What is Marrakesh Agreement?

The Marrakesh Agreement, also known as the Marrakesh Treaty, is an international treaty that promotes access
to published works for people with print disabilities. It was adopted in Marrakesh, Morocco, in 2013. The treaty
allows for the creation and distribution of accessible format copies of copyrighted works without the need for
permission from copyright holders. This helps to increase access to books and other materials for individuals
who are blind, visually impaired, or have other print disabilities. The Marrakesh Agreement aims to reduce the
"book famine" experienced by these individuals by facilitating the exchange of accessible format copies across
borders.

Historical Background of Marrakesh Agreement

The General Agreement on Tariffs and Trade (GATT 1947) was a pact signed in 1947 in Geneva by 23 countries.
To gradually phase out imports subject to the import quota and lower taxes on trade in goods, it entered into
operation on January 1st, 1948.

GATT 1947 held eight rounds of multilateral trade negotiations, the last of which was the Uruguay Round (1986–
1994) that resulted in the Marrakesh Agreement, which led to the establishment of the World Trade
Organization.

On April 15, 1994, in Marrakesh, Morocco, at the end of the Uruguay Round of Multilateral Trade Negotiations,
the World Trade Organization Agreement, sometimes known as the “Marrakesh Agreement,” was signed.

The World Trade Organization’s purview, responsibilities, and organizational design are outlined in this
Agreement (WTO). The agreements reached during the Uruguay Round of GATT and those previously negotiated
under the General Agreement on Tariffs and Trade (GATT) were included as essential components of the
Marrakesh Agreement and are found in its Annexes.

These pacts are currently regarded as WTO pacts. The Marrakesh Agreement, which was signed, is binding on all
WTO members, including new members who have joined the organization after that. On January 1st, 1995, this
Agreement came into effect. It has no time limit.

Need for the Marrakesh Agreement

The nations that signed the Marrakesh Agreement intended to identify a comprehensive multilateral trading
system that would incorporate the General Agreement on Tariffs and Trade (GATT) and the outcomes of all
previous trade rounds, including the Uruguay Round, that had been held since the GATT was established in 1947.
The need for the Marrakesh Agreement is given below.

o GATT 1947 was not a binding treaty, so the provisions of GATT applied to the extent they were by the
country’s law.
o As the participation of world countries increased, a need for institutional organization was felt for GATT
to perform better.

Therefore, the Marrakesh Agreement was signed in Uruguay Rounds, and an institutional organization called
WTO was established.

Major Provisions Related to Marrakesh Agreement

o Definition of Beneficiaries: The treaty defines beneficiaries as individuals who are blind, visually
impaired, or have other print disabilities that prevent them from accessing standard printed
materials.
 o Authorized Entities: The Marrakesh Agreement allows authorized entities, such as libraries and
organizations serving people with disabilities, to create accessible format copies of copyrighted
works without seeking permission from copyright holders.
o Cross-Border Exchange: One of the central provisions of the treaty is the facilitation of cross-
border exchange of accessible format copies.
o Limitations and Exceptions: The treaty sets limitations and exceptions to copyright laws to allow
for the creation and distribution of accessible format copies.
o Commercial Availability: The Marrakesh Agreement includes safeguards to ensure that accessible
format copies are made available primarily to individuals with print disabilities and are not used for
commercial purposes.
o Notification System: It establishes a notification system that allows countries to share information
about which works are available in accessible formats and which authorized entities are providing
these formats.
o Respect for Copyright: While the treaty facilitates greater access, it reaffirms the importance of
respecting copyright laws and the rights of copyright holders.
o Technical Measures: The agreement recognizes the importance of technical measures, such as
digital rights management (DRM), to ensure that accessible format copies are only used by
individuals with print disabilities and not shared unlawfully.
o Duration and Review: The treaty allows for periodic reviews to assess its effectiveness and make
necessary adjustments.

Discussion of the articles of the Marrakesh Agreement

The opening section of the agreement, which may be fulfilling the goals of a typical preamble, can be used to
understand the main goals of the Marrakesh Agreement. Parties to the Agreement, it states.

o Acknowledged that the purpose of their trade and economic relations should be to raise living
standards, ensure full employment, a sizable and steadily increasing volume of real income and
effective demand, and expand the production of and trade in goods and services, all while
allowing for the most effective use of the world’s resources by the goal of sustainable
development.
o Being eager to participate in accords that would benefit both parties, decrease trade barriers like
tariffs and other trade barriers, and end discrimination in global commerce to contribute to the
desired aims. They were determined to uphold the fundamental values and advance the goals that
underlie this multilateral trade system.
o Committed to creating an integrated, economically viable, and long-lasting global trading system
that combines the GATT of 1947, earlier trade liberalization initiatives, and all Uruguay Round
Multilateral Trade Negotiations results.
o Also, recognized the need for proactive measures to help develop the least-developed and
emerging countries so that even they may get a piece of the global market to support their
domestic economy.

Marrakesh Declaration – GATT to WTO

o The Marrakesh Agreement concluded the Uruguay Round of global trade negotiations. It governs the
activities of the World Trade Organization (WTO). It consists of four annex documents that are
considered the foundation of the WTO.
o Annex 1A, known as GATT 1994, includes the General Agreement on Tariffs and Trade regulating goods
trade.
o Annex 1B contains the General Agreement on Trade in Services (GATS). Annex 1C includes the General
Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).
o Annex 2, the Dispute Settlement Understanding (DSU), outlines the procedures for resolving disputes
between WTO members.
 o Annex 3 enables routine multilateral evaluations of the trade policies of WTO members. These three
annexes, often called covered agreements, contain various agreements.
o Annex 4 includes two multilateral agreements: the Agreement on Trade in Civil Aircraft and Government
Procurement.
o Unlike the previous three annexes, these plurilateral agreements only have legal effects in the WTO
member nations that have accepted them.

Article I – World Trade Organization Establishment

In this article, the World Trade Organization is established.

Article II – Scope

The World Trade Organization (WTO) was founded to offer institutional frameworks for managing trade
relations.

Article III – Functions

The Marrakesh Agreement and Multilateral Trade Agreements must always be implemented, administered, and
operated by WTO guidelines to fulfil its goals. Plurilateral Trade Agreements must also be implemented,
administered, and operated within the framework of the WTO.

Article IV – Structure

The Ministerial Conference unites all of the WTO’s members and is the organization’s highest decision-making
body. It convenes every two years and has the power to decide on matters about any multilateral trade
agreement. The General Council oversees the WTO’s ongoing operations and other short-term issues because
the Conference only meets twice yearly.

Three bodies directly support the General Council.

o The Council for Trade in Goods (Goods Council) handles trade agreements covered by Annexe 1A.
o The General Agreement on Trade in Services (GATS), included in Annexe 1B, is dealt with by the Council
for Trade in Services (Services Council).
o The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), included in
Annexe 1C, is handled by the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS
Council).

Article V – Relations with Other Organizations

The General Council was entrusted with developing the necessary frameworks for efficient collaboration with
other intergovernmental organizations that adhere to WTO-like standards. The General Council was granted the
power to create the best communication channels and collaboration with non-governmental organizations
tackling WTO issues.

Article VI – The Secretariat

By the Marrakesh Agreement, its duties are “exclusively international in character,” which means they only answer
to and are held responsible for by the WTO as a whole and not any particular government or member.

Article VII – Budget and Contributions

The Committee on Budget, Finance, and Administration, which takes the ultimate decision, receives suggestions
from the General Council after the General Council examines it. The General Council adopts the budget with a
two-thirds majority, and members are expected to contribute their fair portion of the costs by the General
Council’s financial guidelines.

Article VIII – Status of the WTO

This article shall be the same as those stipulated in the Convention on the Privileges and Immunities of
Specialized Agencies, which the UN General Assembly approved on November 21, 1947.

