WTO AND INDIAN ECONOMY LEARNING OBJECTIVES Background—From GATT to WTO 111 | 17.2 Structure of WTO 173 Features of WTO 174 Objectives of WTO 175 Functions of WTO 17.6 Major Trade Agreements 177 Areas of Relevance in Indian Context 178 WTOinAction + Summary « Review Questions 171 BACKGROUND—FROM GATT TO WTO Along with the World Bank and the International Monetary Fund, GATT was s of post-war reconstruction of the global economy. riffs and Trade (GATT) was established in free trade in order to help in the growth and development of all member countries. In 1947, 23 countries signed GATT f the founder members of GATT. On 31 (GATT 1947). India was one 0 December, 1994, 118 countries were members of GATT ( GATT 1994)—it was the day when GATT ceased to exist. The main purpose of GATT was to ensure competition in commodity trade by removal of trade barriers. It was neither an organisation nor a court of justice which could enforce its decisions. set up to undertake the proces: The General Agreement on Tai Geneva to pursue the objective o! 07.0Economie Development Nd Policy | a Indi, [twas simply a multinational treaty, subscribed by nations Coverin of the World Trade. It provided a forum to discuss trade Problems oes Cen member countries, known as contracting parties. During its existengg by established itself as a prominent feature in the international Tandsca te its presence felt in the world of trade and commerce, Through ng Made rounds of negotiations, the barriers obstructing the free flow of ty CeSsive slowly and steadily lowered. The eighth round of GATT Negotiation (whi e started in 1986 and concluded in 1993) gave birth to the Worta mith Organisation (WTO). Tade The Treaty of Marrakesh established the WTO at the close of the Ury Round in 1994. The WTO began operations on January 1, 1995 4 comprised of 148 members. The WTO is one of the big three internationg organisations that oversee economic relations among nations, joining ie International Monetary Fund (IMF) and the World Bank. The WTo's headquarters is located in Geneva, Switzerland. Uma Kapila writes in her paper “India and WTO” that WTO identified five core principles. These are : 1. Trade without discrimination : It involves most-favoured-nation status and national treatment. MFN states that a trade Concession granted to one WTO member automatically applies to all members, National ‘treatment guarantees equal treatment of imported goods with domestically produced output in nation’s market. 2. Liberalisation of trade regimes : Free trade through the Progressive liberalisation of trade regimes. 3. The predictability of trade rules : Predictability, in this context, prevents governments from arbitrarily raising existing tariffs or non-tariff trade barriers. . Fair competition : Fair competition attempts to level the playing fieldin international trade and minimise the market distortions caused by expot subsidy, dumping and other disruptive trade practices. Economie development through trade : Economic development iw the world’s poorer countries should be enhanced by trade assistance am Increased market access through preferential trade arrangements. 17.2 STRUCTURE OF WTO The structure of WTO canbe Classified as follows: 1. The Ministerial Conference (MC) : F jes the Itis the highest level Consisting of representative members. It am™Ww oan } Ww indian Economy 17.3 eons of the WTO and also has : functions 0! so has the authority to tak i ¢ decisions in an ly matter under the Multilateral Trade Agreement (MTA at least once in every two years, Peas F unctional Committees under MC There are three functional committees which cal i i re under MTA. These ae iy the functions assigned (a Committee on Trade and Development (b) Committee on Balance of Payments Restrictions (c) Committee on Budget, Finance and Administration. The General Council (GC) It discharges functions of MC during interval between two meetings of MC. It co-operates with other governmental and non-governmental organisations which have responsibilities towards WTO. The GC meets as and when necessary. It is responsible for discharge of responsibilities of the Dispute Settlement Body and the Trade Policy Review Body. It has its own rules and procedure and also approves rules of the functional council. Functional Councils under GC There are three functional councils which work under the guidance and supervision of GC. These are: (a) Council for Trade in Goods (6) Council for Trade in Services (c) Council for Trade Related aspects of Intellectual Property Rights (TRIPs). 3. Disputes Settlement Body (DSB) e WTO’s Dispute Settlement Body (DSB), which consists of the entire WTO membership. The DSB, in tum, establishes a panel of three of five experts to hear the evidence and - render aruling. The panel’s ruling can only be reversed by a unanimous vote of the DSB. ‘Atrade complaintis made to the 17.3. FEATURES OF WTO Main features of WTO are: 1, The WTOis global inits membership. At present, there are 153 member countries (as on 23rd July, 2008). 