WORLD TRADE ORGANIZATION (WTO)
The World Trade Organization (WTO) is an intergovernmental organization that regulates international trade. The WTO officially commenced on 1st January 1995 under the Marrakech Agreement, signed by 123 nations on 15th April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. (BCom International Economic Institutions Notes Study Material)
The WTO deals with the regulation of trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments. (BCom International Economic Institutions Notes Study Material)
Organizational Structure
The WTO has nearly 153 members accounting for over 97% of world trade. Around 30 others are negotiating membership. Decisions are made by the entire membership. This is typically by consensus. A majority vote is also possible but it has never been used in the WTO and was extremely rare under the WTO’s predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments.
The WTO’s top-level decision-making body is the Ministerial Conferences which meets at least once in every two years. Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times at a very Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Disputes Settlement Body. (BCom International Economic Institutions Notes Study Material)
At the next level, the Goods Council, Services Council, and Intellectual Property (TRIPs) Council report to the General Council. Numerous specialized committees, working groups, and working parties deal with individual agreements and other areas such as the environment, development, membership applications, and regional trade agreements. (BCom International Economic Institutions Notes Study Material)
The General Council has the following subsidiary bodies which supervise committees in different areas:
- Council for Trade in Goods: There are 11 committees under the jurisdiction of the Goods Council each with a specific task. All members of the WTO participate in the committees. The Textiles Monitoring Body is separate from the other committees but still under the jurisdiction of the Goods Council. The body has its own chairman and only 10 members. The body also has several groups relating to textiles.
- Council for Trade-Related Aspects of Intellectual Property Rights: TRIPS is working on the information on intellectual property in the WTO, news and official records of the activities of the TRIPS Council, and details of the WTO’s work with other international organizations in the field. (BCom International Economic Institutions Notes Study Material)
- Council for Trade in Services: The Council for Trade in Services operates under the guidance of the General Council and is responsible for overseeing the functioning of the General Agreement on Trade in Services (GATS). It is open to all WTO members and can create subsidiary bodies as required. (BCom International Economic Institutions Notes Study Material)
The Service Council has three subsidiary bodies: financial services. domestic regulations, GATS rules, and specific commitments. The council has several different committees, working groups, and working parties. (BCom International Economic Institutions Notes Study Material)
- Trade Negotiations Committee: The Trade Negotiations Committee (TNC) is the committee that deals with the current trade talks round. The chair is WTO’s director-general. As of June 2012, the committee was tasked with the Doha Development Round.
Secretariat
The WTO secretariat, based in Geneva, has around 600 staff and is headed by a Director-General. Its annual budget is roughly 160 million Swiss Francs. It does not have branch offices outside Geneva. Since decisions are taken by the members themselves, the secretariat does not have the decision-making role that other international bureaucracies are given.
The secretariat s main duties are to supply technical support for the various councils and committees and ministerial conferences, to provide technical assistance for developing countries, to analyze world trade, and to explain WTO affairs to the public and media. The Secretariat also provides some forms of legal assistance in the dispute settlement process and advises governments wishing to become members of the WTO. (BCom International Economic Institutions Notes Study Material)
Accession and Membership
The process of becoming a WTO member is unique to each applicant country, and the terms of accession are dependent upon the country’s stage of economic development and current trade regime. The process takes about five years, on average, but it can last more if the country is less than fully committed to the process or if political issues interfere. The shortest accession negotiation was that of the Kyrgyz Republic, while the longest was that of Russia, which, having first applied to join GATT in 1993 was approved for membership in December 2011 and became a WTO member on 22nd August 2012. (BCom International Economic Institutions Notes Study Material)
The second longest was that of Vanuatu, whose Working Party on the Accession of Vanuatu was established on 11th July 1995. After a final meeting of the Working Party in October 2001, Vanuatu requested more time to consider its accession terms. In 2008, it indicated its interest to resume and conclude its WTO accession. The Working Party on the Accession of Vanuatu was reconvened informally on 4th April 2011 to discuss Vanuatu’s future WTO membership. (BCom International Economic Institutions Notes Study Material)
The re-convened Working Party completed its mandate on 2nd May 2011. The General Council formally approved the Accession Package of Vanuatu on 26th October 2011. On 24th August 2012, the WTO welcomed Vanuatu as its 157th member. An offer of accession is only given once a consensus is reached among interested parties. (BCom International Economic Institutions Notes Study Material)
A country wishing to accede to the WTO submits an application to the General Council and has to describe all aspects of its trade and economic policies that have a bearing on WTO agreements. The application is submitted to the WTO in a memorandum which is examined by a working party open to all interested WTO Members. (BCom International Economic Institutions Notes Study Material)
After all necessary background information has been acquired, the working party focuses on issues of discrepancy between the WTO rules and the applicant’s international and domestic trade policies and laws. The working party determines the terms and conditions of entry into the WTO for the applicant nation and may consider transitional periods to allow countries some leeway in complying with the WTO rules.