Article IX: Decision-Making

The decisions are all reached by agreement. If there is no agreement, most of the votes will decide the matter.
This process is used by both the General Council and the Ministerial Conference. Each WTO participant has one
vote.

Article X – Amendments

This page discusses the processes and methods by which the Marrakesh Agreement and the other annexure
agreements may be amended.

Article XI – Original Membership

All those who would be the WTO’s founding members are discussed on this page. The founding members were
deemed to be the GATT 1947 contracting parties, the European Communities that ratified the Marrakesh
Agreement, and all subsequent agreements.

Article XII – Accession

This article discusses the Marrakesh Agreement and the WTO’s recent addition of new members. Any State or
distinct customs territory with complete autonomy over its international trade relations and other areas covered
by this Agreement and the Multilateral Trade Agreements may join this Agreement under conditions mutually
agreed upon by it and the WTO.

Article XIII – Non-Application of Multilateral Trade Agreements between

Particular Members

Although the Marrakesh Agreement and other Multilateral Agreements apply to all of the original members, it is
crucial to remember that if the member does not consent to it before the accession occurs. The fact is
communicated to the Ministerial Conference. They do not apply to the member.

Article XIV – Acceptance, Entry into Force, and Deposit

The official steps that must be followed to join the Marrakesh Agreement and its subsidiary agreements are
discussed in this article.

Article XV – Withdrawal

The Marrakesh Agreement and other Multilateral Trade Agreements are revocable by any member. After six
months after the notice of withdrawal was delivered to the Director-General of the WTO, the withdrawal
becomes effective.
Who got benefited from Marrakesh Agreement?
The Marrakesh agreement eliminates the obstacles erected by copyright legislation that prevent books and other
published works from being copied without the owner’s consent.

For libraries and other institutions to exchange accessible format copies with other nations that have joined the
Marrakesh Agreement, it is necessary for countries that have approved the agreement to alter their national
copyright laws to permit this.

The Marrakesh Agreement is crucial, especially for those of us who live in underdeveloped nations where social
rights, including education, are not protected.

Implications of Marrakesh Agreement

The Marrakesh Agreement established the world's first international trade organization. It promotes a more
structured approach to global trade. It increases inclusivity among countries in the era of globalization. The
creation of the World Trade Organization (WTO) resulted in a significant expansion of international trade. That
fosters the individual growth of both member and non-member nations.

The WTO advocates for free trade, which has facilitated the growth of multinational corporations and increased
access to inexpensive goods worldwide. However, critics argue that this approach has adversely affected the
economies of third-world countries, as they lack trade protection measures.

The "most favoured nation" principle, a key principle of the WTO, promotes non-discriminatory trade among
countries. While this principle has had some benefits. It often prevents developing countries from supporting
their own industries, hindering their development. Additionally, the WTO has been criticized for not adequately
addressing environmental concerns. It raises significant concerns about sustainability and ecological impacts.

Marrakesh Agreement & Uruguay Round

o Uruguay Round ultimately resulted in the greatest change in the trading system since GATT was
established at the end of World War II.
o The Uruguay Round did, however, provide some early benefits despite its rocky development.
Participants agreed in under two years on a package of reductions in import duties on tropical products,
mostly exported by developing nations.
o They had also altered the procedures for resolving conflicts, and some changes had already been
implemented. Additionally, they demanded periodical reporting on the trade policy of GATT members,
which was seen as a crucial step toward increasing trade regime transparency globally.
o Despite the fact that the Uruguay Round began in 1986, the agreement wasn’t finalized until a tentative
agreement was reached in December 1993 and was formally signed in Marrakesh, Morocco, in April
1994.
o The disagreement between the United States and the European Union over agricultural subsidies had
been a significant roadblock that had delayed the Round’s conclusion.
o Another challenge was the number of goods and trade concerns discussed during the Uruguay Round
discussions.

The main features of the Uruguay Round Final Settlement

o A deal on agriculture that would open up more markets cut export subsidies and tariffs, and
remove non-tariff barriers.
o A textiles agreement that places a strong emphasis on the gradual lifting of quota limitations.
 o Agreements to lowermost industrial product import tariffs by a third over the following five years;
tariffs on other items, such as pulp and paper, will be removed in key developed nation markets
over the following eight to ten years.
o An agreement to increase the percentage of import tariffs on industrial goods that are bound, with
developed countries (including transition economies) agreeing to bind nearly all tariffs and
developing countries agreeing to bind 65% of tariffs; one of the markets for developed countries
markets that will see the largest increases in tariff bindings will be for forest products.
o Agreements on trade norms for services, guaranteed market access, intellectual property rights,
and trade-related investment measures.
o Better trade regulations governing subsidies, countervailing duties, anti-dumping measures, and
safeguards.
o The emergence of the World Trade Organization (WTO), which will be in charge of overseeing all
agreements from the Uruguay Round, running the GATT Trade Policy Review Mechanism, and
serving as a permanent forum for discussion of new trade issues like trade impacts on the
environment, global competition policy, and trade in telecommunications.

What is the Uruguay Round Agreement?

The Uruguay Round Agreement on Agriculture (URAA) was a major step toward reforming the agricultural
trading system. It set new standards for export competition and market access and enforced restrictions on
domestic measures that distort trade.

How has the GATT evolved to be the WTO?

The World Trade Organization was established after the General Agreement on Tariffs and Trade (GATT) was
improved through eight rounds of talks (WTO). The GATT was superseded on 1 January 1995 by the World Trade
Organization (WTO).

The focus of the General Agreement on Tariffs and Commerce (GATT) was trade-in products. It sought to
liberalize commerce between its member nations by abolishing restrictions and lowering tariffs.

Conclusion
The Uruguay Round of the GATT, which began in 1986 and resulted in the creation of the World Trade
Organization (WTO), was completed in 1994 with the Marrakesh Agreement, which was tasked with closing the
gap between developed and developing countries. The World Trade Organization (WTO) is one of the most
significant international organizations in existence today and is in charge of governing trade between about 164
members and 25 Observers governments

Dispute Settlement Mechanism

under WTO
Introduction
The World Trade Organization (WTO) is responsible for maintaining the free flow of trade
between its member countries. WTO, in the form of Dispute Settlement Undertaking
(DSU), provides an instrument for the settling of trade disputes between the parties. The
dispute generally arises when any member country violates any provision of WTO
agreement which other member countries think unreasonable.

This dispute settlement process is the outcome of the Uruguay round (1996-1994). This
mechanism provides a speedy resolution of a trade dispute. This settlement system
applies to all disputes covered under the WTO agreement. The Dispute Settlement Body
(DSB) is responsible for DSU to resolve a dispute between parties.

Stages in settlement of trade disputes

Stage 1: Consultations (Article 4 of the DSU)

Before referring any dispute to mediation or taking any other actions, both the WTO
member countries shall affirm to resolve their disputes through consultation. If a WTO
member requests for consultation with another Member concerning measures affecting
the operations of the former member, the latter member must accept such request within
a period 10 days after the date of receipt of such request and shall enter into consultation
within 30 days.

If the consultation fails to provide a satisfactory solution to the problem within 60 days
after the date of receipt of the request for consultation, then the complaining party may
request for construction of the panel. All such requests for consultation and construction
shall be notified in writing including reasons for such requests to the Dispute Settlement
Body by the complaining member.

Stage 2: Establishment of Panels (Articles 6, 8 and 11 of the

DSU)
If no satisfactory solution is reached through consultation between the member countries,
the complaining member may request for the establishment of panels in writing to the
Dispute Settlement Body including a summary of the case and issues involved. The panel
is established at the second meeting of DSB at which request appears as an agenda item
of the meeting.