2. It is the main organ of implementing the Multilateral Trade Agreements.7 Economic settites N. ont ‘ollcy ty ‘dia, eo 3 Whas amuch wider scope than its predecessor GATT, ; ii8 3 4. The representatives of the members and all officials Of the WO. 6 ipl” intemational privileges. Enjoy 40 5. Each member of WTO has a single voting right, 1 0 th 6. Itisa full-fledged international organisation in its own right, pis 7. The WTO administers a unified package of agreements to Which clos members are committed. all oot 8. It is a forum for negotiations among its members, whereby Memb M nations discuss issues related to the MTAs and Associateg legal 16 instruments. psi" tr? me! 17.4 OBJECTIVES OF WTO a WTO has the following objectives: Th 1. To raise the standard of living in member countries by ensuring fu ‘ employment and by expanding production and trade in goods and service 2. Todevelop an integrated, viable and durable multilateral trading system; 3. To promote sustainable development in member countries by the optimal Tt use of resources; ( 4. Tohelp developing countries to get a share in the growth of international trade; 5. To reduce tariffs and other trade barriers among member countries and ( to eliminate discriminatory treatment in international trade relations, To ensure linkages between trade policies, environmental policies and sustainable development. 17.5 FUNCTIONS OF WTO WTO has the following functions: 1. It provides the forum for negotiations among its members conceming their multilateral trade relations. 2. It facilitates the implementation, administration and operation of the obj ijectives of the Multilateral Trade Agreements. 3. Itadministers the ‘Trade Review Mechanism,’ : Itadministers ‘rules and Procedures governing the settlement disputes a Itco-operates with IMF, IBRD and its affiliated agencies to achiev? better place in global economic policy,ph ad fodia” Economy Ins W f 5 .. qwatchdog, of international trade, It examines : ¢. His L bes ‘ade, It examines the trade regimes of individu members. «Trade disputes that cannot be solved through bilateral talks are forwarded * othe WTO dispute settlement ‘court.’ s, ist management consultant for world trade. Its economists keep @ close watch on the activities of the global economy and provide studies on main issues of the day. 11.6 MAJOR TRADE AGREEMENTS Major t included in the Uruguay Round Agreement i Agreement i) There are two main aspects « Agreement on Agriculture, and cessions and commitments e Agricultural package which includes cont in the area of market access, domestic support and export subsidies. follows: rade agreements of the WTO, as ts, are as follows: n Agriculture (AOA) of the Agreement on Agriculture: They are explained as (a) Under the Agreement on Agric a framework for long-term re! domestic policies. (b) Agricultural package provides for commitments in the area of (i) market access, (ii) domestic support, and (iii) export subsidies. (i) In the area of market access, members commit to replace non-tariff measures by tariffs that provide substantially the same level of protection. Tariffs are to be reduced by an average of 36 per cent in the case of developed countries and 24 per cent in the case of developing countries. Reductions ase of developed are to be undertaken over 6 years in the ci over 10 years in the case of developing countries. Least developed countries are not required to reduce their eduction in tariffs is tariffs. The process of tariffication andre expected to provide market access to products from efficient producers of: agricultural commodities. (i) Members agreed to reduce the domestic support (e.g. subsidies) to agriculture so as to correct price distortions and allow market forces to determine the level and composition of agricultural production. Itistobe remembered that only those support measures which are considered trade distorting are to sultwre, members agree to provide forms in agricultural trade and countries andEconomie Development and p, " ‘alley in Indy ¢ fi eo be removed. Other measures which do Not distort i : wi not to be removed. Tade arg pe ot i » Agree 9 (iii) Under the Agreement, members are Tequired to red i ol value of agricultural export subsidy by 36 per ce Uce the er ial base period 1986-90 and to decrease the volume of : from the ap exports by 21 per cent in six years, In case of sa soit f countries, reductions are two-third of those of sing @ A countries over a period of 10 years (with no reductions Pt s to the least-developed countries), ‘plying 6) 7 2. General Agreement on Trade in Services (GATS) ( i General Agreement on Trade in Services (GATS) is based on the fac 6) ! that there is growing importance of Trade in Services for growth t . development of the world economy. It aims at establishing a mulinat and @ framework of trade in services (banking, insurance, telecom, dite etc.) under conditions of transparency and progressive liberalisation, Th @ objective of General Agreement on Trade and Services is to achieve (~ progressively higher level of liberalisation so as to promote stn