The final phase of accession involves bilateral negotiations between the applicant nation and other working party members regarding the concessions and commitments on tariff levels and market access for goods and services.
The new member’s commitments are to apply equally to all WTO members under normal non-discrimination rules, even though they are negotiated bilaterally. (BCom International Economic Institutions Notes Study Material)
Objectives of WTO
The Uruguay round of GATT (1986-93) gave birth to World Trade Organization. The members of GATT signed an agreement of Uruguay round in April 1994 in Morocco for establishing a new organization named WTO.
It was officially constituted on January 1, 1995, which took the place of GATT as an effective formal, organization. GATT was an informal organization that regulated world trade since 1948. (BCom International Economic Institutions Notes Study Material)
Contrary to the temporary nature of GATT, WTO is a permanent organization that has been established on the basis of an international treaty approved by participating countries. It achieved international status like IMF and IBRD, but it is not an agency of the United Nations Organization (UNO). (BCom International Economic Institutions Notes Study Material)
The important objectives of WTO are:
(i) To improve the standard of living of people in the member countries.
(ii) To ensure full employment and a broad increase in effective demand
(iii) To enlarge production and trade of goods,
(iv) To increase the trade of services.
(v) To ensure optimum utilization of world resources.
(vi) To protect the environment.
(vii) To accept the concept of sustainable development.
Functions of WTO
As globalization proceeds in today’s society, the necessity of an International Organization manages the trading systems has been of vital importance. (BCom International Economic Institutions Notes Study Material)
As the trade volume increases, issues such as protectionism, trade barriers, subsidies, and violation of intellectual property arise due to the differences in the trading rules of every nation. The World Trade Organization serves as the mediator between nations when such problems arise. WTO could be referred to as the product of globalization and also as one of the most important organizations in today’s globalized society. (BCom International Economic Institutions Notes Study Material)
The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization. Finally, the WTO cooperates closely with the two other components of the Bretton woods system, the IMF and the World Bank. (BCom International Economic Institutions Notes Study Material)
The main functions of WTO are discussed below:
- To implement rules and provisions related to the trade policy review mechanism.
- To provide, a platform for member countries to decide on future strategies related to trade and tariffs.
- To provide facilities for implementation, administration, and operation of multilateral and bilateral agreements of world trade.
- To administer the rules and processes related to dispute settlement.
- To ensure the optimum use of world resources.
- To assist international organizations such as IMF and IBRD in establishing coherence in Universal Economic Policy determination.
Principles of the Trading System
The WTO establishes a framework for trade policies; it does not define or specify outcomes. It is concerned with setting the rules of the trade policy games. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO:
1. Non-discrimination: It has two major components: the most favored nation (MFN) rule, and the national treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same conditions to all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members.
National treatment means that imported goods should be treated no less favorably than domestically produced goods (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al discriminating against imported goods). (BCom International Economic Institutions Notes Study Material)
2. Reciprocity: It reflects both a desire to limit the scope of free-riding that may arise because of the MFN rule and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialize.