The function of the Panel is to aid the Dispute Settlement Body in resolving the matter in
dispute. The panel assesses the entire dispute, including the facts of the case and issues
involved therein and examines whether it conforms with the covered agreement between
the member countries. The Panel shall provide its final report to the parties within 6
months from the date when panel procedures start.

Stage 3: Selection of panellists (Article 8 of the DSU)

After the establishment of the panel, the next step is to select panellists. The panellists
are selected by the WTO Secretariat. The parties cannot oppose the selection unless they
state reasons satisfactory to the Secretariat. The panel shall consist of three panellists.
The parties can agree to have five panellists on board if they consider necessary within
10 days from the establishment of the panel.

The WTO Secretariat assists the parties in the selection of panellists by creating a list of
all governmental and non-governmental individuals having certain qualifications from
which panellists may be chosen by the parties.

Members may, at any reasonable time, make an addition to the list of individuals by
suggesting the name of individuals who can assist the parties by providing any
information related to international trade law or any of the matter as covered in the
agreement because of which dispute arose in the first place. The addition to the list can
be made only after the approval of the Dispute Settlement Body.

If panellists are not selected within 20 days after the date of establishment of the panel,
the Director-General, in consultation with the Chairman of Dispute Settlement Body and
Chairman of relevant Council or Committee appoint panellists which they consider
appropriate. The chairman of the Dispute Settlement Body, then informs the members of
the composition of the panel within 10 days.

Stage 4: Procedure of Panel (Articles 10 and 12 of the DSU)

The panellists shall, within one week after the composition of the panel fix a timetable for
the panel process. After this, the panel decides a deadline for written submission to be
made by each party. Each party has to submit its submissions with the secretariat which
shall transfer each submission to the panel and submission made by one party shall be
sent to the other party as well. At the first substantive meeting of the panel, the
complaining party shall be the first to present their case ahead of the responding party.

The third parties who have notified the Dispute Settlement Body having substantial
interest in the subject matter of the dispute are also asked to present their views during
the same meeting. Any rebuttals between the parties shall be made at the subsequent
meeting of the panel. Here, the responding party shall be the first to respond against the
complaining party. The parties, before that meeting, have to submit their written
rebuttals to the panel. The panel, if they consider necessary, put any questions before
the parties to be answered in the duration of that meeting.

Where after the examination, a solution has been reached between the parties, the panel
shall submit a written report to the Dispute Settlement Body which shall have a brief
description of the case along with the solution which has been reached. Where the
solution has not been found, the panel shall send a written report to the Dispute
Settlement Body mentioning its findings of the case and recommendations, if any, it
makes.

The report has to be sent within six months of its examination. In case of urgency,
including the case of perishable goods, the report has to be sent within three months.
The maximum period during which the report has to send is nine months from the
establishment of the panel.

Stage 5: Interim report (Article 15 of the DSU)

Following the oral arguments and rebuttal that has been performed and examination has
been made, the panel shall issue a draft report to the parties. The parties have to submit
their comments in writing after receiving the draft report within the period set by the
panel.

After the expiration of the said period for receiving the comments from the parties, the
panel shall issue an interim report, including its findings in the draft report and its new
findings and conclusion. Both the parties, within the time given the panel may submit its
written request to revise its interim report accordingly.

At the request made by the parties, the panel shall call for a further meeting to discuss
the comments made by the parties to the dispute. If both the parties are satisfied with
the solution reached, then such a revised interim report shall be the final panel report
and is circulated among the members.

In case, the parties are not satisfied with the outcome of the report reached then any
objections of the members shall be considered at the meeting of the Dispute Settlement
Body. Such objections have to be reported at least 10 days before the meeting of the
Dispute Settlement Body.

The final report shall be adopted by the Dispute Settlement Body within 60 days from the
date panel report is circulated to the members unless any party to the dispute is
unsatisfied with such report and notifies its decision of appeal to Dispute Settlement Body
or the Dispute Settlement Body unanimously decides not to adopt such report, as the
case may be. In case of an appeal, the report shall deem to be invalid for adoption by the
Dispute Settlement Body unless the Standing Appellate Body provides its Appellate Body
Report.

Stage 6: Appeal (Article 17 of the DSU)

Either of the parties unsatisfied with the ruling of the panel report can appeal to the
Standing Appellate Body established by the Dispute Settlement Body. Only parties to the
dispute can appeal to a panel report and not the third parties. Third parties can be
allowed to be heard only in case such third party has notified in writing to the Dispute
Settlement Body of its substantial interest in such dispute.

The proceeding of the Appellate Body shall not exceed 60 days from the date a party to
the dispute notifies its intention of appealing to the Appellate Body to the Dispute
Settlement Body. In case of delay, the maximum period granted to the Appellate Body is
90 days. The Appellate Body has to submit in writing to the Dispute Settlement Body its
reasons for the delay together with the period within which the final decision is notified.

The Appellate Body has the power to uphold, modify or reverse the panel report and
provide a conclusive report.

Stage 7: Acceptance of report by Dispute Settlement Body

(Article 30 of the DSU)
The Dispute Settlement Body has to either accept the Appellate Body report or reject it
within a maximum period of 30 days after receiving such a report. The report can only be
rejected unanimously.

Time framework for Dispute Settlement

STAGE PERIOD

Consultation 60 days

Establishment of panel and selection of Panellists 45 days

Panel report to parties 6 months

Final panel report to WTO members 3 weeks

Dispute settlement body adopts report (without appeal 60 days

Total time (without appeal) 1 year

Appellate body report (if an appeal is made) 60-90 days

Dispute settlement body adopts appellate body report 30 days

Total time (with the appeal) 1 year 3 months

The Director-General
 The Director-General of WTO in his official capacity assists both the parties in
settling their disputes by providing his good offices, conciliation, and mediation.
(Article 5.6 of the DSU)
 In a dispute settlement case involving a least-developed country where a
settlement of the dispute through consultation is a failure, such least-developed
member nation may request the Director-general to provide his good offices,
conciliation, and mediation before requesting for establishment of the panel. The
Director-General, when considered satisfactory, will provide his good offices,
conciliation, and mediation to settle the dispute between the parties. (Article
24.2 of the DSU)
 When there are no panellists appointed by either of the parties to dispute, the
Director-General, at the request of either party, in consultation with the
Chairman of Dispute Settlement Body and Chairman of the relevant Council or
Committee, appoints panellists as he considers appropriate. (Article 8.7 of the
DSU)
WTO Secretariat (Article 27 of the DSU)
The Secretariat has the responsibility to select panellists for the panel. It must provide a
panel with all the support they need.

The Secretariat also help member countries in dispute by offering legal assistance by
making an available qualified legal expert from the WTO to the members.

The Secretariat also conducts special training courses for members interested in the
dispute settlement mechanism.

Panel
The panel established in the second meeting of Dispute Settlement Body, are bodies
responsible for adjudicating disputes between the parties.

Composition of the panel:

The panel generally consists of three panellists but can be a maximum of five, if the
parties consider it necessary. (Article 8.5 of the DSU)

The Panel shall consist of well-qualified governmental and non-governmental individuals,

including the persons who have served a panel or presented a case to a panel. The
panellists shall be from amongst the persons who have served as a representative of a
member or a contracting party to GATT, 1947 or as a representative to the Council or
Committee of any covered agreement or its predecessor agreement, or in the Secretariat,
taught or published on international trade law or policy, or served as a senior trade policy
official of a member.