growth among trading partners and development of underdeveloped (g) countries of the world. ny The agreement rests on three ideas: (a) a set of general concepts, principals and rules that apply to i) measures affecting trade in services, (8) specific commitments that apply to these service sectors, and (c) aset of annexes that addresses sectoral specificities and allow Spe for temporary exemptions to Most Favoured Nations (MFN) has obligations. wa The agreement provides that each party shall accord immediately and ne unconditionally to services and service providers of any other country. It Le is recognised that MFN treatment may not be possible for every service sil activity and therefore, it is envisaged that parties may indicate specific 4. As exemptions, conditions for such exemptions and provide for review after T five years. a GATS and India as Implementation of some of the aspects of GATS is of special concer i. tr India. India has a distinct superiority and have a vast ad , professionals like IT professionals, chartered accountants, an accountants, companies secretaries, doctors; technicians, et°- io tender specialised services to the whole world. Policy of liberals will increase trade of such services under GATS.Feonomy’ “ nd wilt” 17.7 w ee nt on ‘Trade Related Investment Measures (TRIMs) i ite wait provisions provided in the TRIMs text ensure that government jscriminate against foreign capital. In other words, the TRIMs hall not di jest compels member countries to give national treatment to foreign capital. Main features of the TRIMs text are: Allrestrictions on foreign capital/investors/companies should be scrapped. The foreign investor shall be given the same rights in the matter of investment as a national investor. No restrictions will be imposed on any area of investment. There will be no limitation on the extent of foreign investment— even 100 per cent foreign equity will be permitted. onents will be allowed freely. to use local products and @ o) G) @ (e) Imports of raw materials and comp ( Foreign investor will not be obliged materials. (g) Export of part of the output (A) Restrictions on repatriation of eliminated. (i) There will be a complete exclusion of provisions like phased manufacturing programme which is intended to increase indigeneous content in manufacture. ucrat Muchkund Dubey Speaking on the benefit of TRIMS, Indian bureat tries achieved almost everything they has observed, “the developed count wanted from TRIMs agreement. In case of developing nations, itis Fiona rules for controlling restrictive business TRIMs agreement is totally will no longer be mandatory. dividend, interest and royalty will be necessary to formulate internat practices of foreign investors. However, silent°on this vital issue.” Related Intellectual Properties () RIPs) rm legal protection for scientific, technological and artistic achievements. Intellectual Property Rights may be defined asinformation with a commercial value. Ttincludes copyrights, trademarks, trade secrets, industrial designs, patents, geographical indicators, integrated circuits, etc. Main features of TRIPs are: (a) Each member to be provided minimum standard of protection. 4. Agreement on Trade TRIPs provides unifo!NNT V8 Economie Development and Policy jn India. i or (6) Intellectual property rights to be enforced by domestic Proced, i and remedies. ‘es ce (c)_ Dispute Settlement Body will settle disputes between the wr ws members. 0 et TRIPs envisages five years transition period for developin, we countries and eleven years transition period for less developin jo? countries. 8 ’ get! Agreement on Textiles and Clothing—Multi-Fibre Agreement psi" (MFA). This Agreement provides for phasing out the import quotas a ser textiles and clothing under the Multi-Fibre Arrangement since 1974, over im pric a span of 10 years, i.e., by the end of the transition period on J; fanuary 1 wu 2005. Italso provides special treatment to certain categories of countries 0) For example, those which have not been MFA members since 198¢, ! new entrants, small suppliers, and least developed countries. While the o Agreement focusses largely on the phasing out of MFA testrictions, it @ also recognises that some member nations maintain non-MFA restrictions @ | not justified under the GATT provisions. @ 17.7. AREAS OF RELEVANCE IN INDIAN CONTEXT While could Doha Round of trade negotiations in the WTO effectively made very little : progress after 2008. Throughout 2009 2010, 2011, and 2012 discussions agicu continued but no headway was made on any substantive issue in the negotiations. . Concerted efforts were made by some of the developed country members of ae the WTO to use the G20 Leaders Summit in November 2011 to advance an 208 agenda for the Eighth WTO Ministerial Conference held in Geneva in 7 December 2011. Specifically, they wanted to set the stage for plurilateral India: agreements on selected issues in the WTO negotiations (rather than multilateral issues agreements); get WTO members to agree toa commitment abjuring the use of export