3. Binding and Enforceable Commitments: The tariff commitments made by WTO members in multilateral trade negotiations and on accession are enumerated in a schedule (list) of concessions. These schedules establish “ceiling bindings”: a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute settlement procedures.
4. Transparency: The WTO members are required to publish their trade regulations, maintain institutions allowing for the review of administrative decisions affecting trade, respond to requests for information by other members, and notify changes in trade policies to the WTO. These internal transparency requirements are supplemented and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy Review Mechanism (TPRM). The WTO system tries also to improve predictability and stability, discouraging the use of quotas and other measures used to set limits on quantities of imports.
5. Safety Valves: In specific circumstances, governments are able to restrict trade. The WTO’s agreements permit members to take measures to protect not only the environment but also public health, animal health, and plant health.
There are three types of provision in this direction:
(i) Articles allowing for the use of trade measures to attain non-economic objectives;
(ii) Articles aimed at ensuring “fair competition”; members must not use environmental protection measures as a means of disguising protectionist policies. (BCom International Economic Institutions Notes Study Material)
(iii) Provisions permitting intervention in trade for economic reasons.
WTO Agreements
The WTO’s rules and agreements are the results of negotiations between the members. The current sets were the outcome of the 1986-93 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATT).
GATT is now the WTO’s principal rule-book for trade in goods. The Uruguay Round also created new rules for dealing with trade in services, relevant aspects of intellectual property, dispute settlement, and trade policy reviews.
The complete set runs to some 30,000 pages consisting of about 30 agreements and separate commitments (called schedules) made by individual members in specific areas such as lower customs duty rates and services market opening.
Through these agreements, WTO members operate a non-discriminatory trading system that spells out their rights and their obligations. Each country receives guarantees that its exports will be treated fairly and consistently in other countries’ markets. Each country promises to do the same for imports into its own market. The system also gives developing countries some flexibility in implementing their commitments. (BCom International Economic Institutions Notes Study Material)
(a) Goods: It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating lower customs duty rates and other trade barriers, the text of the General Agreement spelled out important, rules, particularly non-discriminations since 1995, the updated GATT has become the WTO’s umbrella agreement for trade in goods. (BCom International Economic Institutions Notes Study Material)
It has annexes dealing with specific sectors such as agriculture and textiles and with specific issues such as state trading, product standards, subsidies, and action taken against dumping. (BCom International Economic Institutions Notes Study Material)
(b) Services: Banks, insurance firms, telecommunication companies, tour operators, hotel chains and transport companies looking to do business abroad can now enjoy the same principles of free and fair that originally only applied to trade in goods.
These principles appear in the new General Agreement on Trade in Services (GATS). WTO members have also made individual commitments under GATS stating which of their services sectors, they are willing to open for foreign competition and how open those markets are. (BCom International Economic Institutions Notes Study Material)
(c) Intellectual Property: The WTO’s intellectual property agreement amounts to rules for trade and investment in ideas and creativity. The rules state how copyrights, patents, trademarks, geographical names used to identify products, industrial designs, integrated circuit layout designs, and undisclosed information such as trade secrets or “intellectual property” should be protected when trade is involved.
(d) Dispute Settlement: The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore, for ensuring that trade flows smoothly.
Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgments by specially appointed independent experts are based on interpretations of the agreements and individual countries’ commitments.
The system encourages countries to settle their differences through consultation. Failing that, they can follow a carefully mapped out, stage-by-stage procedure that includes the possibility of the ruling by a panel of experts and the chance to appeal the ruling on legal grounds.
(e) Policy Review: The Trade Policy Review Mechanism’s purpose is to improve transparency, create a greater understanding of the policies that countries are adopting, and assess their impact. Many members also see the reviews as constructive feedback on their policies. All WTO members must undergo periodic scrutiny, each review containing reports by the country concerned and the WTO Secretariat.
WTO and INDIA
India’s increasing engagement in the international economy has created a growing awareness that multilateral trade negotiations can and must be used to serve development goals. At the same time, India is a developing economy of key importance in the World Trade Organization, and it played a pivotal role in the negotiation and design of the Doha Development Agenda.