The parties at dispute can select any individual having the above-mentioned qualifications
from the list created by the Secretariat to the panel to resolve their dispute. (Article 8.1
of the DSU)

Dispute Settlement Body (DSB)

Dispute settlement Body is a body established for resolving the disputes between the
conflicting parties by overseeing the entire dispute settlement mechanism. The General
Council of WTO, which carry out the functions of the Ministerial Conference, renders its
obligations under the Dispute Settlement Understanding through Dispute Settlement
Body. (Article 4.3 of the WTO agreement)

Composition (Article 4.3 of the WTO agreement)

The Dispute Settlement Body consists of a Chairman and representatives of all WTO
members (usually government representatives). [1] The Chairman is usually a leader of
the permanent mission of one of the member countries of WTO. The Chairman is elected
with the consent of all WTO members. [2]
Functions 9 (Article 2 of the DSU)
 The main function of the Dispute Settlement Body is to administer the rules and
procedures which are provided in the Dispute Settlement Understanding.
 It has the authority to establish a panel for adjudication of the dispute between
the parties in the meeting of Dispute Settlement Body unless it is decided in that
meeting not to establish a panel.
 It has to adopt the panel or Appellate Body reports to make these reports
binding on both the parties to the dispute.
 The parties must comply with the rulings and recommendations of the Dispute
Settlement Body. The Dispute Settlement Body will scrutinize the application of
adopted recommendations and rulings by the parties. If the parties do not
comply with these recommendations and ruling within a prescribed period then
measures in the form of compensation and termination of concessions will be
adopted by the Dispute Settlement Body. (Article 21.6 and 22.1 of the DSU)

Time-frame for the decision of Dispute Settlement Body

(Article 20 of the DSU)

 Where no appeal is preferred by the parties

The Dispute Settlement Body has to render its decision within nine months (i.e., the
period starting from the date of establishment of panel till the adoption of the panel or
appellate body report by the Dispute Settlement Body). If there is a delay on the part of
the panel or Appellate Body in providing its report, then additional period granted will be
added to nine months.

 Where an appeal is preferred by the parties

Where the panel report or the Appellate body report is appealed by the parties, then the
Dispute Settlement Body has to give its decision within 12 months and if there is any
delay in providing the reports, then such an additional period granted will be added to 12
months.

Standing Appellate Body (Article 17 of the DSU)

The Dispute Settlement Body shall be responsible for the establishment of the Appellate
Body. Where the parties are not satisfied with the decision of the panel report, then
either of the parties may appeal to the Appellate Body who shall prove his award in the
form of Appellate Body report which shall ultimately be adopted by the Dispute
Settlement Body.

The Appellate body consists of seven persons. But only three of them shall serve in one
case. These three people shall be selected based on rotation. The appointed person shall
be in service for four years and can be re-appointed once. Therefore, a member can
serve for a maximum of eight years. The persons comprising the Appellate body shall be
persons of a recognized authority having expertise in the field of law, international trade
and subject matter of the agreement in dispute. The person shall not be part of any
governmental service. They shall be made themselves available till the end of the
dispute.

Arbitration (Article 25 of the DSU)

The parties to a dispute can refer a dispute to arbitration as an alternative means for the
settlement of their dispute. Referring a dispute to arbitration shall be made with the
mutual consent of both the parties. Third parties can be a party to a dispute only after
the mutual consent of the parties in arbitration. The arbitral awards are binding on both
the parties and are not appealable. The arbitral award shall be notified to the Dispute
Settlement Body and the Council or Committee.

SAFTA, which stands for the South Asian Free Trade Area, is a free trade arrangement of the SAARC. It is an
agreement among countries in South Asia to make it easier for them to trade with each other. It was formed in
2004 to help countries work together and increase trade. Afghanistan, Bangladesh, Bhutan, India, Maldives,
Nepal, Pakistan, and Sri Lanka are SAFTA members. They follow certain rules to treat goods fairly, remove trade
barriers, and cooperate with each other. The main goals of SAFTA are to boost trade, help SAFTA countries work
together, and reduce poverty.

SAFTA covers trade in goods, services, and investment. It has a special document called SAFTA Certificate that
gives benefits to traders. SAPTA is a predecessor of SAFTA. SAFTA has broader coverage and an elaborate
dispute settlement mechanism.

What is SAFTA?
SAFTA stands for South Asian Free Trade Area. It is an agreement among the member countries of the SAARC. It
promotes and enhances economic cooperation in the South Asian region. SAFTA aims to create a free trade area
by gradually reducing and eliminating tariffs. It also aims to cut down other trade barriers among its member
countries.

Historical Background of SAFTA

The idea of establishing a free trade area in South Asia was first proposed in the early 1990s.

o The South Asian Preferential Trade Agreement (SAPTA) was signed in 1993. It aimed to promote trade
liberalization among the SAARC member countries.
o SAPTA did not achieve significant progress in bringing down the trade barriers. Hence, SAFTA was
launched as an enhanced version of SAPTA in 2004.
o The SAFTA agreement aimed to establish a more effective free trade area in the region.

Principles of SAFTA
SAFTA is based on the following principles:

o SAFTA aims to eliminate discriminatory treatment among member countries. It provides them with equal
opportunities in trade.
o SAFTA recognizes the differing levels of development among member countries.
o It provides special and differential treatment to the less-developed countries. This facilitates their
integration into the regional economy.
 o SAFTA promotes reciprocal trade concessions among member countries to ensure mutual benefits.
o SAFTA aims to reduce and cut down tariffs on goods traded among member countries.
o SAFTA encourages transparency in trade policies and practices. It promotes fair competition among
member countries.

Objectives of SAFTA
The main objectives of SAFTA are as follows:

o To promote trade liberalization in the South Asian region.

o To provide a framework for the elimination of tariffs and non-tariff barriers to trade among member
countries.
o To promote economic cooperation and integration among member countries.
o To create an environment for investment opportunities in the South Asian region.
o To enhance the competitiveness of industries in the region through cooperation in the following areas:
o Technology transfer,
o Research and development, and
o Capacity building.

SAFTA Certificate
SAFTA Certificate is a document issued by the designated authorities of member countries. It certifies that a
product qualifies for preferential treatment under SAFTA. It enables exporters to avail reduced or zero tariffs on
eligible products. This is applicable while importing or exporting within SAFTA member countries.

The SAFTA Certificate includes the following details:

o Name and address of the exporter and importer,

o Description of the product, and
o Applicable rules of origin.

Member Countries & Observers of SAFTA with their roles

SAFTA consists of the following member countries and observers:

Member Countries of SAFTA

Member Countries Year of Joining SAFTA Role
Afghanistan 2007 Trade and economic cooperation
Bangladesh 2006 Trade of textiles and garments
Bhutan 2006 Trade of agricultural products and hydroelectric power
India 2006 Trade of various goods and services, investment
Maldives 2011 Trade of fish and tourism services
Nepal 2004 Trade of agricultural products and hydropower
Pakistan 2006 Trade of textiles, pharmaceuticals, and other goods
Sri Lanka 2006 Trade of tea, textiles, and tourism services
Observer Countries of SAFTA
Observers
Myanmar
Iran
China
European Union
Principal Organs of SAFTA
SAFTA has some important groups that make decisions:

Council of Ministers

o The Council of Ministers is the highest group in SAFTA. The trade ministers from each country meet and
talk about what they should do.
o It provides policy guidance and direction to promote regional economic integration.

Committee of Experts

o The Committee of Experts has senior officials from each country who know a lot about trade.
o They are responsible for overseeing the implementation of SAFTA and resolving trade-related issues.

Secretariat

o The SAFTA Secretariat is located in Kathmandu, Nepal.

o It provides administrative and technical support to SAFTA. It facilitates coordination among member
countries.

Special Groups

o SAFTA establishes special committees on specific sectors or issues. This is to enhance cooperation and
address challenges in those areas.
o These groups talk about customs, trade facilitation, agriculture, services, and investments.

Specialized Bodies of SAFTA

SAFTA has established the following specialized bodies to promote cooperation in specific areas:

Committee on Economic Cooperation

This committee helps countries work together and share ideas for making the economy stronger. They discuss
matters related to promoting investment, technology transfer, and capacity building.