restrictions; and introduce new issues for negotiation, namely climate hag change, energy security, and food security. In an unprecedented display of @) unity, a coalition of more than a hundred developing countries, including India, Brazil, China and South Africa, met on the sidelines of the (v) Conference and issued a declaration emphasizing the development: agenda ©) They criticised suggestions for plurilateral agreements to replace decision making @ by multilateral consensus. LN The Tenth Ministerial Conference (MC 10) of the WTO was held in Nair ae Kenya during December 2015. The outcomes of the Conference, refered es = asthe ‘Nairobi Package? include Ministerial Decisions on agriculture of (b) and issues related to least developed countries (LDCs).de veg | dices enegotis | y menbest oad | ockholding tor food security purposes, a Special Safeguard ing countries, a commitment to abolish export larly from the developed countries and measures Decisions were also made regarding preferential treatment to of services and the criteria for determining whether exports efit in trade preferences. In MC (lI), decisions were lution on food security and other agriculture issues. jest “pov wublic 5! xt gg) for develop frm exports particu oa cotton. xs inthe area MLpcs may bent int napermanent so vat issues taken UP in the meeting were: jculture and NAMA the issues discussed included: Reduction in overall trade distorting domestic support by d countries, ) tariffcuts, designation of sensitive prov In agriculture, @ leveloped oO ducts, CH) special products, (2) Special Safeguard Mechanism (SSM) for developing countries, etc. scussion focussed almost exclusively on the SSM which could not be resolved, this was not the only contentious issue. Several issues in agriculture and NAMA were not discussed at all and remained unresolved. Multilateral discussions on agriculture resumed at the WTO in October 2008. ifically identified The Chair of the WTO Agriculture Negotiating Group has speci! certain elements in the Fourth Revised Draft Modalities Text of ‘December 6, 2008. While in the end, dis Indias stand on key negotiating issues (Source: Economic Survey, various issues): 1, Agriculture (a) Substanti support (OTDS) of the (b) Self-designation of an appropri (©) Anoperational and effective Special Safe: (@ Simplification and capping of developed country tariffs. ecess (NAMA) flexibilities for protecting economically al and effective reductions in overall trade-distorting domestic US and BU. te number of Special Products (SPs) at guard Mechanism (SSM). 2, Non-Agricultural market A (a) Adequate and appropriate vulnerable industries. (b) Participation in sectoral initiatives only ona non-mandatory and goodEconomie Development and Policy | 110 y "India. faith basis without prejudgment of the final outcome, with substan ‘i aASIS oe woe ‘i anti jal and differential treatment provisions for developing countrie al (c) Serious consideration of non-tariff barrier (NTB) textual pro i i Posals with wide support such as the horizontal mechanism, The Ninth Ministerial Conference of the wTo took Place in Bali during 47 December 2013. Ministers issued a Declaration and ten Decisions were adopted on various issues including trade faciliation and issues Tealating to agricultural trade rules, development, and least developed countries (LDCs), Amongst these decisions, two are of particular significance for India: (a) The Trade Faciliation Agreement (TEA), which was also endors India at the Ninth Ministerial Conference, is basically aimed at greater transparency and simplification of customs procedures, use of electronic payments and risk management techniques and faster clearences at Ports, ed by (b) Issue of rules relating to public stockholding for food security Purposes was put on the agenda by G-33 group of 46 developing countries including India. On 27 November 2014, the General Council of the WTO adopted a Decision on Public Stockholding for Food Security Purposes, a Decision on the TFA and a Decision on Post Bali Work. The General Council Decision on Public Stockholding for Food Security Purposes makes it clear that a mechanism under which WTO members will not challenge the public stockholding programmes of developing country members for food security purposes, in relation to certain obligations under the WTO Agreement on Agriculture, will remain in place in perpetuity until a permanent solution regarding this issue has been agreed upon and adopted. The Tenth Ministerial Conference of the WTO (MC-I0) will be held in Nairobi, Kenya, from 15 to 18 December 2015. 