the economy of European
powers. The British monarchy introduced the concept of free trade with few tariff
restrictions among the colonies [43].
52
Least Developed Country (LDC) :
Least Developed Country (LDC) is designated by the United Nations (UN) based on
income criteria fixed by UN and are recognized by the WTO. The UN list consists of
50 least developed countries (as on 2005) among which 36 nations are the members of
WTO. The least – developed country is supposed to have economic development at a
low level. In the Agreement of Subsidies of WTO, the LDCs were provided
differential treatment [1, 8].
53
Duty Free Quota Free (DFQF)
The share of Least developed countries (LDC’s) in world trade is around 0.5% of the
total world trade. WTO member nations made efforts by helping LDC’s to increase
the exports by means of providing technical assistance and by enhancing market
access through duty free, quota free market access for the exports of LDC’s [55].
India was the first developing country to offer DFQF treatment to the exports of
LDC’s in the year 2008 followed by Brazil [56].
438
Under the Economic Partnership Agreement (EPAs) between EU and ACP (African
Caribbean and Pacific), EU eliminated tariffs and quotas on the imports from ACP
which is an initiative in the line of DFQF access for the exports of ACP [57].
54
Free Trade :
Free Trade is a trade policy by which a country does not apply any descrimination on
imports/exports by imposition of tariffs (for imports) and subsidies (for exports) and
quotas. Free trade provides following benefits [5] :
(i) mutually helps the partner countries from tradings of goods and services.
(ii) free market access
(iii) free market access information
(iv) goods and services are traded without tariffs /taxes
(v) goods and services are traded without any trade barriers (import quotas, export
subsides)
(vi) elimination of trade policies that distorts the trade (e.g. taxes, subsidies,
regulations or laws)
55
ILO :
ILO is the abbreviation of International Labour Organisation. ILO was formed in the
year 1991 at the end of World War I to promote peace by means of improvisation of
working conditions all over world. ILO had 145 member countries in March 1981.
Each nation is having 4 representatives (2 representing Govt, 1 representing
employers, 1 representing employees) in ILO [2].
56
UN Convention on Bio-Diversity :
Bio-diversity means biological variabilities that exists within living organisms
including their ecological complexities of all sources. Bio-diversity is the biological
variability within species and that of ecological systems. Biological diversity is
recognized as a global asset possessing tremendous value for human’s social and
economic development [1]. The United Nations Environment Programme (UNEP)
was instrumental for a convention dealing with biological diversity for preparation of
439
an international forum to conserve and sustain the use of biological diversity and its
components will sharing of benefits by using genetic resources. The UNEP formed an
working group on Adhoc basis (inviting experts from the field of Biological
Diversity) in November 1988 for holding an International Convention. The work of
the Adhoc working Group ended on 22nd May 1992 in the Nairobi Conference with
the adoption of the Agreement on Biological Diversity whch received 168 signatories
till 4th June 1993 and resulted in giving the effect of Convention on 29th Dec, 1993. Ist
session of the Convention held in Bahamas during 28th Nov to 9th Dec, 1994 [34].
57
India’s Patents Act :
Indian Patent Act discussed above at item no. 30. India’s Patents ( Second
Amendment) Act 2002 passed on 25.6.2002 and came into force from 20.03.2003
making the terms of all patents (including patents restored) 20 years from the date of
application filing (u/s 60). Time to restore a ceased patent increased to 18 months
from 16 months as a result of which application to restore a ceased patent to be filed
within 18 months w.e.f. the date the patent was ceased. The word “invention“ has
given a new dimension by giving effect to new product /process which involve steps
of invention and are capable to be applied in industry. Testing process /method of
manufacturing process can be patented. Process of plants (U/s 3 (i)) can be patented
while the diagnostic/ therapeutic process is non patentable. The geographical sources
of origin for biological materials utilised during invention process is to be disclosed
for patenting the product. All patent (except secrecy given in u/s 35) to be published
after 18 months from filing date of the application while publishing of application
from filing in Gazette after filing discontinued. The patent applications will be
processed and examined in serial order of the filing request for examination. The
applicant at any time before granting of patent can withdraw the application of
patent. The application of patent if found eligible will be accepted within 12 months
instead of 15/18 months. Patent application to be filed in duplicate and documents
attached with application are filed in electronically (one copy) and in hard copy (2nd
copy) and the fees for documents are to be paid within one month from the filing date.
Photocopies of documents are provided by the Patent office on payment of Rs. 4 per
page instead of Rs. 10. Amendment charges for amending name, address, nationality
440
service address reduced to Rs.200/500 from Rs. 1000/6000. Provisions Paris
convention extended to Group of nations [1].
58
Exclusive Marketing Rights (EMR) :
Amendments of India’s Patent Act, 1970 took place on 23.03.1999 with the
introduction of India’s Patent (Amendment) Act 1999. This amendment was done for
the introduction of Exclusive Marketing Rights (EMR) by inserting Section 24 (A) to
24 (F), as a result of which the patent holder will have the exclusive right for
marketing the patented products in India for a specified time period based on the
patent granted in another country and without any inspection by Indian authorities.
EMR is valid for five years or till the patent is granted or till the application of
granting the patent is rejected whichever is earlier. India’s Patent (Amendment) Act
1999 was subsequently amended in the years 2002, 2004 for complying the Trade
related Intellectual Property Rights (TRIPS) of WTO and to introduce patenting of
products in pharmaceutical , agro- chemicals, food industry sectors [1].
59
Trade Marks Act, 1999 of India :
The Trade Marks Act 1999 was enacted by India in her 50th year of Republic day to
consolidate the laws and regulations of trade marks which provide registration and
better protection of goods and services by preventing the usage of fraudulent trade
marks. This Act details the followings [60] :
1. Register and conditions for Registration
2. Procedure for and Duration of Registration
3. Effect of Registration
4. Assignment and Transmission
5. Use of Trade Marks and Registered Users
6. Rectification and Correction of Register
7. Collective Marks
8. Certification Trade Marks
9. Special Provisions for Textile Goods
10. Appellate Board
11. Offences, Penalties and procedure
441
12. Miscellaneous
13. Schedules on Amendments.
60
Geographical Indication of Goods (Registration & Protection) Act 1999 :
This act enacted by the Govt. of India on 12th December, 1999. Thereafter
“Geographical Indications of Goods (Registration & Protection) Rules 2002” was
framed on 8th March 2002 which came into force from 15th September, 2003 [1].
61
Marilyn Monroe Syndrome :
Marilyn Monroe Syndrome means WTO looks much better than what WTO actually
is (Bhattacharya, 2002) [4].
62
Frankestein Syndrome :
Frankenstein Syndrome means WTO works much better than what WTO actually
looks like (Pascal Lari) [4].
REFERENCES (CHAPTER)
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442
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REFERENCES (NOTES)
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International Trade, Kolkata, 2005, pp. 10 – 20, 24, 29, 31 – 33, 35 – 36, 43, 49, 54 –
59, 62 - 72, 84 – 88, 89 – 91.
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House, 8th Revised Edition, 2006, pp. 55 – 57, 77.
6. Das, M. R., International Trade, Exchange and Institutions – An Encyclopaedic Dictionary,