Committee on Trade in Services

This committee wants to make it easier to trade services like tourism, banking, and healthcare. They want people
from different countries to be able to work in each other's countries.

Committee on Agriculture

This committee helps countries trade things like food and plants. It focuses on issues related to agricultural
trade, market access, and agricultural development.

Committee on Customs Cooperation

This committee works towards enhancing customs cooperation. It simplifies customs procedures among member
countries to facilitate trade. The committee makes sure that things can move quickly through borders.
Committee on Trade Facilitation

This committee aims to reduce trade barriers. It improves trade facilitation measures to increase the efficiency of
cross-border trade. It makes sure that businesses can trade without any problems.

Committee on Rules of Origin

This committee helps decide where products come from and if they can be traded without too much tax. They
want to make sure that products from member countries get preferential treatment.

SAFTA Vs. SAPTA

The below table gives a comparison of SAFTA and SAPTA on a range of factors:

Comparison of SAFTA and SAPTA

Factor of SAFTA SAPTA
Comparison
Full Form The full form of SAFTA is South Asian SAPTA stands for South Asian
Free Trade Area Preferential Trade Arrangement
Year of 2004 1993
Establishment
Coverage Trade in goods, services, investment, and so Trade in goods.
on.
Trade o Aims to simplify customs Less emphasis on trade facilitation
Facilitation procedures and regulations. measures.
o Promotes trade facilitation measures.

Tariff Reduction Progressive reduction of tariffs on a wide Reduction of tariffs on limited

range of products. products.
Rules of Origin Has detailed rules of origin for determining Has relatively fewer specific rules
the source of products. of origin.
Dispute Has a more elaborate dispute settlement Had a less formal dispute
Settlement mechanism to resolve trade disputes. settlement mechanism.
Objectives Increase regional trade, Enhance trade among member
countries.
foster economic cooperation,

reduce poverty and inequality.

Areas of Investment, services trade, agriculture, Primarily focused on reducing
Cooperation infrastructure development, etc. tariffs on goods.
Membership Afghanistan, Bangladesh, Bhutan, India, Initially, only seven SAARC
Maldives, Nepal, Pakistan, Sri Lanka member countries.
Trade Efforts to address trade imbalances among Less focus on addressing trade
Imbalances member countries. imbalances.

Areas of Cooperation of SAFTA

SAFTA promotes cooperation among member countries in various areas. Some of the key areas of cooperation
include:
Trade in Goods

o SAFTA aims to promote trade in goods among member countries.

o It encourages the expansion of intra-regional trade in the following sectors:
o Textiles,
o Agriculture,
o Pharmaceuticals, and
o Automobiles.

Trade in Services

o SAFTA encourages the liberalization of trade in services. This includes sectors such as tourism, banking,
healthcare, and IT.
o Service providers from member countries can operate in each other's markets. This boosts cross-border
service trade.

Investment

o SAFTA encourages people to invest their money in different countries. It aims to attract foreign direct
investment (FDI).
o It also wants to protect investors and make it easier for them to invest.

Customs Cooperation

o SAFTA wants to make it easy for things to move between countries. It wants to make sure that things can
move quickly and without any problems.
o Member countries work together to simplify customs procedures. They work on enhancing border
infrastructure to facilitate trade and reduce delays.

Trade Facilitation

o SAFTA strives to improve trade facilitation measures. The measures include:

o simplifying trade documentation,
o enhancing transparency, and
o promoting the use of digital platforms for trade-related processes.
o This reduces the time and cost associated with cross-border trade. It benefits businesses and promotes
economic growth.

Agriculture

o SAFTA recognizes the significance of the agriculture sector in the region.

o Member countries collaborate to promote agricultural trade, share best practices, and enhance
productivity.
o It wants countries to share ideas and work together to make farming better.

Economic Cooperation

o SAFTA wants countries to work together and share ideas to make the economy stronger.
o It wants countries to trade more, make things together, and use new technology. This helps create jobs
and make the countries richer.

What is Doha Development Agenda?

In the realm of international trade negotiations, the Doha Round stands as a significant milestone. The Doha
Round was launched in 2001. This round of talks aimed to address the concerns of developing nations. It aimed
to foster fairer global trade practices. It mainly focused on reducing trade barriers and promoting economic
development. The Doha Round thus sought to create a level playing field for all nations involved.

The Doha Development Agenda is a set of international trade negotiations and discussions. It is aimed at helping
developing countries improve their economies by reducing trade barriers. It was launched by the World Trade
Organization (WTO) in 2001. It addresses issues related to agriculture, intellectual property, and services. It
fosters global economic growth and development through more balanced trade policies.

Overview of the Doha Development Agenda

The Doha Development Agenda (DDA) is the latest round of trade negotiations under the World Trade
Organization (WTO). It was launched in November 2001 with the aim of lowering trade barriers around the
world. It also focused on boosting economic growth for developing countries.

o The DDA covers a wide range of issues, including:

o agriculture,
o services,
o intellectual property,
o trade facilitation, and development.
o It is the most ambitious round of WTO negotiations ever undertaken. Disagreements between developed
and developing countries have plagued it.
o As of 2023, the DDA has not been formally completed. However, some progress has been made on many
issues, including trade facilitation.
o The Trade Facilitation Agreement was signed in 2013. It is the first multilateral agreement to be
concluded under the DDA.
o It is unclear whether the DDA will ever be completed. The negotiations have been difficult. There is no
consensus on how to resolve the remaining issues. However, the DDA remains an important goal for the
WTO and its members.

WTO Rounds of Trade Negotiations

The WTO has held 9 rounds of trade negotiations since it was founded in 1995. The first 8 rounds were held
under the General Agreement on Tariffs and Trade (GATT). GATT was the predecessor to the WTO. The 9th round
is called the Doha Development Agenda (DDA), and it is still ongoing.

Round Year
Geneva Round 1947
Annecy Round 1949
Torquay Round 1950-51
Geneva Round 1956
Dillon Round 1960-61
Kennedy Round 1964-67
Tokyo Round 1973-79
Uruguay Round 1986-94
Doha Development Agenda 2001-present
Objectives of Doha Round
Agriculture
 o To proclaim reaffirms the commitment to establishing a fair and market-oriented trade system through a
comprehensive reform agenda.
o To eliminate or reduce barriers and distortions in global agriculture markets.

Services

o To engage in particular issue talks and to engage in subsequent rounds of negotiations to gradually
liberalise trade in services.
o To acknowledge previous work, reinforce negotiating rules and processes, and set several crucial parts of
the calendar, most notably the timeframe for ending the discussions as a single project.

Market Access for Non-Agricultural Products

o Lower or eliminate tariffs, especially tariff peaks, high tariffs, and tariff escalation, as well as non-tariff
obstacles, particularly on items of export interest to developing nations.
o To acknowledge that these nations do not have to equal or reciprocate in full tariff-cut promises made
by other parties.

Trade-Related Aspects Of Intellectual Property Rights(TRIPS)

o To proclaim emphasises the need of implementing and interpreting the Trade-Related Aspects Of
Intellectual Property Rights(TRIPS) Agreement in a way that improves public health.
o The TRIPS Agreement does not and should not exclude member nations from pursuing public health
initiatives.
o To emphasize nations' right to use the agreement’s flexibilities to avoid hesitation.

Relationship Between Trade and Investment

o To define the scope and description of the concerns and promote openness, non-discrimination,
methods of formulating negotiated commitments, balance-of-payments protections, consultation, and
dispute settlement.
o To stress assistance and technical cooperation for developing and least-developed nations and
collaboration with other international organisations such as the United Nations Conference on Trade and
Development (UNCTAD).

Interaction between Trade and Competition Policy

o To proclaim, the work must take into consideration all developmental needs.
o To comprise technical assistance and capacity building to assess the consequences of increased
multilateral cooperation for various socioeconomic goals.