3. Public Health Policies India wants to ensure affordable access to essential medicines and life saving drugs. For this, India has been seeking clarity and flexibility in the interpretation of agreement on TRIPs. India, along with other countries, demanded that nothing inthe TRIPs agreement should prevent government from taking measures" Protecting public health, Government should be able to issue compulsory licences '0 achieve public health policy objectives. The amendment to the TRIPS agreement was welcomed by the Hong Kong Ministerial Conference. if amendment enables manufacture and export of: pharmaceutical products us in Compulsory license to count “ th ° tries with limited or no manufacturing cap pharmaceutical sectors, sane generat spities and ii sportation 2 adress, in futu appropriate aploitation 0! mittances, w tdiahas been INT), clear p ‘soften been Noviders eve td China w *orld, accor: bythe WTO Mia's Stan. ®) Need Mod ( ) Appr Tigh Tite Eff fishydoy tnctey CCson aig that mig bli stay ty po mn Apa digi arene oft center! oil ih 4 pconomy 1711 patil industtY 1 gor is most important, next to agriculture sector, for income generati . ployment creation, The Multi-Fibre Arrangement (MFA) ne a nator) Piewe of legislation which permits developed countries to protect : ' omesti¢ textiles and clothing sectors by imposing quantitative restrictions ‘il rts from. developing countries. It is a group of eight importers and at gas exporters. Out of these eight importers, Japan and Switzerland appl. ‘ restriction on the imports from UDCs. Textile industry faces io t-MFA scenario in the next decade. The sector needs the post a ‘ isati eqancial assistance, modernisation and restructuring. The textile sector should own as it has become sick, All developing countries should make Ive a global textile restructuring programme. In cotton, export iminated by developed countries in 2006. pail? sin : -allenges 1 gotbe shut di efforts t0 evO! subsidies were eli s, Service sector international trade services include brokerage, communication, non- merchandise insurance, leasing and rental equipment, technical and professional services. Jacome generating services arise out of movement of labour and property income (royalties and licence fees related to intellectual property rights), apart from transportation and travel. India along with other developing countries has to address, in future WTO meetings, issues relating to labour mobility and insist on appropriate safeguards. India should take up issues of legal migration, exploitation of foreign workers, their conditions of employment, workers remittances, work penmits, employment benefits, etc., at the WTO conference. India has been pushing for issues such as removal of the Economic Needs Test (ENT), clear prescription of the duration of stay, provisions of extension, etc. It has often been noticed that domestic regulations create barrier for India’s service providers even when the trading partners have taken firm commitments. India and China were among the top 10 exporters of commercial services in the world, according to latest «{nternational Trade, Statistics 2008” brought out by the WTO. India’s Stand o (a) Need for qualitative impro Modes | (cross border supp! (b) Appropriate disciplining of dor (©) Tightening of disciplines on anti reiteration of the lesser duty rule) (@) Effective special and differential treatment for developing countries on fisheries subsidies. ic Survey 2011-12) : he revised offers especially on ement of natural persons) developed countries ing clause and n Services (Source : Econom vement in t Ly) and 4 move mestic regulations by '-dumping (deletion of zero’cn Keonomic Development and Policy jn India . u 6. Quantitative Restrictions (QRs) Indcha has to conduct negotiation over consumer goods like, domestic Appliances consumer electron! was the us is insisting on total removal Of QRs, Indig has to ask fora reasonable time period to implement the recomme the Dispute Settlement Panel. The aspect of technical and financia for capacity building in developing countries is also being looked laid emphasis on compliance issue through an effective Cooperation Mechanism, Ithas made a joint proposal with the US to have a multi lateral mechanism fcr information exchange. In the textile sector, quota regime was terminated in December 2004 (Economic Survey, 2008-09). 7, Registration of Patent Ndationg of l assistance at. India has Till 1994, only 10 per cent of patents were obtained from two Indian firms, Bajaj and BHEL. Rest 90 per cent belonged to multinationals Operating in India. Indian entrepreneurs should seek better knowledge about the Procedure and rights of patenting. 8. Anti-dumping and Subsidies Agreement 1. Inthis respect, India has made two submissions: (a) Seeking special and differential treatment for developing countries during anti-dumping and countervailing duty investigations, (b) Identification of specific provisions of the Anti-dumping Agreement that requires amendments. India has made four submissions so far on mandatory application of ‘Lesser Duty Rule’. India needs to be adequately protected from the cheap imports of dumped or smuggled goods through the porous Indian borders. India has emphasised higher commitment by developed countries in movement of persons as one of the modes of supply of services. India had made substantial improvements in its commitments by includingall the categories of natural persons like intra-corporate transferees, business