Essay on India and WTO Issues

India is one of the founding members of the World Trade Organisation (WTO) and participation in the WTO rule based system implies greater stability, transparency and predictability in the governance of international trade.

The importance of WTO in promoting multilateral trade is being increasingly acknowledged. The WTO rules envisage non­discrimination in the form of national treatment and most favoured nation (MFN) treatment to our exports in the markets of other WTO members.

National treatment ensures that our exports to other member countries would not be discriminated vis-a-vis their domestic products. MFN treatment likewise ensures non-discrimination among various members in their tariff regimes and also other rules and regulations.

Emerging from continued discussions in various multilateral for a , developmental issues along with trade related issues are being increasingly focused at the international level. Poverty concerns of developing countries along with development and trade policies are also being given cognisance.

Need has been felt for integration of trade policies with development strategies, increasing support to areas of finance and debt relief, recognising the importance of technology for development, improvement in market access for developing countries in sectors like textiles, clothing and agriculture, and providing better access to the dispute settlement mechanisms for these countries.

The issue of abuse of the anti-dumping procedure*, the problems of rules of origin criteria, technical barriers to trade, regional trading blocs, etc., are also being considered at various levels in the WTO.

The Government of India has taken several steps to implement the policy commitments made under some of the agreements, particularly

under the Agreement on Tariffs and Quantitative Restrictions Agreement on Agriculture (AoA), Trade Related Intellectual Property Rights (TRIPs), Trade Related Investment Measures (TRIMs), General Agreement on Trade in Services (GATS), apart from others. A strategy for tariff negotiations is, however, required.

The additional ‘non-trade’ issues relating to transparency in government procurement practices trade and competition policy, trade and environment, and trade and labour standards proposed in the Singapore and the Geneva Ministerial need to be addressed for negotiations.

The commitments regarding the technical barriers to trade, social agenda covering labour standards and environmental and phyto-sanitary issues also require establishment of certain national standards and technical regulations in a standardised and transparent system.

At the same time, there are some issues on which India has expressed certain reservations. These are:

• During the implementation of WTO agreements in the last six years, India has experienced certain imbalances and inequities in the WTO agreements. It is found that some developed countries have not fulfilled their obligations in letter and spirit of the WTO agreements, and many of the Special and Differential Treatment clauses, in favour of developing countries, added in various WTO agreements have remained in operational.
• Taking advantage of the exception clauses provided in the WTO, most industrialised countries are still enforcing various regulations on foreign producers and suppliers.
• Extending the scope of the investment regime in WTO beyond Trade Related Investment Measures and General Agreements on Trade in Services, is not appropriate.
• A multilateral framework cannot guarantee an increase in FDI inflows although it threatens to adversely affect the quality of the inflows.
• There are also other asymmetries present, as the WTO does not address the responsibilities of corporations which often impose trade restrictive clauses on their subsidiaries.
• WTO has not been able to ensure abolition of non-trade barriers being imposed on labour and environmental considerations, including the linkage in certain Generalised System of Preferences (GSP) schemes to these issues.z

The present negotiations strategy is based on the decisions taken at the Doha Ministerial in November 2001. The Doha Declaration focused mainly on TRIPs agreement, public health, trade and environment and the implementation related issues and concerns. Elaborate timetables on work programme for current negotiations in agriculture and services and other issues have been worked out.

The Doha Conference presented mixed results for India. India’s main concern was to speed up implementation of various agreements and to undo the imbalances and inequities present in some WTO agreements. From India’s point of view, faster removal of the textile quotas maintained by developed countries like the USA was the most important implementation issue, which was, however, met with limited success. As far as environmental issues are concerned, the Doha declaration has mandated negotiations to clarify WTO rules in the light of multilateral environmental agreements. These negotiations could lead to developed countries raising barriers against goods from developing countries on the pretext of environmental protection.

India had also reservations on starting negotiations on four new ‘non-trade’ areas, namely, multilateral investment, global rules on competition, transparency in government procurement and trade facilitation, i.e., framing of uniform custom’s procedures for clearance of goods. India could secure only a two-year respite and the study process would continue for two more years, i.e. up to the Fifth Ministerial Conference, when a decision about negotiations will be taken on the basis of an explicit consensus.

Apart from mandated negotiations in agriculture and services where the process has already started, negotiations on market access for non- agricultural products is quite important for India, as reduction or elimination of tariffs, tariff peaks and tariff escalation as well as removal of non-tariff barriers will be quite helpful in exports. India would, of course, have to make offers even though the negotiations will be carried out under less than full reciprocity as far as developing countries are concerned.

The other area where action is required is in regard to extension of protection of geographical indications to products other than wines and spirits under Article 23 of TRIPs and the relationship between TRIPs and the Convention on Biological Diversity (CBD), and Traditional Knowledge (TK) under Article 71.1. The process of legislation in regard to geographical indications needs to be completed. In the area of TRIPs and access to medicine, where additional flexibility is provided in separate ministerial declarations in terms of compulsory licensing and parallel imports, India can benefit in terms of lower prices of crucial life saving drugs and even promoting exports of pharmaceutical products.

India and other developing countries should now ensure an average balance of reciprocity in these negotiations. There is need for a continued effort to handle some of the complex issues, as per international requirements as well as our domestic resources and other constraints, during the Tenth Five Year Plan.