Facilitation of Trade

o To emphasize the need for greater technical support and capacity building in this area, as well as the
case for further accelerating the movement, release, and clearance of products, including items in transit.

WTO Rules: Regional Trade Agreements

o To aim at clarifying and enhancing current WTO principles applicable to regional trade agreements.
o Developing features of regional trade agreements must be considered throughout the discussions.

Dispute Settlement Understanding

 o To mandate negotiations and state that these will not be part of a single undertaking.
Major Subjects for Negotiations Covered in Doha Round
Terms
Implementation-Related Issues
And Concerns
General Agreement on Tariffs
and Trade (GATT)
Agriculture
Sanitary And
Phytosanitary(SPS) Measures
Textiles and Clothing
Technical Barriers To Trade
Trade-Related Investment
Measures(TRIMs)
Anti-Dumping (GATT Article
Description
o To poor nations difficulties in implementing the present
WTO Accords, i.e. the agreements resulting from the
Uruguay Round discussions.
o No area of WTO activity drew greater attention or
produced more controversy. During that time, around 100
complaints were raised.
o Less severe General Agreement on Tariffs and Trade
(GATT) standards for poor nations that restrict imports to
safeguard their balance-of-payments.
o Define eligibility to negotiate or be consulted on quota
allocation.
o Food security and rural development in emerging
countries
o Least-developed nations and net food importers
o Export credits, export credit guarantees, and export credit
insurance programmes
o Tariff rate caps
o More time for developing nations to comply with new
SPS measures implemented by other countries.
o Governments should recognise that alternative methods
employed by other countries.
o Effective application of the agreement’s provisions on
early product integration into normal GATT regulations
and quota elimination.
o Anti-dumping efforts must be restrained.
o The prospect of scrutinising governments’ new origin
regulations.
o Members should explore preferential quota treatment for
small suppliers and LDCs, as well as greater quotas in
general.
o Technical aid for least-developed nations, as well as
general technical assistance reviews
o A six-month “reasonable pause” for developing nations
to adapt to new policies, wherever practicable.
o The WTO Director-General encouraged developing
nations to continue their efforts to participate in creating
international standards.
o The Goods Council will evaluate favourably requests
from LDCs to prolong the seven-year transition period
for removing policies that violate the agreement.
o There will be no second anti-dumping probe within a
6) year unless conditions change.
o Clarification sought on the time frame for assessing
whether the number of dumped imported items is small,
and thus no anti-dumping action is required.
o Annual assessments of the agreement’s implementation
will be conducted in order to enhance it.

Rules of Origin o Finishing the harmonisation of origin rules among

member governments.
o Managing temporary arrangements throughout the
transition to the new, harmonised origin regulations.

Subsidies and countervailing o Provisions on countervailing duty investigations are

Measures being reviewed.
o Reiterating that the least-developed nations are excluded
from the export subsidy restriction.
o Requesting that the Subsidies Committee prolong the
transition time for specific developing nations.

Trade-related aspects of o Non-violation complaints: the unsolved issue of how to

intellectual property rights handle potential.
(TRIPS) o TRIPS lawsuits involving the loss of an expected benefit
even though the TRIPS Agreement was not breached.
o Transfer of technology to Least-Developed Countries.

What is an Agreement on Agriculture (AoA)?

 The Agreement on Agriculture (AoA) is a World Trade Organisation (WTO) treaty that was negotiated during
the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and ratified in Marrakesh,
Morocco, in 1994. In 1995, the AoA came into operation.
 Its rules required developing countries to meet their reduction commitments by the year 2000, and developing
countries by the year 2004.
 No reductions were required of the Least Developed Countries.
 The agreement covers agricultural products, with the exception of forestry and fishing products, as well as
rubber, sisal, jute, coir, and abaca.
 The AoA's main goal is to get rid of so-called "trade-distorting" agricultural subsidies.
 The Agreement's overall goal, according to the World Trade Organisation, is to "create a fairer trading
system that will promote market access and improve the livelihoods of farmers around the world

Purpose
The Agreement's primary objective is to reform agricultural policy principles and disciplines, as well as to
eliminate agricultural trade distortions caused by agricultural protectionism and domestic assistance.

Features

Features of Agreement on Agriculture

The Agriculture Agreement's provisions are primarily concerned with three broad categories of agriculture
and trade policy, which are addressed below.

Access to the Market

This includes the following:

  Tariffication: It entails the removal of all non-tariff barriers and the conversion of tariffs.
 Variable taxes, minimum import prices, quotas, governmental trading policies, discretionary licensing, and
other non-tariff obstacles are examples.
 Tariff reduction: Over the course of ten years, developing countries were required to lower tariffs by 24%.
 Opportunities for access: Minimum access equal to 3% of domestic consumption in 1986-88 will be
required for the year 1995, rising to 5% by the end of the implementation period.
 This category involves reducing trade obstacles to improving market access.

Domestic Support

 This refers to policy assistance and subsidies provided by countries in order to boost domestic production.
 The World Trade Organisation (WTO) has divided agricultural subsidies and policies into distinct categories.

Export Subsidies

 Provisions linked to member countries' commitments to minimize export subsidies can be found here.
 Developed countries must lower their export subsidy volume by 21% and spend by 36% in equal installments
over the next six years (from 1986 to1990 levels).
 Over ten years, developing nations must reduce export subsidy volume by 14% and spending by 24% in
equal installments.

WTO Agricultural Subsidies Boxes

WTO Agricultural Subsidies Boxes
 Subsidies in general are characterized by "boxes" with the colors like green (permitted), amber (slow down
— i.e. need to be lowered), and blue.
 Many of the boxes, notably those aimed to help developing countries become more competitive in the global
marketplace, have exemptions.

Green Box

 A subsidy must not disrupt trade, or produce little distortion, according to the WTO, to qualify for the green
box.
 These green box subsidies must be supported by the government, not by raising consumer costs, and
they cannot include price assistance.
 They are often non-product-specific initiatives that may involve direct income subsidies for farmers that are
unrelated to current production levels and/or pricing.
 Environmental and conservation initiatives, research funds, inspection programs, domestic food
assistance, such as food stamps, and disaster relief are just a few examples.

Amber Box

 According to the WTO, agriculture's amber box is utilized for any domestic support measures that
are deemed to distort production and trade.
 As a result, the trade agreement requires signatories to commit to reducing trade-distorting domestic subsidies
that fall into the amber box.
  The amber box contains any support payments that are considered trade-distorting and are subject to
restrictions and discipline.

Blue Box

 Any support payments that are not subject to the amber box reduction agreement because they are direct
payments under a production restricting scheme are included in the blue box.
 The blue box is an exception to the general rule that all production-related subsidies must be lowered or
maintained at predetermined minimum levels.
 It includes payments that are directly proportional to acreage or animal numbers.

Significance
Significance
 It results in considerable gains in trade and provides developing nations with unprecedented chances to benefit
from greater agricultural exports.
 Import quality regulations are easy to comply with.
 Levels of domestic assistance and export subsidies for all producers are consistent.
 It ensures that small producers have equal access to export markets so that they can compete.

Criticism
Criticism
 Developed countries manage to significantly subsidize agriculture in their countries while accusing
emerging countries, like India, of engaging in trade-distorting practices, thanks to a cunning categorization
of subsidies into trade-distorting (amber box) and non-trade distorting (green box).
 According to a joint India-China study, developed countries such as the United States, Canada, and EU
countries offer their farmers several times more subsidies than the rest of the world.
 Developed countries continue to provide trade-distorting subsidies without being penalized by the World
Trade Organization.
 Developed countries were given the option of accepting a 5% product-specific ceiling or an overall
cap under the Amber Box. Most affluent countries have been able to better target sops for specific crops by
opting for the latter option.
 Even with low subsidies, India should be concerned about exceeding the 10% subsidy cap.
 Developed countries regularly criticize developing countries for policies such as the Minimum Subsidize
Price (MSP), while continuing to support their farmers and erecting trade and market entry barriers.
 The World Trade Organization's (WTO) push for globalization jeopardizes three aspects of a
sustainable and equitable agriculture policy: ecological security, livelihood security, and food security.
Producers with little or no money and investment will suffer as a result of globalization.