Standard Literature Associates, Calcutta, 1988, pp. 35, 59, 75, 119, 128, 134.
446
7. Khan, M. Y., and Jain, P.K., Financial Management, Text and Problems, Tata
nd
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331-332, 338-339.
8. Mathur, Vibha., Foreign Trade Policy and Trends in India 1947-48 to 2008-09, New
Century Publications, New Delhi, 1st Edition, pp. 11 – 13, 485, 492 – 494.
9. Parthasarathy, N., “Regional Economic Grouping”, World Trade, edited by K.R

Gupta, Atlantic publishers, 1995, pp. 21- 23.
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Trade“, Journal of Business Perspective, BIMTECH, Vol 2, No. 2, July-
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451

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CHAPTER 6 : ROLE OF INDIA IN WORLD TRADE

WTO founded by 123 member countries at a meeting in Marakkesh, Morocco on 15th

6.2 Pre-WTO Regime in World Trade

Non-discriminatory accesses are to be provided by the member countries of GATT to

6.2.1 Eight Rounds of Trade Negotiations in GATT

Name Start Duration Countries Subjects Achievements

First round conducted at Geneva, Switzerland in 1947 with 23 member nations

6.2.2 Signatories in GATT

the GATT agreement (mentioned within parentheses) and are arranged

alphabetically in Appendix 6.1 [12] :

6.2.3 Domain of GATT

Therefore, the marathon URA of GATT being multidirectional includes agreement on

6.2.4 Objectives of GATT

The major objectives of GATT are [7] :

(i) equating international trade with economic growth and development

(ii) increasing the demand of goods

(iii) increasing the real income

(iv) improving the standard of living

(v) effective usage of resources worldwide

(vi) expansion of production of goods and their international trading

(vii) progressive economic development

(viii) encouraging multilateralism by discouraging bilateralism to expand the

(ix) promoting world trade by means of solidariting co-operative attitudes

6.2.6 GATT’s Impact on India

The multilateral trading system of GATT resulted in trade liberalization in the

6.2.7 Outcomes of GATT

(i) reduction of agricultural subsidies in Europe, Japan, North America ;

(ii) opening of domestic markets in Europe, Japan, North America to outside

(iii) reduction of tariffs of manufactured goods ;

(iv) replacing quotas by tariffs for manufactured goods in several developed

GATT encouraged the followings :-

i) liberalised trade among member countries ;

ii) non-discrimination among member countries ;

iii) multilaterally agreed trading rules.

6.2.7.1 Achievements of 1st round of GATT

6.2.7.2 Achievements of 2nd round of GATT

6.2.7.3 Achievements of 3rd round of GATT

6.2.7.4 Achievements of 4th round of GATT

6.2.7.5 Achievements of 5th round of GATT

Reduction of tariffs of goods traded amounting to $ 40 million of world trade, signing

6.2.7.7 Achievements of 7th round of GATT

6.2.7.8 Achievements of 8th round of GATT

6.2.8 Criticisms of GATT

GATT was biased towards developed country’s interest [6].

In GATT, enforcement of rules and agreements on international trade was inadequate

The URA of GATT was subjected to several criticism viz.

6.2.9 Difference between GATT and WTO

Exhibit 6.2 : Basic distinctions between GATT and WTO

GATT had contracting parties WTO has members

GATT allow existing domestic WTO does not permit this

WTO is more powerful than GATT,

Source : Francis, C., “International Marketing”, Himalaya Publishing House,

6.2.10 End of GATT

6.2.11 Recommendation for GATT

6.3 Eight Ministerial Conferences of WTO

EXHIBIT 6.3 : Rounds of WTO’s Ministerial Conferences

Round Date Host City

1st 9 - 13 December 1996 Singapore

2nd 18 - 20 May 1998 Geneva, Switzerland

3rd 30 November - 3 December 1999 Seattle, United States

4th 10 - 14 November 2001 Doha, Qatar

5th 10 - 14 September 2003 Cancun, Mexico

6th 13 - 18 December 2005 Hong Kong