The Indian economy experienced a major transformation during the decade of the 1990s. Apart from the effects of various unilateral economic reforms undertaken since 1991, the economy has had to reorient itself to the changing multilateral trade discipline within the newly written framework of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO).
The unilateral policy measures have encompassed exchange-rate policy, foreign investment, external borrowing, import licensing, import tariffs, and export subsidies. The multilateral aspect of India’s trade policy pertains to India’s WTO commitments with regard to trade in goods and services, trade-related investment measures, and intellectual property rights.
Multilateral trade liberalization under the auspices of the Uruguay Round Agreement and the Doha Development Agenda is aimed at reducing tariff and non-tariff barriers to international trade. The purpose of this chapter is to provide a computational analysis of the effect of such changes in trade barriers on the economic welfare, and trade, and on the inter-sectoral allocation of resources in India and its major trading partners. (BCom International Economic Institutions Notes Study Material)
The first stage of India’s reforms after 1991 continued to focus on manufacturing while largely ignoring agriculture. The share of value added in the manufacturing sector protected by QRs declined from 90 percent to 47 percent by May 1992 and to 36 percent by May 1995. The corresponding decline was much less in agriculture—from 94 percent to 93 percent by May 1992 and to 84 percent by May 1995. It has been estimated that about one-third of the value of India’s imports in 1998-99 was still subject to some type of non-tariff barrier.
In April 1998, about 30 percent of the 10-digit tariff lines (3,068 of 10.281) under the Harmonized System (HS) of India’s trade classification were subject to non-tariff barriers. The 3,068 restricted tariff lines include 1,379 lines for consumer goods. The import value of these consumer goods is only 0.2 percent of India’s total imports, which reflects the relatively high degree of restrictions. The 40 percent of agricultural products were still restricted because these were classified as consumer goods.
The government of India has made a number of commitments regarding trade liberalization. Being a founder member of the WTO has been following the WTO decisions, but as a consequence, certain effects on the Indian economy have become evident:
- Effects on Indian Industry: WTO has been urging India to lower import duties, remove control on consumer goods imports, reduce quantitative restrictions, etc. Under the Uruguay Round Agreement, India offered to reduce tariffs on capital goods, components, intermediate goods, and industrial raw materials to 40% in case our tariffs were above that percentage; to 25% in case, our tariff was between 25 to 40% and to bind the tariff ceiling at 25% in case our tariff was below that percentage. The reduction of the tariff was to be achieved by the year ending 2000. (BCom International Economic Institutions Notes Study Material)
India was maintaining quantitative restrictions in the form of quotas, and import and export licenses on 2007 agricultural commodities textile, and industrial products. The United States along with Australia, New Zealand, Switzerland, European Economic Community, and Canada complained to the WTO Dispute Settlement Machinery. (BCom International Economic Institutions Notes Study Material)
The Dispute Settlement panel gave a verdict against India and finally, India opened the floodgates for foreign consumer goods to enter the Indian market, thereby seriously damaging Indian Industry. (BCom International Economic Institutions Notes Study Material)
Under this policy, India allowed the import of second-hand cars, machine tools, etc. into India and they seriously damage the domestic industry. On the other hand, in recent years Chinese goods flooding the Indian markets like battery cells, Cigarette lighters, locks, energy-saving lamps, VCD players, watches, toys, electronic items, and other consumer goods. Not only that, Chinese goods are coming through normal channels of trade, they are being smuggled via Nepal at zero duty. Thus it is very difficult to prepare an anti-dumping case against China. (BCom International Economic Institutions Notes Study Material)
- Impact on SSI Units: WTO agreements do not discriminate on the basis of the size of industries or enterprises. In the WTO regime, reservations may have to be withdrawn, preferential purchases and other support measures may not be available and thus Small Scale Industries (SSIS) have to compete not only with the large units within the country but also with cheap imported products. Consequently, a very large number of SSI units becoming sick or have closed down. (BCom International Economic Institutions Notes Study Material)
The real difficulty with the SSI sector is that it does not have adequate resources to prepare the case for anti-dumping duties in the view of prohibitive costs of the anti-dumping investigation. Consequently, small industries continue to suffer due to such a policy.