Conclusion
Conclusion
Non-trade concerns, such as food security and the need to safeguard the environment, are also addressed in
the agreement. Besides, the developing nations are given preferential and differentiated treatment, including
improved access chances and terms for agricultural products of significant export interest.

Introduction
The Agreement on Subsidies and Countervailing Measures are popularly known as “SCM
Agreement” which addresses two separate concepts but the importance of putting both
the concepts in the same agreements is that they are closely related topics and one is the
action of other principles. Subsidies are the multilateral disciplines regulated by SCM
Agreement of WTO whereas countervailing measures are the kind of remedy for damage
caused by subsidy.
Multilateral disciplines are the rules regarding international trade and implicate the right
and obligation to member nations.

The most important part of this agreement is that although the set of rules by WTO is
related to multilateral practice and countervailing duties are unilateral practices where
one nation imposes countervailing duties on that member who tries to affect the
importer’s country market by the means of providing subsidies to its domestic market.
The action of investigation can be carried by the victim country and can raise a complaint
to WTO Dispute Resolution Body (DSB) with their investigation reports either to warn or
impose countervailing duties on the accused nation.

Structure of the SCM Agreement

Unlike all the structure of all contracts, agreements, acts etc., the SCM Agreement also
has a very basic structure of agreement which divides the agreements into different parts
which are:

 Part I: Like most of the structures Part- I of this agreement also contains
definitions and certain other aspects. Part I of these agreements specifically
contains the definitions of Subsidies, the definition of specificity and speaks
about the extent of application of subsidies which specifically deals with an
enterprise or industry or group of industries and other such enterprises.
 Part II & Part III: This part of this agreement divides all the specific subside into
two different categories that are prohibited & actionable subsidies. Both the
parts of these agreements also deals with the effects of these subsidies, remedy
and a DSB authority to grant a remedy for violation of this part of the
agreement. Conclusively we may assume that this part of the agreement has
rules and regulations for different aspects.
 Part V: This part of the agreement deals with the procedural requirements, rules
etc.for application or executing Countervailing measures. It also contains various
topics such as application of article VI of GATT 1994, the procedure of
investigation & evidence of the event, consultation & approaching DSBs etc.
 Part VI & Part VII: It includes institution such as committee on subsidies &
countervailing measures, subsidiary bodies, notification & surveillance by those
regulatory bodies for implementing SCM Agreement.
 Part VIII: This part deals with rules and regulations related to special treatments
to different kinds of countries like developed, under-developed, developing,
LDC’s etc.
 Part X & Part XI: Both these part only deals with the principles of DSB and final
provisions.

Subsidy
As discussed above, Article 1 (Part I) of the SCM Agreement defines Subsidies. The
general definition of subsidies can be understood with a simple word that is ‘financial aid/
help’, which means any kind of financial aid/ help can be considered as ‘subsidies’. The
SCM Agreement has mentioned three conditions and explains that all of the conditions
are to be fulfilled, then only the action will be considered as a subsidy, where the
conditions are-
  There must be a financial contribution either by the government or by any of the
public body within the territory of the member nation; and
 If the action is consistent with Article XVI of GATT 1994, which means if there is
any form of income or price support.
 After any financial contributions, there must a benefit.
The application of this agreement requires financial contributions such as loan, financial
incentives, special grants etc., and explains that any financial contribution even from the
sub-governments is considered as subsidies if they raise any benefit to the recipient.

Part I, also talks about the specificity, which means all the financial aid to enterprise or
industry or group of such industries will only be considered as subsidies and such
specificity of subsidies are only considered under SCM Agreement. Article 2 of the SCM
Agreement explains different types of specificity which are as follows:

 Enterprise- Under this type of specificity the financial contributors are only
concerned with aiding specific company or a specific set of companies.
 Industry- Under this type of specificity the contributors such as government and
public body aim a particular sector of the industry for giving them financial help
and benefit.
 Regional- It is a condition when the government is helping industry/ company
located in some specific geographical area and subsidies them with benefits.
 Prohibited- Here, in this case, the government is aiming at providing subsidies to
all such goods which are exported to different countries.

Categories of Subsidies
1. Prohibited Subsidies– The SCM Agreement prohibits any government from
providing any subsidies-

 Which are contingent with respect to law or fact upon export performance. These
kinds of subsidies are often called export subsidies.
 Which are contingent with respect to law or facts upon giving any protectionism
of domestic goods over imported goods. These kinds of subsidies are often
called local content subsidies.
These are the two kinds of subsidies covered under prohibited subsidies.

The important part to be considered here is that the scope of such subsidies are relatively
low as all the developed nations have already adopted this but it becomes challenging
with developing or LDC countries. The SCM Agreement not only has the dos and don’ts
rather it also comes with sanction with respect to a violation of rules laid down in the
SCM Agreements which are dealt with DSB of WTO.

2. Actionable Subsidies– The SCM Agreement does not prohibits any nations from
taking actions on actionable subsidies rather they can be restricted and are
subjected only when any nations bring an action in terms of challenging either
through DSB or through Countervailing Duties. The actionable subsidy has three
adverse effects on the member nation which are:-

 They cause injury to the domestic market of the member nations.

  Serious Prejudice to the interest of other members- It means when the
government is helping and giving subsidies more than 5% to cover any
operating loss of any industry or sector by the process of directly forgiving them
from any government debts. The effects of granting such subsidies cause
displacement of other net exporter countries to the importing country of Like
Products.
 Nullification or Impairment- it is a process of damaging the importer country’s
benefits and expectations from other member nations of WTO through another
country’s or third country’s change in its trade regime not according to the
GATT/ WTO Agreements obligation.

3. Non- Actionable Subsidies– It is a kind of subsidy which is neither prohibited nor

restricted by GATT/ WTO and does not permit any of the member nations to
impose countervailing duties against them. It is observed that most of the
subsidies are either restricted or prohibited by the GATT/ WTO and whosoever
overrule these guidelines agreed in the agreement then they are subjected to
countervailing measures by other member nations especially by the affected
nations. However, Non- actionable subsidies are not subject to these tariffs
(Countervailing duties) like environmental subsidies, agricultural subsidies,
scientific subsidies etc.

Countervailing Duties/ Measures (CVDs)

Subsidies are explained briefly and the parts which only talks about the Subsidies of the
SCM Agreement, but remedies to all these restricted activities are introduced from Part V
of the SCM Agreement. Part V specifically defines what countervailing measures are and
how do they work. WTO counts Countervailing Measures as a safeguard from all those
practising subsidies which are either restricted or prohibited under the SCM Agreement.
The WTO explains it as a kind of tariffs imposed on imported goods to counterbalance the
subsidies enjoyed by the producers in the exporting country either by their government
of any public body.

CVDs are the counterbalance tariff to maintain a balance between domestic producers
and other foreign producers of the like product because the subsidies producers can
afford to sell it at a relatively lower price than that of other producers because all the
producers don’t get the same or even such types of subsidies by their government or any
public body. If these are left unchecked, then there could be a great possibility that these
subsidized imports may severely affect any importer country like deflation/ inflation, loss
of employment etc., that’s the only reason why GATT/ WTO has reflected the concept of
CVDs in the agreement and mentioned that these export subsidies are unfair trade
practice and must be restricted or prohibited.

