India and World Trade Organisation

The World Trade Organization (WTO) is an inter-governmental organization that regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. It is the largest international economic organization in the world. The WTO deals with 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.Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986– 1994).

The WTO is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an explicit focus on developing countries. As of June 2012, the future of the Doha Round remained uncertain: the work programme lists 21 subjects in which the original deadline of 1 January 2005 was missed, and the round is still incomplete. The conflict between free trade on industrial goods and services but retention of protectionism on farm subsidies to domestic agricultural sector (requested by developed countries) and the substantiation of fair trade on agricultural products (requested by developing countries) remain the major obstacles. This impasse has made it impossible to launch new WTO negotiations beyond the Doha Development Round. As a result, there have been an increasing number of bilateral free trade agreements between governments.[10] As of July 2012, there were various negotiation groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate.

The WTO’s current Director-General is Roberto Azevêdo, who leads a staff of over 600 people in Geneva, Switzerland. A trade facilitation agreement, part of the Bali Package of decisions, was agreed by all members on 7 December 2013, the first comprehensive agreement in the organization’s history.

India’s Role in World Trade Organisation:

India has consistently taken the stand that the launch of any new round of talks depends on a full convergence of views amongst the entire WTO membership on the scope and framework for such negotiations. Our more urgent task is to resolve the concerns of developing countries on implementation of the Uruguay Round agreements. We are against calls for new commitments from the developing world for achieving symmetry and equity in the existing agreements. It is in favour of non-trade’ issues be permanently kept off the negotiating table.

Incorporating Livelihood Clause:

Ensuring food and livelihood security is critical, particularly for a large agrarian economy like India. India’s proposal in ongoing negotiations includes suggestions like allowing developing countries to maintain appropriate level of tariff bindings, commensurate with their developmental needs and the prevailing distortions in international markets.

We are also seeking a separate safeguard mechanism including provision for imposition of quantitative restrictions under specified circumstances, particularly in case of a surge in imports or decline in prices; exemptions for developing countries from obligations to provide minimum market access; exemptions of all measures taken by developing countries for poverty alleviation, rural development and rural employment.

Our immediate priority is that the agreements reached earlier with the developing countries should be implemented so as to correct inherent imbalances in some of the Uruguay Round agreements. Sincere and meaningful implementation of commitments undertaken by developed countries and operationalisation of all special and differential treatment clauses for developing countries in the various agreements is made.

We also strongly favour extension of higher levels of protection to the geographical indications for products like Basmati rice, Darjeeling tea, and Alphonso mangoes at par with that provided to wines and spirits under the Traderelated Aspects of Intellectual Property Rights (TRIPS) agreement. In the TRIMS (Agreement on Trade-Related Investment Measures) review we want flexibility for developing countries in adopting appropriate domestic policy while permitting foreign investment.

Developed countries are pushing for a comprehensive agenda like rules on investment, environment, competition policy, trade facilitation, transparency in
government procurement, labour standards etc. They are pressing for incorporating non-trade issues of environment and labour standards.
Using as an excuse that production of products in developing countries are not being done under proper environment and labour standards they can ban the imports of their products or impose other non-tariff restrictions. The developing countries are opposed to these non-trade issues

WTO and Indian Agriculture and Farmers:

Some critics of WTO have expressed the fears that Indian farmers are threatened by the WTO. There is however no adverse impact. India has bound its tariff to the extent of 100 per cent for primary agricultural products, 150 per cent for processed agricultural products and 300 per cent for edible oils. A few agricultural products had been bound historically at low levels but these bindings have been raised following the Article XXVIII negotiations held in this regard.

It has also been possible to maintain without hindrance the domestic policy instruments for promotion of agriculture or for targeted supply of food grains. Domestic policy measures like the operation of minimum support price, public distribution system as well as provision of input subsidies to agriculture have not in any way been constrained by the WTO agreement

Certain provisions in the Agreement on Agriculture (AoA) also give us flexibility to provide support for research, pest and disease control, marketing and promotion services, infrastructure development, payments for relief from natural disasters, payments under the regional assistance programmes for disadvantaged regions and payments under environmental programmes. Indian farmers now need to take advantage of the opportunity provided by the AoA, by addressing productivity issues and making their products more competitive globally.

WTO and Indian Industries:

Indian industry has had to face greater competition in the wake of globalisation. But it has successfully completed, as can be inferred from the fact that there has been no particular surge in imports. In fact, as per the provisional data for 2000-01 our non-oil imports declined by 14 per cent while our exports rose by over 20 per cent in the same period. A close watch is also being kept to ensure that Indian industry does not have to face unfair competition from dumped or subsidised imports of other countries.

As for drug prices, safeguards are provided like compulsory licensing, price controls, and parallel imports which should help address this concern. It must also be recognised that the prices of medicines are influenced by several factors including the level of competition, size of market, purchasing capacity etc.

The issue of affordable access to treatment for AIDS, which has gathered international attention in recent months, is hopefully a pointer in the right direction. The TRIPS agreement should not be allowed to hinder the efforts of developing countries to provide affordable access to medicines.

The apex Indian organisations representing various industries are sincerely working towards ensuring a gainful transition with least disadvantage into the global economy. The government also has to strive to improve infrastructure and provide a facilitating environment for inducing acceleration in trade.

Developed countries have been putting pressures on inclusion of non-trade issues such as labour standards, environment protection, human rights, rules on investment, competition policy in the WTO agreements.

This is because by asserting that particular developing countries are not observing and implementing the rules in regard to the non-trade issues so that the developed countries can ban the imports of some goods in their countries, as the USA has been trying to do so from time to time. We are against any inclusion of non-trade issues that are directed in the long run at enforcing protectionist measures, particularly against developing countries.

Kannu Vigneshwar