- Double Standards of Developed Countries: Developed countries demand so many concessions and reductions of tariffs from developing countries, but they are encouraging the free flow of trade, capital, and technology across the states. Developed countries have proposed ten long years to reduce quotas in their domestic products, but they pressurize the developing countries to reduce their tariffs, remove quantitative restrictions, introduce Intellectual Property Rights (IPRs), etc. Obviously developed countries play unfair games so far as developing countries are concerned. (BCom International Economic Institutions Notes Study Material)
GENERAL AGREEMENTS ON TARIFF AND TRADE (GATT)
GATT was established on October 30, 1947, in Geneva with 23 countries as its member. It pursued the objective of free trade in order of encourages the growth and development of all member countries. India was one of the founder signatories. The main purpose was to ensure competition in commodity trade through the removal of reduction of trade barriers.
The first seven rounds of negotiations conducted under GATT were aimed at stimulating international trade through a reduction in tariff barriers and also by a reduction in non-tariff restrictions on imports imposed by member countries. In this way, we can say that GATT provides a useful forum for discussion and negotiation on international trade issues.
However, GATT worked for multilateral trade, from the beginning and could be instrumental in the reduction of tariff duties but in the matter of quota restrictions and non-tariff barriers it was not very successful. Even then the importance of GATT has been recognized. Therefore, the number of GATT members increased to 118 countries by 1994 when WTO took birth. GATT worked for a reduction in tariff and trade restrictions over a period of its existence through eight rounds of tariff negotiations.
The GATT agreement has followed the principle of one country, one vote. However, the developed countries are able to pressurize the developing countries with various new devices, especially through intellectual property rights and TRIMs. Although the Government of India is claiming that very substantial benefits are likely to accrue as a consequence of the GATT agreement, it is premature to reach any definite conclusion. The final act is such a big document that it has wheels-within-wheels and the thrust of the act is to toe the line of developed nations. (BCom International Economic Institutions Notes Study Material)
Mr. R.K. Khurana of the India International center has rightly summed up the position: “The consensus, however, is that the Uruguay Round has been a game in which more powerful nations lay down the rules. Unfortunately, India is not among the powerful trading nations and it is, therefore, doubtful if the country could have achieved anything significantly more than what negotiations have managed.”
The past experience of GATT disclosed that whenever newly industrialized nations have challenged the competitive strength of the developed they have immediately related by imposing both tariff and non-tariff barriers. They have now enlarged these in the form of TRIPs and TRIMs. (BCom International Economic Institutions Notes Study Material)
Objectives of GATT
According to the preamble of GATT, the objectives are as follows:
(1) Raising the standard of living
(2) Ensuring full employment
(3) A large and steadily growing volume of real income and effective demand
(4) Developing the full use of the resources of the world.
(5) Expanding the production and exchange of goods.
Uruguay Round of GATT and India
The 8th round of multilateral trade negotiations, popularly known as the Uruguay Round was started in 1986 at a special session of GATT Contracting Parties held at the Ministerial level. World Trade had undergone a structural change during the four decades since the establishment of GATT in 1948. The share of agriculture in the world merchandise trade which was 46 percent in 1950 had declined to 13 percent in 1987. (BCom International Economic Institutions Notes Study Material)
Simultaneously, the structure of employment and the contribution of various sectors to the GDP of developed countries had undergone a qualitative change. The share of the service sector in the GDP of developed countries has also increased.
In the Uruguay Round under the leadership of the USA, developed countries of the world made negotiations in 15 areas like Tariffs, Non-tariff measures, Tropical products, Natural resources-based products, Textile and clothing, Agriculture, GATT articles, Safeguards, Multilaterals Trade Negotiations (MTN), Subsidies and Countervailing measures, Dispute settlement, Trade-related aspects of Intellectual Property Rights (TRIPs), Trade-Related Investment Measures (TRIMs) and trade in service.