Part V of the SCM Agreement has mentioned a substantive rule to check if the imported
goods can be subjected in imposing CVDs, the rules contain three essentials to establish
the objective of imposing CVDs on imported goods which are as follows:-

 To impose CVDs on any imported goods the importer country has to determine
whether there are any subsidies provided to the producers in their country by
their government or any such public body.
 When these subsidize goods are imported in the country they must create some
threat to their domestic market.
  There must be a direct causal link between subsidized goods and a threat to the
domestic market.
Part V of the SCM Agreement also contains rules and procedure of conducting an
investigation for the purpose of imposing CVDs. Apart from this, it is very important to
understand the concept of ‘Sunset’ and ‘Judicial Review’. Where ‘Sunset’ means CVDs will
be collapse automatically after every 5 years and can be continued only after the
condition that if the importer country determines that the exporter country still not
following the key regulations of the SCM Agreement. Whereas ‘Judicial Review’ is the
power given under Article 23 that GATT/ WTO member can create an independent
tribunal to review the decisions of investigation authority or investigation panel of GATT/
WTO with respect to the domestic law of the country only if the country has its own
national legislation or law relating to CVDs.

Special or Preferential Treatment

Part VIII specifically deals with the social treatment for nations other than developed
nations. It is also observed that subsidies play a vital role in economic stability &
development and also helps in improving the living standard and other such standards in
the country.

Article 27 of the SCM Agreement provides that Article 3 (Para 1.a) does not apply to the
developing nations for the period 5 years from the commencement of WTO, and it does
not applies to least developing nations (LDC) for a period of 8 years from the
commencement of WTO, which practically means that now it applies to all the member
nations equally and no favourable treatment is given with respect to Import Subsidies.
Although LDCs & member nations with less than $1000 capita income per year are totally
exempted from the list and can enjoy freedom over export subsidies.

The SCM Agreement has categorised the member nations into three different categories
which are:

1. Least Developing Nations(LDCs).

2. Member nation with less than $1000 capita income per year.
3. Any other developing country not falling into the categories discussed above.
It is noted that there is no favourable treatment with respect to non-actionable subsidies.

Notification and Surveillance

WTO has surveillance on every member nation and mandates rules that every member
nation have to notify the SCM committee regarding their internal policies related to
Subsidies and Countervailing Measures. Where the member nations has to notify SCM
Committee regarding their Subsidies and Countervailing legislations and law within their
country, with the SCM agreement these member nations have to notify the SCM
Committee regarding all such aspects under Article 25 (Notification of Subsidies to SCM
Committee) and under Article 36.2 (Notification of Countervailing Measures to SCM
Committee).

The member nations have to notify the SCM Committee every 3 years with all the latest
amendments or any new regulations or any activity related to Subsidies in their country
for the purpose of an extensive review by the SCM Committee. Whereas in the case of
Countervailing Measures the member nations have to notify all the countervailing actions
taken on every basis like pre or final actions; and the member also has to notify the SCM
Committee regarding their respective authority and their legislation that who and how
these authorities have imposed any countervailing measures.

Dispute Settlement
It is the most crucial and important part of any law and no law can function properly
unless it is benefited by any such regulatory body and here, in this case, Dispute
Settlement Understanding is the regulatory body for governing or deciding any disputes
related to SCM Agreement. Article 30 of Part X of SCM Agreement speaks about the
Dispute Settlement Understanding and DSU is the only international body, which is
responsible for consultations and settlement of disputes. The agreement contains all the
special rules and procedures for the settlement of disputes arising in respect of this SCM
Agreement.

I. WHAT IS GATS? - AN INTRODUCTION

In order to "build a trustworthy and reliable framework of international trade laws," the General Agreement on Trade
in Services was created. The World Trade Organization (WTO) seeks to increase economic activity through
guaranteed policy agreements while assuring the non-discrimination of all participants, i.e., the WTO members. This
is accomplished through the enforcement of the General Agreement on Trade in Services (GATS).

A treaty of the World Trade Organization (WTO), known as the General Agreement on Trade in Services (GATS),
became effective in 1995. One of the most important outcomes of the Uruguay Round was the creation of the General
Agreement on Trade in Services (GATS).

Since, General Agreement on Trade in Services (GATS) entered into force in 1995, India has been a signatory to it.

II. TWIN OBJECTIVE OF GENERAL AGREEMENT ON TRADE IN SERVICES

The two main goals of the General Agreement on Trade in Services (GATS) are to ensure that:
• All signatories are treated fairly when entering foreign markets; and
• To promote the gradual liberalization of trade in services.

III. WHO ARE THE MEMBERS OF GENERAL AGREEMENT ON TRADE IN SERVICES (GATS)?

Although all WTO members are concurrently the members of General Agreement on Trade in Services (GATS), the
countries have differing degrees of commitments in individual service sectors.

IV. BASIC OBLIGATIONS UNDER GENERAL AGREEMENT ON TRADE IN SERVICES (GATS)

The GATS's fundamental commitments can be divided into two subcategories:

a. General Obligations: All members and the services sectors are subject to the GATS' general obligations.
b. Specific Obligations: These obligations are outlined in members' individual schedules, which might have a wide
range of commitments.

These obligations bind member countries to refrain from enacting more onerous regulations that would hinder
commerce.

V. GENERAL OBLIGATIONS UNDER GATS

1. Most-Favoured-Nation Treatment [Part II Article II of GATS]

MFN treatment refers to treating one's trading partners fairly. According to the General Agreement on Trade in
Services (GATS), if a country allows foreign competition in a sector, service providers from all other WTO members
should be given equal chances in that sector. The "Favour One, Favour All Principle" is the foundation of it.
2. Transparency [Part II Article III of GATS]
Members must promptly publicize "any relevant measures of general applicability" that have an impact on how the
agreement functions. Members must also inform the Council for Trade in Services of any new or amended laws or
regulations that have an impact on the trade in services covered by their individual agreement-related responsibilities.
Each member is expected to set up an information point where they can answer inquiries from other members.

VI. SPECIFIC COMMITMENT UNDER GATS

1. Market Access: Following talks, each Member agrees to grant other parties market access in certain industries. It
might be made subject to a few restrictions. For instance, limitations may be placed on the quantity of service
businesses, service providers, or workers in a given industry.

2. National Treatment: National Treatment calls for treating domestic and foreign providers equally. There shouldn't
be any distinction between local and foreign providers whenever a foreign supplier is allowed to provide a service in a
country. This is not the same as MFN.

VII. MODES OF SUPPLY RECOGNISED BY GATS

In accordance with the General Agreement on Trade in Services (GATS), trade in services is defined as the ‘Delivery
of A Service’ through any one of the following four modes of supply:

1. CROSS BORDER SUPPLY: It takes place when a service crosses a national border. It involves the supply of
services flowing from the territory of one member into the territory of another member. Example: Services supplied
through Postal Infrastructure, Tele-Communication etc.
2. CONSUMPTION ABROAD: It means when a consumer of services moves into another member territory to obtain
a service.
Example: Patients coming to India from the US for treatment, Tourists etc.
3. COMMERCIAL PRESENCE: It involves setting up of territorial presence in another member territory by a service
supplier to provide a service.
Example: Hotel chains, Hospital chains etc.
4. PRESENCE OF NATURAL PERSONS: It means when a person of one member enters the territory of another
member to supply a service.
Example: Doctors going abroad to provide service, Teachers going to foreign universities for teaching etc.

VIII. CONCLUSION

The General Agreement on Trade in Services (GATS) is the foremost set of international rules for ‘International Trade
in Services’. The General Agreement on Trade in Services (GATS) established a set of legally binding guidelines to
direct international trade in services. When the General Agreement on Trade in Services (GATS) went into effect,
India made its initial commitments. The website of the Ministry of Commerce provides access to the commitments
that India has so far arranged.