visitors, contractual service suppliers and independent professionals, specifically mentioning sectors where access is available. In he Revised Offer, further improvements have been made in the sectoral coveras® af both contractual service suppliers and independent professionals. In 2015, 230 anti-dumping investigations were initiated by i" Countries with USA, Overtaking India, initiating about 42 investigat© i. However, in 2016, India has again become the highest initiator 0° dumping investigations initiating 69 out of a total of 228 investion” Initiated by G-20 Australl® members, followed by the USA (37) 404 (25) (WTO, 2017), ] count count also fi 9. DGR Rem« subir duty, 01.0 inve safe 9. TRIPs Protection has been n Protect the Agreemen (Intellect, liberalis: conomy ‘Monopo India’s g Log NoOur 1S. ev I Submis the cheap ingot Indian bs ae 17.13 w 40 and indian Keon ean slowdown, complaints of dumping have been rising. 4 ind conducts anti-dumping investigations on the basis of applications filed by tHe domestic industry with prima facie evidence of dumping of _ 2 eae injury to the domestic industry and causal link ae dumping and injury to the domestic industry. puring the fiscal year 2016-17, India initiated 44 anti-dumping investigations and issued preliminary findings in 5 anti-dumping investigations, final findings in 28 anti-dumping investigations, and final finding in one anti-circumvention of anti-dumping duty investigation. The major products found to have been dumped in India and in respect of which anti-dumping duty has been imposed fall in the product group of chemicals & petrochemicals, products of steel & other metals, fibre & yams and consumer goods. During 2017-18, anti dumping investigation were initiated in the import of 24 products. 8, During 2018-19 to Directorate General of Trade Remedies (DGTR) initiated 24 anti-dumping investigations, and issued final findings in 50 anti-dumping investigations. During 2018-19, DGTR initiated 5 countervailing duty investigations and issued final findings in two countervailing duty cases. One safeguard measure investigation was also finalised during 2018-19. 9, DGRT has introduced an online portal - ARTIS (Application for Remedies in Trade for Indian industry and other Stakeholders) — to submit online petitions for different trade remedies like anti-dumping duty, safeguard duty and countervailing duty. During the period from 01.04.2020 to 30.10.2020, DGTR initiated 43 anti-dumping investigations, 4 countervailing duty investigations and 1 safeguard investigation (Economic Survey 2020-21, Vol. II). 9. TRIPs Protection of intellectual property ri ights-patents, copyrights, trademarks etc. has been made more stringent in the Uruguay Round. This has been done to protect the interest of multinational corporations and developed countries as Agreement on TRIPs is in favour of patent holders. It has been said IPR (Intellectual Property Rights) protection is anti-competition and anti- liberalisation and goes against the spirit of opening up the world economy and global integration. It amounts to ‘legalising’ the ‘monopoly’ of MNCs. India’s Stand on TRIPS: 1. Establishing a clear linkage between the TRIPS Agreement and the Convention on Bio-diversity (CBD) by incorporating specific disclosure norms for patent applications.rita Feonomle Development and Policy in ag n > Enhanced protection for geographical indications (Gls) and spirits, During the WTO TRIPS Council meeting, held on 15-16 Octobey ® India and South Africa jointly proposed “Waiver from fh , Provisions of the TRIPS Agreement for the Preve rn Containment and Treatment of COVID-19” for a limiteg time on witha view to ensure that the intellectual Property rights do ng? bea abarrier in the timely and affordable access to medical Products, ineludi, le vaccines (Economic Survey 2020-21, Vol. II). ling 10. TRIMs Developed countries achieved almost everything they wanted from the Agreement. In order to make the Agreement balanced from the of the developing countries, it was necessary to formulate inte: for controlling restrictive business practices of foreign inves! the TRIMs Agreement is totally silent on this vital question. When applied i. the developing countries, the provisions of the TRIMs Agreement had the effect of undermining any plan or strategy of self-reliant growth, based on the technology and other resources available locally. It also pro’ ved a drain on the foreign exchange reserves of the developing countries, adversely affecting their balance of payment position. The focus then shifted to the possibility of selecting some issues for finalisation as an ‘early harvest? in time for the Ninth Ministerial Conference of the WTO (MC9) to be held in December 2013. It began with an attempt to select issues of particular importance to least developed countries (LDCs) and the small vulnerable economies (SVEs). The developed countries and a few developing countries are making efforts to harvest ‘Trade facilitation’ for an early outcome, in time for MC(. India along with most of the developing countries wants issues of market access and rade facilitation to be balnced with developmental issues such as duty free quota, free market access for LCDs, and acceptance of the modalities for reducing cotton subsidies. The G33 group of countries, which is a coalition of 46 devloping countries, including India, has tabled a proposal on food security: The proposal is for an amendment to certain provisions of the WTO Agreement on Agriculture to allow devloping countries greater flexibility in their public Stockholding operations for food security purposes. 