(IGP) GS Paper 1 - Economic & Social Development - "GATT and WTO"

Subject - Economic and Social Development
Chapter - GATT and WTO

GATT:

• The General Agreement on Tariffs and Trade (GATT) is an agreement that was arrived at in 1947 by 23 countries to establish an free and fair international trading regime among member countries based on dismantling of trade barriers - tariffs or non-tariff restrictions like quotas. It came into existence in 1948. India was a founding member.
• GATT progressed expanded its scope in terms of areas covered by a series of “trade rounds”- negotiations centered around a specific set of issues over a period of a few years leading to agreement among members are called a round. GATT was headquartered in Geneva, Switzerland.

WTO:

• WTO was set up as a result of the Uruguay Round. WTO came into existence in 1995. Doha Round is the first round under the WTO (2001). It is yet to complete.

GATT and WTO:

• GATT is different from WTO in two essential respects- GATT is a treaty while WTO is an organization. GAIT had no dispute settlement process while WTO has. The GATT was essentially concerned with traditional trade issues such as tariffs and quotas in international trade. It had only a relatively small secretariat with no institutional foundation to implement these rules.
• Like its predecessor, it is headquarter in Geneva, Switzerland. It has 157 members. Russia, montenegroo & Samoa has given membership status in 8th ministerial centre in 2011. Pascal Lamy, former European Commissioner for Trade, is the current Director General of the World Trade Organization.

• The WTO states that its aims are to increase international trade by slashing trade barriers and providing a platform for the negotiation of trade and related issues. Basically, it sets up a rule based multilateral trading System to liberalise the regime and boost world trade.

Dispute Settlement:

• World Trade Organization (WTO) has a dispute settlement body (DSB) that settles trade disputes among members. Disputes can arise from trade policies of members that are violative of the WTO rules.
• WTO procedures require sixty days of ‘consultations’ among the disputants to resolve the dispute falling which a disputes panel is set up.

• There is no separate DSB but the General Council which is the second highest body in the organization works as the DSB while giving verdict on the trade dispute. DSB conclusion can be challenged in an appellate body.

• The process of taking the decision by the DSB: the process requires that the ruling of the Panel should be adopted “unless” there is a consensus of the members against adoption.

TRIPS:

• Intellectual property (IP) is the work of intellect or mind to create products that have commercial uses- products like drugs, literature, paintings etc. It is protected like the physical property with trade marks, patents etc. Holders’ of the patents etc are entitled to the commercial proceeds for a specified time period, exclusively.

Types of intellectual property rights:

• A patent may be granted for a new, useful, and non-obvious invention, and gives the patent holder an exclusive right to commercially exploit the invention for a certain period of time (typically 20 years from the filing date of a patent application)
• Copyright is given for creative and artistic works (e.g. books, movies, music, paintings, photographs, and software) and give a copyright holder the exclusive right to control reproduction or adaptation of such works for a certain period of time.
• A trademark is a distinctive sign which is used to distinguish the products or services of different businesses.
• An industrial design right protects the form of appearance, style or design of an industrial object (e.g. spare parts, furniture, or textiles).
• The need for agreement on TRIPS arises from the fact that the commercial proceeds from international trade in intellectual property are growing in worth.
• Agreement on TRIPS lays down legal standards for the member Countries to protect intellectual property by way of copyright rights; geographical indications industrial designs; integrated circuit layout design patents; monopolies for the developers of new plant varieties; trademarks TRIPS regulates dispute resolution procedures and enforcement procedures.

Patents:

• A patent is an exclusionary right. It grants the right to exclude others from making use of the patented invention for the given period of 20 years from the filing date. In return for the patent, the inventor offers the knowledge with commercial use to be put in public domain after the expiry of the patent. Patent is an incentive to innovate and invent. It sustains research and development (R and D).

Geographical Indications:

• In 1999, the Parliament passed the Geographical indications of Goods (Registration and Protection) Act, 1999 This Act seeks to provide for the registration and protection of geographic indications relating to goods in India the Act is administered by the Controller General of Patents, Designs and Trade Marks who is the Registrar of Geographic Indications The Geographical indications Registry is located at Chennai.

• The Geographical Indications of Good (Registration and Protection) Act, 1999 came into force in 2003. This is a Sui generic legislation intended to give better protection to GIs of India. The registration is done by the Geographical Indications Registry at Chennai.

Patents (Amendment) Act 2005:

• Indian Parliament passed the Patents (Amendment) Bill 2005. It introduced product patent regime for food, chemicals and pharmaceuticals. India was required to introduce product patent protection in these sectors from 1.1.2005 in accordance with the obligation under the TRIPS Agreement of the WTO.