These negotiations are expected to be conducted in four years but on account of differences between participating countries in certain critical areas, such as agriculture, textiles, TRIPs, and anti-dumping measures, the agreement could not be reached. To break this deadlock, Mr. Arthur Dunkel, Director General of GATT compiled a very detailed document, popularly known as Dunkel Proposals.
The Dunkel Proposal culminated into the final Act on December 15, 1993, and India signed the agreement along with 117 nations on April 15, 1994. (BCom International Economic Institutions Notes Study Material)
A big offensive was launched by the left parties, the Janta Dal and Bhartiya Janta Party (BJP) against the acceptance of Dunkel Proposals. The basic thrust of the attack was that the Government has surrendered its sovereignty under pressure from the US Government and the multinationals. (BCom International Economic Institutions Notes Study Material)
There is no doubt that some of the criticisms were politically motivated and value-loaded, and it would be correct to say that to some extent, they were misleading. On the other hand, there is no doubt that the claim of the Government of India, that as a consequence of the Uruguay Agreement, Indian export would rise at the rate of 2 billion dollars per year is exaggerated.
TRADE RELATED INVESTMENT MEASURES (TRIMs)
The government often imposes conditions on foreign investors to encourage investment in accordance with certain national priorities. Conditions that can affect trade are known as TRIMs. The agreement on TRIMs, which was negotiated in the Uruguay Round, requires countries to push out TRIMs that have been identified as being inconsistent with GATT rules. TRIMs are concerned with the liberalization of foreign investment conditions. (BCom International Economic Institutions Notes Study Material)
Under national treatment rule, WTO member states commit themselves to treating foreign enterprises under the same terms and conditions as their domestic enterprises (GATT, 1994, Article III). Member countries also commit themselves to the reduction of all quantitative restrictions on imported goods, including tariffs and non-tariff barriers (GATT, 1994, Article IX).
The TRIMs agreement provides a few concessions to safeguard local industries such as the requirement of local content aimed at ensuring that local industries benefit from providing inputs into the production process of foreign companies. It is obvious, however, that for countries to benefit from TRIMs they should have a very organized and advanced industrial sector, which would be able to respond to the specific input, and needs of foreign investors. (BCom International Economic Institutions Notes Study Material)
LDCs generally lack the infrastructure to enable them to respond positively to the input needs of various foreign investments. If LDCs are to benefit from TRIMs then their governments have to assist in building the capacity of small and medium enterprises (SMEs).
TRIMs Agreement-Main Features
(1) Applies only to investment measures related to trade in goods (not trade in services).
(2) Focuses on the discriminatory treatment of products (imported/exported).
(3) Does not regulate the entry of foreign investment or investors.
(4) Concerns measures applied to both foreign and local firms.
TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHT (TRIPs)
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members. It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.
The TRIPs agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date. In 2001, developing countries, concerned that developed countries were insisting on an overly narrow reading of TRIPs, initiated a round of talks that resulted in the Doha Declaration.
The Doha declaration is a WTO statement that clarifies the scope of TRIPs, stating for example that TRIPs can and should be interpreted in light of the goal “to promote access to medicines for all.” (BCom International Economic Institutions Notes Study Material)
Specifically, TRIPs require WTO members to provide copyright rights, covering content producers including performers, producers of sound recordings, and broadcasting organizations; geographical indications, including appellations of origin: industrial designs; integrated circuit layout designs; patents: new plant varieties; trademarks; trade dress; and undisclosed or confidential information. TRIPs also specify enforcement procedures, remedies, and dispute resolution procedures. (BCom International Economic Institutions Notes Study Material)
Protection and enforcement of all intellectual property rights shall meet the objectives to contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge, and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
The three main features of the Agreement are:
(i) Standards: In respect of each of the main areas of intellectual property covered by the TRIPs Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. Each of the main elements of protection is defined, namely the subject matter to be protected, the rights to be conferred, and permissible exceptions to those rights.