17.8 WTOIN ACTION World trade has grown at Present, more than two-tl other than Wing S Point of, View Tational rules tors, However de. At an average rate of 6 per cent over the past ee hirds of the 153 members of the WTO are de Variov Int Inc CQSl ty cont 17.15 nu gal wit " caving approximately 20 per cent share in world export. This has wt ins implications for the global economy. Since the past ei ight years, ae een in action and has proved to be more successful than its esot GATT. tits achievements of the WTO in its short-period of existence have pect aS follows: Tariff based protection has been implemented. wie 228 Greater market orientation has been achieved. There has been a decline in use of restrictive measures for balance of payment. 4, Trade of services trade has been brought into the multilateral system. 5, Many UDCs have gone in for reforms. Increased trade practices have improved their efficiency and led to economic growth. 6. The trade policy review mechanism has led to greater transparency and process of liberalisation. 7. Bilateralism has been placed under control by WTO provisions, TRIPs, TRIMs and by the unified dispute settlement mechanism. Various limitations of WTO are as follows: 1. There have been cases of reversals in the overall liberalisation process in some developing countries. 2. Trade reforms have not been completed in many countries and many Miss fa rial Conferna i with: "I i ine negotiations have been postponed. nies (yale 3. Inmultilateral system, not all WTO members are equally integrated. 4, Combination of globalisation and technological changes created a res are making cit premium on high-skill divisions. ime for Mii 5. Developing countries have experienced loss of autonomy in policy ake making. These countries are not able to use their legitimate policy ch asd instruments to pursue their own development goals. : abies 6. WTO has overloaded agreements with a built-in agenda and harsh terms - wait” for developing countries to adhere and adjust to. It is argued that the sich 18# ia A WTO agenda is shaped, paced and driven by the US, EU and other apost aa developed countries which have negotiating capabilities and 5; ie ot? economic strength. ges Integrated Approach India’s advantages of talent, established track record, and a geographical location | that provides a 24 hour working day to American professionals and i if communication infrastructure of data connectivity and security should be fEconomie Development and Poticy jn India V.16 fy consciously leveraged to achieve its full potential. We need to work through WTO to assure access to overseas outsourcing. We also need to build a much larger Information Technology work force through a Human Resource Dev elopment Plan, and improve urban infrastructure Ss Public-private partnerships. In future, WTO’s agenda will be dominated by talks o oe labouy standards, environment, services and agriculture. India will haye to face the challenge posed by the developed countries and formulate its stray in consultation with other developing countries. India’s stand ts unequivocal. the protection of poor, subsistence farmers of developing countries and vulnerable industry is a priority. An integrated approach should include; 1. Measures to strengthen competitive edge of the domestic industry, trade and agriculture by providing suitable infrastructural Support and incentives; 2. Measures to free the domestic industry, trade and agriculture from cobwebs of state-control before exposing it to international competition; and 3. Policies of liberalisation and globalisation so that domestic industry is able to compete with international competitors on a level Playing field. There is an urgent need to meet the deadlines of the trade negotiations under the WTO which would contribute to greater expansion of world trade and sustained global economic growth, The broad elements of India’s Proposal in WTO reforms include: (i) Preserving the core values of the Multilateral Trading System; (ii) Resolving the impasse in the Dispute Settlement S stem; (iii) Safeguarding development concerns; and (iv) Transparency and Notifications (Economic Survey 2020-21, Vol. ID. —_ ee > Background i: i i oe Signed GATT. India Was one of the founder members of re » 1*° Countries were memb z wit effect fiom January ise ers of GATT. GATT was converted into WIO > Structure of WTO Structure of WTO can be classified into: 1. The Ministerial Conference (Mc) he po ist i D 4, 7 p Func The main 1. | ] 2.