Highlights of the Act

• Product patent protector to drugs, foods and chemicals
• availability of Pre-grant Challenge
• discover of a flew form of a known Substance does not qualify for a patent; nor mere discover of any new property or flew use for a known substance
• introduction of a provision for enabling grant of compulsory license and parallel imports to meet public health crises

Doha Round:

• Doha Round of Trade talks under the WTO began in 2001 in Doha, the capital of Qatar. Doha was the fourth ministerial after the WTO came into force- Singapore, Geneva, Seattle and Doha. It is called Doha Round because the talks were started in Doha. It is called Doha Development Round as it promised to address the issues that were important to the developing countries like India.

• The criticism is that since the developing countries believed that they received a raw deal under the Marrakesh Treaty in matters related to agriculture, patents and so on, they needed additional inducements to agree to the new round of talks.Thus naming the Round as a Development Round was to pacify the developing countries.

Most Favoured Nations (MFN):

• The principle of the MFN treatment means that, the tariff policy that one country receives in an organization should be extended to all others. Some members may form a preferential trading block within the larger body but all others should atleast receive normal treatment. Contrary to the popular view, the MFN does not mean giving special treatment to imports from another country. It only means normal trading relation- neither positive nor negative discrimination. MFN treatment is not limited to tariffs. It extends on all matters like quotas and other rules related foreign trade.

• The members of the World Trade Organization, which also include all developed nations, accord MFN status to each other.

What are the benefits:

• It provides level playing field among countries which is the essence of multilateralism
• A country can import from the most efficient source. This may not be the case if tariffs differ by country.
• Poorer countries will have normal trading relations with the rich countries which may not be the case otherwise

Amber box:

• Amber box - trade and production-distorting policies. They are subject to reduction commitments (AMS).

Anti Dumping Duties:

• Special import duties imposed when a firm, following an enquiry, is assessed as having sold a product in the importing market at a price below the one it charges in the home market or below the cost of production or at less than fair value; and it damages the producers in the importing country

Blue Box:

• Trade-distorting direct payments to farmers combined with production-limiting programmes, e.g. programmes requiring land to be “set-aside” from production. Blue box support is not subject to reduction commit-ments in the Uruguay Round.

Dumping:

• exporting goods at a price lower than the price a company normally charges on the domestic market. Governments in the importing country may levy anti-dumping duties, designed to offset the actual or potential injurious effects of dumping practices.

LDC:

• Least Developed Countries, group defined by the United Nations on the basis of certain economic indicators includes 49 countries.

Special Products and Special Safeguard Mechanisms:

• Special Products (SP) and Special Safeguard Mechanisms (SSM) are key concerns of developing nations involved in WT0 negotiations. By using SP and SSM, these nations hope to ensure food security and protect small farmers and the rest of the poor from the vagaries and pressures of inter-national trade in agriculture commodities.

ACTA:

• The Anti-Counterfeiting Trade Agreement (ACTA) is a proposed plurilateral agreement for the purpose of establishing international standards on intellectual property rights enforcement. ACTA would establish a new international legal framework that countries can join on a voluntary basis and would create its own governing body outside existing international institutions such as the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO) or the United Nations. Negotiating countries have described it as a response “to the increase in global trade of counterfeit goods and pirated copyright protected works.” The scope of ACTA is broad, including counterfeit goods, generic medicines and copyright infringement on the Internet.

NAMA:

• The Non-Agricultural Market Access (NAMA) negotiations cover all those products that are not covered by the Agreement on Agriculture or the negotiations on services. In practice, NAMA products include manufacturing products.

• The NAMA negotiations have been considered important by the WTO because NAMA products account for almost 90% of the world’s merchandise exports.

• After the Doha Declaration was adopted in 2001, negotiations on NAMA formally began in 2002. In the beginning, negotiations on non-agricultural products were to be concluded by 1 January 2005.

WIPO:

• The World Intellectual Property Organization (WIPO) is one of the 16 specialized agencies of the United Nations. WIPO was created in 1967 “to encourage creative activity, to promote the protection of intellectual property throughout the world.”

• WIPO currently has 184 member states, administers 24 international treaties, and is headquartered in Geneva, Switzerland. The current Director-General of WIPO is Francis Gurry.

• WIPO administers the Berne Convention for the Protection of Literary and Artistic Works; Paris Convention for the Protection of Industrial Property; Patent Cooperation Treaty, the Madrid system for trade marks and the Hague system for industrial designs.

• Unlike other branches of the United Nations, WIPO has significant financial resources independent of the contributions from its Member States. Revenues are generated from the collection of fees under the intellectual property application and registration systems under the above treaties and others.

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