(ii) Enforcement: The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights. The Agreement lays down certain general principles applicable to all IPR enforcement procedures. In addition, it contains provisions on civil and administrative procedures and remedies, provisional measures, and special requirements related to border measures, and criminal procedures, which specify, in a certain amount of detail, the procedures and remedies that must be available so that the right holders can effectively enforce their rights. (BCom International Economic Institutions Notes Study Material)
(iii) Dispute Settlement: The Agreement makes disputes between WTO Members about the respect of the TRIPs obligations subject to the WTO’s dispute settlement procedures. (BCom International Economic Institutions Notes Study Material)
In addition, the Agreement provides for certain basic principles, such as national and most-favored-nation treatment, and some general rules to ensure that procedural difficulties in acquiring or maintaining IPRs do not nullify the substantive benefits that should flow from the Agreement. (BCom International Economic Institutions Notes Study Material)
The obligations under the Agreement will apply equally to all Member countries, but developing countries will have a longer period to phase them in. Special transition arrangements operate in the situation where a developing country does not presently provide product patent protection in the area of pharmaceuticals. (BCom International Economic Institutions Notes Study Material)
Thus, the TRIPs Agreement is a minimum standards agreement, which allows Members to provide more extensive protection of intellectual property if they so wish. Members are left free to determine the appropriate method of implementing the provisions of the Agreement within their own legal system and practice. (BCom International Economic Institutions Notes Study Material)
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)
The United Nations Conference on Trade and Development (UNCTAD) was established in 1964 as a permanent intergovernmental body. UNCTAD is the principal organ of the United Nations General Assembly dealing with trade, investment, and development issues. The organization’s goals are to: “maximize the trade, investment, and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis. (BCom International Economic Institutions Notes Study Material)
The primary objective of UNCTAD is to formulate policies relating to all aspects of development including trade, aid, transport, finance, and technology. The conference ordinarily meets once in four years; the permanent secretariat is in Geneva.
One of the principal achievements of UNCTAD has been to conceive and implement the Generalized System of Preferences (GSP). It was argued in UNCTAD that to promote exports of manufactured goods from developing countries, it would be necessary to offer special tariff concessions to such exports. (BCom International Economic Institutions Notes Study Material)
Accepting this argument, the developed countries formulated the GSP scheme under which manufacturers’ exports and some agricultural goods from the developing countries enter duty-free or at reduced rates in the developed countries. Since imports of such items from other developed countries are subject to the normal rates of duties, imports of the same items from developing countries would enjoy a competitive advantage. (BCom International Economic Institutions Notes Study Material)
The creation of UNCTAD in 1964 was based on concerns of developing countries over the international market, multi-national corporations, and great disparity between developed nations and developing nations. The United Nations Conference on Trade and Development was established to provide a forum where developing countries could discuss the problems relating to their economic development.
The organization grew from the view that existing institutions like GATT (now replaced by the World Trade Organization, WTO), the International Monetary Fund (IMF), and World Bank were not properly organized to handle the particular problems of developing countries. Later, in the 1970s and 1980s, UNCTAD was closely associated with the idea of a New International Economic Order (NIEO).
The first UNCTAD conference took place in Geneva in 1964, the second in New Delhi in 1968, the third in Santiago in 1972, the fourth in Nairobi in 1976, the fifth in Manila in 1979, the sixth in Belgrade in 1983, the seventh in Geneva in 1987, the eighth in Cartagena in 1992, the ninth at Johannesburg (South Africa) in 1996, the tenth in Bangkok (Thailand) in 2000, the eleventh in Sao Paulo (Brazil) in 2004, the twelfth in Accra in 2008 and the thirteenth in Doha (Qatar) in 2012. (BCom International Economic Institutions Notes Study Material)
Currently, UNCTAD has 194 member states and is headquartered in Geneva, Switzerland. UNCTAD has 400 staff members and a bi-annual 2010-11) regular budget of $ 138 million in core expenditures and $ 72 million in extra-budgetary technical assistance funds. It is a member of the United Nations Development Group. There are non-governmental organizations participating in the activities of UNCTAD.
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BCom International Economic Institutions Notes Study Material